Prime Minister Christopher Luxon and other notables rode on the first passenger train on the CRL. Video / Michael Craig
Opinion by Simon Wilson
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues. He joined the Herald in 2018.
Auckland is falling behind the rest of the country on key economic health and progress indicators.
The Chamber of Commerce has called for the Government to provide a stimulus package for the city.
The Prime Minister says he’s not sure how that could work.
Enough with the hand-wringing.
Auckland’s unemployment rate is higher than the national average and our economy has been shrinking faster, business confidence is low, there are more destitute people on the streets and everyone’s wailing that something needs to be done.
Auckland unemployment is 6.1% against New Zealand’s 5.2%.
Economic growth for the year to March was negative: -1.3% compared with –1.1%.
Only 44% of businesses are optimistic, according to the Auckland Business Chamber, down from 51% in its previous survey.
And in May, Auckland Council’s outreach teams counted 809 people in the city who were “unsheltered homeless”: a 90% increase since September.
Fix this now, says everyone. But how?
Last week the Business Chamber’s CEO Simon Bridges suggested that corporates need a tax cut. He has a fine sense of humour, that man, so perhaps he was joking.
Corporate Auckland has done extremely well out of the last five years. No one else has.
The banks, with their record profits, have the power to drive progress. But they don’t. The big “service” companies, aka the consultancies, have the influence to make a difference, but do they use it well?
As for the big energy companies, where is their shame?
These companies don’t need a tax break, they need a conscience top-up.
I did like the way Bridges phrased his suggestion, though.
As BusinessDesk reported, he said the Government needs to stir up Auckland’s “animal spirits”. Tap into the superpowers of the Super City. Very cool.
And he wasn’t talking about mere movement in interest rates.
“I do think,” Bridges said, “there is an argument for fiscal stimulus that’s pretty strong, actually”.
Finance Minister Nicola Willis has also taken to using the “s” word. She claims they are already “stimulating” the economy; the recent re-announcement of $6 billion of infrastructure investments was designed to make the same point.
I love it when centre-right politicians talk like they’re Keynesians. But what they’re proposing is not enough: we need fresh thinking and a much stronger, future-focused plan.
Such a thing would include a decent regional deal, which is now in negotiation, to unlock new sources of funding. And a much better working relationship with Ngāti Whātua Ōrākei: the iwi has $1.5b in assets and its own 100-year plan, but is not integrated into economic planning for the city in anything like the way Tainui or Ngai Tahu are on their whenua.
Why is Auckland dragging its heels on that?
What about a programme to learn from kura kaupapa, which produce academic, social and cultural results that many schools in poor parts of the city would love to match? And a stronger climate-resilience strategy, because more floods are coming.
Prime Minister Christopher Luxon told RNZ on Monday he didn’t see how a special package could be applied to Auckland.
Really? As well as all the above, here you are, boss, a five-point plan for a prosperous Auckland you can have for free. All it needs is a spot of courage.
1. Fast-tracked transit
Prime Minister Christopher Luxon (left) with NZ First leader Winston Peters and Auckland Mayor Wayne Brown, about to ride the CRL under central Auckland. Photo / Michael Craig
Luxon rode a train through the City Rail Link last week and was reportedly thrilled.
Also last week, the managing director of KiwiSaver fund Simplicity, Sam Stubbs, revealed that by his calculation, 30% of all KiwiSaver funds are invested locally. That’s $295b available for productive investment over the next 25 years.
Luxon called the CRL “a major, major feat” that would spur $12b of investment in the economic life of the city. It was “a bit like Star Trek”, he added.
And Stubbs’ news effectively meant there’s enough money to build many more rapid-transit lines. Imagine it: faster travel times and less congestion, boosting economic life all over the city.
There are many options for new transit routes, including a second North Shore line, city centre to the airport, Botany to the airport, Westgate to Albany, Avondale to Onehunga, not to mention faster progress on the already-planned Northwest Busway and the under-construction Eastern Busway.
There are also mode options for all these routes: light rail, rapid bus, even gondolas.
I don’t have a fixed view on which should be built first or what modes of transport they should be, except to say tunnels are too expensive, too slow to build and use too much concrete.
The Labour Government failed to grasp that we need more transit as quickly as possible. What’s holding National back?
By the way, I mention gondolas because they are easy, fast and relatively cheap to build, the technology is proven, and they might serve very well on second-tier routes. Te Atatu to New Lynn, perhaps, or Browns Bay to Takapuna to Devonport?
