By Gareth Vaughan
As recently as last year New Zealand local authorities weren't allowed to borrow money overseas. But Parliament changed that and the Auckland Council "Super City" is at the forefront of moves by local government to tap offshore borrowings, with Auckland Council Treasurer Mark Butcher saying given the massive size of Auckland's investment programme, the Council simply has to diversify its borrowing overseas.
In a Double Shot interview Butcher told interest.co.nz Auckland Council group current debt of close to NZ$5 billion is forecast to rise to a peak of NZ$12.5 billion over the next decade.
"That NZ$5 billion portfolio needs to be refinanced. So our total borrowing across the group is about NZ$14 billion over the next 10 years so it’s about NZ$1.4 billion borrowing requirement year in year out," Butcher said.
Because of the sheer scale of the Super City, established on November 1, 2010 through the amalgamation of eight Auckland councils - the Auckland Regional Council, Auckland City Council, Franklin District, Manukau City Council, North Shore City Council, Papakura District Council, Rodney District Council and Waitakere City Council - Butcher said the move away from sourcing 100% of borrowing domestically over the past year had to happen.
Aside from domestic borrowing, such as through last week's NZ$125 million six-year retail bond offer, Auckland Council now also borrows through the Local Government Funding Agency (LGFA), and via an overseas borrowing programme, the first from a New Zealand local authority, which has an upper limit of US$2.5 billion and the potential to list debt on the Singapore Exchange.
"A year ago we were funding 100% domestically. We didn’t have the LGFA, we didn’t have the ability to fund in foreign currency (which is done on a fully currency hedged basis). We had a historical reliance on domestic funding – retail and wholesale – but what we’ve realised, over the past two years now, is that we can’t rely fully on those domestic investors," Butcher said.
"We are the largest borrower in New Zealand after the central government, after the four major banks and shortly after the LGFA. So we really need to diversify funding sources, lengthen the term of our debt too, and diversify the investor base as we go through this large investment programme in Auckland which is debt funded."
Three way split
Over time the plan is for the Auckland Council's borrowing to be one-third domestic, one-third through the LGFA, and a third from offshore funding.
"So domestic funding is important to us still. The cheapest borrowing cost in the world is to fund domestically or through the Local Government Funding Agency, but it's really important to diversify," Butcher added.
He said all Auckland Council's domestic debt issuance was now likely to be via its retail bond programme.
"We really want to grow that, we want to have those debt issues listed on the NZX. Currently we’ve got about 15,000 investors of which 14,800 are retail, the other 200 are banks, institutional investors and offshore."
Last week's inaugural issue saw stronger than expected interest from retail "ma and pa" investors, even though the interest rate they're receiving is only 4.41% per annum, Butcher said. Auckland Council had "deliberately accepted" all the retail interest and had about NZ$270 million worth of bids in total for the NZ$125 million worth of bonds issued.
"We took the strategic view that this is the first issue under the new programme (so) we’ve got to show our intent that whenever we can get retail investor involvement we should actually take that," said Butcher.
"So it was a great outcome, it was better than we expected. Interest rates are low, we have all this feedback that retail investors don’t want to take something with a yield of 4.41% on it, so we were pleasantly surprised by it."
Has borrowed NZ$525 mln through the LGFA
Meanwhile, Auckland Council has participated in seven of the eight bond tenders run by the LGFA thus far, borrowing about NZ$525 million.
"We are the largest (LGFA) borrower, we’re currently about 40% of their total assets, or total lending," Butcher said.
When it comes to borrowing in its own name the Auckland Council will aim to steer clear of the LGFA bond maturity dates, and take a "real co-operative stance."
"We’ll continue to be a really active supporter of the LGFA, not only to assist us, but also obviously to assist the sector. In terms of volume I think we’ve done about NZ$525 million of funding through the LGFA," he said
The LGFA was created by Parliament passing the Local Government Borrowing Act in September 2011. As well as establishing the LGFA, this legislation lifted a previous prohibition on local government bodies borrowing overseas.
