Land Grab Unacceptable

A recent decision by independent commissioners finding against the Hastings District Council building the Northern Arterial Route linking Havelock North with the Napier Hastings Expressway sends a clear message to the council. Using local government powers to grab land is unacceptable and it that land is owned by Maori it is especially unacceptable.

Two years ago the same council lead by the same mayor proposed using the Public Works Act to take ownership of the road leading to Ocean Beach. Access over the road was never an issue so the action seems unnecessarily provocative, but probably had more to do with the councils involvement in the proposal for major beach subdivision.

New Zealand's short 200 year European history started with minimal impact on Maori when sealer's and whalers setting up camp in the inhospitable deep south. In 1840 organised migrations by the New Zealand Company saw a huge increase in settlers. British officials signed a treaty with Maori stating amongst other things the rights of Maori to retain their lands. Unquestionably it was a genuine effort to preserve their rights whilst establishing conditions suitable for European type settlement. Of course the advantage lay with the settlers because they controlled the process, were accustomed to a formal legal system and had a written language to record the details of the agreement.

Over time the spirit of the agreement was overlooked, ignored or forgotten and some fairly unscrupulous actions were used to wrench ownership of land from tribal owners. Whilst Maori often objected to these actions they were always powerless to stop the process.

By 1975 there was a concerted move for compensations highlighted by a protest hikoi from the far north home to Wellington led by 80 year old Dame Whina Cooper. Ultimately this led to the establishment of a formal treaty settlement process intended to investigate and compensate for the unlawful loss of lands. The cost already is more than $1 billion.

So what has all this to do with the recent actions of the Hastings District Council. Well in the light of history it seems totally inappropriate that the Mayor and Councillors of the Hastings District Council keep trying to repeat the wrong doings of our forebears 150 or more years ago. Do we really want to burden for our descendants with new claims some time in the future?

That $1.8 million has been spent on this project, much in recent years when the issue was already heading to court is astonishing. Better judgement might have seen the writing on the wall before significant funds were committed.

Is bigger better?

The proposal for a Hawke's Bay super city is not new. In 1999 a referendum revealed significant support by the people of Hastings, and an almost identical level of rejection by those in Napier. Will it be different this time?

Hastings Mayor Lawrence Yule has put forward his proposal promising to contest the issue at next years local government elections. This is an interesting approach because it implies political choice, rather than letting the people decide.

Before the people can decide, the benefits must be spelt out in detail. While duplication or triplication of premises and staff suggest tantalizing savings, it may not be possible to realise these? The plan as outlined by Lawrence Yule with two minor Mayors and a super Mayor plus two tiers of attendant Councillors and staff seems to negate the reason for merging in the first place.

He talks of an overall 5% savings. Since annual rate increases are of this order (though often hidden by borrowing) the gains seems rather meager. And if there are savings how might ratepayers benefit? Will ratepayers see a reduction in their costs. As a resident of the Hawke's Bay County Council prior to it being taken over by Hastings in 1989 I recall no rate reductions or improvements in services though some might argue no change is an improvement on what might have happened.

Only a full merger, or a compete take over of one city by the other will achieve any great savings, but to do so means there will be losers because jobs will be lost and in shifting to one location some people will experience significant inconvenience plus additional traveling costs getting to their local council. For instance car parking is already a problem and significant cost in Napier.

Any investigation must look at all options. Significant savings with much less disruption appear possible if Napier and Hastings simply absorbed the Regional Council. Where there is duplication there is opportunity for rationalisation and joint operations as already happens with the landfill and the airport.

And if there are savings how long will it be before they are swallowed up by the relentless mushrooming Local Government staff numbers? Perhaps we should look at a single city with a similar population to our two cities such as Dunedin to see if more, better, or lower cost services are provided.

It will cost millions to investigate and implement. The people should be told what these costs are up front before a cent is spent. Certainly Hastings does have a great record of managing major projects. We have only to look at Splash Planet, the Opera House, and the Sports Park to see how far astray the financial projections might be.

The two council system seems to have at least one advantage. People are able to make comparisons between the two organisations for services, efficiency and value for money.

