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Executive Director Report
Looking back and moving forward could well be the theme of the Committee for Auckland’s present focus. We are moving at pace to complete our major report on Auckland’s relationship with China -rhetoric and reality; continued focus on the Port study; Future Auckland Leaders’ second and final year for this cohort as well as the implementation of a new event series which focuses on the major issues facing the future of our region and how well we are equipped to deal with them.
We have long discussed Auckland being in a phase of ‘infrastructure catch-up’, due to the lack of bold decision-making by past political leaders when looking at the region’s future requirements and initiating the investment needed to support growth. We now face major congestion issues that are impacting productivity; a housing affordability problem which requires a multi-dimensional solution, including the requirement for intensification close to employment and transport nodes. It has become very obvious, we need be more open to new thinking when it comes to paying for what we need now and well into the future.
These are just some of the issues that continue to challenge our organisation as we accelerate our work programme in 2015/16.
Heather Shotter
Executive Director
News in Brief
Budget 2015 – In Brief
The Government has flagged that there will be no surplus in this year’s budget. Instead they have promised a small surplus next year and increasing surpluses in following years.
Social Welfare
The big budget news came in the form of a $790 million package to reduce hardship among children in New Zealand’s poorest families. Initiatives are designed to prevent young people caught up in the welfare or justice systems from becoming permanently stuck there. An additional $240 million a year will go to low-income families on benefits but sole parents must be work-ready by the time their youngest child turns three, rather than five-years old.
Health
The Government will invest $1.7 billion in health over the next four years, bringing the health budget to a record $15.9 billion in 2015/16.
Housing
The Government tightened rules around the purchase and sale of property to try and ensure capital gains are taxed if property is bought and sold within two years.
The key issue is still land supply and availability to meet demand. The announcement to free-up more Crown-owned land for new housing in Auckland is a step in the right direction. The latest measure involves setting up a $52.2 million fund to facilitate housing development on Crown-owned land in Auckland. There’s an estimated 500ha of Crown land in areas zoned for residential housing in Auckland that can be fast-tracked for new homes. Government agencies will look to partner with private developers through a competitive process to build affordable homes. They aim to have signed a development agreement for the first land parcel within six months.
Education Infrastructure
Alongside housing, the Government will boost spending on school infrastructure, including $130.1 million operating funding over four years and $243.8 million capital expenditure for new schools and classrooms.
Transport
More money has been allocated for transport – an additional $248.9 million for “key projects” over the next four years – bringing total spending on transport to $4.27 billion. This includes a capital injection of $209.8 million into Kiwi Rail which is integral to New Zealand’s land transport system.
Business Innovation
A fund of $12.1 million over four years will help establish and run the New Zealand Business Number (NZBN), which will become a key tool for businesses to interact in an efficient manner with Government, and therefore assist in reducing compliance costs. In the R&D space, there is funding for up to $25 million over three years to support the establishment of new, privately-led Regional Research Institutes, along with $80 million extra for R&D growth grants.
Taxation
The Government’s first three fiscal priorities for the next three years were: To return to surplus this year and maintain surpluses thereafter; reduce net government debt to 20% of GDP by 2020 and to reduce ACC levies further from April 2016. Of the $1.5 billion set aside by 2017, about $1 billion would go to tax cuts, while the rest would go towards debt reduction. Income tax cuts would be modest and targeted at low to middle income earners.
The only other announcement of note in relation to taxation policy is a funding boost of $74 million over five years for extra tax compliance, which includes $29 million for property tax compliance.
