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Home / Hawkes Bay Today

Mike Williams: Price of Govt inaction in regions is high

By MIKE WILLIAMS - THE OUTSIDE INSIDER
Hawkes Bay Today·
23 May, 2015 09:07 AM5 mins to read

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Mike Williams

Mike Williams

IT'S HARD to see Hawke's Bay people getting excited about this week's Budget.

The most desperate beneficiary families will get an extra $25 a week from April next year and, because Hawke's Bay has a disproportionate share of such families, the local supermarkets and landlords will get a small boost in 2016.

The Government has missed an opportunity to at least seem to make a commitment to regional development, a key issue in Winston Peters' crushing defeat of National in the recent Northland byelection.

Just how badly Hawke's Bay is lagging has been brutally driven home to me in the past three months.

Three years ago, when my dear old mate, Sir Paul Holmes, was on the way out, I was visiting Hawke's Bay much more regularly than I'd done for the previous few decades.

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Paul and his closest friends had a lot of reminiscing to do and we wanted to plot his final honour, the knighthood (not easy - but another story).

Like many who grew up in the Bay, I'd fantasised about a place in Havelock North, and when a pretty four-bedroomed villa close to the cafes, boutiques and nightlife of that village came up for sale, we bought it for around the council valuation at that time.

With the house fully insulated, the money we had to spend on a new woodburner proved a stunningly cost-effective foil to the chilly winter nights.

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This was a very welcome bolt-hole and all of my family took the opportunity of free accommodation to experience the local delights.

Three years on, a busier life has limited the times we could enjoy the property, so with some regret we put the house on the market.

My belief that the location, size and, by Auckland standards, a modest asking price, the house would be a magnet for youngish Hawke's Bay families looking for good schools has proven to be mistaken.

Though I mustn't generalise just one experience, after three months of marketing I haven't seen a single serious offer, and though some reports tell us that that Hawke's Bay real estate prices have bottomed out, that is not my experience.

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In a couple of weeks, I'll be able to make a judgment on the state of the rental market in Havelock North, as I've advertised the house to let.

Rents are said to be rising in Hawke's Bay, but the absence of offers from investors who might achieve a better return than the banks offer suggests otherwise. If the rental market is in the same state as the property market, then I'll keep the house and stay periodically, maybe pay the rates and insurance via "Bag a Bach" and wait for some kind of economic recovery in the region or my eventual retirement.

By contrast, I attended a property auction in Auckland two months ago.

Around 50 properties from all over the city were on the block and all but one sold, mostly for $100,000 or more over their council valuations.

Compared with other sellers in the region, I'm lucky.

I took a gamble that I can afford and still have an asset for whenever in the future a recovery happens, but the property market underpins so much of a local economy that stagnation or reversal means reduced opportunity and dashed dreams for many.

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Property prices accurately reflect economic activity and measures aimed at enhancing regional prosperity were notably absent from this week's Budget.

Although this Government has a philosophical aversion to "backing winners" and had its fingers burned with Muldoon's disappointing "Think Big" energy projects of the 1970s and 1980s, the price of government inaction in the regions is potentially high, economically and politically.

As Hastings Mayor Lawrence Yule regularly points out, Hawke's Bay has deprivation numbers not much worse than our poorest region, Northland.

This state of affairs costs all taxpayers in benefit payments, expensive health interventions and myriad other ways, including prisons.

The latest figures say that each prisoner is now costing us $2000 a week, and getting released into a stagnant local economy like Hawke's Bay only increases the sky high re-offending rate that gives New Zealand such a high rate of incarceration.

I would have thought that a bit more money to promote tourism into the regions would have been a wise use of the taxpayer dollar, as might be a different government approach to the funding of projects like the proposed Ruataniwha Dam, now apparently in its death throes.

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The political price of regional neglect can be high.

Although one-third of voters are found in Auckland, two-thirds aren't.

This was a missed opportunity for the Key Government.

The only Kiwis who should be celebrating this week's Budget are the feathery, flightless variety.

They got a few million dollars to avert extinction.

Wairoa didn't.

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Mike Williams grew up in Hawke's Bay. He is a supporter of pro-amalgamation group A Better Hawke's Bay. He is chief executive of the NZ Howard League and a former president of the Labour Party. He is a political commentator and can be heard on Radio NZ's Nine to Noon programme at 11am on Mondays and Sean Plunket's RadioLive show at 11am on Fridays. All opinions in this column are his and not the newspaper's.

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