The Coalition Government plans to place a Crown Observer on the Wellington City Council as it rewrites its long term plan following a vote to retain its stake in the city's airport.
Left and right-wing councilors joined forces to halt the sale of its 34% share in Wellington Airport, shooting down Mayor Tory Whanau’s plan which would have reduced the city’s insurance risk and diversified its investments.
The sale could have raised half a billion dollars which would have been reinvested into a perpetual fund and reduced net debt levels. Now, the Council will have to revise its long term plan and potentially cut investment in some infrastructure projects.
Local Government Minister Simeon Brown said he was concerned about the councils’ ability to manage this process and use its financial resources effectively.
The Department of Internal Affairs has advised Brown the Council was not using its balance sheet “appropriately” when planning its water infrastructure and insurance risks.
Water service upgrades were being funded primarily through rate revenue when they should be debt-funded, the Minister said.
This appears to mean the Crown Observer will be tasked with advocating for the Council to take on higher debt levels, although Brown was not clear on whether that would be the case.
“Ultimately, they are taking on debt for other things but … 94% of their [water] capex is being funded directly from rates. They could be funding and financing that differently and reducing the burden on ratepayers,” he told reporters.
He said he notified Mayor Tory Whanau on Tuesday morning in a “pleasant conversion” and she did not indicate any intention to challenge the decision — the Council has 10 days to respond before the Observer gets formally appointed.
Council responds
Whanau said she was happy to work with a Crown Observer and that it could be a good thing for the council.
“It is my view that we accept this and work constructively with whoever is nominated,” she told reporters on Tuesday.
However, Councilor Tim Brown told BusinessDesk the decision was premature but Simeon Brown had “backed himself into a corner” with his previous criticisms.
Tim Brown had a long career as an infrastructure investor at Morrison, which manages Infratil, prior to standing for Wellington Council in 2022.
Whanau also expressed confusion over the Minister’s criticism of its water funding. She said Wellington was using both debt and rates to cover infrastructure updates.
“The way we fund water is inherently the same as the majority of the country, so again I was surprised by those comments but I will work closely with the Minister”
While she broadly welcomed a Crown Observer, she did note ratepayers would have to foot the bill for having a central government representative sitting at the table.
“I find that a little frustrating … it is a cost that we didn’t want but they are the Government and we’ll work collaboratively with them,” she said
Credit ratings
Finance Minister Nicola Willis said it was in Whanau’s best interest to cooperate and show ratepayers the Council was doing everything it could to deliver good outcomes.
She was not willing to say the Council was not taking on enough debt. Instead, she said many ratepayers didn’t think it had been taking “a prudent financial approach to funding long term assets such as water infrastructure”.
“Ultimately, it is for the Council to work through those things, but making sure it has effective financial management in place with balance sheet management and is receiving good advice, is one of the matters the Crown Observer can look at”.
S&P Global Ratings downgraded Wellington City Council’s credit rating to AA from AA+ in September, citing rising debt levels and costs. The Council would materially increase debt to meet the cost of its water infrastructure renewal and rising costs of delivering services, it said. (See credit ratings explained here).
Debt levels had historically sat around 100% of operating revenues but were already at 213% and would rise to 286% by 2027 — with rate hikes helping to support that increase.
“The steep rise in debt reflects the large step-up in Wellington City's capital program, significant increases in operating expenses, and the council's pre-funding strategy”.
Opposition leader Chris Hipkins said there was a high threshold for Government intervention in elected councils and he was not sure it had been met in this case.
“There's a lot of other councils around the country who are struggling to put together a long term plan as a result of the Government's changes around water infrastructure … that doesn’t mean the central government should step in,” he told reporters.
82 Comments
Finally...an adult in the room
$593 million on social housing
$400 million for a sludge minimisation facility at Moa Point
$330 million on rebuilding the town hall so we have another music venue
$240 million on Civic Square
$236 million on food recycling
$189 million on Te Matapihi library
$180 million on the Takina convention centre
$160 million on cycleways
$139 million on removing cars and redeveloping the Golden Mile
$55 million to “upgrade” Thorndon Quay
$42 million on renovating St James Theatre
$32 million to Reading Cinemas (attempted but failed)
$13 million on a carpark building
The locals love it. They keep voting for it. Why deny the people what they so clearly want? And those who don't want it are obviously too apathetic to care and vote otherwise ... it's not like it's hard to tick a box once every three years.