http://www.beehive.govt.nz/feature/budget-2015
Building Better Cities – Infrastructure Panel Discussion
Members were treated to a fascinating glimpse of future Auckland as panelists looked at where our infrastructure is headed in the Building Better Cities panel discussion hosted by Beca, in May. The session was moderated by Committee for Auckland Board member and Jasmax Principal, Richard Harris. Panellists included:
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John Dalzell, Chief Executive Officer, Waterfront Auckland
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Greg Edmonds, Chief Infrastructure Officer, Auckland Transport
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Steve Evans, Chief Operating Officer – Housing, Fletcher Building
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Pejman Okhovat, Chief Executive Officer – Warehouse Stationery, The Warehouse Group
The discussion centred on how Auckland can create better communities for the future through improved infrastructure, planning and delivery. Panellists believe there’s a requirement for high quality intensification in areas of mixed development – residential, commercial and retail - close to transport nodes. But they see challenges to realising that vision. Intensification brings with it the challenge of achieving a balance of the correct ratios of land use, and for that, it’s important to understand the needs of the occupiers. The future is about making wise choices that will unlock the capacity for infrastructure to work best.
Change is happening fast and there are many areas of opportunity - especially for retail. Auckland needs to start asking questions about how to best adapt to influences beyond our control. The digital world will continue to change retail. Stores may become places in which to experiment, or hubs where you pick up your products on the way home. Auckland's increasing migrant population will also have an impact on shopping habits. It’s vital we start to incorporate these changes into our thinking. Retailers must work closely with developers and visualise innovative concepts for Auckland, to build balanced precincts that create better communities.
Another challenge to realising Auckland's vision of being the world's world's most liveable city is resolving Auckland’s transport issues. This requires substantial improvement to Auckland's transport infrastructure and investment in areas that will regenerate town centres.
Greg Edmonds spoke of Auckland Transport's plans to embark on a major transformation of Auckland transport infrastructure with a plan to reduce congestion. The strategy is to improve public transport by giving people more options. Significant investment has been made in creating a rapid transit network for rail, buses and ferries aligned with the NZ Transport Agency's motorway and arterial network.
Greg also commented that Auckland has one of the best modelling systems in the world which will help bring about major benefits for Auckland’s growth through route optimisation. By monitoring and optimising traffic flows, Auckland can expect to gain a 20 to 30% improvement.
The future of infrastructure is about building strong communities and joining them up to make better places. How we do this is a challenge that we must all find ways to address.
Photo (from left to right): Richard Harris, Principal, Jasmax, John Dalzell, Chief Executive Officer, Waterfront Auckland, Greg Edmonds, Chief Infrastructure Officer, Auckland Transport, Steve Evans, Chief Operating Officer - Housing, Fletcher Building, Pejman Okhovat, Chief Executive Officer - Warehouse Stationery, The Warehouse Group
Auckland’s Quest to become a Smart City – Upcoming Event
Committee for Auckland members will hear international guest speaker Caroline Haynes discuss what it means for Auckland to be a Smart City in the next dialogue session on June 24. Caroline is based in the UK, a Director of KPMG and co-author of Magnet Cities.
In her book, Caroline talks about cities as magnets. “Just as magnets can either attract or repel, so can cities. A city with a strong magnetic-pull draws in new residents, visitors and business investment for the benefit of all.
She also discusses the importance of smaller cities.
“In developed economies, it is important for countries to have economically strong and well-functioning second-tier (non-capital) cities. Smaller cities can offer a different pace and quality of life than the hustle and bustle of global and large capital cities. Yet they still provide the educational, cultural and occupational opportunities people seek.”
Caroline will be joined by a panel of our members who will discuss smart cities in the context of Auckland, what this means in their area of expertise, and what impact that will have on our economy in general and individually in New Zealand's largest globally connected city.
Panellists for this event are:
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Victoria Crone, Managing Director, Xero
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Matthew Ensor, Director - Advisory Services, Beca
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Phil Gibson, General Manager - Hydro & Wholesale, Mighty River Power
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Tim Hooson, Principal, Jasmax & Head of Not Yet Known
A smart city uses digital technologies to enhance performance and wellbeing, to reduce costs and resource consumption, and to engage more effectively and actively with its citizens.
Key 'smart' sectors include transport, energy, health care, water and waste. A smart city should be able to respond faster to city and global challenges than one with a simple 'transactional' relationship with its citizens.
Emerging technologies are poised to reshape our urban environment. Our panellists will also explore some of the new technologies and strategies to integrate them, that will help us address the challenges as Auckland heads into the future as a globally competitive Smart City.