The LGFA is 20% owned by the central government, with the remaining 80% held by 30 local council shareholders, of which the Auckland Council is one. See the full list of LGFA council shareholders here.
So far NZ$200 mln borrowed overseas, from Japanese investors
Auckland Council's offshore borrowing programme, put in place late last year, had its first debt issuance in February. To date the Council has raised about NZ$200 million through it, which Butcher said was primarily from Japanese investors in Australian dollars over a 10 year term.
"The Japanese life insurance companies like the credit story, like the yield, like the diversification to this end of the world. So we’ve had a really good response out of Japan. We’ve just recently been through Switzerland and are getting a similar response from them as well too," said Butcher.
Offshore funding was set to become a critical means of raising funding, getting a diversified investor base, and lengthening the tenor of council borrowings.
Butcher said Auckland Council could only borrow money to fund new investment - capital expenditure - or to roll over existing debt.
"What that means is when the councillors under the Long-Term Plan determine the amount of investment in the region, both new investment and renewals, that then dictates how much we have to borrow," he said. "Under the Local Government Act we have to act prudently and run a balanced budget."
The Long-Term Plan forecasts rates revenue will rise from NZ$1.39 billion this year to NZ$2.35 billion in 2022.
Auckland Mayor Len Brown says investment planned over the next decade includes sinking NZ$5.3 billion into upgrading and renewing roads and footpaths, spending NZ$2.4 billion on bus and ferry services, and splashing out NZ$115.4 million on walking and cycling projects. The multi-billion dollar City Rail Link proposal, which needs but doesn't yet have central government backing, is the "most important transformational project", according to Brown.
11c in the rates dollar paid in interest, doubling to 22c in the dollar over 10 years
Currently for every dollar of rates Auckland Council collects, it pays 11 cents out on interest. With NZ$14 billion worth of borrowing forecast over the next decade, this will increase to about 22 cents in every dollar, Butcher said.
Asked about concerns some ratepayers would have about such a big increase in debt, Butcher said the value of the Council's assets was forecast to rise by significantly more than its borrowing. Auckland Council's about NZ$36 billion worth of assets are forecast to increase in value to about NZ$58 billion in 10 years.
"So debt increases by NZ$7.5 billion, assets increase by NZ$22.5 billion. So therefore equity from a ratepayers point of view increases from about NZ$29 billion to NZ$42 billion. That increase occurs because obviously we’ve got government contributions in terms of transport and capital expenditure, we’ve got inflation in terms of assets increasing in value, you’ve also got the private sector coming in as well too."
'Prudent' level of debt
Butcher said although the Auckland Council's borrowing plans amount to 'big numbers", the region it's funding is big too.
"It’s a third of New Zealand’s population, it’s 37% of national Gross Domestic Product (GDP). Over the next 30 years the population increases by 60% from 1.5 million to 2.4 million, (and) as a percentage of national statistics we get to over 40% of population, 40% of GDP. So if you don’t do this investment, you don’t borrow, not only is Auckland going to not go forward, the rest of the country’s not going to go forward either," Butcher said.
"The credit rating agencies (Standard & Poor's and Moody's) have looked at our debt projections, they’ve kept our credit rating unchanged at AA and Aa2. The Auditor General, Audit New Zealand have looked at it and consider it to be prudent levels of debt."
In a world of credit rating downgrades, every week you hear of further downgrades, for us to maintain our credit rating from independent sources would also suggest that they are looking at it and suggesting that we can also service that debt and refinance that debt as well too."
Under investment in infrastructure in Auckland in the past threatens to hold the region back, Butcher suggests.
"And if we want Auckland to grow then we’ve just got to do this."
