The cost of promises

Voting has started in this years local body elections. After a week and a bit slightly over 20% of those eligible will have made their choice of representatives. If the trend of past elections is followed, this will have increased to a little over 40%. by the October 9th when all votes must be in.

Having opened my own orange envelope a can't help but feel one of the inhibiting issues keeping the vote down, is the complication of the system used for electing our Health Board.

It's hard enough finding candidates to support, without having to rank them as well. Of course it's a legacy of the Helen Clarke government and I think from a voting point of view we were lucky she ceased to reign, otherwise the system might have been added to all our ballet sheets.

Its likely some voters get through the mayoral section, find some councillors including the regional councillors, then are stumped by the health vote. Its human nature not to want to reveal a failure so perhaps these ballot papers are simply discarded. Certainly I have come across one voter who simply ticked those she wanted, not realising they also had to be ranked.

We all tend to try and influence others to vote the same way we do, but some go a little further. A large sign on St Aubins St in Hastings warning people “Our rivers are polluted” is a thinly disguised attempt to influence voters. Some who clearly feel it is aimed at them, have reacted in defense but have simply drawn attention to themselves and the message.

There have also been a series of candidate surveys that are possibly more interested in influencing attitudes, rather than finding out what candidates think. For example I was recently asked about fluoridation. I think its good but made it clear the community has a right to decide otherwise.

Quite a few candidates claim to be committed to sustainability or the environment. I always always look at the way they run their own lives because often this suggest unsustainable or anti environmental actions. For instance what sort of vehicle do they drive. I know of one lady who proudly urged people to vote green at the last general election with a huge sign in her garden, but had one of the smokiest home fires around.

Recently I was asked to fill in a questioner by our local newspaper. Questions related to the sports park, rejuvenating main street and amalgamation. There was no requirement to indicate costs and perhaps this should have been included.

One candidate wanted a light rail system connecting Napier and Hastings. Having watched near empty buses travelling between the city centres I am not at all convinced of the viability of such a proposal and believe the running costs would be horrendous. Not a problem of course because the candidate in question has no chance of winning and will probably loose his deposit for failing to reach the 10% threshold – again.

The Mayor wanted a first class hotel in the middle of Hastings to compliment the Opera House. Most people I know in the hospitality industry think it is a pipe dream but if a developer is willing to put up the money I have no problem, however I do worry about the likely cost to ratepayers of any concessions that might be made. Napier had a similar ambition a decade ago and went as far as buying up the wool exchange then demolishing it to make way for Te Pania. The developer went bust.

The Hastings Mayor apparently also wants an Olympic size swimming at the sports park on top of the velodrome and 3rd stage main building. The cost of all these could be nearly $50 million and it is hard to see rate payers wearing it.

I was very much more modest, suggesting more foot patrols by police, and affordable parking plus a few other improvements. I also suggested the one million dollars or so the council proposes to spend on widening footpaths, reducing the road width and reducing car parking spaces is a waste of money and is not wanted by retailers.

Because it is possible I might be elected Mayor I am determined not to promise more than I think can be delivered. It is better to be truthful about ones views

Candidates use a wide variety of measures to attract your attention , and vote. It also can take up a lot of time. Bill boards, fliers, meetings, newspaper, radio and even TV advertising, are all part of the mix I have used. Its all quite expensive and it is the candidates who put up the money. Only for the winners is it tax deductible.

Eventually however it is up to the voters to make some effort to find out what each candidate has to offer. If you don't then you have only yourselves to blame when you become unhappy with the outcome over the next three years.

Meeting the Regional Council

There are few opportunities to question our Regional Councillors in open forum but recently representatives of the hospitality industry met with aspiring and existing councillors.

As a board member of Hawke's Bay Wine Country Tourism Association I have an interest in visitor issues, and have watched the disaster of Venture Hawke's Bay from close range.

Nationally tourism is calculated to generate around 10% of economic activity and to create 10% of employment. Local figures suggest the visitor industry is at least this important to Hawke's Bay.

The Regional Council manages our RTO or regional tourism organisation, Venture Hawke's Bay which has been in the news recently after over spending its budget by $½ million in the past year.

One thing that stood out was the lack of importance given to this opportunity to meet the industry by most councillors. Only three saw fit to attend, including Elleen von Dadeleszen, Elizabeth Remmerswaal and Christine Scott.

Both the Regional Council Chairman Alan Dick and Chairman of Venture Hawke's Bay Neil Kirton failed to show. Aspiring councillors were rather better represented with five attending including Robert Burnside, Murray Douglas, Tom Belford, Tim Tinker and Hugh Richie.

It seemed to me the challengers had a much better grasp of the visitor industry than the councillors. All three councillors seemed unable to get past water quality issues trying hard to make somewhat vague connections to the visitor industry. This is not intended as a put down and I am not suggesting water is not important, just that it was not the purpose of the meeting.
The meeting was called by people involved in the Visitor industry to hear the views of all the candidates towards their industry, and in part because of general discontent with the Regional Council's handling of Venture Hawke's Bay over the past year.

Easily the best speaker from a commercial prospective was Murray Douglas who heads up the Chamber of Commerce. Murray has a great deal of experience in local government, but clearly also understands the both the Hawke's Bay economy, and the visitor industry.

Another excellent speaker was Tom Belford who publishes the monthly newsletter Bay Buzz. As expected Tom put more emphasis on environmental issues but also demonstrated an understanding of the visitor industry.

Local businessman Robert Burnside also seemed to grasp the key issues.

Tim did not make a huge impression on me.

Alas the candidate for Central Hawke's Bay Hugh Richie seemed not to appreciate that for a visitor industry to even get started, there must be transport. He started by expressing strong opposition to upgrading the airport claiming the bio security risk and border control costs were simply too high. The logic of his stance was hard to understand when there are already seven civilian points of entry throughout the country for international flights, plus two military air fields which also handle international services.

Of course for Hawkes Bay easily the biggest bio security hazard is the port. Already we have had major infestations of Argentinian Fire Ants and Southern Salt Marsh Mosquitoes. The port provides an essential gateway for our exports especially primary products which presumably includes the output from Mr Richie's farming operations so it seems he is willing to accept the biosecurity risk when he benefits, but not if it is someone else.

Of course agriculture with a $2 billion contribution to our GNP is worth far more than the visitor industry but on the other side of the coin offers much less opportunity for growth especially in the short term. If we are to lift the performance of the local economy, it is most likely to come from the visitor industry.

Overall I found the existing councillors disappointing. Remember they control the council that is in charge of our regional tourism organisation. Clearly they were asleep at the wheel when Venture Hawke's Bay was overspending its budget to the tune of half a million dollars. So, do they have what ever is needed to provide our future tourism needs.

I have serious doubts. In my view if these people are left in charge we will continue to experience the sort of performance problems we have been having. The no show of so many existing councillors is another issue deserving further mention. Regional councillors have lived in a sheltered unchallenged environment for far too long. Some have been on the council for over 20 years. Now they are being asked to front up in public they seem to be ducking for cover.

So for me the entire Regional Council is ready to be replaced by the new breed of enlightened, well informed prospects waiting in the wings. Alternatively the Regional Council should loose its involvement in the visitor industry.