You'd have a hard time convincing me at this point that the average Wellington local election voter wouldn't sacrifice their first born before considering that maybe the council just needs to reign it in, and focus on basics for as long as needed to fix the sinking ship.
Maybe there is something in the water up there? Well there is presumably feces (in fact I'm sure I trod in some poop water on a recent work visit, flowing down the street) but what else is in the water supply that causes the locals to act this way?
The difference as I see it, is the difference between want and need. They wanted everything, the nice to haves, the flashy venues and vibrant CBD as well as functioning infrastructure, but there's no the money for both. Now the swing is coming back to the core basics, the infrastructure and transparency on funding decisions by council as well as heads to roll as an example to keep the faith in the council, yet the council keep spending on the nice to haves and collecting their paychecks.
Zero. It's a "first in nz" virtue signalling project so that WCC can claim an emission & waste improvement (note, not elimination).
https://wellington.govt.nz/news-and-events/news-and-information/our-wel…
Fixing the half of water supply leaked before it gets to ratepayers should have been a higher priority.
KKNZ= party political broadcast.
Bollocks.
This is orchestrated, dumb ideology. It started with the carefully-chosen 'shambles' word - assuming correctly that it would be regurgitated rather than challenged by a fairly shallow MSM (RNZ seriously included).
Then they timed this.
But listen carefully - the only move in the advice, is to do FURTHER into debt.. That isn't just Wellington, that's the whole of New Zealand. It's bankrupt thinking (indeed, it doesn't qualify for the description 'thinking'.
Tax cutes and debt. Oh, and we're gonna kickstart growth - expoential growth, mark you - by doing wee things like increasing speeds (killing people) and reducing health (killing people). This is going to get serious, long after it just looks goofy. Dan, can you do a 'where this sits on the Limits to Growth backdrop? Or are you editorially-curtailed?
Try listening.
Degrowth is happening planet-wide. More debt is being incurred than GDP made, and GDP avoids real counts (resource stocks, remaining sink capacities) even before that.
Wellington is suffering from what ALL cities are facing: entropy. That's the bursting pipes (no, it's not the Green's fault).
The choices are either to adapt, or wait until physics/nature does it to us. The latter will hurt more. And it ain't far away; Brown's pathetic little attempts (10km faster here...) are nothing in the face of exponential doubling - if that's the best they can do, they're goners. And soon; this collapse is gathering pace.
The keep saying it until people believe you thing ended a while back. The problems at WCC are caused by idiots, not a lack of resources. Sure they wasted heaps of money on useless projects so they are struggling with debt, that’s their problem. Nothing to do with de-growth or other made up words that you seem to trot out to tie every issue to the same solution.
Hang Kiwikidz, why aren't you including Simeon Brown's road tunnel under Wellington on that list? Your National Party saviour is in the process of bankrupting us by building roads we can't afford and don't need. If you thought light rail and CRL was eye watering figures, wait until you see Simeon's tunnel under Wellington.
Not "my National saviour", your strawman. If I had the tunnel cost I'd have added it.
Ive previously said the best solution is to go through the Basin reserve (< 1 test pa avg), across the front lawn of Govt house over Alexandra park & have a cutting to Ruahine/Wellington street intersection. No tunnel & minimal earthworks required.
We've spent $1.6m so far on consultants.
https://www.nzherald.co.nz/nz/wellington-long-tunnel-investigation-taki…
So you have no idea how much the tunnel option costs (I can tell you from professional experience that it will put the costs you have listed above will pale in comparison). The reason there are no costs in the public realm is because they are so monumental.
And yet despite this you say having Simeon interfere with the democratically elected council is having the 'adult back in the room'.
He is literally proposing one single project that will incur even more unnecessary costs than all the ones you have listed above and he is saying that Wellington should borrow more to pay for it.
Your cognitive dissonance is astounding.
The ACT party spokesman basically said "They are wasting money on 'ideological' cycleways". Meanwhile the government are spending billions on 'ideological' roads.
The coalition are wanting to override democracy because Wellington voters wanted something different to what the coalition want, and the media are lapping it up instead of questioning how this could happen in NZ!