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57 Comments
I have a huge number of issue with this on a whole range of fundamentals
1) This money should be for Capital expendture ONLY ( Not current expenditure like funding Port of Auckland losses , V8 Racing , and cultural "events" of interest only to minority groups )
2)There shoud be a rate of return on every Dollar spent at least equal to the costs of borrowing , and not wasted on pie -in-the-sky things like the rail loop.
3) Why the hell are we issuing debt paper yielding 4,4% when Treasury is issuing debt at 2%, and the FED is issuiung paper at almost Zero .... we are paying too much
4) I hope that all the debt is demoninated in NZ$ and not in US$ because it opens us to currency risk when the US Economy revives , as it will . This type of risk- taking borrwoing in other peoples currency never ends well . It would be safer for Auckland Council to spend their ratepayers money at Ellerslie Racecourse or SKY-CITY Casino.
5 )Why do we continue to own the Port which is losing ratepayers money hand over fist , the Port operation should be sold and priviatised to get it on a proper commercial footing and raise Capital from the sale
6) Why does the City not live within its means like all of its denizens must do?
Boatman, try contracting to Auckland City or any local council for that matter. Deal with the staff for a few months, then you'll begin to understand why local council is always SNAFU. Don't stay too long through, or you'll be in danger of sinking to their sub-minimal level of competence...
The stuff is in the air, Boatman. One whif of it, and one's gone! Then it becames generic, and whole cities of them develop. I hear the debraining air conditioning machine is standard equipment for all US governmental offices, and they (g'mentals) have started implementing this policy abroad in all OECD nations.
HGW
Don't worry Andrew. The debt is all guaranteed.
By the ratepayers of all the councils who are shareholders of LGFA:
.. if we want Auckland to grow then we’ve just got to do this
Gee. Where was that referendum on never ending growth....
With NZ$14 billion worth of borrowing forecast over the next decade, this will increase to about 22 cents in every dollar, Butcher said.
Cue Disaster Capitalism. (Which I have long suspected was the real long term reason behind the super city... wait for a disaster (or engineer one through over-borrowing), then get the monopoly assets sold and milk the rate payers....
Absolutely right. 2 objectives National came in with- tie Auckland up in massive beaurocracy (as was done with Chch) and usher in TPP. Both of these moves will make any future political action irrelevant. Saddled with debt there will be no recourse. Unfortunately, NZ already approximates a 3rd world country in so many respects, that apart from the sentiment that we are somehow different, the path is already laid out.
The new 3rd world countries are the bottom tier OECD countries of the past, because the snake is now eating its tail. The people of this country would have to wake up and take bold steps a la Iceland and be willing to forego the easy way- reliance on credit and foreign debt. They won't because most people feel the same as commenters here; that NZ "has to grow". Fear of the that smaller danger will open NZ up to the larger danger which countries like Hungary are facing now. When growth is no longer possible, all of a sudden the most valuable commodity is a nation's ability to act in its own interests.
As all the investment gurus are saying now, this is a time when return OF investment rather than return ON investment is paramount. Time to scale down expectations and start looking at how to hold onto what we've got. But no one gets it until after autonomy is gone, which is as sad as it is predictable.
MP indeed, and you should be one! That is precisely what is needed, think of one's country first. The snake is eating it's tail, and we are it! The bottom of the OECD...
Control engineering gone amock is the best way to describe OECD central banks' policies today. They are punching numbers into absurdly simplyfied computer models and using the results as a proxy for the real economy's behavior.
Over ther past few cycles the transfer function of the system has resembled a critically damped oscillation, one which will inevitably become ustable in time. Kinda like the speed-wobbles that develop when going downhill too fast on a bike.
The output graph of this function has exhibited lower lows and higher highs over the past few decades. It will become unstable in time, as oscillation amplitud increases unbounded, they will loose control!
Then the world will re-adjust. A fundamental premise of economic science is a balancing mechanism constantly at work. It is a natural science, in the sense that man is not the only one who economizes, every living organism does economize energy and resources in a natural setting, whilst completely unaware of doing so. Only men (and some women!) try to control it, deluding ourselves that correlation of facts, is causation of effect.
