A year into the job, Mayor Phil Goff is having big problems with his budget. And with water, transport, housing, the America’s Cup, the rest of council and the whole of government. And he’s still trying to beat up on the city’s tourism and economic development agency, ATEED. But somehow, says The Spinoff's Simon Wilson*, he also seems happy.
It’s one year on and Phil Goff hasn’t got any money. Well, not him, but the council. His annual budget was passed mid-year, and it’s very tight. His 10-year budget is now being developed and there’s hardly enough to do anything. “All the easy options for savings have gone,” he told me when we sat down for an interview.
And it gets worse. Council staff, it’s been revealed by the Herald, have a bloated salary structure: of the 11,893 staff, 20% of them earn more than $100,000 and 194 of them earn over $200,000. Is there any word for that other than outrageous? The council overspent its budget for salaries by 5% last year.
And worse. The America’s Cup is coming and there’s nowhere to put it. The council needs to find 30,000 square metres somewhere on the harbour and none of the options is all that good.
And still worse. Every time it rains in Auckland, 70 outlets dump sewage into the harbour. “Diluted, to be fair,” said Goff. “But sewage nonetheless. I think it’s completely unacceptable.” Aucklanders are going to get a shock when the new pollution data comes out next month, he said. This is a problem that’s been stewing for 100 years and it will cost $1.8 billion to fix.
And worse again. Over at Auckland Transport, they’ve hatched a plan to spend $630 million on “active transport” – that’s cycling and walking – over the next 10 years. There’s no money for it.
And even worse again. Whatever Phil Goff wants to do as mayor, he has to persuade a majority of councillors to support him, because he has no caucus, no whipping structure he can rely on to pull errant councillors into line. After parliament he’s just not used to it. Being mayor is about herding cats.
And worse still. A delegation of school principals went to see Goff recently to plead with him to take their case to government. Auckland schools are in crisis: teachers are leaving because they can’t afford to live here and too few people are entering the ranks to replace them. The immediate problem is the price of housing, but it’s not just a problem for teachers. All middle and low income people are affected.
And then there’s Winston, potentially the worst problem of all, because the demands NZ First makes in coalition talks will have real implications for Auckland.
Goff was careful not to express a view on Winston Peters, or any other politician. But he will know that Peters could suck resources away from desperately needed transport projects, and could stop the move to light rail, to the airport or anywhere else, because he favours heavy rail. Peters could slow the house-building programme by collapsing immigration numbers, mess with the orderly planning of the future of the port and undermine business confidence with reforms to the fiscal settings.
WINSTON PETERS IS EVERYWHERE RIGHT NOW. PHOTO: GETTY
So how is Phil Goff, one year into the job? He’s quite a happy guy, really. “One year in and three years older,” he said, sitting in his favourite spot on the leather couches in the anteroom to his office, enjoying the joke. He likes making jokes. He leans in quickly to shake hands, he’s still got a spring in his step.
He’s also still got a desire to get things done. His way. He barely had time to get his feet under the desk last year before picking a fight with the council-controlled organisation ATEED (Auckland Tourism, Events and Economic Development). Goff accused them of, among other things, excessive spending on staff perks and acting unilaterally to create a marketing campaign for the city.
Within months, ATEED boss Brett O’Riley had moved on. But Goff still has the outfit in his sights.
O’Riley’s replacement, Nick Hill, barely had time to get his own feet under the desk before the mayor wrote to the chair of the ATEED board, David McConnell, asking for Hill to conduct a “first principles review” of everything the organisation does.
The Spinoff has a copy of that letter. In it, Goff noted that ATEED seems to duplicate work done by government agencies like Trade and Enterprise, Callaghan Innovation and Tourism New Zealand. He also wondered whether ATEED was making the most of opportunities to work with local initiatives like “the Southern Initiative, COMET and the business improvement districts”. The first two of those are Manukau-based council agencies that coordinate educational, health and social programmes. ATEED already does some of this work but it’s a world away from what it has treated as core business: running big events like the Masters Games, enticing to entrepreneurs to set up shop here and sharpening the tourism potential of the place.