While not ACT specifically, in 2015:
Transport Minister Simon Bridges has today announced a $333 million cycleways investment that he says will change the face of cycling in New Zealand.
https://www.beehive.govt.nz/release/govt-delivers-333-million-urban-cyc…
Yes, but, that was (I assume) the cycle ways around the country that were actually useful. This has been turned into an ideological mess of cycleways messing up cities and the removal of parking and bankrupting of small business that was never the actual intention, but Labour and the Greens took it and ran with it (and ruined it), like normal.
Again completely wrong Joe. The original funding was to develop a network of cycleways to alleviate congestion for car drivers. To work it needs to be a network otherwise you are just building orphaned bits that do not connect into anything (it would be like building the harbour bridge but not building any roads up to it).
The cycling network premise still holds and is what Wellington is doing on a shoestring. The issue is that f***wits fall for the culture war narratives that the coalition is peddling and believe that somehow people cycling is a bad thing.
Yeah, but, it is pretty obvious the cycle ways that have been implemented recently, are completely hopeless, hence all the complaining from business, road users, etc etc. Tart it up as much as you like, but the original well intentioned idea has turned into a complete failure (again).
Not sure about that to be honest, I think it's just a useful scapegoat for a decline in revenue that's happened because we've had a larger reduction in per capita real income than following the GFC over the past couple years. Recession is real. It's very real. And if your business slows down during this, and all you see outside are cycleways when there used to be a couple of car parks, it's easy to blame the bikes.
The thing to me though is how ridiculous some of the businesses that have fallen over blaming cycle lanes is. Hospitality businesses are not car dependent for customers. Yet they're the ones who've been blaming the bikes. Might it be instead WFH + high interest rates leading to a decline in customers?
Frankly, nothing outside of large format retail and large supermarkets (i.e CostCo, PaknSav or the odd large Countdown) is car dependent for customers.
I do have sympathy for those that are afflicted by roadworks during this recession. That's a double whammy and can significantly reduce turnover in all economic conditions.
The cycle lanes are bringing customers in. The car parks aren't even full.
It's super easy for businesses to blame council. When I worked for Council it used to happen all the time. A new better cafe would open and the old cafe would blame the council for their fall in revenue due to ***enter what ever council beat is topical at the time***. The reason was that the business had failed to adapt, had become complacent and lazy, customers went elsewhere. It's amazing now many people who critique nanny state actions are actually communists when it comes to parking.
So the 'observer' is somehow going to recover the rates that should have been collected over the last 30 years but never were because ratepayers didn't want to pay for things that they are now complaining about?
Tough job. Who'd want to be that 'observer', ay?
But let's not worry. The simian Brown wants more debt to do it. Talk about kicking the can down the road!
It's the non ratepayers (eg. students, renters) that elected the last decade of councillors who wanted virtue signalling vanity projects & didn't want to even consider prioritising out of sight out of mind basic infrastructure.
All enabled by Helen Clarks extension to local authorities powers beyond basics in 2002? & not reversed by National when they had the opportunity - hopefully that's on a to do list.
The government should also have to pay rates on its properties - a bigger problem for Wgtn than other main centres
The turnout for local body elections is apathetic and abysmal. This allows a well organised and motivated faction to gain disproportionate representation even though likely in a minority in terms of a manifesto, if there even is one. In other words if only 40% vote then you only need in the vicinity of 50% of 40% to hold quite some sway. Resultantly the electorate simply gets what it gets. Like it or lump it.
should non ratepayers have a choice who is in council and how that money is spent?
lets all vote for soda fountains on every street and bankrupt our city.
with lower rates of OO, more people with no financial commitment chose by voting, the policies of the city.
why would you care what the council spend money of if you don't have to pay for it.
virtue signalling vanity projects
Like the RONS.
I mean for a guy who has admitted they are absolutely woeful at voting in the right people consistently through your life it's astounding that you are so one-sided in your analysis of the govt's policies. You would think being wrong so often would have inspired a level of humility and acknowledgement that maybe you don't really understand how policy works all that well ...
Yup. Three Waters was a terrible idea ... /sarc
Because now fools are suddenly going to discover how much it's going to cost without government's balance sheet to back it up. (In case you're not getting it ... Yes. I'm saying voters are dumb! The vague promise of tiny tax cuts for them, but big ones for landlords, was all they heard ... And the fact that government was always going to borrow more to deliver the tax cuts never entered their minds. That was someone else's problem - apparently.)