Regards,
HGW
In that case, you can borrow my copy of Jared Diamond's book this hols.
Lot of historical instances of resource-depletion, overshoot and collapse there.
I totally agree we should learn so as not to repeat - particularly as we're running the experiment globally this time.
Oh, not that bit of history, eh?
:)
Or, even, Hugh, borrow My copy of that old hippie (Whole Earth Catalog - 'member 'at?)Stewart Brand's 'Whole Earth Discipline - an Ecopragmatist Manifesto' ; where amongst other things he urges:
- Dense Cities, for the intellectual ferment and innovation they generate
- Nuclear energy, for the low-carbon future
- Transgenic crops, for the health and bio-fuels benefits (and remember maize is an anciently GM'ed artificial species, so history is with us here...)
- Restored wildlands, for the obvious reasons
- Geoengineering, for as he says, 'We are as Gods - better use this power wisely'
Brand has, shall we say, a rather wider perspective than most. His 'How Buildings Learn' is still one of my most treasured books (along with the 1922 AA Guide to South Island Motoring - a fascinating slice of history).
Nothing like a Contrarian View, eh?
I am looking forward to the day when our old tormented pal PDK comes over our side, when he realizes just how good the market economy is at using resouces wisely.
...........
When it comes to the market economy the developers focus is on profit and run (at least at the "tacky end of the market" -[using Olly Newlands words]. There's always a market for a nice warm carton house.
To achieve the best longterm results in housing a clear slate is needed. In Singapore the state owns 80% of the stock in a two tier system of ownership, but the state dictates when it is time to knock down and redevelop. What the market does in NZ is (e.g) let an area run down untill the old people die out and people sell up (for their safety) and then the land lords redevelop and increase the density.
The suburbs are a ponzi scheme
Gibber, Steven wants to use urban planning rules to stop Auckland growing, (he says Auckland but he obviously wants all of NZ to be stopped). That is he wants no new houses, roads, businesses etc. But the population will keep growing, new people are entering the workforce and they need jobs and business opportunities, they need somewhere to live. New Zealand has terrible housing that is cold and damp, especially prevalant in our rental housing stock.
People are trapped by unaffordable housing. See the following link for the kind of problems we have http://asthmafoundation.org.nz/wp-content/uploads/2012/03/Michael-Baker-poverty-and-infectious-diseases.pdf housing affordabilty chart page 27 compared to hospitalisation rate from infectious diseases page 25.
You could also read the latest child poverty report to learn how unaffordable housing is impacting on our kids.
http://www.occ.org.nz/__data/assets/pdf_file/0008/10151/Child_Poverty_Report_Web.pdfSteven might think the world is about to end and whether this is true or not, his solution harms the poorest segment of our society. He chooses not to debate this because he has no fair solution.
Brendon - on a planet which can support perhaps 2 billion at subsistence level, perhaps 1 billion at our current level, there is no longer a 'fair' solution.
Monkton made the same kind of idiot comment "I can't believe they have to eat mud pies".
Doesn't matter what he believes, it's a case of carrying-capacity. We overshot via tapping into millions of years worth of stored solar energy, a one-off short-term boost.
We can't do much about the rest of the planet, but putting NZ on a resilient footing, is a valid and proactive target. Business as Usual is not part of getting resilient.
Ungrading the existing housing stock, is indeed a valid target. There isn't the time left to replace with new.
"But the population will keep growing, new people are entering the workforce and they need jobs and business opportunities",
Read: But the people want to stay in their warm staterooms, and won't be forced into the lifeboats. Getting into the lifeboats proves there is a sinking, and if we refuse to get into them, it won't happen.
Affordability? You missed the debate round here? Oil is required for all activity - from the building of the houses, to the generating of the payment. Sorry, but 'affordable' went out the window about 2005, although rampant inflation might eliminate the numerical equation. Won't solve the resource-supply problem, though.