I asked Goff about the review Hill has been asked to do, thinking he would beat around the bush. He didn’t. He said it’s “a basic review of everything they’re doing and how well it’s being done”.
Does ATEED have a reduced budget? “Yes it does.” And reduced staffing? Yes, that too.
“Look, we do need a body to promote Auckland as a destination, and to promote us as a city with work skills,” he said. “But why would we want to double up on the work of government bodies like the Ministry of Business, Industry and Economic Development?”
So does he even value the work ATEED does? “Auckland did very well from the Masters Games,” he said, but then added that sometimes ATEED talks about events as if it made them happen when really it’s “a contributor”.
Was that the case with the Masters Games? In that instance, he acknowledged, “they were a driving force”.
Phil Goff and Nick Hill both spoke at a function this week to open the innovation hub Grid AKL’s new Generator building, in the Wynyard Quarter. Goff was excited about innovation and quoted the late Paul Callaghan: “a place where talent wants to live”.
“I thought that was so good I stole it for my campaign slogan last year,” he said. Which was true.
Hill made an amazing speech. He looked at the notes his comms team had given him and then said he had some other things he wanted to say. So he tossed the notes aside. After calling innovation “really really important”, which made everyone feel good, he said that when you strip away the population growth, productivity in Auckland “is actually going backwards”. Then he pointed out that the room was full of white people and most of us were male as well.
“What we need,” he said, “is an innovation corridor, running north south through the city. We need to be linked up to what’s happening in Manukau and in the Southern Initiative. We need to be talking about how we generate real value. Not the buildings, but the people side.”
It felt like a real throwdown to Goff. Five weeks into the job, the new ATEED boss was saying to the mayor he was totally on board with the idea of bring the people of south Auckland into the equation.
THEN-LABOUR LEADER ANDREW LITTLE CONGRATULATES PHIL GOFF FOLLOWING THE MAYORAL ELECTION ON OCTOBER 8, 2016. PHOTO: FIONA GOODALL
Meanwhile, Goff has a long-term budget to resolve. Spending has grown “because of the marked growth in population” and rates income hasn’t kept up. He can’t borrow more because that would impact the credit rating, not just of Auckland Council, but of all local councils. And it’s not credible to make the budget work just by cutting off ATEED and/or whichever other parts of the council body he doesn’t like. When he says all the easy options have gone, he really means they’re already well into the not-so-easy options.
They’re debating hot-button topics like whether sports clubs should pay for the privilege of using the playing fields. (It was fascinating listening to Cr Dick Quax at a recent meeting, trying to reconcile his commitment to kids in sport with his user-pays approach to politics. The kids won.)
Library staff numbers have been cut. The operating budgets of the museums, galleries and sports venues that come under the Regional Facilities umbrella have been gouged. Auckland Art Gallery lost over $1 million from last year to this: a cut of 13% on top of other cuts in previous years.
And on it goes. The trouble is, at the same time we now know the council pays its staff (many of them but not all) salaries that are absurdly out of whack with the private sector. There are mid-level professional staff with no management function at all paid well over $100,000.
Goff said things were changing. The salary of the incoming CEO of Auckland Transport is $100,000 less than that of the outgoing one, “and there are no bonuses either”.
That’s good, I said, but using attrition to drop the top salaries is easy. You’ve got a workforce with established relativities and it looks like far too many of them are earning far more than private sector equivalents. How are you going to fix that?
“I’m not happy,” he said. “We have to compete for staff, but I have to be convinced we are not leading, but following.” He said he wanted to be satisfied that salaries were in line with what council officers were paid “in places like Wellington, Christchurch and Brisbane”. Although the Herald story had suggested Brisbane salaries were much lower and he wasn’t sure if that was right. “That might be a case of comparing apples and oranges,” he said.
But what was he going to do? “The public need an assurance we are paying good people at an appropriate level.”
Given that you can’t just undo employment agreements or the relativities around them, that assurance will be a while coming.
Is the council really spending its money well? The question usually gets asked in a political way: why do ratepayers have to pay for this project or that service? But what if we leave all those questions out of the equation and accept that the council has the right to decide what gets funded? After all, that’s what we elect them for. Do we – do they – really know that any given project or service is operating as cost-efficiently as it should be?
