I Would Say Wellington Does – Hands Down

(Parliament that is)

Two notes before I start this post in reply to The Vote NZ’s supposed debate that occurred on Wednesday night:

1. This is just me musing and posting my thoughts on this debate about the regions hurting while Auckland continues to “surge” ahead. I might later write a paper on the matter backed by primary research and my own findings
2. Australia is just a consequence of actions or inactions here in NZ. People are free to come and go between Australia and NZ although I see more Kiwis are coming back to NZ at the moment.

On Wednesday night The Vote NZ decided to hold a debate on whether Auckland was sucking the life out of the regions (everywhere else) and what should basically be done about it.

I did not bother to watch as it turned out as I predicted: a Duncan Garner (the host) led JAFA bashing session of New Zealand’s largest and most powerful city. Then again I can’t expect much else out of Garner and his ineptness most days of the given week.

Look, I’ll keep this post brief; Auckland is not sucking the life out of the regions, Wellington is. That is the current Neo Conservative John Key led Government is with Steven Joyce as the Minister of Everything (Business, Innovation and Employment) and Gerry Brownlee as the Minister of Transport.

Our Neo Con Government basically does three things:

Economics

“Pick winners.” $30m subsidy for Rio Tinto’s Aluminium Smelter yet nothing for Solid Energy and Huntly. Interfere with the free market through getting in the road and picking winners through subsidies – most times the winner being sold overseas soon after or failing and needing prop up. If a company fails in the free market it usually (if there was demand) will rise again from the ashes and continue on. Let the private individual decide not Government. Our Neo Con Government also does not really have a regional development strategy in place to help the regions grow. Now it can do that in two ways: infrastructure upgrades, or either a Crown Research Institute or tertiary education facility somewhere near by. Businesses naturally flock to these areas including large and often heavy industry through complementing each other.

Infrastructure

Our Neo Con Government can not build our transport infrastructure to save both itself and NZ. While our State Highways do need to be maintained do we need to binge on the gold-plated Roads of National Significance? Of all of the RoNS that are there (7) I can only think of two that were needed at all – the Western Ring Route (under construction) and the Victoria Park Tunnel. Both in Auckland and both needed to assist Auckland move. For the rest, like the Holiday Highway, better and less expensive safety upgrades and bypasses can be built (like the Maramarua State Highway 2 bypass) rather than 4-lane motorways. Ironically I just saw this as I was writing this post: Motorway benefits debated. A virtual drain on both Auckland and the rest of the nation’s regions. As for other forms of transport, we need major investment in road and coastal shipping as well.

Taxes and Investment

We do hear the regions wail that they do not get their taxes they send to Wellington in the form of investment and blame Auckland for getting the “lion’s share.” News to the regions, Auckland does not even get all the tax it sends down back to the city into the form of investment. For every dollar we send down especially in transport and fuel levies, anywhere between 65-75cents comes back to Auckland in transport investment. That hurts us as much as it hurts the regions.

What to do?

First of all Auckland does not suck the life out of the regions. Auckland like Fonterra is a powerhouse. However, Auckland is also massive and of critical mass in size and population. Realise though, especially those who are quick to bash Auckland – which can contribute up to 40% of New Zealand’s GDP  (great if Fonterra takes any more whacks), Auckland and the regions are interdependent on each other. Not one over the other and independent of the other – interdependent! If one fails the other also fails.

Wikipedia: The sub-national GDP of the Auckland region was estimated at US$47.6 billion in 2003, 36% of New Zealand’s national GDP, 15% greater than the entire South Island.[54]

In my honest opinion the Government should be doing this:

Economics

Stop picking winners and sending money to places like Rio Tinto. It does nothing for the regions nor Auckland. It only helps a few and most likely an elite few at that. Allow the free market to work, create, burn, destroy, and recreate out of the ashes. Private individuals are responsive to the needs of others and often the economy, not the cumbersome Government.

People in a free market situation also move naturally to areas best suited to them and their requirements. For some that is Auckland and its offerings, others the regions and its offerings. When the Government does not interfere the movement of people and capital moves naturally, balancing itself between the interdependent regions and Auckland. Our Government has upset this natural balance.

Sure, the Government can help with education and mentoring people along BUT, no hand outs.

Infrastructure

Realise this for moving goods efficiently and economically:

• Road and truck: small volumes and most efficient for short distance
• Rail: medium volumes (can take the volumes of 100+ trucks) over medium and long distance
• Coastal Shipping: large and bulk volumes over large distances (Auckland to Timaru for example)

Plan and build for this. This means upgrading the North Auckland Rail Line and building the Marsden Line to serve the North Port in Northland which is growing. Reopen the Napier-Gisborne Line as it can move logs much better and in higher volumes than trucks can. Make sure our coastal shipping facilities and inter-modal transfer (boat to train or truck) are in tip top shape. These water haulers move vast amounts of cargo in the most cost effective and efficient manner possible over a long distance.

Building the infrastructure also has a bonus effect: people wanting to set up a business to utilise that infrastructure and its benefits. This means that if the regions are well served by good roads (not gold plated ones), good rail connections and/or good coastal shipping connections then people, business and industry will naturally come and invest in that particular region (providing the government is not “picking” winners).

In building the infrastructure and as a flow on effect, neighbouring Local, City and Regional Councils start working together and plan growth and cooperation with each other – benefiting all. This working together between each other seems to be happening between Auckland and Waikato (although the Government is NOT building the complete infrastructure suite of road and rail).

It got mentioned to me that Auckland Council and Environment Waikato are talking and planning ways to set about achieving cooperation in planning as both areas continue to grow. Effectively what is being looked at is population load sharing – people move naturally out of Auckland and live in northern Waikato and work in Auckland. However, they might do their shopping in the regional town centre or even Hamilton city. This kind of movement is normal and seen internationally. It seems wise as Auckland grows to have the Waikato help us out in return for population load sharing. Both Waikato and Auckland win on all fronts: economic, social and physical.

In fact I might do some commentary on that this weekend – the Auckland-Waikato partnership and population load sharing. It does have effects on Manukau as well as an interesting issue,

Dollar for Dollar

This is easy; for every dollar we send down to Wellington in transport levies we get the same dollar back for transport investment – for regions and Auckland. Not for Holiday Highways but for actual transportation infrastructure suited to moving whatever we need to move to wherever most efficiently.

While not the full spiel and hot air of The Vote NZ, this is a quick look into what I think is happening and should actually be happening.

For Auckland is not sucking the life out of the regions, Steven Joyce and Gerry Brownlee are (sucking the life both out of the regions and Auckland combined).

More on the Waikato-Auckland partnership this weekend