Debate? Im all for it, ditto PDK bring it on, and no I odnt think the world is going to end.
Actually strictly speaking not true on the urban limits and much else of what you claim. If its done in a lost cost way, ie the council takes the agricultural land of the owners in suitable areas en-mass changes its zoning and releases land en-mass at dirt cheap prices....then some, yes sure.
I think its mis-guided and if it isnt done properly it will be a disaster...knowing how things work, it will be a disaster.
You also assume growth, with Peak Oil growth is finshed...it wont happen, pricesa re going to go down a lot.....like 60~75%.
NB Poor housing stock has nothing to do with growth, it needs to be upgraded.
Un-affordable housing is due to political mis-management by Labour, which is funny if it wasnt so sad....really the poor have been screwed over by Labour....but Labour knows full well there is no where else to go....though the Green's % of the vote might suggest a paradygm shift.
regards
Steven, the problem I have with peak oil is two fold. Firstly the consqences are unknown, we do not know how bad it will be and when it will get bad. One thought is that Melbourne had something like 1 million residents at the turn of the 20th century. So Australiasia can cope with some pretty big cities in a oil free economy. But the consequences of limiting growth has definite costs as I showed. Are you really confident that preparing for peak oil is worth the costs?
The second problem is that their is no consensus on peak oil so there is no society wide agreement on spreading the costs fairly. A lot of the plans promoted seem self serving. Protecting the existing elites and pushing the costs onto others.
Brendon - consequences unknown? Sorry, they've been thought about, studied, written about for a long long time. You - and to be honest, the bleating majority - may not know of them, but I've been attending physics/energy studies lectures for 6 years now (to learn, not for the qual) and they're known, alright. They've been known - seriously scientifically known - for 40 years.
Growth will limit itself - you can't have exponential growth of anything in a finite sphere of operations. That is not up for debate - those who suggest economic growth can go forever are simply lying. We can investigate whether they're lying to themselves, or knowingly, but a lie it is.
The question then, is whether it is better to hit the wall in a controlled and planned manner, or in an uncontrolled and unplanned manner.
Anyone with an IQ over 100 should be able to work out which is the better option.
We have to presume that Joyce & Co know the reality - they certainly understand that 'wealth' is resource-based, else why the push? - so the question of them is; do they somehow think they'll be immune via the holding of 'wealth'? If they do, I suggest they're in the 'under 100' class. Elites of the past sometimes repressed with force, and relied on ignorance; my kid's generation aren't going to go meekly, and they're smart enough to take the elite out as per Syria.
Relate it back to Auckland. What is needed is an immediate curb on immigration, an immediate deterrent on litter-breeding, and a discussion about sustainability. I suggest the rail-pushers are thinking in terms of existing types of work in an existing CBD. That won't be the case. I also suggest that the 'more roads more sprawl' pushers will be in triage mode early. It may be that the sections can be big enough for local food production, or that village-green, or allottment-spaces, can ease the morph; but it is better planned for than not. All new housing, and 80% of existing, will see the day that oil is no longer available (and will have seen prior to that, the definitive end to growth-based finance).
Don't shoot - or blame - the messengers. The Nero legend suggests it's not much good denying, either.
Brendon there is grow auckland and there is grow auckland. The problem I have with this idea is its put out by the council and I dont consider them competent and they want to take out huge debt to do it.
Now if private business/investors want to add housing I have no real problem with that. If the boundary is relaxed in such a way as to release say 20,000~40,000 plots all at once at a very low cost (ie agricultural land prices, say $5k for 800m2) in selected locations I am all for that.
In terms of 3rd world country, 1st world countries are only that because of their un-sustainable energy use and huge debt. Take a look at Greece and Spain on youtube for how the debt is crippling them....how the hospitals have limited drugs and huge un-employment etc etc.
