By Bernard Hickey
Prime Minister John Key has floated the idea of creating new Urban Development Authorities (UDAs) in Auckland that would allow big construction firms to build both housing and horizontal infrastructure in specific areas and then recover the costs through development contributions.
Key said he had been approached by Chinese state-owned infrastructure companies and others willing to build both residential developments and the water and roading infrastructure needed to support those developments. But to do this, the Government would need to change the laws to allow the creation of these UDAs, which would then pass on development contributions directly to developers, instead of the Auckland Council.
The new way of funding infrastructure would effectively set up a parallel type of local government authority for a specific area that bypassed the current Council authorities and over-came the current infrastructure funding problems the Auckland Council has.
Key made the initial comments on Saturday to a Chinese Chamber of Commerce event in Auckland when asked by China State Construction Engineering Corporation's (CSEC) New Zealand Managing Director Timothy Yang about the potential for it to do more infrastructure work in New Zealand.
Yang said CSCEC had offered with Shanghai Pengxin to fund and build the NZ$387.8m four-lane Penlink highway to Gulf Harbour, but had not gotten anywhere with local Government.
"I'm now getting quite a few developers saying that sort of thing to me," Key told NewstalkZB on Monday morning.
"At the moment they can build the above ground stuff -- the housing. They can't build the water, waste water, roading, those other networks. There is an argument to say that what should happen is a developer, as long as they meet the standard, should be allowed to build all of that infrastructure, potentially under the auspices of an Urban Development Authority, so you'd get containment of that particular area and potentially some financial way of the developer then recouping the costs, so instead of the development contribution going to the Council, (the funds) going directly to the developer to allow them to do that," he said.
Asked if the Government could change the law to achieve that, he said: "We're always prepared to explore new and interesting ways of getting things done."
Key was quoted as saying on Saturday that Urban Development Authorities could be used to grow at a faster rate in Auckland.
"If Auckland is going to grow at a consistently faster rate than it historically has, it needs to build the infrastructure to match that more ambitious growth rate," Key was quoted as saying by the NZ Herald.
"It can't have the lead times that it's historically had. If you look around the world, urban development authorities have been used quite successfully in Australia and elsewhere to support faster infrastructure in a more contained way. We've got to do a bit more creative thinking," he said.
"Built to the right standards with the right conditions I can't see why that wouldn't be possible," he said.
"We are turning our mind to those issues. It might require some sort of changes. As you pointed out, you are building huge constructions around the world, there's no reason why you can't build that here," he said to Yang.
The Productivity Commission put the case for the use of Urban Development Authorities in its June 2015 'Using land for housing' report (pages 12, 285-295).
Key dismisses 90 day trial research
Meanwhile, Key responded to research commissioned by Treasury and done by Motu, which found no evidence the 90 day trial scheme improved hiring generally or of disadvantaged workers.
Key said he did not accept the research and had spoken to cafe owners and other small businesses who liked the scheme.
"If you take the advice away for a moment and put yourself in the shoes of a business owner with three employees, who is thinking of taking on a 4th one, you can't tell me the fact that they know the impact that one staff member that might not work out would have on their business, and you can't tell me that they fact that they can sever that relationship isn't a factor in allowing them to hire them," he said.
98 Comments
God Save NZ.
Allowing Chinese Buyer to create havoc with house prices was not enough. Slowly and steadily selling NZ to Chinese.
No wonder is not taking any actin to curb speculation and admitting the cause of the Housing Crisis in NZ.
Everyone should beware specially opposition and media and should not allow foreign power to rule us.
God Save New Zealand sorry China Land.
via 3d printing....
http://www.stuff.co.nz/life-style/home-property/70675881/3D-printed-hou…
We can see a pattern emerging here. Treasury are providing policy advice based on professional research - Key knows it better, because "look, I just had a chat with blah blah blah" ...
Key needs to take forceful action and disband Treasury. What a waste of money and time when we can rely on the genius of our great leader instead.
These are unfunny times.
The Council is only interested in the rail tunnel which will only benefit a few commuters from the poorer parts of Auckland. It doesn't even deal with all the dangerous level crossings.
To call it a loop is disingenuous. Sydney has a loop, this proposal is more like a continuous line in and out of the city.