Goff says he’s doing his best to find out. He’s got a guy in his office called David Wood who is in charge of that. Wood, a former Treasury official, is director of finance and policy, and it’s hard to find anyone who loves his work.
That’s not necessarily a bad thing, of course, if he’s the guy asking the tough questions. But there are many who say he asks the wrong questions. We’ll return to this in a future article.
PHIL GOFF, POST-ELECTION – ‘ONE YEAR EARLIER AND THREE YEARS YOUNGER’. (PHOTO BY FIONA GOODALL/GETTY IMAGES)
Goff has put city planning for the America’s Cup is in the hands of a committee chaired by council CEO Stephen Town, with the relevant council and government agencies all represented. The mayor has asked them to look at all the options for a site to house the syndicates and highlight “a couple of the most likely”.
Auckland won’t even know for sure it will host the cup until August 31 next year (Italy is formally on standby) and everything has to be ready for the arrival of the first boats in the middle of 2019. That’s basically no time at all.
If they use the current Tank Farm (Wynyard Point) there will be massive problems clearing and cleaning the site in time. Captain Cook wharf isn’t big enough, so some syndicates would have to go elsewhere. Whangaparāoa is too far away. Westhaven has traffic issues and so does the naval shipyard at Devonport. Halsey Wharf would involve building out into the harbour and what happens to the site after that? Put the whole lot in the Orākei Basin, with a drawbridge? (Sorry, nobody has suggested that. It’s just an idle thought).
“The America’s Cup will bring hundreds of millions of dollars into the Auckland economy,” said Goff. Well, probably yes. But it’s a worry that nobody is yet talking about an inspired option for where the boats will be based. This thing has to leave our city better than it found it, not with a bloody great legacy problem somewhere on the waterfront.
As for the sewage, next month the council will start its new high-tech advisory system for the water quality of beaches. We’re going to learn there’s a lot more pollution in the water than we thought.
Yes, there are plans to fix this, with three big new “interceptors” soon to be built so that sewage doesn’t flow into the harbour. Half the budget has already been set aside in the current 10-year plan. But there’s no scope for the rest when they renew that plan. Goff wants to use a new funding model, involving private investment through an infrastructure fund, which would eventually be paid back out of water rates. He’ll need government support to set it up.
“I’ll bite the bullet and say, ‘Let’s do it now’,” he said. “We’ll solve 80% to 95% of the problem. Now that’s worth doing.”
This proposal, along with everything else related to the long-term plan, will come before council in the next couple of months and will be up for public consultation in the new year. The plan covers the next 10 years and gets updated on a rolling basis every three years. Making it workable with almost no money to play with will be by far the biggest test of Goff’s mayoralty this term.
That $630 million proposal for walking and cycling? Goff was keen on the idea, in general, but it’ll get flicked on to government. The council is already spending 37% of the rates on transport and there’s no scope for big new ideas like that.
Help for the schools? Goff will not be lobbying central government for an Auckland allowance for teachers. “If you do that, what about all the other people who deserve it too?” But he will continue to make the case that they need to build a lot more houses a lot more quickly.
As for herding the council cats, that’s almost easy by comparison. Goff gets a wistful look when he talks about how he misses the “disciplined political environment” of parliament. He means he doesn’t have a caucus he can boss around.
But it has advantages, surely, I said. You got to choose Bill Cashmore as your deputy (Cashmore belongs to the National Party, Goff is Labour). Don’t you value that?
“Oh well, yes, of course I do,” he said.
The cross-party allegiances work well on council, even if they do mean the mayor has to keep making sure he has enough support for his proposals. He’s got National, Labour and independent people in his kitchen cabinet.
Goff also looked wistful about what he called “the lack of checks and balances”. There’s no Treasury to contest the official advice from other departments, he said, and no Department of the Prime Minister and Cabinet.
In fact, that’s not really true. The council officers under CEO Stephen Town can contest the advice of the Council Controlled Organisations (CCOs). More directly, the Office of the Mayor was established precisely so the mayor would have advice independent from Town and his officials, and from the CCOs. With David Wood in charge, Goff is getting that independent advice.
As for Winston Peters, Goff is waiting – just like the rest of us.