The debt as it stands probably cant be paid off so they will default and 3rd world is where they will be by the look of it.
NZ could easily go there if we continue as we are....when councils default then it will be for Govn's to pick up the cost.
regards
The 3/4 headed leftie govt are on their way - they are going to be all in with Rail loops, airport rail etc - so get ready for some serious infrastructure spending.
Also - Stock up on Wellington Property because all those pencil pushers who lost their jobs under DonKey are going to be getting their cushy jobs back.
SK
SK I hope DK (donkey kong!) becomes history, and I agree with Windy property coming into favor. I have plans to move there soon. Brilliant city in my opinion!
However, all that infrastructure will be developed with borrowed money and the stream of cash to service it will be extracted from the rate payers (us!).
Money grabbers, they all are!
HGW
At most, 1.5 million people are living in AKL.
It is not in anyway a super city. Please justify your heavy borrowing.
Does building infrastructure really that costly?
Which contractors are you going to use?
Do you run a global tender process?
Are you obliged to use local companies with inferior productivity but superior costs than international ones?
Are you obliged to use local companies with inferior productivity but superior costs than international ones?
Such as Mainzeal - doing a fine job of chewing up taxpayer's money in the never ending task of building a food court at Victoria University, in Wellington.
Maybe its your english but do you mean inferior productivity and higher costs? ie "superior" doesnt make sense to me.
National tenders for smallish projects is sufficient, also bear in mind the tenderer and building has to conform to NZ laws and regulations.
regards
Asked about concerns some ratepayers would have about such a big increase in debt, Butcher said the value of the Council's assets was forecast to rise by significantly more than its borrowing. Auckland Council's about NZ$36 billion worth of assets are forecast to increase in value to about NZ$58 billion in 10 years.
"So debt increases by NZ$7.5 billion, assets increase by NZ$22.5 billion. So therefore equity from a ratepayers point of view increases from about NZ$29 billion to NZ$42 billion. That increase occurs because obviously we’ve got government contributions in terms of transport and capital expenditure, we’ve got inflation in terms of assets increasing in value, you’ve also got the private sector coming in as well too."
Surely a release of equity back to ratepayers would allay concerns about the inexorable rise of rates bills, then asset and liabilities would match? Or is this asset revaluation formula a fervent wish rather than a realisable reality?
Mind boggling....so we shoudnt be worried because they have good accountants. la la land...
Lets look at the opposite effects in a depression, deflation, assets will fall in value.....rate payers will be under (even more) financial stress....higher un-employment, wage cuts, closing businesses etc.
Great, just great....
If I had my way the jails would need to be a lot bigger and the ppl making decisions like this would be a big % of those I'd be locking up.
regards
Where is the mandate for a bigger Auckland? It's either sleep walking into "growth" and debt to futher grandiose empire building visions or as Gibber said above, a cynical plan for disaster capitalism, forced privatisation to pay down unsustainable loans.
Ask US municipalities and State governments about how they're going with all the debt they were talked into as affordable by their financial institutions.
Clogged roads, crowded filthy beaches, unaffordable housing, overtaxed water, sewerage and power supply....what's the point? Bragging rights at international conferences and a mention in Wikipedia?
What do you mean by mandate? Most of the causes of population growth is uncontrollable unless you restort to serious dictatorship policies. Would you stop domestic immigration? Would you stop foreign immigration for families. I bought 3 foreign nationals into NZ because I am a kiwi and they were my kids and wife, should that be mandated? What about foreign students?
Or would you mandate away Auckland's business strengths? force multinational head offices to relocate? Put some limit on Aucklands port so imports have to go elsewhere. What is your point?
Or can people come but you mandate nowhere for them to live, forcing the poor to live in slum caravan parks?
Brendon:
Growth is the most mis-used word around these parts here.