Earthquake risk

The force 7.1 earthquake in Christchurch has inflicted $4 billion worth of damage on the city. Though it was frightening, 7.1 is not especially big. For every whole number increase in the Richter scale the amount of energy released increases by 10. So the Hawke's Bay Earthquake of 1931 was around 4 - 5 times bigger than the one that struck Christchurch. The Boxing day Indian Ocean earthquake off Indonesia that triggered the tsunami was 100 times bigger. That's pretty much as big as earthquakes get.

Looking at the television pictures I am amazed at the lack of reinforcing in so many of the buildings. Just brick plopped on top of brick. Little wonder it all fell down so easily.

Though this particular fault line was unknown, the risk of earthquakes to the city was well known. Just a few tens of kilometers away is the alpine fault, a fracture that extends the entire length of the south island. It is a close relative of faults that also pass through Hawke's Bay.

These fault tines are created by the impact of our planets Pacific plate grinding against the Australasian plate . Here in Hawke's Bay the former is diving under the latter but for much of the South Island the movement is horizontal.

There is clear evidence that at times in the past, hundreds of kilometres of the alpine fault line have moved at the same time. When this happens the result can only be a monumental earthquake of at least force 8 and possibly very much larger.

So to me it is a surprise the city of Christchurch was so ill prepared.

I was personally involved in providing media coverage of the Gisborne shake nearly three years ago and there as well was astonished at how easily so many buildings were seriously damaged. Christchurch now seems very like Gisborne was then though on a very much larger scale.

Hawke's Bay had its own disaster in 1931 but had also been warned only a couple of years earlier by a large earthquake centered somewhere close to Porangahau. Incredibly in the same area as our own recent rash of quakes, including a 5.3 shake.

Some took heed of the danger and most notable of these was the Public Trust Office. We have all seen pictures of their Napier edifice standing intact against a background of total destruction.

Woodford House school was also alarmed by the inadequacy of their architecture and demolished a near new classroom block to replace it with a seismic sound structure. This decision may have saved the school from being put out of business.

Since most of Napier and the most vulnerable structures in Hastings fell down the bulk of our older buildings are made from ferro concrete.

So where does Hawke's Bay stand today. My guess is most houses will survive a major shake mainly because they are built from wood. Likewise I feel most commercial buildings will still be standing or at least will stand up for long enough for everybody to get out unharmed.

The biggest danger I see are the other affects of ground shaking. Clearly liquefaction, or the way waterlogged sandy or alluvial soil takes on the properties of a liquid when shaken could be a problem. Probably more so in Napier than Hastings because the water table is often just below the surface, as evidenced by the many pumping stations around the city.

Under severe shaking structures could simply sink into the ground or could even be swallowed up completely.

For me the biggest risk is tsunami. Any great movement on the seabed would cause massive displacement of the sea and this could easily turn into a wall of water racing several metres deep across what we now think of as dry land.

Its even possible the land gained from the sea could be returned to the sea if the ground level drops.

So are we prepared. Well I think not. I have watched how we handle much smaller events such as the serious flooding around Tamatea a few years ago, and more importantly the South American tsunami earlier this year.

For a start we have an organisational problem. All three councils run their own civil defence operations. There seems to be nothing binding them together, and judging by their handling of the tsunami there seems to be total inconsistency on how to handle an emergency.

If a wall of water meters deep heads to the city how are the authorities going to get everyone out of the way. How are those without transport or mobility going to be saved? What are the chances of roads being impassable?

All roads out of the city need to be made one way instantly, and there must be a plan to open paddocks for car parking so the roads do not block up and become impassable. We may have as little as 10 minutes of opportunity to save people after which it could be too late.

Few of us have ever been involved in a real emergency rescues. If there is a plan who knows of it? What manpower will be available?

The only people I have any confidence in is fire and ambulance services who are used to dealing with emergencies. Unfortunately I am not convinced the police will make any great contribution. Even beyond the initial impact army and others from outside may struggle to get here.

Chances are the airport will be closed though perhaps Bridge Pa might be operational, however do they have generators to operate the runway lighting. One area where we do seem well endowed is helicopters but is there a plan to coop their services?

We don't want to become paranoid but my concern is , there is no plan, and no one capable of making a huge difference in an emergency situation.

Trans-Tasman air merger

The Australian regulator ACCC has turned down a proposed merging of trans-Tasman services by Air New Zealand and arch rival Pacific Blue.

And rightly so. This was a blatant attempt by our national carrier to reduce competition. In any other industry if two competitors were discussing the elimination of competition between them, they would be charged with anti competitive offences punishable by huge fines and even jail sentences.

While the Tasman is often said to have the most competitive air space in the world, this really only applies to services starting and finishing in Auckland where multiple airlines operate.

This move shows up Air New Zealand's anti competitive colours again. When they can't drive the opposition out of business as they did with Kiwi Air, Qantas New Zealand, and Origin Pacific, they resort to forming alliances. In 2006 it was a code share with Qantas, and most recently shared services with Pacific Blue, which they claim will result in more seats, more destinations, and lower fairs.

Highly unlikely.

We only have to look at Air New Zealand actions in recent years to anticipate what might happen. Two years ago when Air New Zealand monopolised services from secondary gateways such as Palmerston North and Hamilton they dropped them. Services out of Wellington and Dunedin were greatly reduced.

Only the arrival of Pacific Blue forced a rethink with Rotorua added to the trans-Tasman network to combat the reintroduction of services to Hamilton and increased capacity applied to Wellington and Dunedin by Pacific Blue.


Our own consumer watchdog the Commerce Commission seemed reticent to deliver a swift no , at least until the Australian equivalent the ACCC delivered its decision. In 2006 the ACCC saved us from the proposed Air New Zealand code share agreement with Qantas.

Imagine if Telecom wanted to combine with Telstra Clear, the Power Companies wanted to combine, or Supermarkets proposed a merger. It just wouldn't happen so why is this somehow different?

It seems New Zealand consumers have been saved by the Aussies again.

The real cost of building consents and approvals

In this country as is the case everywhere else in the developed world the building industry is a major driver of economy activity.

For instance it is lack of house building in the United States that is preventing the return of prosperity. Here in New Zealand a marked slowdown in housing and non residential construction is also causing concern.

When someone undertakes to build a new house, factory, or some other structure a wide range of resources are mobilised

Land must be prepared, roads, sewers and water supply installed. Utilities such as phone, electricity and gas must be connected up. Then the building starts in earnest. First the concrete people, then the carpenters, plumbers, electricians, roofers, and finally plasters, painters, and carpet layers.

Somewhere in the process are the real estate people, financiers, and local council staff.

This last group have a duty to maintain certain quality standards. Bad design work by draftsmen, and architects, poor construction techniques by builders and developers and a change in materials such as replacing treated timber with kiln dried wood has led to the leaky homes problem. In time this will cost Government, local authorities, and home owners billions in dollars to remedy.

I have struggled to understood how we could build homes for over 150 years without them rotting away only to have widespread failure in the past 20 years. Perhaps for much of history those in the industry assumed buildings could leak so certain safe practices were adopted to prevent catastrophic failure. For instance roofs were extended well out from the walls so any water not captured by guttering was thrown well clear of the structure.

I remember the designer of my last addition insisting on heavy duty water resistant felt being laid before the tiles were put down. He explained this by saying all roofs can leak the trick is to ensure no damage occurs as a result.

Luckily for Hawkes Bay people the problems seems greatest elsewhere especially in Auckland. Mediterranean style houses without eves in a city where it rains ever second day is clearly inappropriate.