To RSVP please email or phone 09 303 3974 by Friday 19 June.
Please note this event is open to Committee for Auckland members only.
Convention Centre is a “Go”
Following a three month review of the previous International Convention Centre in Auckland, SKYCITY and the Government have agreed on a modified design that retains key aspects of the original.
SKYCITY Chief Executive, Nigel Morrison, says: “We are very proud of the exceptional design we have presented to the Crown and happy to have reached this milestone.”
The revised design is a smarter, streamlined and more flexible building that makes clever use of space and has an overall footprint very similar to the original Crown brief for the project.
“Careful redesigning of non-essential space has seen the gross floor area reduce to 32,000sqm while still allowing for a plenary of 2,850 delegates – just 150 fewer than in the previous design. The Exhibition Hall, an area of some 8,100sqm (some six times larger than the current largest convention facility in Auckland, SKYCITY’s The New Zealand Room), will be able to seat banquets ranging from 1,360 to 3,000 people.
“If needed, the flat floor Exhibition Hall could accommodate over 4,200 people in theatre style seating. The centre will still be capable of hosting two concurrent conferences of up to 1,200 delegates each – or a single conference of up to 3,150 people.”
A newly created laneway – similar to that in Federal Street - will encourage Aucklanders and visitors to linger and enjoy the precinct with its public gallery space, shops, cafes, bars and more quality signature restaurants.
The additional tens of thousands of international visitors that the centre will attract each year is great news for retailers, tourism operators, and indeed everyone in the tourism and hospitality industry and further cements Auckland’s place as a leading international city in the 21st century.
SKYCITY has agreed to increase the contracted value of its investment in the NZICC from $402 million to $430 million. The additional commitment for the project by SKYCITY reflects the relocation of the future hotel development site from Wellesley St to Hobson St.
Port Update – Submission to the Unitary Plan Independent Hearings Panel
The Committee for Auckland was satisfied by the response it received to evidence submitted to the Unitary Plan Independent Hearings Panel in support of its recommendation for the Stage 2 Ports Study (following the Upper North Island Strategic Alliance (UNISA) study).
The Committee’s submission focused on the need for a sound, robust study with clear terms of reference and provided an example of what those terms should be. Both executive director Heather Shotter and economist Dr Aaron Schiff addressed the panel to support the Committee’s case.
Auckland has a choice about the port’s future location; its scale and focus of activity or service options. A robust study of alternative scenarios for the future of the downtown port is needed to understand the trade-offs involved, to facilitate public debate and to make good decisions.
The terms of reference should use international best-practice, cost-benefit analysis techniques to value all significant effects of each alternative scenario under analysis, relative to a counterfactual scenario that reflects the status quo.
In her address, Heather Shotter expressed disappointment the Council has regressed from its principled position for a proper analysis of the options Auckland needs to consider. “The Committee does not support the revised Precinct Plan 4 Council provided in its rebuttal evidence (Area B – extent of reclamation)."
She indicated the requirement for the Stage 2 Study was agreed as an essential precursor to any new port reclamation by the Planning Committee of the Council in 2013.
“The Ports of Auckland does not have the right incentives, mandate or skills to make efficient choices for the Auckland region as a whole about its scale and location.
“Given the importance of the Auckland waterfront and the Waitemata and its contribution to helping deliver the world’s most liveable city,”…”a notified requirement should be in place at least until the study is completed.” And, “It is critical that there be no discretion for additional wharf structure consents or reclamations until that study is completed”.
Dr Schiff supported the Committee’s argument, pointing out that while Auckland’s growth is clear, the costs and the full range of effects of having a large port in downtown Auckland have not yet been fully studied. “Other options for serving Auckland’s sea freight needs have not been analysed fully and independently. The panel and Auckland Council have seen partial evidence about some of the issues, but no one has yet undertaken a study within a coherent analytical framework that can cope with the variety of benefits and costs that are relevant to the port."
Dr Schiff said the POAL did not make comparisons with alternative (or counterfactual) scenarios in the economic impact estimates because they were not sure what they should be.