WTF is referring to Mark Butcher's assumption that (everyone?) wants Auckland to "grow"
You refer specifically to population growth and misconstrue WTF's point as pertaining only to population (which it doesn't) and therefore Mark Butcher's presumption of "growth is good" or "growth is necessary" or even growth is a "strategic target" which it isn't, unless someone has determined it to be so, which they haven't. (If so who?)
If you are a kiwi born and bred why did you go and purchase (buy, bought) 3 foreign nationals?
Are you a kiwi born and bred?
Static population policy. You as a citizen are entitled to bring your family here but that means another family of four misses out. Kiwi's for the most part do not wan't a bigger population (Herald poll had over 60% rejecting more than 5m) as it would destroy the things they treasure, like access to an uncrowded outdoors. Ironically that is also a primary motivation for immigrants. Too many kills the golden goose. Students are mostly on temporary visas.
There is widespread opposition to extending the Port of Auckland with further reclamation. Auckland as a city doesn't exist purely for commerce. Its inhabitants are citizens not just consumers or economic units. We have a fair balance at the moment I think. Too many people just for commercial reasons, to generate activity, is classic quantity over quality rationale. I think the Australian Productivity Commission recently put to rest the notion that high immigration spurs a better economy.
I probably miss a lot of posts. I sort of get mini-breaks and then I can be absorbed, busy for hours.
fairness, nature isnt fair....it simply is. We construct a society that attempts to give some fairness to all, we can however only do that within the boundaries of what we have available.
anything else is short term fantasy...delusion.
PDK doesnt say or agree that its OK to sacrifice the poor, read his posts....indeed he's sort of retired and contributes a lot of his time to help others for free.
I dont know where you come from over peak oil....I simply see that you have no concept of the huge negative change that is going to have on everyone and especially the poor.
As PDK says what you are is really a deck chair shuffler on the deck of the titanic. ie when you say a "possible" peak you are denying the inevitable but advocate "helping the poor".
Lets examine that peak oil briefly, we are on a finite planet, every single element is limited, therefore at some stage there will be no more to extract, thats maths and science. Way before that is the maximum rate of extraction, that is about the half way mark or about now for oil, give or take 5 years, that is a geological, physical and mathematical fact....really it cannot be refuted.
So to continue, you are ignoring the ship is sinking, the first class are in the few lifes boats and the steerage are kept down there with force. PDK and I are trying to say there is space and we can save a few...you are saying, no there is no problem just move the deckchairs some more, maybe offer some in steerage the odd spare deckchair.
So really fairness depends on your point of view....what we will see is huge social unrest and riots and possibly worse....colapse of society as we know it. The worst of these effects could have been avoided if in the 60's and 70's we'd set about seriously controlling population, we didnt. Instead the namby pamby do gooders like the half wits in the UN and Vatican insisted people have rights to have as many children as they want....was the mantra....
Like I said nature isnt fair it just is....it will correct the imbalance for us as we have chosen not to do so ourselves. In the meantime many ppl such as yourself dont want to believe what PDK and I are saying....
So in terms of auckland's housing its moot.....
Now Im off to do research....a particular theme Im keen on.
I suggest you spend some hours at,
It will show everything you didnt want to know.
then maybe there is a good debate.
regards
Steven, I think the posts have got a little messy, so no worries.
I think if peak oil, sorry I mean when it hits, New Zealand should be a good place to be. We have plenty of renewable energy. A good climate for growing things and making low energy housing.
I do not know why you guys have to be so negative. Life might even be better. We might have a stong local economy, less hooked into the 'globalised' world.
I don't understand how shoving more people into Auckland is going to make it better for the folks in the caravan parks.
If a couple o hundred thousand moved to Aus (for example) and no new migrants come in, I'm pretty sure those people in the caravan parks might find they could afford a higher quality of housing.
But if a couple o hundred more thousand are crammed into Auckland, pray tell how is that going to benefit the poorest members of our society?
Or, as a society, we could aim to balance immigration with emmigration and rebuild the housing stock to a higher quallity level.