The leaky homes problem has resulted in very much tighter building codes being introduced. It is the duty of local councils to approve all the design features and to sign off the work as it is done. No argument with making sure we do not have a repeat performance of leaky homes.

However over recent weeks I have come across many in the building industry who have experience major problems with the consent process, especially where the Hastings District Council is involved. Now everyone likes to complain about their council but the same people reckon the difficulties are nowhere near as bad in Napier.

The nature of the complaints are diverse.

For some it is the excessive delay getting various stages of construction signed off. The boxing may be in place, the reinforcing down but the concrete cannot be poured until it had passed inspection. In Napier I am told you can ring in the morning and someone from the council will be there that afternoon. In contrast in Hastings it might be next week, and apparently there is always an air of unhelpfulness.

For others it is the seemingly randomness of the decisions. Works can be in an advanced stage when new previously unmentioned demands are made.

I was looking around one small commercial building recently and was told the developer had decided not to proceed with a second project next door after his experience with Hastings District Council Staff.

I hear there are people who are not prepared to build in Hastings at all because of previous bad experience.

A friend of mine recently had a bay window installed. The design was submitted and approved and a bill for nearly 1000 dollars including GST submitted. The window was installed to the point a further inspection was needed before closing the addition in, at which point the construction was disallowed.

Apparently the drawings lacked sufficient detail to reveal possible problems even though the design had been approved based on the drawings.

OK its only a window, but it seems similar difficulties are being encountered with whole houses.

While these problems annoy developers, home owners, builders and a whole lot more, it is not their inconvenience that worries me the most. It is the damage it is doing to our economy.

Having to do additional work after the job is completed adds to the cost. Delays waiting for parts of the job to be approved mean having to stop work and trades people put on stand down. Then there is the cost of getting approvals. Apparently for a new house in the tens of thousands of dollars.

All of these things make building unattractive and if people decide not to go ahead then jobs are lost. In the current climate this is something we can ill afford to let happen.

In July Hawke's Bay was one of only five out of the country's sixteen regions to post a drop in residential building consents compared to last year. Commercial approvals also a dropped.

I cannot understand why the Hastings District Council is so difficult to deal with but in the minds of most of those in the building industry it is a huge problem.

Clearly there is a management issue. Perhaps there are not enough suitably qualified and experienced staff, or maybe its an attitude problem. Certainly senior council staff seem to regularly exhibit a belligerent attitude refusing to accept any shortcomings on their side.

This must change. We cannot have a small bunch of individuals holding the wider community to ransom. Council staff are the servants of the people not rulers. While they are subject to legal requirements they also have a duty to help, not hinder.

If the situation cannot be changed then perhaps the wrong people are running the operation. An alternative might be to sub contract the work, perhaps even to Napier where at least people seem much more satisfied .

One Job one pay

Hawkes Bay Regional Councillors are paid a little under $50 000 a year each and Napier and Hastings councillors under $30 000 dollars a year each. The extra paid to Regional Councillors is supposedly due to the very much larger asset base the Regional council has which includes the port, leasehold land around Napier and significant assets held elsewhere.

While the regional council has done an excellent job in maintaining the value of these assets it must be remembered the key elements such as the port were inherited and are not as a result of good decision making by the present incumbents. I suspect if all that wealth has gone to the other two councils it would have all been dissipated by now on money loosing wasteful pipe dreams.

In addition to their base salaries many councillors are paid extra as chair persons of the many committees all three councils have. Typically this adds about $10 000 to their base income.

The Mayors and chairman of the Regional Council earn around $100 000 an amount that is probably appropriate for the job but still a good little earner especially as none of the present trio would be likely to get an equivalent paying job elsewhere.

The base salaries are not especially generous and there are councillors earning these amounts so some presumably have other jobs or other sources of income, and this is entirely understandable.

Others such as Hastings Mayor Lawrence Yule have previously owned businesses or farms and clearly they have spent many years building up these assets and do not want to give them up.

Generally I am not especially interested in these activities as they have not been acquired or developed as a result of their council occupations. Most retain these interests as something to go back to, when they are no longer in elected positions.

Some however are involved in activities that might be seen as pushing the boundaries.

One that stands out in my mind is the present Mayor of Hastings. In addition to being Mayor he is President of Local Government New Zealand a job paying $84 000 a year when he took it over and presumably rather more now two years later. This job involves a huge amount of travelling away from Hawke's Bay something the Mayor seems very fond of. It might be interesting to know how many days or part days he has been out of the area over the past year or two.

In addition he is Chairman of the Regional Sports Park, a position the other trustees receive $15 000 a year for, and Chairman of the Pettigrew Green Arena. Until recently he was also on the Board of Venture Hawke's Bay another job most board members were paid $10 000 a year for.

While there are often calls for people holding public office to reveal their wealth as MP's are now required to do, I personally am less concerned with their wealth and more about whether they have to time to do the job they are elected to do.

Another local body politician that interests me is Regional Councillor Neil Kirton. A while back I noticed he held the title Eastern Police District Victim Support District Manager. A position I understand he no longer holds but with a name like that it sounds very important and well paid. I have no idea if it was a full time job but who knows for sure.

In addition to being a Regional Councillor Mr Kirton is Chairman of Venture Hawke's Bay which I understand to be another paid position.

Its probably worth while reminding listeners that Venture Hawke's Bay has been in the news lately for all the wrong reasons including a ½ million dollar overspend in just one year..

Perhaps the problem is the people charged with providing governance are simply too busy to put in the real effort needed.

The only other one who deserves a mention is perhaps the Mayor of Napier. Though never publicly mentioned it seems she is or has been involved in a Wellington based business providing training for school boards of trustees.

I imagine these boards need all the help they can get, and the present school governance system goes back several decades so it is possible this involvement started well before the Mayor became Mayor.

There is nothing in anyway illegal about any of these activities. The point I am making is when people are elected to represent the community we have a certain expectation of unencumbered commitment. Clearly to a greater or lessor extent we are not always getting it.

So this is my suggestion. Rather than demanding a breakdown of assets held by local government officials we should be provided with a list of other income earning occupations or commitments especially those in anyway linked to their elected positions so at election time we can be sure the people we are electing are going to be available to do the job.

Anyone wanting to be elected must understand they are doing it so they can contribute to the community, not for the money.

Picking a candidate

It is generally acknowledged that local Government rates are increasing very much faster than prices generally.

We all know Government especially the last one piled increasing responsibility onto local councils effectively shifting the burden and this certainly had an effect on costs, however I think much of the reason is due to the people running local government, especially our elected representatives.

Being a local councillor requires no qualifications what so ever, other than being able to persuade voters to support you. There no vetting, no checking qualifications and experience, nothing in any way to ensure a candidate is capable of understanding the issues and making informed decisions.

A person could be illiterate and still turn up meeting after meeting voting on all sorts of issues of major importance to the community, without understanding anything of the subjects involved.

As Councillors often have no idea what they are doing this has to be one of the reasons Local Government administrators have become so powerful. Now in contrast to the elected representatives the management are cleaver people. Often very cleaver, highly qualified, and very influential.

But both the governance( that is the councillors) and Management have one very serious short coming, and that is they lack practical experience in the real world. They live in a feather bedded environment where the consequences of getting things wrong are not especially onerous.

Whether previous experience is important or not probably depends on what else you have done in the past. For some, previous council experience is probably the only relevant qualifications they have. Often you can pick these people because they reappear election after election hoping for the certainty of another 3 years guaranteed employment.