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*Simon Wilson is Auckland Editor at The Spinoff. This article first ran on The Spinoff and is used here with permission.
73 Comments
It really is so obvious what needs to happen. Rates in Auckland as a % of property values are about half what they are in most other parts of the country. Double rates and apply them against land values only so that we don't disincentivise improvements. Make it something on the order of 2% of land values. A $500k piece of land would have $10k worth of rates then. And it would significantly incentivise efficient use of economically important land. Tenancy space would expand heaps increasing supply and dropping rents. Land values would fall, but productivity would increase, and teachers could once again afford to live in their city.
It's all coming to a head. Landholders and banks have been on a rort for too long.
It's mostly propaganda and misdirection if you actually look at the scope of the complaints you see in the media all the time. The people behind the media agenda are the landed, the banks, the real estate industry etc. In otherwords just look to who stands to benefit from stratospheric property prices. It's not a conspiracy, it's just a whole lot of players with power/influence and vested interests all pressing in the same direction because they each individually stand to gain far more than just a cheaper rates bill from suppressing rates, and choking development.
Read (or at least Google) Noam Chomsky's "Manufacturing Consent", and follow the money. Have a close look at the "Ratepayer's Assocation".
Tl;dr The landlords and the banks are more than just passive beneficiaries of this structure, they're active manipulators of it too.
edit: This video from the UK applies to us too and helps paint a clearer picture about the incentives. https://youtu.be/rVX3c_O3RSY
Ocelot , you really have not thought this through , have you ? ............... increase rates on a $500k property ( almost every property in Auckland ) to $10 k in rates per annum and every ten\ant in Auckland will be financially ruined when this cost of this is passed on to the hapless renter
Over-extended property investors will be forced to sell, regardless of whether or not they'll see a loss/bankruptcy. They had/have the choice to make those investments. Many people don't have a choice about the rents they have to pay, they need a home. It's time to tighten the screws on the speculators/investors.
Yields on rentals have been falling, oftentimes to below that which it costs to maintain the debt and other expenses that go along with the property. Even with the government pumping yields with accommodation supplement, we are already past the point where landlords can extract enough money from tenants to turn a profit without capital gains. It's a market. It responds to supply and demand, but also is limited by what tenants are willing and able to pay.
Land tax would increase tenancy supply which would shift the demand supply equilibrium point which would mean that rents actually fall and/or it would make properties far more affordable for owner occupiers to buy.
The landlords costs are actually disconnected from how much they can charge for the property.
The narrative that anything that impacts a landlord hurts a tenant is again a false narrative that is being used to get tenants to vote against their own best interests. It is part of the propaganda that I mentioned in my post above. Your vested interest has caused emotional corruption of your perspective.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair
"Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants." - https://en.wikipedia.org/wiki/Land_value_tax#Efficiency
Went to a candidates meeting and actually spoke to Phil Goff - clearly a really nice guy and he would have been my choice if it was who to invite to a BBQ but fearing he was another Len Brown I voted elsewhere. However his first action was to drop that embarrassing and meaningless 'most liveable city' slogan so he is not bad.
Still unable to see why ATEED exists - it is very expensive, duplicates or competes with other NZ organisations, and when successful adds more low skilled workers to an already overcrowded city. Auckland leads the world in having the lowest productivity for a metropolitan city compared to the rest of the country. How can ATEED's boss make a speech praising diversity in NZ's most diverse city when you only have to go to the ATEED website to see photos of their middle-aged, white, mainly male bosses.
Phil Goff should show some balls and just close it down - merge with the parks department. That might shake other council departments into controlling excessive pay rises.
Winston may be Auckland's saviour - force them to sell the port which would give our council a big bonus to pay for the new desperately needed infrastructure and then let them tax whoever buys the port with hefty rates.
"Peters could slow the house-building programme by collapsing immigration number"
I don't see why this couldn't be to Goff's, and more importantly Auckland's, advantage, particularly with the waste water situation. They have a plan that in ten years wouldn't even fully address the current amounts, and putting ever more pressure on the system will only make that harder and less likely.