Most of Auckland's population growth is uncontrollable. It is domestic immigration, needed skilled workers etc. We need an urban plan flexible enough to cope with new growth without leading to house price rises and symptoms of unaffordable housing like people living permanently in caravan parks.
Of course limiting immigration where we can and preventing non citizens from buying existing homes would help the housing market. But the key thing is reforming the planning system.
Most of Auckland's population growth is uncontrollable. It is domestic immigration..
Brendon - I disagree. I perceive most of Auckland's growth as off-shore in-bound migration.
However, the Pol-Lies of the Left and Right Wings of the Neo-liberal Treasury party both appear to be wed to the "Growth to infinity and beyond" paradigm.... I do not believe that Either Labour or National will volutarily move to a stable population policy. They have too many vested interests in both parties keen to keep the population growing. While that policy remains in place I belive the numbers of people needing to live in caravan park type accomodation will continue to grow.
Q&A Interview with Massey academic Paul Spoonley (who is pro growth/pro immigration)
http://www.nbr.co.nz/article/150000-left-nz-recession-began-ck-124153
PAUL – Well, just to talk about New Zealand for a minute – natural growth, that’s the births over deaths, is still the most important factor in New Zealand’s growth. But in Auckland, our most important factor is immigration. So we are one of the major destination cities around the world, and you can see that in the make-up of Auckland – the number of people who have been born overseas.
JESSICA – Let’s talk about that immigration mix, particularly in a place like Auckland. 40% of the population is born overseas. What is that immigration growth looking like long term?
PAUL – Well, the first thing is that 40% puts us right at the top. I mean, there aren’t many cities around the world that have 40% of their population born overseas. I mean, Toronto, Vancouver, but really Auckland’s right up the top there. Increasingly, if you look at the figures for the last year, we still attract people out of Britain, but we’re also seeing very large numbers coming out of India, and the growing population is the Filipino population. So we’re what’s called a super-diverse city, so we— immigration’s very important to the city’s growth, but it’s the diversity of that immigration population that’s really important, and it marks Auckland out. I mean, people tend to think of Los Angeles or London. In fact, Auckland’s more diverse than those cities.
It's time for a pause and a debate about what it means to be a New Zealander, what are the qualities we want to retain and which we are happy to change. I suggest that while most kiwis are supportive of cultural diversity, nobody voted for the recent level of immigration. Too many too fast. Auckland's property market and public infrastructure cannot cope with more "growth".We are near or have reached the point of negative marginal returns.
Because of the sheer scale of the Super City, established on November 1, 2010 through the amalgamation of eight Auckland councils - the Auckland Regional Council, Auckland City Council, Franklin District, Manukau City Council, North Shore City Council, Papakura District Council, Rodney District Council and Waitakere City Council - Butcher said the move away from sourcing 100% of borrowing domestically over the past year had to happen.
Um firstly almagamation of the councils does not create more people the new entity represents. Same number of people, same infrastructure, why can't the domestic funding for the eight fund the new council? Secondly wasn't a single super council supposed to bring greater efficiency and cost savings - Rodney Hide?
"The credit rating agencies (Standard & Poor's and Moody's) have looked at our debt projections, they’ve kept our credit rating unchanged at AA and Aa2. The Auditor General, Audit New Zealand have looked at it and consider it to be prudent levels of debt."
Well that's a relief. Those guys never get it wrong.
Gibber. My take on the situation is that for a generation politicians and business community have not cared about creating opportunties for our young. At 15 our young have some the world's best education results in the international Pisa test. But we saddle those young with large student loans and high house prices. Businesses focus on low cost business models rather than investing in high skills. Studies show that kiwi graduates staying in NZ get some of the lowest payoffs compared to other countries for their education.
So these young leave NZ in large numbers. Politicians and the business community instead of solving this problem just open the immigration tap... problem solved, no worries, put another sarnie on the barbie and hand me a tinnie...
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