I am optimistic we are at a low-point here with all the ideological nonsense and distractions from basics. NZers have realized at central govt they need something more sensible to arrest decline. Perhaps at local govt too...
A beauty of democracy, xingmowang, is that when your leaders are incompetent you can vote them out! Sadly this is not the case in authoritarian countries.
...$236 million on food recycling, $160 million on cycleways, $139 million on removing cars and redeveloping the Golden Mile...
There is your half billion, keep your WIAL shares for a future disaster.
But no...Wellington corrupted by the spin from the maniacal lefties who have no idea on how to run an organisation!!
This coalition is directly responsible for the situation Wellington is in. The government is undertaking a well signalled austerity approach like the UK Tories did 20 years ago and proceeding to hollow out the civil service. It failed in the UK and it will fail now.
This move is an attempt to shift responsibility for the decline of Wellington by trying to blame the council.
It was obvious this was going to happen as the coalition PR machine started softening up their gullible fanboys that "Wellington is in decline and it's the council's fault" for a few weeks now. They are using the same culture war narratives that Kiwikidz seems to fall for.
And what is the solution they are proposing, borrow more money because *checks notes* when National coalition borrows it's good but when Labour borrows it's bad.
This coalition is undermining democracy and localism by stepping on the toes of elected members, it's a power grab plain and simple.
We can expect further decline as the young see that even when a progressive council gets elected the government will come in and take over.
Absolutely disgraceful.
No, they won't. They too, suffer from entropy.
And last time I checked, the lead-time for cable-laying was 15 years...\
Which puts it out of range; the global implosion is well before that; I give us to 2030 at best, before multiple inter-reacting problems become a too-hard-to fix predicament.
Don't worry, the roads won't hold long past the importing of bitumen, either. So nothing arriving to need ferried.
There isn’t a ferry debacle. There is a competence issue with KiwiRail, they cannot maintain or drive the ferries. Amazing isn’t it. Didn’t happen in the last 12 months either. Similar things are happening in the navy……that 100m vessel sank it seems because the apparent DEI hire set sail with that vessel with critical backup systems already non operational, and when the primary systems failed there was no backup and the vessel crashed into the rocks. I think it was fairly new too. As I have said before, it is going to take a while to clear these idiots out of these positions, and that includes WCC, KiwiRail, the Navy and I am sure many other govt organisations. WCC has been rubbish for years, but Tory has really stuffed it. I one forced her, and it won’t be fixed quickly, like everything else that has been wrecked in the last term of govt.
How on earth can people buy into this idea that the vessel sank because the captain was a lesbo.... since when did someones sexual orientation determine their competency to sail a ship? If a straight male with a similar CV had been captain, nobody would be questioning the hire.
For those who prefer to hear from an former navy captain who has actually experience rather than a misogynist know it all like Averagejoe, this is a good article. It's from the Telegraph, although because it counters the f***it arguments of some I assume it will be labelled woke media.
https://www.telegraph.co.uk/news/2024/10/08/hmnzs-manawanui-sinking-roy…
I will read it, but only if you first promise to learn what DEI actually is and why it normally fails spectacularly. Hint - DEI does not mean women or Lesbos. The fact is that if this ship left port with backup systems not working, that is pure incompetence (particularly if it directly resulted in the grounding of the vessel. There are no if, buts or maybes about it. If the rumours are true, then your article makes pointless reading.
I know what DEI means. You are implying that because the captain was a woman she was a DEI. That is straight up misogyny.
Read the article, it's written by a white dude so it's OK, you can trust what he writes without feeling victimized by all the wokester politics.
Clearly you don't know what it means. But thanks for trying. DEI is, in practice, where you pick someone unqualified for a particular role, as a sop, because you feel guilty or because you want huge praise for giving someone a chance they are not entitled to and not qualified for. When your crusade fails, and fails badly that is most likely going to be the case you become very defensive and call anyone who is critical or your poor decision making a racist or a sexist. DEI is supposed to encourage participation by all groups, but in reality it is a total failure, because it is extended to people with no actual skills being given important roles.
Given the person given the job was qualified, your use of the DEI term only make sense in relation to them either being female (in a male dominated industry) or a lesbian. As a little thought experiment, when was the last time you referred to a straight white male a DEI hire?
