Kim Campbell: Incentivise investors to back Auckland

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Kim Campbell, chief executive of the Employers and Manufacturers Association. Photo / Steven McNicholl
Kim Campbell, chief executive of the Employers and Manufacturers Association. Photo / Steven McNicholl

Turning Auckland into the world's most liveable city requires much more than good intentions; it requires Auckland Council to have a major attitude adjustment.

Mayor Len Brown says his vision will only be realised if the city is "underpinned by an internationally competitive, prosperous economy that all Aucklanders can benefit from and participate in".

That's totally laudable. Likewise when he said: "To grow at the rate Auckland needs to, (to become the most liveable city) it must add a much stronger export focus ... aim(ed) at developing and selling high value goods and services into high growth sectors."

The Auckland Economic Development Strategy sets out the targets. Average annual increases for the region have to reach:

* 6 per cent for exports

* GDP greater than 5 per cent

* Productivity growth greater than 2 per cent.

We need, the strategy says, to switch from being import-led to become export-driven.

Bravo! But it's not going to happen.

The many thousands of ratepayer dollars that went into the strategy is about to turn into so much hot air. Unless, that is, the Auckland Council itself undergoes a transformation in its attitudes to business success. To do that the council has to re-assess its practices and policies in the issuing of such things as resource consents, and realign its rates and charges with its strategy for attracting business development.

Unless it does this, all of its strategies and plans will amount to politics and grandstanding. The reason is simple. If we are to achieve our economic goals set out in the strategy, Auckland needs to attract significant investment from offshore and locally in order to develop competitive businesses. No one will readily invest here if the hurdles for developing any project are set too high and in the absence of any incentives.

So far most investment has gone into existing retail, distribution and property assets; we don't need more of that. Auckland's Economic Development Strategy identifies the high value businesses where investment must be targeted: in sectors such as food and beverage, niche manufacturing, biotech, marine and IT.

The strategy is far less certain on why investors would develop businesses in these sectors. Why they would not invest is clear. Among the reasons are the cost, and the byzantine, time-consuming processes required for getting consents under the Resource Management Act, and council policies that require businesses to pay more in rates and charges than other users of council services. For example, consent is being held up on a project out west where $10 million has been spent on studies, tortuous consent processes and interference by government agencies.

The council's Economic Development Strategy has rightly pointed to food and beverage businesses as a prospective high-growth sector. Businesses in the sector typically use a lot of water yet the council-owned Watercare is charging businesses 1.6 times more for waste water than it charges other users. It seems the council expects businesses to subsidise the management of residential waste water. The message is at odds with the strategy.

Similarly the rates applying to all Auckland's businesses are 2.63 times higher than for other ratepayers for the same level of council services. Though we have the mayor's assurances this impost will move down over time, in the absence of incentives and lower costs elsewhere, the extra cost signals business is only welcome if it's prepared to pay more than others. It's a big turn-off. What can we do?

The mayor's present efforts to reduce rates increases below the rate of inflation are essential. We urge him to keep looking for efficiencies and unwarranted spending. But more is needed. To spark investor interest, Auckland should consider what it can offer multinationals to make their investment here more attractive.

Together with measures such as rates holidays, the council might consider setting aside an investor-ready industrial corridor where planning, resource consents and necessary infrastructure is already in place. Temporary tax or rates holidays may sound like a gravy train but they work in many other places. When the businesses that become established because of them eventually start paying their way they deliver revenue that was not going to be collected otherwise - new business and new revenue for the city.

Perhaps what would help most is a culture change at the council. Instead of preventing development our officials need to be empowered to assist. Instead of issuing notices saying what must be complied with, our officials need to be empowered to recommend ways whereby consents can be issued.

The council needs to become an enabler of business success, and this requires a change in attitude, not changes to the law. Our national agencies, such as those for Transport, Environment and Conservation need to do likewise.

To ensure the mayor's vision for Auckland to become the world's most liveable city, we call on the council to trigger a change to the administration's culture so our city's officials become facilitators of business success, not inhibitors of it. That would signal to Wellington we are open for business, and they should do the same.

Kim Campbell is chief executive of the Employers and Manufacturers Association

- NZ Herald

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