Now councils are huge enterprises. Here in Hawke's Bay the Napier, Hastings and Regional Councils all have a turn over in excess of 50 million dollars a year. That puts each of them in the league of big business.

Ask you self would you feel confident of our councillors running some major business? I know I wouldn't.

As many of you will know I am one of the candidates seeking public office, and I am often asked about my lack of previous local body experience. Frankly I think it is my experience outside of council that makes me qualified.

I don't want to go through all the details though I have had some senior positions in very large companies. Along the way I have picked up some very useful skills, but is as a small business owner that I have acquired the survival skills that cannot be learnt working in local government, or even in big business.
When I make a mistake, fixing the problem comes out of my pocket. So I have got quite good at learning from anything that goes wrong, and I go to great efforts to not making the same mistake twice.

In a small business you are in charge of production, marketing, finance, human resources and everything else.

Small business owners often work for very little , sometimes for quite a long time before starting to enjoy the fruits of their endeavours

In the real world making a mistake can be catastrophic. No ratepayers to pick up the bill. Get it wrong and you're bust – kaput- bankrupt. No income, no business perhaps no house

This is a world most council employees and many councillors simply can't imagine. For them getting it wrong simply passes the cost on to ratepayers. Most councillors and many staff would struggle to get an equivalent job in the private sector.

Remember the disaster when the Auckland Regional Council bought the LA Galaxy and star David Becham to New Zealand. A seven figure loss paid for not by those responsible for the disaster, but by ratepayers who had no choice in the first place, and none when it came to paying.

In Australia a number of councils were caught out by the sub prime mortgage fiasco collectively loosing several hundred million in the process.

So what is my point.

You can normally judge the suitability of people by their past performance. Those representatives with a history of association with bad decisions will probably continue to make make bad choices.

If you don't vote, or make your choices for very superficial reasons then you will likely get the sort of representatives that will eventually make you very unhappy.

People that are very enthusiastic, very persuasive, and have lots of ideas, may lack a sense of realism and that may cost you dearly.

Pushing idealism over realism is often why councils get it so wrong so often, when they stray from the things they do well like roads, water, sewerage, rubbish and other basics.

Everyone makes mistakes but not every one learns from them.

Remember vote for those people you actually want or you will likely end up with people you don't want.

Vote carefully my friends. There is no 90 day probation period. It takes 3 years to correct bad choices.

Local Government Elections

The process to elect people to represent our interests on local councils has started.

For the people of Hawke's Bay this means one of: the Hastings District Council, Napier City Council Central Hawke's Bay District Council or Wairoa District Council plus the Hawke's Bay Regional Council and Health Board. Some voters also get to select a member of the rural community board.

For our local council we get to choose a Mayor and councillors, but for the Regional Council and Health board we do not select the chair person.

In both Hastings and Napier everyone gets to vote for the Mayor but for councillors there is a ward or electorate system that effectively allocates some positions to represent specific suburbs. In Hastings these are Hastings city 6, Havelock North 2 , Flaxmere 2 Heretaunga 2 and the farming areas of Kahuranaki and Mohaka 1 each.

In Napier the system is a little different because some positions are allocated to wards and and others are councillors at large.

Six (6) Councillors will be elected at large across the whole city and Six Councillors will from four (4) wards :

Ahuriri 1, Onekawa-Tamatea 1, Nelson Park 2, Taradale 2

Nominations have now closed and but voting will not start until Friday Sept 17th and will continue until the final day of polling in October .

All local government voting is by postal ballot. If you have enrolled on the parliamentary roll, you will be on the roll for local government elections, and every ratepayer is automatically enrolled. For those who are newly arrived in the area or have changed address and are renting, it pays to check you are enrolled if you plan to vote. This can be done at local libraries or at the council offices.

There are no preliminary results though some indication of the turnout is normally announced throughout the voting period. At best only about 40% actually choose to participate, meaning 6 of every 10 do not vote. I will come back to the reasons shortly. Voting is not compulsory.
The councils all use the FPP system meaning the winner is the person with the most votes. Preliminary final Election results are released a few hours after polling closes at 12.00 noon on Saturday October 9th . Though all voting papers must be with the councils before that time, there is a delay of a few days in getting a final, final result because the votes must first be sent to the counting station.

Local councils and the Health Board can have quite an impact on our lives. Just about all the roads are built and maintained by councils, not as some may assume by Government.

Water supplies, sewerage, rubbish, libraries, are all council services, and we tend to take these things for granted. Perhaps the easiest way to think about it, is councils provide all the things we need and use on a daily basis.
In contrast Government tends to do the big things like the police, defense, design the laws, and run the country when dealing with other countries and make welfare payments including superannuation.

Generally council rates take less of our money than government, but rates must be paid whether you earn anything or not so for some people rates are quite an onerous expense. When the people standing for office promise you something you can bet it will cost you.

So voting in local body elections is important.

Now I mentioned a little earlier that 6 out of ten people people don't vote and the obvious question is why not?

My view is it is not because the issues are not considered important but because its difficult to relate the issues to the people standing.

There are no parties so we must choose individuals, and the individuals are just a list of names most of whom we have never heard of.

As a result existing office holders have a huge advantage because their names are more likely to be recognised than new and unknown people.

From a practical point of view the avenues for publicity are limited to leaflets, billboards, and a little bit of advertising.

There are some meetings arranged by third parties but in the case of the Hospital Board and Regional Councillors there were no public meetings last election. This in my opinion is why so many Regional Councillors have been in office for so long, many for seven terms or just over 20 years.

The amount that can be spent is strictly controlled. For community boards its $3500, for Hastings between $7000 and $20 000 depending on population, and for the Hastings Mayoralty $40 000.

In the past voting used to be on a specific day, much like the general election when we choose our Government. As only a small percentage voted it was decided to change to postal voting. The numbers are probably not much different.

When filling out the voting papers it's worth remembers you don't have to vote for every position on the ballot sheet. If you can see only one person that you really want, then you should vote for that person only. If you add additional names you may end up effectively voting against the one person you really want.

Ultimately the thing to remember is “if you don't vote you cannot complain about what subsequently happens”.

Venture Hawke's Bay

It has become apparent that on top of everything else there are significant financial problems at Venture Hawke's Bay.

As most people do not have a clue what this organisation is all about

Although I have no direct involvement in VHB and have met only a few of the staff as a board member of HBWCTA I thought I would try to explain a bit about this mysterious organisation. .

Even my very limited contact has always left me with concerns, mainly I think because I did not have a lot of confidence in many of those involved.

The purpose of VHB is two fold. To foster economic development, and secondly to act as regional tourism operator.

I strongly support economic development. We have low incomes, high unemployment, low population growth, and feature on the wrong side of many health statistics.

We also need to be more successful in attracting visitors. For the past several years our numbers as measured by visitor bed nights have been dropping at a rate that puts us seriously into negative territory, and makes us one of the worst performing areas in the country.

Around 2003 the Napier and Hastings Councils combined with the Regional council and agreed to provide an additional $200 000 each on top of funding already being provided for tourism development bringing the total budget funded incidentally by ratepayers to a little over $1.2 million a year.

