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PM says the Wellington emperor has no clothes

  • May 7th, 2013

A Canterbury couple this morning will be echoing John Key's frank warning to Wellington (that it is dying). They are Wellingtonistas. They stay with Cathy and [me] for up to a week for every International Arts Festival. They come for regular mental health breaks.

And last week after a few days here they told us they thought Wellington was sick. They noticed a lack of energy among the friends they usually visit. Their friends here in business seemed worried. We talked about apparent lack of reaction from anyone in leadership in Wellington to Jeremy Moon moving his creative team to Auckland. They mentioned empty buildings and the lack of construction. They were sorry for us.

I knew they were right. It chimed with what I have been noticing for a year or so. And it is not just the necessary downsizing of the government workforce here. Much more telling is the desperate enthusiasm of people who are important to Wellington, about amalgamating the region's councils.

I think they are misguided. They could well succeed, though rearranging local government tatty deckchairs could make our predicament worse (more on this later).   But when challenged they react with real anger. The reasoning not logical. But they see a desperate need to "do something", so amalgamation it is, to feel that 'something' is happening.

We should therefore be grateful to the PM for saying openly what many in business have been saying sotto voce for several years.

I'm concerned that the problem is hard to fix partly because of our success, and what we love about living here. The concentration of high earners, administrators, academics, professionals, journalists and other artistic types who like living here is exactly what Richard Florida prescribed. But Florida has had to admit that his key thesis is wrong. It does not necessarily trickle down to benefit all. Many creatives (and officials and academics) rely on scraping taxes and self reliant initiative off boring commerce and its workers. Control workers get their incomes and their satisfaction from second-guessing others and ordering them around. But as Florida has acknowledged, even creatives do not necessarily repay those who pay them, let alone bureacrats and academics. Instead they may despise vigour as crassness,  and irreverence as ignorance. More importantly they vote for people like them, who will promise to maintain whatever is the status quo.

Many creatives' ignorance of business and what business actually needs and seeks (basically for officials to get out of their way) leads to an unwelcoming hostility to change – and unwillingness to accept mistakes and to move on in optimism. All are the essence of successful business cultures. Wellington's pathetic inner city by-pass is a case in point, flowing into doing nothing around the Basin Reserve. For nearly three decades politically active Wellington has been faffing around trying to find costless solutions that offend no-one, and in particular the precious types who find reasons to hate all change. We could have built the covered trench, or the open one 20 years ago. And in a dynamically growing city where commerce finds transport frictionless, if we did not like what we had, we'd have torn up the bits we did not like and rebuilt them. Instead, we've prevaricated and got the worst of all possible compromise solutions – a bypass that is not.

Creatives and control workers think they know how to make a city thrive. Curiously it is by taxing others and 'fostering' themselves. They want to run events, and to subsidise favoured businesses opening. But never anything as boring as just getting out of the road of business people and would be home and apartment builders and developers who are already here, and want to stay, but can't because collectively the disadvantages are coming to outweigh our advantages.

Businesses leave as our living attractions cease to outweigh factors like small market size and a too small runway, and night curfews for planes, and the cost of housing and commercial space. As fewer and fewer business people remain, the delicate balance with the 'creatives' and control workers may have tipped. Our local politics now favours the decision paralysis that suits those who love consultation and other political processes. Can-do types steer clear of local democracy. A lack of humility in those who win office creates a climate uncongenial to those who must toil in more ordinary productive businesses. All around the world the left elite look down on money-making from risk, and those who must do it.

Can it be reversed? I think so, though just how is unclear at the moment. On our side is the fact that thousands of our creatives are now unavoidably involved in making money. They have to appreciate risk taking under uncertainty. They want to be facilitated, not directed. If we can mobilise them alongside our residual leaders who understand business we should be able to revive our animal spirits. So thank you John Key  for your frankness.

Comments

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  • Wellington ratepayer
  • May 7th, 2013
  • 12:11 pm

The first thing we could “do” is elect a no-nonsense mayor – someone like present councillor John Morrison.

Our current mayor is absolute pants. Clueless.

