“If you chose, as a family to live there, you might want to live around one of the inner-city parks - but where do your kids go to school?" asks the EMA's Alan McDonald. Photo / Dean Purcell
Auckland wants to be a globally competitive city but struggles with everyday urban basics such as connectivity, planning and liveability. Major projects dominate public debate, yet many of the barriers to growth lie in smaller gaps between the city’s existing assets.
Given that Auckland generates about 30% of New Zealand’s GDP and anchors the upper North Island economy, closing those gaps is a national urgency.
Alan McDonald, head of advocacy and strategy at the Employers and Manufacturers Association, says while businesses see those gaps every day, “The assets are already in place.”
He says Auckland has a great harbour, the best universities, top hospitals and an excellent research base.
Yet it lacks integration. “We’ve got a beautiful natural city ... but we’re also difficult to get around. We don’t have great connections between business hubs, the university and specialist communities like the med-tech sector.”
McDonald says leveraging these assets for economic success depends less on mega-projects and more on filling in the gaps between what already exists.
This matters to EMA because it represents firms employing a large share of the workforce. Most of its members are Auckland-based. They depend on the city’s transport links, industrial land and research institutions.
When Auckland’s planning fails, it shows up quickly in EMA members’ productivity and investment decisions.
McDonald says Auckland’s importance goes beyond the city itself. It is the anchor of the “golden triangle” economy linking Auckland, Hamilton and Tauranga.
If the city functions well, the benefits flow across the wider region and the national economy. Investment is essential: “If you’re serious about driving the engine room of your economy, serious about attracting overseas people to come and help drive that”.
Creating a more liveable city is part of that. Successful international cities typically have a vibrant heart. Global talent expects to see dense urban environments.
Although Auckland has improved in recent years, McDonald says it needs to do better. In particular, it needs family-friendly infrastructure.
“To be an international city we need more people to live in the centre. People often talk about at least doubling the population of inner-city Auckland. Currently there are 38,000 people living in the area between Symonds St and Hobson St.
“If you chose, as a family to live there, you might want to live around one of the inner-city parks - but where do your kids go to school?
“We need inner-city schools — primary, intermediate, high school — because that is the glue for families.”
He is concerned that the city often feels empty after the workers have gone home. That weakens the city’s vibrancy, its attractiveness and its safety: “The more people there are around, the safer the place is.”
While intensification is already part of planning, the social infrastructure has not kept pace. A busier central city supports retail, hospitality and knowledge industries that depend on dense urban networks.
“If we say we want double the growth, then let’s put in place a plan that includes the social infrastructure, such as parks and schools.”
McDonald says the city could also make better use of existing buildings. Under-used office buildings could be converted into apartments, which would allow the central city population to increase without large new developments.
“Changing building regulations so that some of those emptier office blocks can be readily converted to apartments would help unlock that potential.”
A few office conversions have happened, though others have stalled. Different safety and building standards apply to residential buildings, which can make conversions difficult even where the structure is suitable.
Planning challenges are not limited to housing. McDonald says similar planning gaps affect Auckland’s business and industrial areas, where businesses looking to expand often struggle to find suitable space.
The problem is particularly acute in established industrial areas such as Wairau Valley on the North Shore. Companies that want to grow often struggle to find nearby space.
“I’ve got members who say, ‘I wanted to expand. There’s nowhere I can expand to except I could go south or I could go further north,’” McDonald says.
In some cases, he says, businesses are pushed to new industrial zones far from their existing operations. “There’s little room to expand in places like Mt Wellington. The new industrial areas are places like Waiuku and Warkworth.”
For many firms, relocating further away from existing operations risks losing skilled staff who are reluctant to face longer commutes. McDonald says he knows of companies that ended up moving operations overseas because that is an easier option.
He argues the consequences are visible across the city.
“A lot of the congestion we see is because we haven’t planned where businesses and people should be located. If you push industry further out, people still have to get to work.”
For McDonald, these problems reflect a broader planning issue. Auckland often struggles to connect individual projects into a clear long-term vision.
He points to Sydney as an example of a city that has reshaped its central district over time.
“If you look at downtown Sydney, they’ve reshaped everything. They’ve done Barangaroo, they’ve done the light rail and the underground,” he says.
“As you walk from the ferry terminal up George St, there are new squares, new buildings, apartments and parks. You can see a plan. You can see the outcome.”
Auckland, he says, often lacks that same clarity of direction: “We tend to say no for this reason or that reason. Instead, we should be asking how we can make things work.”
Planning failure has a direct cost. In 2018, the EMA commissioned a study that put Auckland’s congestion bill at $1.3 billion a year.
McDonald says the underlying cause is not just too many cars, it is decades of industrial land decisions that force people to travel further than they should. “A lot of the congestion we see is because we haven’t planned where businesses and people should be located,” he says. “If you push industry further out, people still have to get to work.”
The answer, he argues, is not always a new road or a new rail line. It is using what already exists more intelligently.
Auckland’s harbour sits largely idle as a transport corridor. The Northwestern Motorway was widened without a busway. Meanwhile, Sydney’s public transport network — rebuilt over a generation — offers the reliability Auckland is still chasing.
McDonald recalls leaving a meeting in Martin Place and reaching Sydney’s North Shore in seven minutes. “Last time I tried to get a train from here into town, I left an hour before the meeting and was half an hour late.”
The same integration gap that troubles McDonald about housing and transport is visible in Auckland’s innovation economy.
Standing near the EMA’s offices, he can see the University of Auckland’s innovation precinct and the Auckland City Hospital from a single vantage point. The proximity is striking. The connection is not.
“You’ve got research, tech and innovation there,” he says. “But where’s the connection to the business communities?”
The med-tech sector is a case in point. Auckland has genuine world-class assets: the medical school, the hospital and a strong research base. Yet McDonald says the cluster has never fully integrated with the commercial ecosystem that could scale its work into products and exports.
The contrast with Rocket Lab is instructive. Peter Beck’s company has become a one-firm lesson in what agglomeration can do. Its supply chains have spread across the country’s manufacturing base in ways that even insiders find hard to quantify.
“It feels like about 50% of the manufacturers in the country are supplying Rocket Lab,” McDonald says. The company’s composites work, much of it done in Auckland, is world-leading. What Rocket Lab shows is that when a high-value anchor business takes root in a city, the benefits ripple outward fast; provided the city has the industrial depth to respond.
McDonald keeps returning to a single point. Auckland does not need to invent its future from scratch. The assets are already there.
His “make the most of what we’ve got” message sounds simple. But it requires fresh ways of thinking and a lot of hard work.
Auckland needs a plan that connects assets rather than leaving them as islands. It needs to create density that supports genuine agglomeration, the social infrastructure that makes the centre a place families want to live and a political culture willing to commit to decisions and see them through.
He points to the Viaduct redevelopment. It was fiercely opposed at the time, yet now it is admired.
“Is anyone saying that was a bad idea now?” Auckland’s problem has never been a shortage of assets. It has been a habit of finding reasons not to act.
“We just have to connect them,” he says. “The pieces are already there.”
EMA is a sponsor of the Herald’s Project Auckland report.