You dont need to go as far as Africa - Fiji - they are building a dam on Taveuni, and have built a desalination plant at the southern end of the island (although with no maintenance program post installation it is currently defunct). Samoa - Parliament buildings, hospitals, numerous other municipal projects... Look out when they call in the favours.
True. In Tonga they also bought the "elites". Their embassy is the biggest by a country mile and for some reason no native seems to be allowed to run a grocery store any longer.
I guess with a weak leader like John Key at the helm, the Chinese are looking at New Zealand for the next colonial takeover.
It is amazing how disgracefully politicians can act these days and the media do not pick up on it. I guess that was why the Chinese propaganda ministry (-> see recent Australia deal) bought those off first.
If Hillary Clinton becomes president, we are done for. She will do absolutely nothing to stop Chinese domination of the Pacific. She will invite scores of "refugees" from terror riddled places to the US and maybe force some of them on us and then spend all her time arguing that the ensuing terror attacks have nothing to do with her poor judgement, but with gun laws, racism, social disadvantage - you name it. Merkel and her EU autocrats are already in that mode.
On the other hand, living in Chinese New Zealand will probably be still be a bit more agreeable than living in an Islamic Europe.
No choice given the under performance of exports necessary to service desirable import costs.
Before it's understood China will have arranged renminbi bank credit to pay for our milk exports, which in turn will pay the proposed Chinese civil engineering companies operating locally. The WMP which represents USD funding collateral, will be lost to us causing a scramble to arrange enough US dollars to pay the imported petrol bills.
I think the amount of currency that arrives by outright purchase of NZD for economic investment is miniscule today. Currency swaps and their many flavours have prominence since reduced credit risk profiles demand collateralisation of most credit extension functions other than those offered to the unsecured domestic bank deposit base. Speculators buying and selling the currency pairs at volumes surpassing economic need by many mutiples are the cause of the movement you refer to. The net earned or lost pips on forward currency positions reflect the net interest rate differentials that drive observed direction and yet ownership time either way is short for each participant and mainly conducted in London. The big banks conducting this type activity in our time zone are tending to execute just out of Sydney and more likely Singapore.
I was viewing the mechanism as a black box out of which came a surplus on capital account. It is not necessarily possible to understand where the money comes from, but it is possible to see where it goes - into such things as increased bank lending. The surplus on capital account must be balanced by an exactly equal deficit on the current account. The mainstream view is that we don't export enough, which I think is a case of thinking the effect is the cause. We export exactly as much as we are able to at the prevailing currency level, which is determined by the capital flows, not the current account flows. The capital inflow thus causes the deficiency of exports. The mechanism is a vast chain of balanced ledger entries. Michael Pettis is the goto guy on this stuff.
It is essentially the same type of argument whereby lending creates deposits, they are not cause or effect, they are merely the two sides of a transaction, stripped, as it were, of all information about cause and effect. Double entry is the the most extraordinary thing, cleverer by far than compound interest.
Yep. Even as the world melts and essential life-support systems disintegrate as a consequence of urban development there are still plenty of maniacs who want more urban development, and want it faster.
Perhaps the next piece of insanity from the government will be the announcement of a new coal-fired power station -to be built by Chinese contractors and paid for via a loan from China- because NZ doesn't have enough electricity generation capacity to keep pace with growth nor any money.
er, no; actually we are generating too much electricity now from hydro and geothermal. We just don't have the energy intensity we used to. Best thing the Govt did was sell down its generation investment (should sell the lot to avoid future writeoffs), demand is slowly sinking even as economic output is rising. When Bluff closes we will have way too much, and prices will fall to the point no-one could get a return from big energy projects.
Local, roof-top PV has yet to come in scale to NZ. Where it has in AU it is messing with investors.
"More urban development" no longer means straight-line ramping up of electricity demand. It is no longer linear in that way.
Interesting point of view, David. Wouldn't mind some background about where you got this information.
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Electricity percentage from renewables is 80% in NZ, the bulk of which is hydro. There's not that much from Geothermal, and the main reason for that is the transformation cost: lots of energy gets lost from geothermal. it's also reasonably polluting (renewable doesn't necessarily mean clean).
Only 40% of our overall energy need is only met by renewables. So the way to reduce our dependence on imported oil and coal, is to switch large swathes of our transport to electricity.
E-vehicles should be subsidised, with the money for the subsidies coming from levies on combustion engine vehicles.
More rail, electrified. City buses should be electrical.
