The capital’s business community has pitched its plan to revive the city’s “stagnant” economy, urging the council to cut commercial rates, push long-debated regional amalgamation, and launch an aggressive PR campaign to rebrand the city.
The Wellington Chamber of Commerce has published its pre-election report, saying the city is at a crossroads.
While optimistic the capital can play to its strengths to kick its “Government town” reputation and narrative problem, the report points to a bleak economic outlook.
“Our growth is stagnant, and our private sector is lagging. Wellington has a successful private sector, but it is hampered by a clear lack of vision for commercial growth.”
Greg Pollock, who chairs the Business Central employer group that works alongside Wellington’s chamber, told the Herald the city’s businesses are coming out of a tough period, but believes things can turn around.
“We are in charge of our own destiny and if we can work together constructively and collaboratively across business, local government, and central government, we can change the narrative and start to focus on the things that we are really good at”, Pollock said.
He said the city needs “a greater voice for business at the table”, and the business community wants to see more targeted investment in innovation.
Most of Wellington’s workforce is employed in the private sector, which boasts the highest proportion of tertiary-qualified workers in the country working across globally competitive firms in technology, film, finance, and professional services.
The city’s workforce also has a high concentration of New Zealand business leaders, the report states. But it said this talent is not reflected in its growth numbers.
“Between 2009 and 2024, our private sector GDP grew at an annual average of 1.4%, nearly half the rate of Hamilton (2.4%) and even further behind Auckland (3.1%). We’re not translating our strengths into momentum”.
“Perhaps the most concerning story”, the report outlines, is the lack of population growth, with Wellington growing by just 23% since 1996 compared with Auckland’s more than 60% and Christchurch 40%.
It points to examples like Silicon Hills in Austin, Texas, or Boulder, Colorado (the latter is smaller than Wellington) as examples of cities that grew as business and start-up hubs because of targeted pro-business vision.
Recommendations to emulate this include an “aggressive PR campaign” to highlight Wellington’s existing start-up successes, to change perceptions of the city, as well as converting underutilised buildings into start-up hubs.
Commercial rates are also a key constraint on the city’s business, the chamber argues.
Numbers released to the Herald recently reveal commercial landowners, and in turn businesses, are paying the highest rates in the country, an average of $20,000 more than other cities.
That is because commercial property owners are responsible for a greater proportion of the Wellington City Council rates take than residential owners.
This differential alone is an immense roadblock for business, the chamber said, calling on the new council when elected to “take urgent action on reforming commercial rates”.
Rates reform has long been a fraught issue for the council.
In 2023, council officers agreed the city’s commercial rates differential was too high, recommending it be brought down from 3.7:1 to 3.25:1.
That proposal was voted down by councillors, who noted they did not want to increase the proportion put on households.
The council reviews its rating system annually and the issue is expected to come up again before the 2027 Long Term Plan.
But it is not only how much is charged that is the issue; the chamber says businesses deserve greater influence on how council money is spent.
One way to spend that money, the business leaders propose, is a business investment fund.
The co-investment fund would give grants to start-ups based in Wellington and be managed by a new board.
As for local government reforms, the chamber is calling on the council to review whether council controlled organisations (CCOs) are getting value for money, and look into amalgamating all the region’s councils.
“Businesses operating across the region navigate different rules, timeframes, and processes in each jurisdiction. Economic opportunities requiring regional coordination often fail due to institutional complexity.”
The issue of amalgamation has bubbled away in Wellington for years after the idea was axed in 2015.
It’s not the first time the chamber has called for it; its last pre-election report in 2022 raised the issue.
It wants to see business given a seat at the decision-making table through a new business advisory council with “meaningful influence” on council spending and strategy. The group would be made up of eight business leaders appointed by the Mayor, council, and chamber of commerce.
The council currently has a mayoral business group, set up this term by Mayor Tory Whanau last year. That group has weathered challenges, with two high-profile members leaving and expressing concern over the council’s priorities.
The chamber’s report said its new group would operate at arm’s length from the council and act as apolitical advisers.
While the proposals in the report have not been costed, Pollock does not think much spending is required to refocus the city for growth.
“We’ve got all the expertise we need. What we need is alignment around what we’re trying to achieve together.”
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. He can be emailed at ethan.manera@nzme.co.nz.