It is claimed one city will have a stronger voice with Government. As President of Local Government New Zealand the Hastings Mayor is in constant contact with Government and it seems not to have bought any greater voice for the city. Lack of meaningful progress on the airport development is the ultimate proof of that.

Perhaps my greatest concern is it does not address the real problems facing Hawke's Bay. We have nearly the lowest wages in the country, high unemployment low population growth, lack of job growth, and plummeting visitor numbers. How will these things change with an amalgamation.

Certainly we need to get our act together. Is a super city a better way to the future?

Visitor figures misleading

British PM Benjamin Disraeli is credited with being the first to use the phrase “Lies damn lies and Statistics”

Its a very apt description of the situation involving visitor statistics for Hawke's Bay. Each month accommodation providers throughout the country submit figures from their guest registers thereby effectively measuring the health of the tourism industry. The results published as regional visitor nights are broken into domestic and international, and by type of accommodation, motels, backpackers, hotels and camping grounds. Generally any errors in design are repeated every year so the figures probably give a reasonable indication of direction, if not absolute accuracy.

The problem is a new element has suddenly emerged in Hawke's Bay which is seriously distorting the figures. Due to serious labour shortages on orchards and vinyards up to 5000 temporary “guest workers” are being bought in each season to provide the necessary work force especially during harvest. The bulk of these workers are from low wage countries in Asia and the Pacific. Their remittances must be invaluable to their families, while potentially of course reducing our obligations to provide official aid.

They are also hugely valuable to our economy because of the work they do, and the money they are spending on supplies such as groceries and accommodation. This spending could be worth as much as one million dollars a week to the local economy.

Many live on their employees properties in caravans and other housing. Some also stay in budget motel accommodation. One such establishment has been housing around 100 such workers which does not sound that many until it is remembered they stay for months. So one hundred people staying for 30 nights adds 3000 to international visitor totals which in May were 13,647 out of nearly the 60 000 total visitors.

Local Regional Council offshoot Hawkes Bay Inc recently crowed about the May international bed nights increasing by 1780 or 15%. Somewhat different to the experience of many in the accommodation industry who are finding conditions are the worst they can remember. Also very much better the 5% reduction in visitor arrivals for the country as a whole, adding weight to the doubt.

International guest night s using backpacker accommodation increased by 2041 for May YOY a larger number than the 1780 for all accommodation categories. There is no reason and no evidence backpacker tourism is growing. Almost certainly this number reflects pickers staying at backpacker type accommodation. This suggests without seasonal workers our international guest nights would in all probability have DECREASED.

Does it matter? Well the real worry is it will reinforce the poor decisions already made made leading to more bad decisions. It serves no purpose other than boosting the egos of those involved. This can be demonstrated by the somewhat fanciful claims by Venture Hawkes Bay CEO that the increase in international visitors is due to their media hosting programme and other initiatives. Somewhat inappropriate considering the true numbers have probably declined. It also understates the continuing and successful promotional efforts of the Napier and Hastings Councils.

If we are serious about increasing visitor numbers reducing air fares and increasing seat availability might do more. If the $1.5million spent by the Regional Council to support Venture Hawke's Bay was instead spent on the airport an infinitely greater return could be obtained.

The Oil Crises

In early 2008 as oil passed $US100/barrel I predictions it might reach $200/barrel within 2 years and petrol $5.00/litre within 3 – 5 years. From a high of $147 in July 2008 the price then plummeted to just over $32 in December. However long term I believe prices will continue upwards because demand will continue to increase while supply will not.

Oil production has, or is peaking. Most of the world major fields are in decline including the North Sea, Mexico, Saudi Arabia and Russia, and of course the USA where production topped out in 1970 and has now halved.

Every drop of oil has already been created and producers have found all the easy stuff. World capacity is about 85milllion barrels a day (mbpd). Any major new discoveries, or new technologies will only slow the decline in production. In the long term it's all downhill.

Low prices have severely curtailed exploration so new discoveries are now insufficient to replace the oil we are already pulling out of the ground. New discoveries will need high prices to justify the huge expenditures involved.