Household energy use is mainly met by electricity, so there really is not a huge need for solar panels on rooftops....commercial buildings, maybe....
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There is no way we are producing too much electricity.
Check the "Energy New Zealand 2015" report from MBIE
http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-…
Does our dear leader realise things happen fast in China because there is no personal liberty or property rights? The regional and state governments just do what they want. Exporting this kind of progress hasnt worked in Africa, what makes the government think it will work here? Is the govrnment admitting defeat in Auckland. It is building so many low value Roads of National Significance that there is nothing left for Aucklands needed infrastructure? Why does Auckland have to pay for new trains and the rail tunnel when central government pays the bills for Wellington rail investments?
Expect to see concessions given to allow itinerant labourers in to speed up the building process.(In West Africa they used Chinese convicts.) It is probably happening already - at a recent new build in Mairangi bay the chippies - all Chinese - lived in the house once the first walls went up. On moving day there were about 5-6 decrepit mattresses spewn on the driveway plus half bags of rice and various cooking gear. They were doing their ablutions up against the fence until neighbors complained to the council and they would bang away till midnight until the council again started responding to noise complaints.
what could possiably go wrong letting the chinese import materials and building our infrastructure, even better let them oversea the work so we dont know what is happening, that way JK can say his normal i did not know
http://www.newshub.co.nz/business/faulty-steel-halts-waikato-expressway…
http://www.citymetric.com/skylines/half-houses-will-be-demolished-withi…
and how many of them where born here, or just hold a NZ passport.
i can understand why australia tightened any claims kiwis had for australian benefits and why the aussie PM said no way to JK taking some off the boat people.
they know we are the back door left open
Seriously, Media is too weak and obliged tot he government in power and we do not have activist / thinker who can raise the voice of the people.
We too will see a rise of Donald trump in NZ, thanks to the policies of national party as seriously have concern in whose interest is the current national party government working. Definitely Not NZ.
On vertical infrastructure, I assume he's warming us up for some high rise apartments to be built by the Chinese. On this particular element, I personally have less of a problem, as long as the quality is good to very good. They have built a reasonable number in Melbourne and I think Sydney, and one I stayed in seemed pretty good. You would still very much want to understand exactly how New Zealand paid for all this including the extra infrastructure short and long term, and exactly how there was a benefit to NZ in allowing/encouraging the development, and in changing any rules to do so.
When the UDA stuff it up, how we gunna sue a company sitting in china ? Sounds like privatising short turn profits for the chinese and long term problems for the public - such as leaky buildings etc.
Another idea for john key, why not just send the used pig/chicken coups over from china so we can load them three high for our kids to live in.
Why does he announce things at Chinese Chamber of Commerce ? - i mean WTF has happened. You gotta wonder who is lobbying our leaders. Len brown is most likly up for it as well - being chinese.
is this a new form of corruption? He's up front about it, clearly been approached by his Chinese mates in big business with their own agenda, and now he's buying into it and softening up the country to a fait accompli?
Any way we can bring the election forward to stopping him selling off what's left of the country?
Murray totally agree with you. Their has to be a mechanism in democracy to challenge and not wait for 3 years. Opposition is suppose to play that role but is missing in NZ.
Unfortunately even Media is not strong as depend upon government. Need Independent unbiased strong Media in NZ, supported by strong investigative journalism, which does not exist in NZ
The mechanism is the election. You get one every 3 years. It is not "the media's job" to pitch your view or agenda - or anyone else's for that matter. If you want change you need to put time, money and most importantly effort, into convincing your fellow citizens of the wisdom of change. (Ranting on websites doesn't count.) After all, that is what the current elected people have done. Why do you think you can get people to take you seriously without making a similar effort?
"The “Fourth Estate” describes the journalists’ role in representing the interests of “the people” in relation to the business and political elites who claim to be doing things in our names"
http://theconversation.com/right-to-know-the-nation-the-people-and-the-…
That's not a bad definition of the role of media. You don't have to go far to think that in NZ most MSM actually represent the interests of government and big business. An example would be the awe struck media's relationship with Key perpetuating the myth there is no opposition. I have yet to see MSM do a full expose on the economic benefits (or not) of high immigration. Crooked Cassandra did one recently that showed there was little economic growth coming from the type of immigration we do but MSM not a lot on what is probably the major issue in NZ today.
https://croakingcassandra.com/2015/09/04/immigration-a-critical-economi…
Yes, holding the powerful to account is a role the media can play. But you misunderstand how comprehensive that can be. For every journalist that has the role, time and support to do that there are 100+ PR spinners on the other side. Plus 1000+ dodgy operators trying to game the system.