The value of the port’s land in alternative use is another important issue. Dr Schiff said: “The panel has evidence that the opportunity cost of the port’s land could be in a wide range, but I’m not aware of any fully independent analysis of that value. The valuation that POAL has commissioned from CBRE depends on a large number of assumptions, and I don’t think those assumptions have been debated and tested. This is another important piece of work that needs to be done.”
Dr Schiff argued the appropriate framework for analysis is a cost-benefit analysis because it provides a coherent way of valuing benefits and costs and weighing them up against each other, and is widely used and recommended for making important public policy decisions.
POAL evidence was based on a limited economic impact analysis (or EIA) or what is known as “input-output” analysis. “The Treasury and other government agencies such as MBIE have made it clear that CBA is the best quantitative tool for making policy decisions,” as it considers the full range of effects and market responses that would occur if the port were to move to another location, or if its expansion were to be constrained in its current location.
In light of all this, Dr Schiff disagreed with the POAL that the panel has sufficient information to be confident it can give POAL the freedom to operate and expand as it wishes. “A more cautious approach is warranted, pending the outcome of the wide-ranging port study that Auckland Council is right now in the process of designing.”
He concluded that it is obvious there will be some trade-offs between the port’s interests and the well-being of Aucklanders. “These trade-offs need to be addressed to make good decisions, and further work needs to be done to understand the benefits and costs of alternative options. For that reason, in my view the Unitary Plan should not assume that the port’s growth is required for Auckland’s growth. “
Inspiring New Leader for Future Auckland Leaders Programme
 A veritable Renaissance man with a breadth of communications experience, Timothy Giles has joined the Committee for Auckland team as Manager for the Future Auckland Leaders Programme.
In his new role, Giles (as he prefers to be called) will be responsible for leading the programme development, management and delivery as well as providing support and coaching to the Future Auckland Leaders.
He brings to the role strengths in coaching, mentoring, leadership development, media and communications. Beginning June, he will focus on developing and marketing the 2016 Future Leaders’ Programme.
Giles says, listening is at the core of his work and life – “with the usual outcome of enjoying, telling and re-telling stories that motivate me and bring new insight."
We wish Giles all the best as he champions the Committee for Auckland’s values and drives our leadership programme.
Getting to know Auckland – Poverty & Social Session for Future Auckland Leaders
Auckland’s Future Leaders attended a session on social and poverty issues at the Auckland City Mission in May.
Hilary Sumpter, Chief Executive Officer, Auckland Communities Foundation outlined how her organisation finds ways for generous people to give their money to worthy causes through legacies and endowments. Whether they want to donate to the arts, sports and recreational groups, medical foundations, crisis groups or community service organisations, Auckland Communities Foundation can match the donor to a charity with appropriate values.
A growing number of people in Auckland want to donate bequests and Sumpter said it’s important that these are managed correctly to be as effective as possible. She has a helicopter view of what charities focus on; how they are faring and the impact they are having on their causes. So she is well-positioned to know which charities need most help to deliver what the community needs.
Sumpter pointed out that many well-meaning people want to put their name to or to establish new charities, which only serves to dilute the pool. “We try to get them together to deliver the most value to those in need.”
The Foundation’s aim over the next 20 years is to have around $500 million in bequests to share among charities to ensure the right people are getting the right help.
Major Campbell Roberts, Director of the Social Policy and Parliamentary Unit for The Salvation Army in New Zealand, Fiji and Tonga has a mandate to work towards the elimination of poverty. He gave an enlightening address on Auckland’s housing crisis, citing a wealth of data and anecdotes to illustrate the widespread extent of this issue.
The health and well-being of any city relies on its capacity to affordably, safely and securely house its citizens. “Housing is the entry point for many other aspects of life. Housing contributes to our health, education, social life, personal well-being and success. It’s difficult for the city to achieve those things when so many households are struggling.”