This organisation became Hawke's Bay Inc with former former Hawke's Bay Regional Council Chairman Ross Bramwell as its first Chair person. The first two Chief Executives departed quite quickly and the third Janet Takarangi was appointed in 2008. As best I can fathom it was during this period that quite substantial financial reserves were built up effectively because for much of the time there was no Chief Executive on the payroll

A year later both the NCC and HDC decided to stop their funding and pass control and responsibility for funding to the Regional Council. Effectively this was a sneaky way of increasing rates because the RC introduced a new targeted rate where as previously it had been funded from existing council resources. If you look at your regional Council rates bill you will find a specific sum dedicated to paying for VHB.

At the same time Ross Bramwell stood down and was replaced by long time critic Regional Councillor Neil Kirton. There seemed to to have been endless problems over a long period with the accuracy of the financial reports. We can only assume the Regional Council headed by Andrew Newman were more than happy to take on this additional responsibility. They probably saw it as an elevation of their regional status.

A board was appointed consisting of representatives of the 3 councils, and at least 3 people with commercial backgrounds. The board however, and this is critical, was not a governing board but a consultative board, meaning financial control was in the hands of the Chief Executive, the Chairman Neil Kirton and the Regional Council Chief executive Andrew Newman.

Staff numbers then built up rapidly with at least 17 positions on the establishment. Additionally several consultants seemed to be engaged on various assignments.

Throughout 2010 the whole empire has been unravelling. A $130 000 advertising campaign based around a $57 000 animation was intended to boost visitor numbers over summer, but fell foul of many accommodation providers especially Moteliers.

Numbers may have lifted slightly in January but the depressed state of the industry continued unabated. There was continuing and ever more shrill criticism, until in June 2010 the Chief Executive decided to leave.

Rumors about the financial plight have been circulating for quite some time but now the balloon has gone up.

The nearly half million dollar deficit is a major blow out and only about half can be funded from reserves. The rest will come from a loan from the Regional council to be repaid over 5 years meaning there will be less money for essential work in the future. Clearly this is a disaster and the situation is not sustainable.

At a recent meeting of tourism interests Regional Council CEO Andrew Newman was a key speaker. He talked about some of the problems and indicated there would me more redundancies both to bring expenditure down, and to free up money for promotional activities. I felt there was a lack of acceptance of accountability, and I saw no evidence of a plan to move forward.

The simple fact is ratepayers are being billed over a million dollars a year to support an organisation that seems to have had few successes. The decisions relating to VHB are traceable to the Regional Council and with elections looming now is the time to be asking the hard questions.

Clearly ratepayers will not tolerate a further increase in the targeted rate, and why should they. There is little evidence the money already spent has produced any lasting benefits.

Funny Money

Recently the Hastings District Council announced a contribution to the sports park from the Lotteries Commission, a fund set up specifically to fund such community projects. This is the second donation towards the park that is clear of scandal and not an effective ratepayer payout. The other was from Hastings Pack and Save towards developing the netball courts.

Contributions from the Hawke's Bay Regional Council, and Unison are either rates funded or are from some sort of compulsory levy, and are not given freely by those who are actually paying. There is no little box on our rates demands and power accounts allowing us to support or declining these payments.

I am not going to get into the details of the Higgins donation, but in my opinion awarding millions of dollars of contracts in return for a donation does not constitute a donation as was claimed by the Hastings Mayor. The process may have been cleared by the Audit Office but that investigation was requested by Council rather than being the result of a complaint. Personally I find it shady and not the sort of thing any council should be getting up to.

Buried in the Hastings District Council estimated for at least the past two years has been the sum of one million dollars intended as a contribution from Hastings towards the planned extensions to the museum in Napier,

It seems there might be a similar sum in Napier being set aside as a possible contribution towards the Sports Park. No doubt when the appropriate decisions are made to release these monies there will be much fanfare and toasting by the two Mayors.

We should see the situation for what it is. Rather than admitting to pouring money into the park and the museum, the councils are simply swapping cash and calling it a donation. Hastings will give Napier a million dollars and Napier will give Hastings a million dollars. In no way, shape, or form, are these true donations.

Ratepayers in both councils need to realise they are about to be conned.

Somewhere in all this nonsense it also seems to be forgotten that at the time Nelson Park was sold an undertaking was given to allocate $3 million of the proceeds to central city green areas. That is, $3 million of the $17 million net received from the sale. So far there is no sign of this happening, and while in due course something will be done, the reality is the Sport Park has already gobbled up all the proceeds from the sale.

The sports park funding seems clouded in secrecy and misleading disclosure. Recently I attended a public meeting on the subject. For some strange reason it was chaired not by the Mayor who is also Chairman of the Sports Park, but by Ross Bramwell former Chairman of the Regional Council and also Hawke's Bay Inc.

I asked about the cost of water and waste water services. These services are likely to be very expensive, for instance waste water will require a three Kilometre pipeline. The Mayor claimed both water and wastewater costs were in the budget but I have my doubts.

I also asked about roading upgrades for both Evenden and Percival Roads and was informed by the Chief Executive that the cost was included in the LTCCP and not the park estimates. I have yet to find the amount but clearly it is likely to be in the millions of dollars as well.

I think other Sports Park costs are being buried. A chief executive has been hired and now the position of Recreation Programmer is being advertised. There have also been significant fund raising costs including the $300 000 a year paid to Kelt Capital.

Clearly contributions to the park are not paying for these expenses.

Its a pity the Mayor and the clutch of tame councillors who seem to fall into line every time a contentious issue arises, find it necessary to support this lack of transparency. It is giving the sports park a bad image.

Though I have always disagreed with the Sports Park location, the athletics track and grand stand were always going to be built somewhere once Nelson Park was sold.

The velodrome is a new new idea but I have come to the conclusion that provided a Government contribution can be obtained we should support it whether we are cyclists or not.

Our visitor industry is in the doldrums. We need attractions that will bring more people here. With the only other indoor velodrome located at the bottom of the South Island we should get a useful boost should our efforts succeed.

But it is difficult to to determine either the costs or the returns, when the Hastings District Council is determined to conceal critical financial information that might help people make an informed decision on the issue.

Gisborne Rail link

There has been much recent agonising over the future of the Rail Link between Gisborne and Napier

Certainly one or two trains a week pulling just a couple of wagons, or a load of super phosphate fertiliser hardly seems sufficient to warrant the cost of keeping the railway going and some think it is time to close the line down.

Others want the line kept open because of an expected long term increase in wood products.

So are those who want to keep the railway line operating futuristic, or futile?

When the line was first envisioned in the 1920's circumstances were very different to the present. Gisborne was even more isolated than it now is with an over night ferry service to Napier while road transport was in its infancy.

Hawke's Bay had been connected to Wellington in the 1880's and the main trunk line from Auckland to Wellington opened in 1908. The Gisborne line was one of the last major rail links to be built in New Zealand and was severely restrained by Depression era finances. It did not reach Gisborne until 1942 during WW2.

War time needs and fuel rationing meant the line provided an essential link back then but now rail must now compete on price and convenience with trucks.

There was a time when many large manufacturers had their own railway siding for convenient access to the rail system, but now for many using rail means multiple handling transferring freight to the rail head the loading it onto wagons.

Rail can work but but for bulk loads such as Solid Energy shipping huge quantities of export coal from the West Coast to Littleton.

Like wise Fontera would struggle to transport the huge volumes of milk from Oringi near Dannevirke to Harwara if it could not load it onto several trains a day. In Australia rail lines are used to ship bulk products such as iron ore and coal from the mines to the ports.

The line to Gisborne simply isn't in this league. Heinz Wattie's tried shifting bulk tomatoes in the the 1980's but they soon found having trainloads of ripening tomatoes all arriving at once did not suit the continuous needs of their production line processing.