You may have noticed that our own output of stories has been lower recently. That is because we have been focusing on a few major issues, most of which soak up huge amounts of time and resources, and some of which will never get to the 'publish' line because the work does not warrant it in the end. Lots of work, so little output. Actually, that lower output in the pursuit of in-depth actually undermines our commercial viability. Such is 'new media'.
Your "definition" of the media can't be sustained. It is what used to apply (and perhaps still does for public funded entities who don't have to have more revenue than costs). Not now.
Certainly we are not here to chase shallow blogger diatribes. We are not here to channel the anger of angry, older white people with a skewed, lacking or misinformed education.
If you really think change is what is needed, get out there and get elected. Shooting off a few lines in a comment stream isn't going to change anything. Expecting 'us' to pitch your view is completely unrealistic too.
And don't blame the "MSM" (whatever that is). Take responsibility yourself. The barriers to entry to set up an online news or opinion website are very low. Start with WordPress. Or Twitter, Or Facebook. Or YouTube, Or WeChat. You need to prove others ("the people") will listen and follow before you earn any cred.
Good summation David
Prior to 1980's when corporate takeovers and amalgamation became the norm, the majority of the print media were either partly or wholly family controlled, wherein the proprietors themselves operated on the basis of reflecting the views of the community in which they themselves existed. Generally speaking the daily papers were not provocative and I'm not too sure they held the political elites to account. While they exercised reasonable balance in their daily coverage, it was all a bit bland and vanilla based. All the family controlled media are gone with the exception of the Otago Daily Times
Yes, the print media are now stuggling to survive with serious investigative reporting non-existant, if it ever existed. Sensational expose's are usually short lived and do not and cannot sustain the business model
The one area we as a society should concern ourselves with is the volume of PR spin press-releases dressed up as news and published with little regard to balance
By way of comparison, in NSW, my favourite ferarless financial investigative scribe IS Michael West of Fairfax Media who without fear or favour took on the financial gamers. In the 1990's he worked for the Australian and frequently reported on the goings on of Macquarie Bank who in turn would initiate legal proceedings against NewsCorp and the Australian - eventually NewsCorp teminated his services. He then went over to Fairfax Media and continued his fearless approach to exposing financial shennanagins. Hs services were terminated by Fairfax as not being aligned with their future direction. A twitter post accused him of being a "litigation magnet"
That's how they shut them down
Unwilling to be silenced, he is going out as an independent at
http://www.michaelwest.com.au/
I think that time will only arrive when we start having unfortunate accidents or suicides in NZ such as http://qz.com/570524/a-list-of-chinas-top-bankers-who-disappeared-were-…
or something like the more recent "unfortunate" car crash of leading Chinese "Dove" Wu Jianmin http://www.ft.com/cms/s/0/0a11435c-356e-11e6-a780-b48ed7b6126f.html#axz…
Government funding costs are at 2.5% or less. Why on earth would you look at getting local or central government infrastructure financed privately and especially from offshore? The last major project the Nats funded in this way was Transmission Gulley where they are paying the Aussie financiers 15% per annum for 25 years; or a premium of $2 billion more than the actual $850 million cost of the project.
If Key really thinks Aucklanders want their City to grow even more quickly through massive unchecked immigration, but the financing rules his own government impose on Councils don't allow the resulting necessary infrastructure to be financed, then the rules to change are the financing rules. They don't even need to be generous to Auckland. The government could loan Auckland the money at 2.5%, being their own funding costs) and there would be nil cost to the government. They could even make a profit.
owning a house which is worth more does not put more money in my pocket.
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I'm actually worse off, bcause my rates have gone up by about 20% since I bought, but my wages only 5% over the same time.
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maybe rates should just be collected on 'investors' who own more than one house.
Even by John Key's standards this idea is seriously bad.
We have had a UDA that not only didn't enable fast development but what it did do was terrible. The Canterbury Earthquake Recovery Authority mimicked the Roman Empire by tearing everything to the ground then declaring 'job done'. It will take decades to recover from the damage they caused. Not only were they out of their depth but, unlike Christchurch City Council, they had no commitment to see through what they started; they knew they were out of there within five years. And they knew there was no accountability.