True Fritz: with applicants currently being processed, the uncapped family stream (= wives & husbands) and humanitarian stream it is impossible to drastically cut immigration. Cutting 20,000 would be progress and take the 3 years to the next election and then we would still be top immigrant nation but sharing the title with Australia & Canada.
What Winston could achieve is a charge on employing immigrants to subsidise training for Kiwis - so the next Chefs would pay for catering courses etc.
Did you notice Fran O'Sullivan in the Herald yesterday saying we need immigration to supply labourers!
... in fact , it was seen 30 to 40 years ago ... by Dove-Myer Robinson in his second term as mayor ... but he was shouted down and vilified for being too far out there in his views ... he envisaged the congestion and need for rapidly upgrading Orc Land's infrastructure ... a light-rail system ... yadda yadda ... purifying the city's putrid poo ponds ...
But , no one was listening then ... are they awake now ? ..... it's a cluster f&$@ , sigh !
Humbuggery
This excuse has been going for 10 years or more
The need to build new buildings does not increase exponentially
The need for migrants to help build new buildings is also not exponential
How many have come in over the past 10 years
Where have they gone
Are they still here or have they left
Are we simply replacing ones who are leaving?
If so, why are they leaving?
The whole thing is bulldust
so 7 years of labour leaders and management since the super city promised a billion of savings - we have nearly 3000 more staff , they are paid a huge amount more - rates have gone up about three times the cost of living - rises more than promised year on year - and again we have no money for anything !
its gross ineptitude at best- serious mismanagement most likely - creating more and more 100k+ jobs for ineffective, powerless papershufflers - with no end result - meantime - increased gridlock - huge delays in planning and consent, where is the high speed fibre that even hamilton can have, no direction or future plan
About time these people were properly held accountable for the lies and broken promises
Re salaries, it's the total salary bill that is the issue, not the fact that people earn over 100k (which isn't that high)
There is a huge amount of wastage in that organisation, with the right processes and approach they could cut staffing levels by 25%.
They should have much fewer staff, who are paid more.
If salaries are slashed then the place will be filled with clowns and they will be even harder to deal with.
... how much more would we save , if we just scrapped the Orc Land City Council entirely ... just booted Goofy and the 1000's of overpaid Goofettes out of their privileged salaried jobs ... and ran the whole shebang out of Wellington ....
See what a bang-up job Jumbo Jerry Brownlee is doing in Christchurch ...
... we'll gladly gift him lock-stock-and smoking-salmon to the Orc Land cause ....
I TOLD YOU SO ................... go back and look at my comments over the years , it was patently obvious to anyone with half a brain that the stupid train tunnel was a monumental waste of resources , that would effectively bankrupt us .
It made no commercial sense , and it will never be economically viable ............... ever .
The money should rather have been spent on PPP'S to set up and run light rail with more medium sized owner-driven buses .
Instead we undertaken the building of a white elephant that we cannot even pay for before it has carried a single passenger .
We should actually scrap the whole thing while we still can, and fire the entire incompetent set of fools that organised this mess , thereby saving ourselves a fortune in inflated salaries over the next 10 years
Boatman.
I've come to really enjoy your uninformed, bumper sticker-eske comments.
"It made no commercial sense , and it will never be economically viable ............... ever ."
CBR for the rail link was most definitely estimated in the positive range, like pretty much all transport projects. (Except of course Simon Bridges' follies).
"The money should rather have been spent on PPP'S to set up and run light rail with more medium sized owner-driven buses."
Owner operated/driven buses?
A comment like that shows a distinct lack of commercial sense.
The cost benefit analysis was not positive for the rail tunnel! Len Brown did not care. And finally John Key muttered something about there being some "certainty" benefits for people wanting to build buildings in the CBD. That was what swung it.
That was all done prior to the most recent cost estimate increases.
And we have not even had the prices in for the construction as yet! Wait for the "commercial sensitivity" confidentiality spin when they come in.
@nymad. its not eske but "esque' derived from French esco which broadly means "like" , when attached to an adjective .
I am also a little better informed than you may care to accept , and I am not some Redneck with a ute and a bumper sticker .
While you may regard my comments as flippant its really the only way, we who pay, can express our dismay at the utter folly of the often reckless spending decisions made by that august body of bureaucrats who run our city .