Even shipping logs means multiple handling, but much is being made of the so called wall of wood expected out of Gisborne in the next few years, and containerised loads of processed wood products may be a different matter. .

Internationally passenger rail is making a huge comeback but this involves specially engineered systems capable of handling speeds of 200mph (320Km) and more. Such services offer travel times that are competitive with flying for distances up to 1000Km .

Passengers traffic also seem unlikely to return to rail, even though travelling by train seems a much more attractive proposition than bus or even car. It seems highly unlikely high speed rail will ever operate on New Zealand's narrow gauge single track system, and even less likely such trains will ever link Gisborne and Hawke's Bay.

Additionally Gisborne does not have the same inter dependence with Hawke's Bay that it once had. Rail is no longer practicable for all those passengers travelling north to places like Auckland.

One thing a rail system needs is reliability and the line to Gisborne has suffered some major problems over recent years. During Cyclone Bowler in 1987 a major wash out just south of Gisborne put the line out of commission for well over over a year, and a few years ago a Bridge collapsed at Nuhaka again making the line unusable for many months.

On the other hand rail can be an important alternative. For a time after the main road bridge at Wairoa collapsed during Cyclone Bowler the only way the two halves of the town could be connected was by using some old freight carriages pulled by a freezing works locomotive then based in the town. .

Undoubtedly energy prices will keep rising and shifting freight by rail is very fuel efficient. This might eventually make rail competitive again though there are many other costs considerations that need to be taken into account. Electrification is also possible but unlikely.

There have also been calls to convert the line to a cycleway as happened in Central Otago. This could boost tourism but requires that the tracks be ripped up.

While there are occasional railcar and steam train excursions, these are not regular users. Even in Central Otago the heart of tourism country, the steam train powered Kingston Flyer seems unable to attract sufficient patronage to be profitable..

It is likely to be many years or even decades before conditions are right for rail between Hawke's Bay and Gisborne to be viable.

Unless Government is willing to keep propping up the line then closure seems inevitable.

The only practical solution seems to be if services are put on hold, the system should be left in place, because provided the tracks are still there, the line could be recommissioned. If the tracks are ripped up that will be the final curtain for the rail system, for ever.

Road safety

The results of a new state highway evaluation method called Kiwirap or Road Assessment Programme saw all state highways in the country classified into one of five groups, from one star to five star.

The method judges roads according accident density or the number of fatal and serious accidents per kilometre of road.

There were no roads anywhere with one star rating, nor were there any roads judged five star though some sections under the minimum 5 K length met the five star requirements.

Four star highways or roads with only minor deficiencies, were all in either Auckland, Wellington or Christchurch. In Wellington about two thirds of the length of the highways was deemed to be four star, while only one quarter were two star.

In Hawke's Bay all roads were judged two star. That is all state highways had major deficiencies such as poor alignment and roadside conditions .

Hawke's Bay roads were judged some of the poorest, and we have two of the three most dangerous roads in the country. SH 2 from Napier to Hastings was number one , and SH2 from Napier to Bay View was number three.

This is highly unsatisfactory. I have already commented on how we seem to miss out on so much meaningful Government expenditure. Recently the New Zealand Transport Agency called for tenders to build one of New Zealand's most expensive-ever roading systems, the two billion dollar 4.5-kilometre long Waterview Connection in Auckland, linking the Southwestern motorway with the Northwestern motorway.

On a per capita basis if we were to get that sort of money we would be getting $200 million. Some important upgrades are now underway including the southern extension of the expressway, road straightening at Dillans hill on SH5 to Taupo, and the Matahura Gorge deviation on the road to Wairoa.

The out of town upgrades are good especially for trucks, but traffic volumes mean these roads are not deemed as dangerous as the two worst sections of SH2.

I was disappointed but not surprised there was no comment from our local government leaders. They seem more interested in gaining funding for pet projects rather than fixing life and death issues.

Bad driving does cause accidents and there has been some talk of lowering the speed limit to 80K, but the present limits are appropriate for major arterial roads.

The problem is lack of money to fix the problems. Making it easier to pass and having more slow lanes for turning traffic would help. At the Marine Parade end of SH2 there are large Norfolk pines, and near Hastings deep ditches on both sides of the road. The ditches could be piped removing one obvious danger while at the same time providing more space for slow vehicles and turning traffic.

Some accidents involve pedestrians and cyclists and even more effort is needed to provide a continuous walkway/cycleway between Napier and Hastings, starting where there are bridges.

There is now firm evidence there is a problem, so we must act. We need to make a better case for some serious spending. We need to prioritise safety and efficiency. Lets do so before we are dealing with another fatality.

Marineland

Two years after Marineland's last dolphin Kelly died and the attraction closed to the public there has been no decision about the future of the facility. Many marine animals and birds continue to live there, either because they are sick or because they would not be able to survive in the wild.

For nearly 4 decades Marineland was a unique New Zealand attraction allowing close up contact with a range of marine birds and animals, especially dolphins.

Unlike most other council owned businesses in both Hastings and Napier, Marineland was was not a huge drain on ratepayers pockets, and even with just a solitary dolphin could still pull in the audiences. Not just locals but people from throughout the country, and from overseas. Marineland helped pump millions of dollars into our economy

So with the closure of Marineland we have lost an important magnet, and almost certainly this is contributing to the general malaise in our visitor industry.

Moteliers in particular believe the drop off in families a group that seemed most likely to visit Marineland, is especially pronounced.

The visitor industry is especially important to Hawke's Bay contributing perhaps 10% to the economy overall. While we remain a major holiday destination with Wine and Food and Art Deco the mainstay attractions, supported by events such as the Mission Concert and Horse of the year these are all very seasonal. Marineland was a year round attraction making it especially valuable.

An independent report in 2006 calculated an overall contribution of $5 million to the Napier economy and also claimed Marineland was the top priority for many visitors.

So what are we going to do about it?

Other countries including Australia and the USA have dolphin attractions so replacing the dolphins is a possibility, but catching live dolphins at sea and keeping them in captivity is not an option. This would require an upgrade of the facilities and the cost could be prohibitive.

The reality is all four dolphins at Marineland lived well past their expected lifetime in the wild, so clearly they were well cared for once they assimilated to the conditions.

There has also been talk of turning it into a butterfly house or other similar attraction, but it is hard to imagine such a facility having anything like the benefit to the visitor industry.

Since the Napier City Council is already paying for the staff, keeping the facility open during school holidays, or for weekends is surely an option. The seals and other and other marine animals are still an attraction.

The Friends of Marineland Society suggest $2.5 million has been spent over recent years just evaluating upgrade proposals. If true it might have been better to have spent this money keeping it open.

It is time for openness by the Napier City Council with all the cards laid on the table so the people can better judge the options, rather than leaving the decision solely to an elite who seem committed to tucking the place away.

For the moment Marineland seems to have become nothing more than a bus stop and continuing complaints suggest it is not doing especially well in this new role.

Hawke's Bay Airport

The announcement suggesting the Hawke's Bay Airport upgrade was about to start, looked positive but was really more of a public relations exercise and photo opportunity.

Many people have been fooled into believing competition is arriving and they can expect lower airfares. In fact this is highly unlikely because those involved have decided to build a runway that is just 150 metres too short to be sure we get the services we really need.

Just why the runway is to be extended to 1750 metres instead of 1900 metres defies logic. Almost certainly it is guaranteed to fail.