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I agree entirely with your assessment of Wellington’s state except for one point – the decline has been going on a lot longer than a year or two. I began to notice the outflow of businesses from Wellington in the late 90s/early 2000s. This loss was disguised for many years by the huge expansion of the public service under the Clark Labour Government (staff numbers increased by more than 50% between 1999 and 2009). There are almost no manufacturing or distribution businesses left in the greater Wellington area and the empty industrial buildings in formerly thriving industrial suburbs like Gracefield and Porirua testify to this. The only part of the private sector that has survived the decline to any extent is the retail and service industry that supports the public servants that live here and these are now visibly declining, as evident in empty shops even on the Golden Mile.

This demonstrates, should it be necessary to prove something so obvious, that it is the private sector that ultimately creates all wealth in an economy. It is all very well for John Key to highlight Wellington’s decline but as prime minister he has done nothing in terms of significant policy change to reverse the decline.

The broader risk for New Zealand is that our high commodity prices, which have protected us from the ill winds of the global economy in the last five years, are unlikely to remain high in the face of the sustained economic stagnation in the US and European economies. Greece and Spain are examples of New Zealand’s future on our current trajectory.

John Key is in a position to change all of this but after four years in power there is little doubt he lacks the courage, inspiration and principles to change anything.

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  • Ross
  • May 7th, 2013
  • 3:46 pm

Great piece Stephen. I agree entirely.

Kiwikit — why does central Government have to solve Wellington’s problems? Steve Maharey had an excellent piece in the NBR last weekend. Basically he said if there is a problem ” someone(or several people) have own it , deal with and move on” That someone in Wellington’s case is NOT John Key or central Government. It has to be locals and preferably our council but we may have to wait until after the elections later in the year to get action.

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Ross, I think you missed my point entirely. I did not say central government should solve Wellington’s problems, only that it was the primary cause of them. The answer is for government, central or local, to stop thinking it can generate economic growth and get out of the way.

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  • Mark Wright
  • May 7th, 2013
  • 6:16 pm

Hi Stephen,
While I agree with much of your article, I wonder whether the factors for moving out of Wellington aren’t more complex (or at least different) to those you list.

You included:
– small market size
– the cost of housing and commercial space

Taking these two in order. Is small market size really an issue that’s addressed by moving within NZ? Expansion to the Auckland market is not hugely difficult from Wellington (and our shorter runway and curfew doesn’t present much issue for commuting between the two).

I was under the impression that most businesses that leave, do so to move to Auckland. Are housing and commercial costs really cheaper there?

There must surely be more than that driving businesses away (especially the mountain bikers!). I’ll concede that in my case, the airport and its international capacity is certainly an issue, but I can’t ever see it driving us to Auckland (more likely offshore in some fashion altogether).

I’d be interested in hearing some real stories of these factors – if only to help my decision making at the next local body election.

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  • Mike Mckee
  • May 7th, 2013
  • 7:11 pm

To Illustrate our councillors, the winter before the last election two streets in Miramar got flooded again.
The residents complained it happened each year and WCC weren’t listening to them.
A WCC officer opined that it would cost too much to fix properly and they didn’t have the budget.
I waited for our sitting councilors to castigate him publicly as he had opined.
None did.
I voted for none of them and won’t in the future.
Infrastructure is vital as is a leadership with direction and pace, something we don’t have at present.

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  • Tropicana
  • May 7th, 2013
  • 7:11 pm

Sorry, but it’s “They stay with Cathy and me” in the same way that it would have been “They stay with me”, not “They stay with I”

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  • Mark Wright
  • May 7th, 2013
  • 8:11 pm

I followed your link to the article about Richard Florida … then to his rebuttal. Interesting reading. I think he’d probably dispute your assertions about his recent admissions, but more interestingly is his point about cost of housing.

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  • Daniel McCaffrey
  • May 7th, 2013
  • 8:14 pm

Fair comment.
Putting another 2000 meters on the airport runway and digging a tunnel through the Rimutakas are essentials.
The bypass fiasco dragging on for 30 years because some green religionists thought cars and petrol was a thing of the past says it all about the wellington attitude.
Its possible the left contempt for business might be seen for what it is by a new generation and the city revive.