As for owner driven medium sized buses , they do work ( in the EU ), 20 seater Mercedes Benz Sprinters (or the Iveco or Toyota equivalent ) , they are way more efficient , ply specific routes without having to change buses 3 or 4 times , and they dont need ratepayer subsidies to survive .
Andrew Richie and his cartel of bus owners have ensured such cheap effective , quick and cost-efficient public transport will never happen here
He does have some significant assets that he can sell and with some help from the government the scope for road use charges.
The council could sell Water Care to Vector who have significant synergies. If they did this the people of Auckland would retain majority ownership through the Auckland Regional Services Trust. So in one move he would release a lot of cash and put a strategic asset beyond the reach of future administrations who may wish to sell it to their overseas mates in arrangements that are not in the public's best interests.
As people have sensibly suggested above, a halt on the flood of immigrants would give some essential breathing space to deal with the near emergency situations that they face.
If the rate increase is limited to 2.5%, all the employees salary increase more than 2.5% will potentially cause pressure and risks in the budget. That means if the finance management and execution is not going well, the council should look for better candidate to replace the force and build a working force in combination of senior and junior members. In that case, our new graduating workforce won't have to migrate to other town or overseas for finding jobs or building career. Its very important to ensure seniors perform their duty well and they share the knowledge professionally to the new members.
I have a perfect if completely unfeasible solution: put all AC staff on teacher-salary structures.....make them eat their own dog food for a change.....
The core TLA spending issue comes back to another Labourite - Sandra Lee's disastrous 2002 LG Act which effectively gave TLA's open slather on spending: the notorious 'four well-beings, which one can still see occasionally bruited about by TLA staffers unaware of the 2012 amendments which ditched them.
But by the time of the 2012 amendment, the damage was done - soft spend ('social and cultural well-being') which TLA's had generally gone hog-wild cranking up, was cemented in, and is proving, quelle surprise, very difficult to unwind.
The current LG Act (see legislation.govt.nz, search Local Government Act) sets out a much more restricted authority:
10 Purpose of local government
(1) The purpose of local government is—
(a) to enable democratic local decision-making and action by, and on behalf of, communities; and
(b) to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.(2) In this Act, good-quality, in relation to local infrastructure, local public services, and performance of regulatory functions, means infrastructure, services, and performance that are—
(a) efficient; and
(b) effective; and
(c) appropriate to present and anticipated future circumstances.
Methinks a large chunk of them $100K plus salaried warm bodies would flunk 10(2)(a-c)..... but who's gonna give 'em the good news? Technically they are all employees of the CEO, and the Council directly employs only that CEO.
Wouldn't bet the farm on any remedial action in the next decade.....especially if the Wizened One swings Left.
Why just go for 10(2)(a-c). Auckland Council has failed the whole set, (10(1)(b) being particularly grating). The benefit of employment in AC being you never need to be accountable and the further up the hierarchy less work & skills you need with ever increasing pay scales well above national average which you can easily lobby for. ATEED is just the embodiment of a gravy train that actually exists and runs on time (AT however is more corrupt and inept).
Yes, and being unfamiliar with Auckland specifically, I'd be interested in a specific list of the "well beings" type of capital expenditure projects in Auckland during that period which I imagine still make up a large part of the debt burden. For example, Dunedin has the covered stadium - Kapiti has their Aquatic Centre... what are the big ticket items that ACC took on with the amalgamation?
Although he seems a nice guy, I find Goff really 'vanilla' and bland.
Auckland is on the edge of a teaching crisis yet he's not willing to advocate for better teacher wages?
It's all very well saying he will advocate for more action on housing, but WTF does that really mean?
If Labour get in we will have Kiwibuild, which if done well could make a big difference. But National is showing no signs of understanding that it has to become much more active in building and supporting affordable housing.