Three of those claiming credit are the very individuals who have held the project up for the past 6 years. The Mayors of Hastings and Napier, and Airport Chairman John Palairet failed to act as they should have after being warned of serious shortcomings in the 2004 Pricewaterhouse report on the airport.

Instead they dithered inflicting tens of millions, perhaps even hundreds of millions of dollars of economic damage on the Hawkes Bay economy.

This is now showing up in depressed visitor statistics, subdued business activity and reduced spending power in our community as millions of dollars are unscrupulously syphoned out by excessively high air fares. The drop in visitor numbers is conservatively estimated to be costing the region at least $10 million a year.

We have lost many important employers over recent years and those remaining complain of both the high pricing and the inflexibility of Air New Zealand services.

Transport is essential to our economy. Air Transport essential for it to function efficiently. Some 400 000 people a year use air travel because of convenience, urgency, safety and practicability The fact numbers are down about 10% on 2 years ago delivers a clear measure on the true state of the Hawke's Bay economy.

No other airport in New Zealand attempts to operate jets from 1750 metres. While very limited services will be possible the slightly lengthened runway will impose restrictions that will make scheduled jet services less likely.

Those who loosely claim competition is just around the corner might like to explain just which aircraft will be able to operate commercially from the new runway.

One thing is clear the $5.5 million extension will not enable trans-Tasman services, ever.

While Airbus A320 jets as flown by Air New Zealand will have some capability to provide domestic flights, the airline has made clear their opposition to flying jets into Hawkes Bay. In the past they have gone so far as to threaten legal action to prevent development charges being imposed to finance a runway extension

Jetstar also operate Airbus A320 aircraft but look unlikely to fly here. So far they offer services only to the three main centres plus Queenstown. Since they have not opted to service smaller centres its hard to imagine why might they come to Hawke's Bay?

The third domestic carrier is Pacific Blue, who fly Boeing 737– 800 aircraft to the three main centres, Queenstown, Dunedin and Hamilton. They seem more likely to be interested in adding Hawke's Bay to their network. So, has Pacific Blue stated the runway will be of sufficient length for commercial operations?

At best we might see the occasional Air New Zealand charter or non scheduled flight in support of events such as the Rugby World Cup, but achieve little improvement in the outrageous pricing that is doing so much damage to Hawke's Bay.

It seems strange that both Mayors have been quite willing to sink more than 100 million dollars into conference venues, sports facilities and various attractions, all of which have been justified on the basis of attracting visitors, yet they have been so tardy in making Hawkes Bay more accessible.

The $7 million of ratepayers money poured into the Regional Tourism Organisation Venture Hawke's Bay might have been more usefully employed upgrading the runway.

We are the most inaccessible large population centre in the country, and the largest urban centre in the country not to have any sort of jet services.

We have allowed a barrier to be created that simply dissuades people from coming here, is a disincentive to new businesses being established, and allows monopoly pricing and services. We would not accept such an arrangement in telecommunications, energy, or for most other products and services, so why are we so apathetic when it comes to air services?

While the new runway will be inadequate it is better than nothing but on the basis of $5.5 million to build 450 metres another $1.8 million would build a 1900 metre runway.

Significantly this far less than the amount the board have always claimed.

Extending the runway is a one off cost. The worst that could happen is air services do not improve.

Compare this with the millions lost annually by other council operations such as the museum, Aquarium, Splash Planet, and the Opera House. Splash Planet alone has cost ratepayers $10 million in accumulated losses.

Higher patronage would help all these ventures and getting more visitors here will go along way towards increasing numbers.

A 1900 metre runway would allow both B737 and A320 aircraft to operate both domestically and to Australian East Coast capitals without restricting passengers. Airport profitability and cash reserves, mean the work can be done at no cost to ratepayers.

To most people it's a no brainer.

Elections Issues

The Mayors of Napier and Hastings have both signaled their intention to stand for fourth terms in this years local Government elections. Hardly a surprise since neither could earn near as much as they now do, doing anything else.

Its a winner takes all proposition. For the incumbents loosing means loosing everything. The $100 000 salary, the council supplied motor vehicle, expense accounts, and prestige.

The Mayor of Hastings appears especially concerned. He has already publicly identified me as a serious challenger, perhaps with some justification as 3 years ago I came within 4000 votes of winning, when totally unknown, and campaigning on a single issue.

I am now better known and recent favorable media publicity over the airport issue has been helpful.

It seems he has engaged the services of a Wellington Based polling company who are asking whether respondents think the Mayor is doing a good job, who did they vote for last time, plus what do they think are the major issues. Surely questions the Mayor should have been asking a long time ago but instead he has chosen to ignore opinion that was not aligned with his own.

My guess is the Regional Sports Park could become his achillies heel, as he ignored the protests of significant sections of the community, firstly over the sale of Nelson Park, then dismissed criticism over the location of the new facility.

Funding for the Sports Park appears to be in disarray. Donors are not queuing up to provide support and the council is hiding the extent of the shortfall. Kelt Capital were paid around $300 000 in the first year with little or no return. A new fund raiser has now been appointed. At a guess some half a million dollars has already been paid out, just trying to get money in.

It seems the $17.5 million realised from the sale of Nelson Park is all spent. The circus involving Higgins Construction being given $1.9 million of council roading contracts in return for a half million dollar donation towards the park, is not a good look.

While Unison and the Regional Council have chipped in $3.5 million towards the Vellodrome it must be remembered these are publicly owned institutions so those funds are not exactly donations but more like compulsory charges.

The only real voluntary contribution is the very generous donation from Hastings Pak and Save.

The Mayor of Hastings would like us to forget these difficulties and has decided to make the amalgamation of Napier and Hastings his primary election issue. Chances are it is not paramount in the minds of Hastings electors.

Unfortunately the Mayor of Hastings is not also the Mayor of Napier as well because the present Mayor of Napier seems to have a quite different view of amalgamation stating in the past week that she sees no benefit for Napier, in joining forces. My observation is she is supported my the majority of residents of Art Deco city.

So does the Mayor of Hastings know something none of the rest of us know? Is he in secret talks to have Government force an amalgamation against the will of one of the two parties, as effectively it has done in Auckland? Or is he hoping to include Wairoa and Central Hawke's Bay so the no vote from Napier can be overwhelmed.

Clearly he has ambitions to be the new Mayor of Hawke's Bay Super City. This however is unlikely to ever happen, not because there will be no amalgamation but because he is unlikely to gain the support of Napier voters who believe Hastings is a cot case with out of control debt levels.

Last election he captured 11 000 votes, about 55% of the Hastings total while the Mayor of Napier gained over 15 000 votes or 80% of the vote. If they were competing head on for the same job it is clear the Mayor of Napier has a head start of 4000 votes and would likely win.

Its a year since the Hastings Mayor first nominated amalgamation as the big issue so it seems strange there has been no proposal to have a referendum included in the up coming elections. Or does it simply acknowledge that the result will be similar to 10 years ago when the idea was soundly rejected by the people of Napier. In any case referendum allowing people to vote on the issue would take it completely out of the arena for this years elections.

Clearly having two cities plus a Regional Council is wasteful. Three chief executives, duplicated heads of departments, two Mayors and a Chairman plus a couple of dozen surplus councillors suggest there are significant savings on offer.

