The Auckland port debate has unleashed a storm of economic numbers. Photo / Michael Craig
If you've been following the debate over whether Auckland's port should stay or go, you'll have realised there are actually more certainties in life than death and taxes.
There are at least two more: consultants are going to have a very jolly Christmas on the fees from all the economic impact reports we've been blitzed with from both sides; and that whatever's decided, even if it's do nothing, the price tag will be phone number-sized.
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To summarise the message of hundreds of pages of earnest economic theorums on freight growth and the possible cost of shifting the Auckland Council-owned port's cargo activities to Northport, or Tauranga, or divvying them up between both, or to a fantasy new port in the Firth of Thames, or just keeping the status quo, the cost will be billions of dollars and it'll be taxpayers and ratepayers wearing it.
There've been more than 20 studies in the past 10 years on the upper North Island freight supply chain and the ports of Auckland, Tauranga and Northport. Nothing's come of them so this latest NZ First-driven one probably isn't disturbing your sleep.
But this time the Government-funded Upper North Island Supply Chain Strategy (UNISCS) working group, which is behind the $850,000 study, has produced dollar figures needed to keep the port business viable.
According to the group's leaked final report, ratepayer investments of $1.69b will be needed by 2034 and a further $4.8b to 2049. And this doesn't take into account the cost effects of increased traffic congestion - a daily prospect which may well keep Aucklanders awake at night.
The reason for the debate is that New Zealand land freight infrastructure needs to grow by 55 per cent by 2042 to handle projected demand.
The leaked report says by the Auckland port's own admission, even it remains in place for another 30 years, it has to expand or choke. Port expansion plans are expensive for its ratepayer owners, socially divisive and require extensive dredging from Waitemata harbour. Expansion would mean one container truck projected to leave the port gates into already gridlocked Auckland traffic every 23 seconds by 2034.
The report says the regenerated use value of the port land could be as much as $10b and it could be rated accordingly. Maintaining the status quo is costing Auckland ratepayers between $5-6b in lost value.
It notes the council's dividend earnings from the port will slump in the next two years from $51m in 2017-2018, to just $8.7m next year and $9.4m in 2021.
To recap what all those consultants have said:
Ernst & Young (EY) produced an analysis to support the working group's preference for a staged move of cargo to deepwater port Northport. EY said it would cost $1.77b to move to Northport; $3.5b to Tauranga; $3.4b to the Firth of Thames; and $3.3b to split the cargo between Northport and Tauranga.
EY suggested it would cost Auckland $9b if the port remained.
The firm also offered a figure of $10.3b for a move to Northport, but working group chairman Wayne Brown says most of this was for rail and road building to Whangarei. He reckons the Government is going to have to pay for this work anyway because Northland is where New Zealand's future growth will be.
EY's work was then rubbished by Ports of Auckland economist conscripts NZIER and Castalia. NZIER's report said the move to Northport would cost at least $6b. Castalia said EY's figures were seriously under-cooked and punted a cost of at least $4-5b.
Then followed huffing and puffing among Auckland port defenders over what they saw as a screeching U-turn by EY in favour of Northport. This was because EY in a ports future analysis for Ports of Auckland in 2016 put Northport in 12th spot as a desirable alternative. But now suddenly Northport has EY's vote. (Paid-for professional opinion - you've gotta love it, said the cynics.)
Brown says his working group chose EY because it knew the subject well from 2016 and therefore was cheaper. Also the intention of the 2016 study wasn't to nominate alternative ports outside the Auckland region.
This week the Auckland port company fired out another economic analysis.
It's by NZIER and looks at what would happen if the port was close and its freight had to be delivered to the city from "distant" ports.
It says the cost of imports would increase by between $533m and $626m a year. Divided between 1.7 million Aucklanders, that's between $313 and $368 a year each.
That cost would fall on adults and children alike. A family of four would pay between $1250-$1470 a year.
However the working group's leaked final report addresses this area. It says analysis of how global supply chains operate and how consumer prices are set indicates there would be no consumer price effect in Auckland or New Zealand shops. It says it paid special attention to import price effects and found no evidence to support price rises.
The working group notes around 30 per cent of imports destined for Auckland already enter the country through Tauranga with no additional cost to the customer and consumer.
In commentary supporting the release of the NZIER report, port chief executive Tony Gibson said this is because the price of imports is kept low by competition.
"Think of it as the 'Gull effect' for ports. Just as opening a Gull petrol station lowers prices at stations nearby, having a port in Auckland keeps import prices low."
NZIER's new report says cites multiple negative regional and national impacts such as over $1.2 billion a year in reduced GDP nationally, fewer exports which put jobs at risk and less investment.
The working group's final report says thousands of jobs would be created in Northland and port industry workers who can't afford Auckland house prices could get an opportunity to buy their own home in Northland.
The new NZIER report says closing Auckland's port would also increase carbon emissions because freight must travel further by land to reach market in Auckland. CO2 emissions would rise between 121,000 and 212,000 tonnes annually.
NZIER says if the port did not exist, its council owner would forgo about $100m a year, which is about the average it derived over the last five years. If the port did not exist the economy would've been smaller by about $158m a year over the past five years.
The location of the port is worth about $1.4b a year, says NZIER.
The working group has been scathing about Ports of Auckland's financial performance.
It says the slashed dividends in the next two years suggests the company is valued at less than $200m - while operating on council-owned land variously valued by city property investors at between $3.8b and $20.8b. The working group chose a point of $6b as a fair valuation.
It concludes that its recommendations will result in significant long-term growth in productivity, jobs and incomes for the Auckland Council region.
• Part 1: The Big Idea
• Part 2: For and against: Why move the Auckland port?
• Part 3: The lure of the Waikato: Why not go south?
• Part 4: The North of Plenty: The prospects for Northland
• Today: Crunching the numbers: Is this good economics?
• Saturday: Auckland 2050: Our city in 30 years
Everyone struggled for bites after Monday morning's quake. So were the fish spooked by it?