The high prices of 2008 suppressed demand as has the most severe downturn since WW2,. Yet the International Energy Agency estimates crude demand has fallen by only 2.47 mbpd or about 3%.

From a low of $32 last December, crude is nearly back to the 2007 average of $US72.36. As $32 is also well above the $US19.84 low following the 2001 dotcom crash it seems the whole pricing structure has ratcheted up significantly over the past decade. .

The worlds biggest oil consumer the USA accounts for over 20 mbpd or ¼ world production, and China which is still growing rapidly even in these difficult times, may move into top spot in just a few years.

We use petroleum for plastics, pharmaceuticals, home heating, and thousands of other applications. The World Energy Council calculates 7% of world oil is used for electricity generation. Replacing this with renewable solar, wind, tidal, and geothermal or even nuclear or coal must be given priority.

The biggest use however is transportation. In the USA it is estimated 50% of petroleum consumption is used for transport, and the figure may be even higher in New Zealand.

Oil is not going to run out any time soon but it could become very expensive. One US study found petrol prices need to quadruple for demand to halve. The inelastic demand for oil is means it takes large price changes to cause relatively small changes in demand. Or small changes in demand can force quite large changes in price, as evidenced by weakened demand and plummeting oil prices after the $147 peak. A return to very high oil prices could plunge the world back into recession. The very high fuel prices of 2008 probably contributed to the present economic downturn as people stopped travelling, and were forced to give up normal purchases so they could fuel their cars.

While environmentalists, planners and governments damn the motor vehicle we need to accept two realities. The world aspires to owning a car, and motor vehicles are a huge driver of economic prosperity. Much of the improvement in living standards over the past 100 years has been the result of improved transportation.

While public transport is far more fuel efficient, congestion and parking difficulties seem more important reasons for its use. The fact public transport needs subsidies and the support of draconian anti car measures suggests it is failing to respond as it should. Artificially encouraging public transport may in fact be distorting the situation.

If we want to retain any semblance of life as we know it we need a new approach because the fuels we now use are not a long term option. Alternative fuels must be developed. They must be portable and storable. Biofuels and hydrogen have both been touted as solutions but there are huge costs involved setting up the infrastructure . Biofuels may compete with food supplies, while hydrogen poses massive technical problems.

In the short term smaller vehicles and diesels offering greater fuel efficiency and lower CO2 emissions seem the most practical solution. Longer term electric cars are probably the only option. For the moment batteries have insufficient storage and are slow to recharge. A huge amount of research is targeting the problems. Some lightweight sports vehicles now boast up to 400Km between charges and in Israel a network of quick exchange battery stations is being developed. Generation and distribution can be built on existing electricity systems.

Meantime if we want to retain the style of living to which we have become accustomed and limit the extent to which central planning controls our lives, we must cut consumption to maximise the remaining life of the finite oil reserves that exist while we decide then implement viable long term solutions.

The Tourism Problem

Last week during a submission on the Hawke's Bay Regional Council 10 year plan, Wine Country Tourism revealed the disastrous state of our visitor industry. In addition to pointing out our visitor numbers have been in decline for 10 years, they also disclosed Hawkes Bay has one of the lowest international visitor numbers of any region in the country. This latter point should not be a surprise because the situation had been pointed out to all 3 councils just two years ago by consulting companies APR and BERL as part of their airport investigations.

Clearly the true position totally challenges the endless feel good PR pushed out by the councils and others who want us to think things are hunky dory. Of course if they had revealed the truth it would have raised serious questions about the competence of those whose job it is to drive the visitor industry.

HBWCT were asking the Regional Council to inject some urgency into the coordination of tourism activities and to expedite the development of a comprehensive visitor strategy. The Regional Council manages Hawke's Bay Inc which was formed in 2005 as a successor to Vision 20/20 and is funded equally by the 3 councils.

During the presentation it was disclosed they do not expect to have a visitor strategy until 2010/11 begging the question why they are in charge of tourism at all? Since its inception Hawke's Bay Inc seem to have accomplished little so it is probably unrealistic to expect an effective tourism strategy.