So the old run down houses in multi million dollar run down suburbs will drop in price to an affordable level. I would be cracking champagne if that was the case. They do not even drop below the value of the newly slapped down cheap material small terraced adjoined houses outside of the airport and wood treatment plant (where nightly burn offs are commonplace and deadly for those with lung issues). Saying that old properties will become affordable in old suburbs is the exact opposite of the housing market we have. Gentrification has slapped it's sweaty buttocks down and sparked several yeast infected price rises with speculation running rife. At best this thrush infection of Auckland should be treated and cleaned before it becomes unhealthy and spreads too far down the legs of the country. Throwing more population to sleep with in the market is not a way to limit the impact, (like most speculator transmitted diseases). Luckily Auckland Council offers numerous amounts of entertainment in their endeavors to distract. The entire management, procurement and infrastructure policies are a great comedy skit.
Teachers are doing a pretty good job themselves of arguing for those better wages in seeking 14% wage rises and a number of improved conditions of employment.
And much as perhaps it is wishful thinking, I suspect the Auckland housing market itself, given the right regulatory settings (reduced immigration; improved tenancy laws; ring-fencing losses; better policing of money laundering, etc) will correct over the course of 5 or so years.
There also seems to be a lot more internal migration out of Auckland going on.
So I'm guessing, the ACC debt situation will not improve for some time, but living costs/conditions in Auckland will - and once they do, then households will generally have more money to spend on infrasturcture improvements.
As Chris_J said on here many a time - Auckland is full. Phil Goff pretty much agreed on Q+A this morning - pointing out that a reduction in immigration numbers would be welcome relief (as would the ACC being able to retain the GST charged on their rates bills up there). Two things Winston might grant his wishes on.
hmmm, don't disagree Kate but I do think there is an element of wishful thinking in what you wrote :)
I can't see genuinely affordable housing provided for first home buyers until the government gets off its backside and does something like, wait for it.....Kiwibuild
I think ramping up state house building is more important than Kiwibuild. Kiwibuild at $600,000 starter homes is still way over what FHBs on median/average starter wages should spend, given our current wage settings. Perhaps changing the state house model to a rent-to-own model over time would be more useful to FHBs, or the idea NZ First had about government selling residential sections at cost in conjunction with low interest state loans - and let the FHBs build the houses they can afford themselves (that kind of model could have been used with the CG owned land at Whenuapai).
I take a different view.
Whilst I think state housing is important, I think affordable housing is more important, because Auckland will cease to function if there is not enough affordable housing for teachers, healthcare workers, care workers, police etc.etc
BTW Kiwibuild starts at $500K in Auckland
Well, I think Labour actually started at $600K early on in the election dialogue and then adjusted the 'talk' to between $500-600K for starter homes. And even $500K is too much if you work on the 3-4x income benchmark. Hence, many young couples who want to purchase a home before they start a family, need houses in the $300K range, particularly if they still have educational debt to contend with. Sadly, they are prime candidates for state housing at that early stage of their family formation.
@Kate , you are right , $500k is way too much for a "starter home " , that would take up about 100% of the annual salary of someone on the NZ Median wage .
We have reached a tipping point with houses in Auckland , and there is just no solution , Labour cannot sort this mess out and nor can National .
@ FRITZ , $500k is affordable until they want to start a family , then they are down to a single income and they are in big trouble .
Or we have a recession and one of the couple loses their job
Or interest rates go up 3% resulting in a 100% increase in mortgage costs .
Well, my point is it's all relative. Some middle income families will be able to afford 500K, some won't.
We don't live in a perfect world, homes going for 500K is much better than 900K isn't it. Perhaps 500K could be lowered if the homes were on leasehold rather than freehold land?
Leasehold annual rents can change to such a significant degree they have often blown out to unaffordable levels. Quite often it can be easier saving for a deposit than paying for the leasehold, even the amount returned on renting them out is minimal and even more risky is leasehold apartments. Many apartments in the city are worthy crime Scenes; one, two and three. While leaseholds with guarantees and regulation would make access easier to start if you were a new retiree or family looking for a sustainable home during income fluctuations they are still a trap. The change in the value of improvements is not equatable to the change in sales value of the property.
Teachers are doing a pretty good job themselves of arguing for those better wages in seeking 14% wage rises and a number of improved conditions of employment.
I recall reading somewhere that this is a catch-up payrise to where they were ~8 years ago, or along these lines.