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  • Rosy Fenwicke
  • May 8th, 2013
  • 12:42 pm

I completely agree with you. For too long the council and its vocal supporters have obfuscated the real issues in developing the city. And time and again the naysayers are proved wrong and the world has not ended and it still looks pretty good.

Flying into Auckland yesterday morning, I saw a layer of smog over the downtown area, dirty brown smog as seen in overseas cities for the first time.

Wellington has a responsibility to present a viable alternative to business and people as a habitable place to live or poor Auckland will be too crowded, too polluted and too congested to function as a business hub thus crippling the rest of us who have come to see it as the only option for these activities in NZ. It is NOT.

We need a longer runway, we need negotiable streets with room for public and private transport including safe cycleways. We need infrastructure to the suburbs and we have to stop acres of houses being built miles from facilities making them only liveable to those with cars, empty during both the weeks and weekends.

We need business because people with money support the arts and NOT the other way around.

As you say, if there are business people who want to use the advantages of the region- we need to get out of their way.

We have to have the roads in and out of the area made accessible to freight, if we want the port to function as more than a log site and we have to develop the port as a competitive alternative to other lower North Island and Upper South Island ports. We need to get off the proverbial and defend what we have and stop giving it away.

For these reasons we need amalgamation- Get rid of the 309 different strategies gathering dust on shelves in council offices, get rid of under-performing councillors who refuse to see the big picture and get a Mayor who is 1. aware of what is happening in the city, in the country and in the world! .2. can make an informed decision. 3 has the courage to defend that decision rationally based on facts and not WHAT IFs? favoured by the fear-mongers who continually hold the rest of us back or worse repeatedly sabotage what we have left and then just sigh when it goes.

So Stephen Franks- you would be a great Mayor! When are you going to stand?

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Rosy

I endorse all you say, and admire how it is said, until the second to last paragraph. Unfortunately I see no connection between the size of Councils (their territorial scope) and Councillor (or Mayor) quality. I have had plenty of exposure to them, starting with a couple of years in the Office of the Ombudsmen many years ago when we staff had daily evidence of a lack of correlation of size with quality. Think Christchurch. Think ECan. I was struch by the dynamism of Melbourne last week, which is made up of a plethora of local authorities.

Indeed putting all our eggs in one elected basked could be more risky. They become immune from local comparison and competition. They come to have so much economic power that even the local media are too scared to comment freely (all that advertising power now in the hands of one CEO). Local consultants jump to order because instead of a range of customers, only one is left, who can tell them what to say in their “independent” reports on pain of not getting the next contracts.

The local government problem lies in the erosion of command, efficiency, satisfaction and honour for elected members. Good people will not stand. They have better things to do with their lives than to spend long hours every day with the accidents of name recognition. Under representative democracy those elected are there to lead, to make decisions as efficiently as they wish, and to implement them as best they know how. Our remedy if we do not like what they do, is to sack them at the end of their term. It served us well for 150 years.

Sadly we replaced it a decade ago with participatory democracy. Our councillors now cynically preside over endless rounds of planning and consulting, with not much doing. Participatory democracy I learned in my student politics days is a form of paralysis ornamented with spasms of mob rule. The paralysis comes from its preoccupation with the rituals of process, as the own goal defence against rule by those who love politics. The left wing student politicians of my era have managed to install their model across the country, in their interests and at the expense of the huge majority who have better things to do than trying to order their neighbours around, in’consultation’ and submissions.

So successful city leaders from business and other spheres will not frustrate and demean themselves greasing for compromises with people they do not respect, after sitting for hours listening to unrepresentative whingers who primarily want to live off their fellow ratepayers, or to prevent any change.

We have to be very grateful to the few who stick it out after proving themselves with success in other spheres. We trade on their sacrifice.
I think there are simple ways to steer things back to a more constructive balance. I’ll post on those shortly.

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PS Rosy

I hope you stand, despite this bleak warning

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