In the past 4½ years over $7 million of ratepayer funding has been poured in, yet little of value has been delivered other than a rumored $120 000 salary for the Chief Executive and mushrooming staff numbers. Clearly there has been major people problems because in spite of the remuneration it took nearly a year to find the first chief executive who then left within a year, and was replaced by an expatriate bought back from Singapore at great expense. He also left on completion of his obligatory 12 months. So we are now onto the 3rd Chief Executive in just over 4 years.

Our new Government has correctly identified Australia as our best future visitor opportunity. Visitor numbers from Australia have held up well in these troubled times. As fuel prices start to escalate again Australians will find trans Tasman travel quite attractive compared to longer haul trips to Asia, Europe and North America. Relative proximity makes New Zealand attractive but the problem for Hawkes Bay we have no affordable or convenient links. If we want Hawke's Bay to be a part of this we need to get real about travel. The indisputable reality is the modern overseas visitor travels by air, and Hawke's Bay needs decent air services if we are to succeed in attracting a share of these people.

Of course we can't compete because we have an airport that quite simply is inadequate. Visitors arrive in this country to places where there are modern innovative and affordable air services. They normally have a choice of airlines. With choice comes competition, ample seats, and affordability. Not so for Hawke's Bay. Here we are at the mercy of Air New Zealand a monopoly supplier who can provide as many or few seats as they choose, at what ever price they decide on.

For example last week I booked a flight to Auckland for the last Saturday of August, some 14 weeks away. The best price I could get for a one way flight was $160. Last week Emirates were offering return international flights from Christchurch or Auckland to Sydney for just $159. No wonder our visitor numbers are dropping.

We need to question our spending priorities. In addition to funding the Regional Council controlled HB Inc both Napier and Hastings provide significant budgets for visitor activities so total expenditure is much greater than the $7 million spent on HB Inc so far. Had this money been used to upgrade the airport we would now been a position to move forward and cater for the real needs of travelers when economic conditions improve. As it is we are still locked in a 1960's time warp.

There is no point in continuing to spend money trying to entice people to come here if we are not also prepared to provide the necessary transport infrastructure. If we don't want visitors then let stop pretending we do and at least save the money we are now wasting.

The Population Dilemma

A dose of reality from our civic leaders would not go amiss. In spite of all the hype about how Hawke's Bay is attracting people the statistics tell a different story.

For the year to June 2008 we had an increase in population of just 0.2%. Only Wanganui, Invercargill, Rotorua and Gisborne are growing at a slower rate while the fastest growing regions of Auckland, Hamilton and Tauranga all grew by 1.5% or more. Dunedin for years the butt of jokes asking if the last person to leave would turn out the lights, is now growing at about about 3 times our rate.

Longer term statistics tell the same story. Between the 2001 and 2006 censuses the population increased by 3.4% compared to 6.8% for Otago 6.4 % for the Bay of Plenty and 7.8% for the whole country. Projections suggest numbers could start declining within 20 years.

The issue of population growth is especially relevant right now because our councils are now preparing their 10 year plans. Surely the starting point should be the likely number of people living here.

Slow growth may not be bad. Less people means a smaller environmental footprint, but we need to consider this option carefully because growth seems essential to prosperity.

Growing numbers means more houses, more roads, more drains, more water systems, and more just about everything. The people involved in building and doing these things generate incomes which they spend, creating more economic activity.

If we look at Wairoa a downward spiral of people leaving, low prices for houses, a lack of houses being built, and a shortage of jobs seems well under way.

History suggests when the population falls the economy falls over. Ireland lost half its population in the 1800's, the population of Japan has been stable for several decades and declined by 51,000 people in 2008. In Russia the population has dropped about 5 million people since the fall of communism, while the former car capital of the world Detroit USA has lost half its 2 million residents since the 1950's

Wile there was a bit of a lift over the past few years these places seem to be heading back towards their normal depressed states.

There are two forces behind population growth , natural increase and immigration. Demographers claim it needs 2.1 births per couple just to maintain population at a stable level. This level of reproduction now occurs in only a few countries such as India, Africa the Middle East and believe it or not Australia. Most countries in the developed world have no natural increase the result of declining birth rates and the increasing mortality of an ageing population. Where population is growing it tends to be due to immigration (often illegal) from Africa and Middle East.