Set up a route, for only few million, and see if it creates proof of concept. Fresh thinking.
2. A new energy deal
Bridges has been blunt about energy too. “Energy today is a severe handbrake on business and the economy,” he wrote in the Herald.
“Before 2018, long-term energy contracts averaged $70-$80 per MWh. But since 2021 the average has been $150-plus per MWh and over the last year it’s averaged a whopping $190 per MWh.”
This is a nightmare for businesses and a government that tolerates it is a government that simply isn’t taking economic development seriously.
Bridges called for the big gentailers to have their generation and retail functions separated. Almost everyone else agrees, except the gentailers themselves.
But while that’s needed, it’s not all we need and it’s not the quickest way to a fix. Solar is now the cheapest way to generate power and batteries make it easy to store, and Auckland is perfect for it. Vast swathes of the city are covered in warehouse and factory roofs. Where are the solar panels? What about residential solar?
The Government could supercharge the industry, creating jobs, providing cheap energy and shoring up supply. In Melbourne, around a third of electricity comes from solar; in Auckland, it’s less than 2%.
3. Kickstart homebuilding
Remember this? Houses being built in Auckland. How did a Government committed to growth allow the momentum of this to collapse?
Crashing residential construction will go down as one of the biggest blunders of this Government, especially as it was triggered by the destruction of Kāinga Ora’s social and affordable housing programme.
Communities were undermined, many people’s hopes of a new home vanished, and over the last 18 months the country has lost 17,000 construction workers. Most of the pain has been felt in Auckland.
Kāinga Ora needed fixing, to be sure, but not by wrecking an entire industry. As the economy shrank in the post-Covid world, the Government should have stimulated, not retrenched.
Now there’s a lot to do. Incentives for the return of at least some of those workers. Ramped-up education and training, fast-tracked new projects, new life for off-site production, industry reforms to bring down construction costs. Most of all, the reinstatement of projects cancelled or “put on hold”.
Parallel importing of construction products is now allowed. That’s great, but what about the rest?
4. Modern freight management
Empty containers hanging about in Wiri. Photo / Alex Burton
Some of our freight companies are among the most go-ahead outfits in the country, but the Government’s grasp of how their industry works is stuck in the 1980s.
Auckland should not be using valuable waterfront land as a freight depot, let alone for storing empty containers. And trucks should not be clogging the highways, making those roads less efficient and more dangerous for everyone else.
The freight industry itself is onto this, despite a lack of leadership from the Government, the mayor or even Port of Auckland. The future of freight logistics is now located in Hamilton, where the vast Ruakura Inland Port sits alongside the main trunk line and the Waikato Expressway. It’s an initiative of Port of Tauranga and Waikato-Tainui.
And it won’t be long before a rail line to Northport, at Marsden Point in Northland, unlocks the potential of that port.
Auckland shouldn’t be worried about these things. It’s good that freight management in the upper North Island is evolving. But we do need a coordinated plan and Auckland needs to be part of it. We need a far more functional rail network, including a fourth rail line to get goods to inland ports and off the waterfront quickly and efficiently.
Instead, most Government ministers are focused myopically on spending billions on more roads. It’s a colossal waste of money.
We need roads. But we could have a good road to Northland without it being a super-expensive four-lane expressway. And we certainly don’t need the proposed East-West Link, a highway to link Penrose to Ōtāhuhu, replacing Neilson St.
The Northern Expressway and the EW Link are both are “roads of national significance” (RONS). But the only “significance” of the EW Link is that it will manage the freight traffic at Port of Tauranga’s MetroPort facility, located along the route. Moving MetroPort away and freeing the isthmus land for housing is a far better option.
RONS like those two are to National what tunnelled light rail was to Labour: absurdly expensive, going nowhere slowly, a pointless distraction from the realistic options we have to solve our transport crisis.
5. Big events
Metallica is returning to New Zealand in November. But what about all the other events we should have?
Events are vital to the life of a city, for the visitors who come to spend money and for the vibe. Never underestimate the vibe.
Auckland’s current schedule of events includes a Springbok test, SailGP and Metallica, but the programme is light and getting lighter.
This can’t be turned around in a hurry, what with the long-term planning of sports world cups and the like, and especially as the council has eviscerated its own budget for big events. Which is why this needs urgent attention.
None of these five things is wacky or weird. They’re little more than what we should be able to expect from any government, even a business-as-usual one. So why aren’t they happening?