The only way a private company could do what Key is promoting is if they built a "New Town" on greenfields miles outside Auckland. Either that or run riot on Auckland's existing infrastructure.
Key also displays a fundamental ignorance of what development contributions are. Anne Tolley and Nick Smith (both former local government councillors) must be tearing their hair out in frustration listening to this nonsense.
Development contributions are applied to projects that upgrade infrastructure to provide more capacity. They do not necessarily have anything to do with a specific project and, in fact, the legislation makes it clear that DC's exist to mitigate the effects of cumulative development. There are other mechanisms for dealing with the immediate effects.
And just a reminder that developers already put in the bulk of the HI for development. It's what they do.
What Key appears to be saying is that these foreign companies would be allowed to do anything they liked to Auckland's infrastructure, send in an invoice, pocket the money then head off home. Leaving the people of Auckland and their council to pick up the pieces for decades into the future.
Doesn't sound like a good deal to me.
WOW!! John Key is so crazy!
This is so fundamentally wrong on so many levels that even the opposition parties might notice and say something that the voters can grab hold of.
Instead of stopping the population growth John Key wants to empower them to build our cities bigger so we can fit more in.
WHY???
WHY do we need more people?
As one who has actually participated in the development cycle at both ends (raw earthworks, and sealing/K&C) I can reassure common taters that there just isn't that much to it. Nowadays the scene is complicated by Elfin Safety, obscured by lotsa machines (mostly stopped or at idle), and so the woods/trees view gets lost.
But horizontal infrastructure is fundamentally simple:
- Three waters: potable, grey plus black (shower/bath plus kitchen/laundry/loos). Pipes laid in a trench, tested for leaks, laid to fall if gravity has to be involved, backfilled and fill compacted. The odd thrust block where pressure pipes change direction. Lumps of concrete. Haunching if close to the surface - more concrete.
- Power/gas/fibre - no-one lays copper anymore for telco stuff) - ideally in a conduit for each to facilitate future changes which means - more pipe and joint/inspection points. Trenched, laid, tested, backfilled and fill compacted.
- Roads done the way the Romans did - pit or river run laid and compacted, crushed aggregate - coupla layers, topcourse clay mix laid, compacted, fatted up with water and rolling, left to dry then sealed.
- K&C extruded with machines that have been around for half a century, expansion joints hammered in, plastered over with a nice creamy mix.
None of this stuff needs much in the way of intellect: just brawn, weatherproofing and plain common sense. An excellent path for youngsters with too much energy and too few prospects. No need to import 'em - they're everywhere. Might need a press-gang, though......
The issue is not that this is hard or needs especial immigration consideration for skills etc. The issue is timing and financing. The latter is squarely in the Gubmint's hands for, as Stephen Hulme has sagely noted above, it can simply issue debt instruments at almost negligible rates. In a ZIRP and now occasionally NIRP world, positive Interest attracts much - er - Interest.
What's missing, as with the Housing Bubble/Crisis, is the political will/cojones/vertebrae....
Talking to a Vietnamese work colleague this am. Cannot understand what john Key is up to... back in Vietnam lots of Chinese workers building lots of poor qaulity apartments etc. So many they have lost track of who should be in the country and who shouldn't. Thinks it's crazy how we are trying to mimick the mess created in other cities back here in NZ. We need a catalyst for a public march...enough is enough.
Well there you have it. The result of everybody's precious Free Trade Agreements.
Cheapest quote gets the job.
Don't complain now
It's what everybody wanted, and those who complained were called whingers and doomsayers.
And you think things will improve if the TPPA comes into effect?
At some stage NZ might have to get off the fence and if we make the wrong move Hawaii might be off the travel plans if the 9dashed line is extended down to NZ - it might as well be, it covers a lot of imagined territory already,
http://www.news.com.au/world/united-states-navy-sends-two-nuclearpowere…
I thought ones nose was supposed to get longer when they lied, but in John Key's case it appears to be a hair line that is having a race towards the back of his head and excessive bags under his eyes.
Looks like such an enjoyable lifestyle....NOT!!
That mouth nappy continues to get fuller by the day as well...will someone please change it soon?
This is how they do it.
(Floggings will continue until moral improves - Coming to a city near you courtesy of The PM of Parnell)
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=116605…
Nice one.
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