In Australia immigration accounts for half the 1.22% annual increase.

So back to Hawkes Bay. The fact we are growing slowly is indisputable. For the June 2007 year births exceeded deaths by 1036 yet the estimated overall increase in population was only 400 meaning at least 600 more people must have left than arrived.

This must be depressing the demand for housing and many other developments. Builders and other skilled people will eventually shift elsewhere in search of work and businesses may close down or shift.

Lack of population will also down grade education and health amenities so it will be more difficult to hold or attract skilled and highly paid workers.

Our representation at national level will decline. Thirty years ago we had 3 parliamentary electorates now we have two. In time this will likely decline further to just one. Fewer representatives means a smaller voice in the clamor for resources.

While Government is funding huge projects such as Eden Park, building motorways, electrifying commuter rail systems, and generally boosting the economies of the major urban areas we are being largely ignored. If we continue to shrink relative to the rest of the country we can expect to fall even further behind.

We need to make a conscious decision on the issue of growth. Doing nothing is not an option.

Perhaps its time to ask our Mayors justify their annual trips to the UK immigration fairs. The money spent might be better used finding out why so many people are leaving. Probably they are young and looking for opportunity, education and excitement. It's claimed they eventually come back, but do they? Or perhaps the question should be do they return before they reach their twilight years when their main contribution to the local economy is providing work for caregivers?

Extend the Runway

Water scientist Brett Stansfield believes the runway at Hawke's Bay Airport should not be extended because in his view air travel is fuel inefficient. 

Contrary to his claims flying is in fact fuel efficient when compared with auto's. Air travel also saves time, and is the only realistic means for long distance or overseas travel. A flight to Auckland using turbo prop Q300/ATR 72 type planes uses about one litre of fuel/15Km/passenger (70% full), or about 20 litres for each passenger over the 300Km journey.

In comparison a car gives about 10 Km/Litre (or 12 Km/Litre/passenger when adjusted for the average 1.2 passengers carried). Since the distance by road is 450 Km, half as far again as by air, each passenger accounts for almost 40 litres of fuel, nearly twice that of flying.

Now for longer journeys using B737/A320 type aircraft direct travel to Australia will carry each passenger nearly 25 Km per litre (80% full) and will also eliminate the 20 litres now wasted by each passenger flying via Auckland.

Mr Standfields views on flying are just Green party rhetoric and is typical of their double standards. Retiring Green Party MP Nandor Tanczos accepted a tax payer funded business class freebie world trip as a parting perk and party Co-leader Jeanette Fitzsimons  is a regular flyer. How else could she get to the voters?

Both the Green Party and Clark/Cullen Labour Government obstructed the runway development for over 5 years. We now have a more enlightened Government.

However the delay has allowed the airport to amass nearly $5 million towards the project and the cost has likely come down in the current financial environment. Prime Minister Key's proposed domestic treatment for trans-Tasman flights, and a possible security upgrade at Hawkes Bay Airport are significant developments, eliminating two of the reasons historically used as a crutch by the 3% of people APR consultants discovered were opposed to the extension when surveying the attitudes of residents for the local councils.

Mr Standfords seems unaware both BERL and APR calculated multi million dollar returns to Hawkes Bay each year and discovered Hawkes Bay attracts only half the number of overseas visitors that might be expected. Hardly surprising considering the extra costs, transfer delays, and unappealing small connecting aircraft. Already some 75 000 passengers a year travel between Hawkes Bay and Australia.

Now if we lived in Europe or Japan where high speed trains offer city to city travel times that are competitive with flying he might have an argument, but we don't. Here the automobile is the most likely alternative.

Before we worry about flights to Australia however we need domestic competition to reduce fares and increase seat numbers. This requires a runway extension to allow services by jet only domestic airlines such as Pacific Blue and JetStar.

Perhaps Mr Stansfield should stick to water where presumably he has some expertise.

Bold moves should be made now to ensure we are competitive when better times return.