Of course, the rest of the country should keep paying more and more in tax so Wellington can have even more civil servants while the actual outputs of the civil service are either in decline or simply no longer measured. Of course, the only solution is more tax, from other parts of the country. And because WCC can't run their own utilities, they should be allowed to dip in the central taxation fund to cover what is a core Council function? Sorry, that's a bad deal for the rest of the country.
Perhaps if Wellington could produce more things themselves, rather than a being a regional black hole for funds syphoned away from productive enterprise and people in other parts of the country, they might find the city a more interesting and vibrant place to be in the event the government trims a mere six months of public servant growth off the employee numbers.
There are plenty of hardworking Wellingtonians in private enterprise (I used to work with a few of them) and portraying the city as being solely capable of an assembly line for the public sector does them a great disservice. They get up and go to work and make things happen regardless of who is in charge. Maybe other Wellingtonians could learn from them.
What austerity? Despite their best efforts to rein numbers in, public service staff numbers are still up 0.7% year on year. Interest rates to hammer down labour's inflation however, are definitely crushing retail, hospo etc....
https://www.rnz.co.nz/news/what-you-need-to-know/531083/despite-job-cut…
very uncomfortable about central government over riding local democracy.
they would be better off spending their time sorting out the electoral system for local body elections, very few people vote only 30% of the people eligible voted in the last auckland election that in itself should send shivers up central government spine.
Systems thinking tells us why they do it - and why they will fail from here on.
Thinking In Systems: A Primer - Wikipedia
The bigger System subsumes all others, but if it is a growth-requiring one, will always hit limits regardless of the others. The bigger System, particularly this last 200 years, has been Economic Growth (the exponentially-more use of energy, to process exponentially more materials). It was doomed to slow, flat-line, reverse and collapse.
But anytime protest or challenge got in the way of it, protest and challenge were stomped. World wars, Key removing Canty Regional; these are the same thing; the System getting rid of impediment. It also uses the teachings/example of Bernays, to sway propaganda (hence 'shambles" launched into the ether prior).
The System will ensure protest gets more harshly dealt with (the Penwardens of this world will be long-term jailed or worse) but it is in trouble now: unable to manage another 'doubling-time' (I can be confident: even if we managed 3% growth, a whole doubling would only give us 24 more years, so Systemic demise has to be well short of that).
It's a mistake for Central Government step in.
Wellington voters live in a parallel universe where money grows on trees and accountability is white supremacy.
Let them go to hell with 30% rate rises and rest of the country can sit back and laugh.
They made their bed and now they get to lie in it.
It'd quite unbelievable even commenter's here are defending the councils performance of setting a pland and budget.
Wellington CC clearly has had issues of extended periods of time doing 'the basics', but if you are a rate payer facing enormous rates hikes to fund projects jow are you feeling now? I know I'd be feeling horrific, especially with exposure to civil service down sizing (not commenting on right or wrong).
It is a complete and utter shambles.
"This appears to mean the Crown Observer will be tasked with advocating for the Council to take on higher debt levels, although Brown was not clear on whether that would be the case.
“Ultimately, they are taking on debt for other things but … 94% of their [water] capex is being funded directly from rates. They could be funding and financing that differently and reducing the burden on ratepayers,” he told reporters."
Debt (credit) to be provided by whom...the question is rhetorical.
Will those providing the credit be willing to so provide if they are needed to be taxed more in order to service and repay that debt?....I suspect not.
“The advice from the Department highlights that the 2024-34 Long-Term Plan shows the Council’s net borrowings for water services increase by just $66 million to fund this investment (6 per cent of the total), with the remaining $1.10 billion of capital investment proposed to be funded by rates (94 per cent of the total)."
“This is an inefficient and expensive way to fund infrastructure investment. The Council is front-loading costs on current ratepayers rather than utilising debt financing to spread the cost over current and future users of the assets,” Mr Brown says.
“The Department estimates that the Council’s financing approach to water services as set out in the 2024-34 Long Term Plan would overcharge Wellington City residents by more than $700 million over ten years."
See what I LOVE about our council, is they wanted to use their ability to access cheap debt to help Reading Cinema out, but don't want to use that same access to help residents out.
P.S we're not all numpties, but I suspect given the confused direction of activity and hiring practices in the public service, and the concentration of that public service in Wellington, we have a larger degree of numpties here than elsewhere. Pay is also higher so a lot of people don't mind voting for the gold-plated crap.
https://www.beehive.govt.nz/release/government-appoint-crown-observer-w…
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