Major Campbell has seen whole streets in South Auckland where families are living in garages; where two or three families live in small homes; where a mother and her three children live in a six by four metre shed, paying $150 a week but don’t have toilet facilities on site. Many families live in caravans in motor camps. It’s a common scenario because of the growing housing shortage and unaffordable rents, he said.
Major Campbell drew on statistics to explain the underlying issues. “The average new house will cost over $500,000. Houses are larger and more expensive than a modest family can afford, mainly because of the high cost of land. The 2013 census states that the combined income of the average household in South Auckland was less than $60,000. The typical new house costs at least nine times that. In 2002, a new house cost just five times the median household income.”
Unfortunately, housing affordability, the cost of land consents, low quality housing standards and so on affect the whole housing continuum; from those who can’t afford to buy homes; to those who can’t rent; to others who can’t find social housing to accommodate them. Because people can’t afford to buy homes, a whole spectrum of people can’t transition to the next level.
More assistance is needed to create greater social housing options, said Major Campbell, as a third of Aucklanders are living in social housing. Although the Government is starting to respond, it is too slow. The need is urgent.
To resolve the current crisis, Major Campbell believes a lot of work has to happen around creating partnerships and consortiums between the land-owners, local authorities and community groups. He also believes the Government has to put emphasis on regional development policies that encourage people to settle outside Auckland to relieve some of this pressure.
Superdiversity has Huge Implications: Mai Chen
 New Zealand’s ethnic diversity statistics are almost double the numbers that make us a “superdiverse society” where 25% of the population is foreign born with over 100 different ethnicities. That demographic has huge implications for New Zealand’s legal, policy and business framework, says lawyer and adjunct professor at the University of Auckland Faculty of Law, Mai Chen.
Mai Chen made this statement during her annual address to the Auckland University Faculty of Law on May 12, where she raised many issues we must resolve to reap the benefits of the megatrend that is superdiversity.
(Note: The Committee for Auckland continues to promote the benefits of immigrant integration. See Heather Shotter’s article.)
“Superdiversity has many implications. Most of the challenges of diversity affect New Zealand’s skill capital, so we must litigate. The Bill of Rights will be subject to much greater case law in the future. Maori rights could be affected by the fact there are more Asians in New Zealand than Maori now. We need Maori to understand the benefits of immigrants being here.
“The growing ethnic customer base means they have growing economic power. It’s imperative employers understand that migrants and their children now comprise 56% of the workforce. It’s about communicating in their own language and also about knowing the products they sell.”
Earlier in the day Mai Chen announced the establishment of a Superdiversity Centre for Law, Policy and Business to compile a Superdiversity Stocktake of key statistics and analysis, studies and surveys to help Government, business, organisations and New Zealanders transition to the country’s rapidly changing demographic profile.
The Stocktake will be published this year and will be updated annually.
The Centre will focus on the viewpoints of the diverse in the challenges they experience and their views on best solutions.
“New Zealand is superdiverse already, and the trend is towards increased superdiversity across the country. To maximise the diversity dividend of increased innovation, productivity and investment, Government, business and organisations need information and analysis to factor into their strategic business planning. The Superdiversity Stocktake will provide that, and it should be a useful resource also for all New Zealanders,” said Mai Chen, who chairs the Centre.
“The Superdiversity Stocktake focuses on eight key challenges as we transition to superdiversity:
- Maintaining social cohesiveness and sense of nationhood;
- Discrimination against the diverse;
- Maximising the economic opportunities of superdiversity;
- Democratic and constitutional ramifications, including to electoral law;
- The place of Maori in a superdiverse society;
- Extremism;
- Preserving our transparent and anti-corrupt business and government culture; and
- State sector response.”
In summary, Mai Chen said superdiversity will be “the big issue” over the forthcoming years.
“There is so much more research needed to help us think about what we are now and where the challenges might come from. It’s about understanding the challenges and adapting to what can be done. We shouldn’t presume that we should have unmitigated diversity at a fast rate. There needs to be a grown-up conversation around this.
“There are issues for diversity,” said Mai Chen. “But my vision is that in 20 years’ time, we will all get on like a house on fire.”
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