1) Introduce congestion tolls now. There is no need to wait to study it - Singapore does it well, & no need yet to go to full distance based charging via satellites. This will spread the peak traffic, delay the need for expensive future roading infrastructure & increase PT patronage & thus reduce the subsidy required.
2) Whether we get National + NZ First or Labour+Greens+NZ First it seems like the immigration rate will drop driven by NZ First. After decades of incompetent governments we may have a more sustainable immigration rate which will reduce some of the pressures in Auckland. The immigration rate should be given to the RBNZ to use as a macroprudential tool to maximize GDP/capita growth - our politicians are incompetent and simply cant be trusted to run a proper immigration policy.
3) Legislate & move to land based property rates and require the Crown to pay property rates. This would be a simple & effective way to redistribute some income to local government
No , a congestion tax is no solution .
We actually need an efficient and inexpensive PUBLIC TRANSPORT system way before taxing people for driving to work. There are tens of thousands of Aucklanders who simply cannot get to work by any other means than their cars
Our bus Company owner cartel has no interest in fixing the problem ............ they are the problem .
A congestion tax will simply make everything more expensive as food transporters , couriers , productive businesses and tradesmen pass the costs on to the end users.
"An efficient and inexpensive PUBLIC TRANSPORT system" is an oxymoron - no such thing exists. There is not a PT system worldwide that is not subsidized. Very few make an operating return and none make a return on capital. Having congestion tolls will be better for PT as it will mean more demand and more services that can be run.
User pays provides the best allocation of resources. Peak period travel is free so we have excessive demand & we can never afford to build our way out if it.
Congestion charges are actually good for freight movement as they will not get stuck in never ending congestion. Their time savings will outweigh the costs.
Agreed. Wasn't possible in the past technically but now possible. Two requirements (1) attach charges to rego - may need legislation and (b) introduce with small charges to get everyone used to it - say $1 to cross the bridge or use the tunnel during the rush hour - they could even refund $0.50 if you travel in the opposite direction. It would be a great tool to get our overloaded roads utilised efficiently.
Later they could decide whether it is the fairest way of assisting funding road building.
Unfortunately the disabled and elderly normally get stuck with no available public transport and with only private transport as the only option, (having to foot the bill for the lack of access), but they also have to support costs for poor access to mobility vehicles (about $55k to get basic independence and a work life, renting on a 5 year period is much, much worse) and poor to no parking access. Throwing congestion charging at them is punishing the poorest of society with no choice in their condition. At best a mobility card is a good excuse as to why the vehicle is "parked" on a footpath to get access to work and medical. All the council does is furiously remove disabled access to local communities and services. They even close down roads, and cut what minimal council mobility parks, (to disabled population), there are. Many family and clients experience this in Auckland, much of the city has become inaccessible so many events and public spaces are locked off for them. Public transport is a luxury, certainly with the inaccessible access to it, the cost, and the added time it takes away from useful working hours, (especially with the poor unreliable service). So far only the supermarkets and chain stores with large parking blocks & added services have made an effort to support the disabled community, not ACC.
Nothing focuses the mind quite as well a cash crisis .
Auckland needs to cut its cloth , just like its citizens do with their weekly , fortnightly or monthly pay packet , and live withing its means .
They should start with some severe AUSTERITY measures , and stop funding all manner of nonsense like cultural events for fringe groups .
The next step should be to get McKinsey's in with a chainsaw and cut out all the dead wood and check that all those overpaid staff are actually providing value for money .... in other words a total restructure of ALL functions of the city .
There is no way in hell we need 10,000 staff to run the city , or a fleet of 800 cars
Can I also ask why Auckland Council own a 41% stake in the Tamaki Regeneration Project. How much is that costing the Ratepayers? Sell it to the Government with one of their preferred PPP partners as it is not about the people of Tamaki at the end of the day. They have already transferred the State Houses. Why are we in it?
...Penny Bright has been digging. Asset sell off by stealth.
https://www.facebook.com/AskWhyHomeless/videos/1622560314485898/
Easier said than done. I read an article last week that noted subdivision activity under the UP was no better than pre UP. Maybe it needs time to work, but right now the UP has simply raised the value of properties that can be subdivided and not resulted in actual subdivision.
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