There are other opportunities for savings by combining various activities. I have previously identified Emergency Management as one such area. Another glaring opportunity is IT or information technology. All three councils operate their own computer systems with significant hardware costs and many support staff. All three have recently updated their systems at huge costs to ratepayers yet all three have systems that are apparently totally incompatible.

If the Mayor of Hastings wishes to reduce the cost of local government why has he not pushed harder to amalgamate at least some of the most wasteful services.

Its not too late for the issue to be put on the Ballot paper. Doing so might destroy the Mayors campaign plans but it would give the rest of us a clearer picture of where we stand.

Some months ago I commented on Venture Hawke's Bay.

This is the organisation that started out as Hawke's Bay Inc.

It was set up about 5 years ago when the Hastings District Council, Napier City Council, and Hawke's Bay Regional Council all agreed to provide a further $200 000 each a year on top of the $200 000 each then being used to help develop our visitor industry.

The purpose of Hawke's Bay Inc is “to foster regional economic development”

It took nearly a year to find a chief executive who lasted less than a year.

After a significant delay, a second chief was appointed. He too departed right on 12 months.

The third chief Janet Takarangi, formally of trade and Enterprise then got the job. She has now departed as well but this time it has been announced no replacement would be appointed.
During her time in charge the organisation changed it's name from Hawke's Bay Inc to Venture Hawke's Bay and at the same time governance and responsibility for providing funding was taken over by the Regional Council.

Incidentally if you look at your regional council rates demand you can see exactly how much you are paying through the targeted rate.

In spite of the changes the organisation seems unable to function as might be hoped.

For the current year spending is at least $200 000 over budget.

A TV campaign that ran in October also attracted much criticism as did a new web site.

Now I am no expert on Venture Hawke's Bay but I have had some concerns from the outset. As a board member of Hawke's Bay Wine Country Tourism, a voluntary organisation set up to represent businesses involved in the visitor industry I have a little bit of experience in dealing with Venture Hawke's Bay.

I always had reservations with the people involved. To me they have had neither the experience or qualifications necessary to advance our position.

Somehow local political involvement always seems a problem. Hastings Mayor Lawrence Yule clearly perceived a growing crises some months ago and resigned before the proverbial, hit the fan. Involving ratepayers has cost Hastings District Council at least $2 million.

It's now clear that in spite of some $7 million in total being spent, there is not a lot to show for it.

Three chief executives seems rather excessive. As each departed continuity has been lost so each new chief has had to start afresh.

Last time I expressed the opinion former Chairman Ross Bramwell was at least partly responsible but clearly he is not alone as over 12 months has now elapsed since his departure. The problems are apparently much deeper.

There is a need for a concerted effort to lift Hawke's Bay out of the mire, but before we even try to make a start we need to understand and accept our local economy performs near the bottom of all regions.

People are leaving the area faster than replacements are arriving meaning population growth is less than the rate of natural replacement, that is births over deaths.

Our population growth is only one third that of Auckland of Auckland and half of New Zealand overall.

We have high unemployment, low incomes, and poor health.

Our visitors numbers are less than 2 years ago.

Businesses leaving and not being replaced. Finding new businesses, new employees, and new opportunities is long term stuff.

Our economy is dependent on primary industries such as animals, forestry, apples and grapes and this is unlikely to change at least in the short term. While these are solid industries they are unlikely to give us the boost we need.

We must do very much better. Because if we do nothing things will just get worse. The problem is those in charge seem to have little relevant experience.

So how can we possibly move ahead when our political leaders only claim to fame is they have been political leaders. A former car dealer, school librarian, and a farmer are reasonable occupation but do not provide relevant backgrounds when it comes to driving the economy forward.

To my way of thinking they are far too comfortable, too well paid, and are over rated.

We have leaders with agenda's that have more to do with their own embellishment than bettering things for Hawke's Bay overall. Leaders also unwilling to stick their neck out and demand better things from government, but willing to waste huge amounts on projects that satisfy their egos while loading the community with millions of dollars of on going long term costs.

The problem of debt

Over the past few months there has been a growing awareness of the problems caused by debt . Greece was near the point where lenders considered the country could not pay the interest, let alone repay the capital on its huge borrowings.

Government borrowings exceed the total annual output of the economy. Earnings especially from tourism have been hit especially hard.

The size of the debt problem has necessitated a massive trillion dollar bailout by other more financial European countries, plus the IMF.

Greece is not the only problem in Europe. Portugal, Spain, Italy and Ireland are also on credit watch.

The problem is simply, too much borrowing.
Debt is always a burden though normally manageable. Interest must be paid to the lender and eventually the amount borrowed must also be paid back. If there was no debt there would be no mortgagee sales, no bankruptcies, no sovereign debt issues.
With Greece far too much money ended up being wasted on social agenda's. So instead of adding to their productive capacity it simply propped up unsustainable programmes that might have made people feel good in the short term, but did nothing to grow the economy in the longer term.

Companies also get into trouble borrowing too much. Feltex was a classic example of getting it wrong and they went broke because the housing market slowed down in Australia and carpet sales slumped.

Closer to home the Hastings District Council is engaged in a spending binge. It started innocently enough with $6.2 million borrowed to build Splash Planet. This amenity was supposed to be self funding but patrons have failed to reach more than about half the numbers forecast, so losses totalling about $10 million have resulted.

The only way to make up the deficit is for the council to find the money. For council read ratepayers.
If that money had not been lost council would have been $10 million better off and that might have been available for other uses such as to fixing up the footpaths . Or it could have been left in ratepayers pockets.

Four years ago about the time when council debt started taking off some $15 million was spent upgrading the Opera House. While there were some generous contributions from local business ratepayers still contributed close to 10 million dollars.

Operating losses already amount to a further 3 to 4 million dollars.

Now the Hastings District Council is developing the new Sports park in Percival road. The cost seems likely to be $60 – 70 million. Though Nelson Park yielded $17 million after the site was cleared it seems clear work to date has exceeded this so ratepayers are already funding the shortfall.

While there have been some generous contributions from Unison and the Regional Council towards the proposed Vellodrome more than $10 million is still needed.

As Council debt has grown in the same period it is clear the Sports Park is contributing to the problem.

For the record Hastings District Council debt is forecast to grow to over $100 million up from $37 million in 2006. That's nearly triple the Debt in just 4 years and more than total annual council income from rates and fees.

The chances Sports Park will be self funding are near zero.

We are not yet a cot case like Greece though we are on a greasy slope. Its so easy for politicians to justify borrowing to fund pet projects, and so difficult to find the means to repay it when the time comes. Inevitably it is the little people who end up paying for the extravagances.

RSE workers

During late summer and early Autumn Hawke's Bay has an influx of people from Pacific Island nations such as Vanuatu and Samoa who come here to work on our Orchards during the fruit picking season. They are known as RSE workers. RSE stands for Recognised Seasonal Employer.

The scheme was introduced about three years ago as a result of growers having major problems getting the labor needed to get their crops off the trees, during the short window for optimum quality for each variety.

The money they earn helps them to provide better lives for their families back home, where it might well take a year to earn the same as a months wages here. But the benefits are far from one sided.

The contribution these people are making to the Hawke's Bay economy is huge. In the years before the scheme was set up growers might be limited to two picks, then have to abandon perfectly good fruit on the trees because later maturing varieties were ready to pick. Not any more. Every salable last apple can be harvested.

Since the bulk of on orchard costs such as pruning, spraying and rates have already been paid for, the economics of growing apples improves significantly.

The extra output then creates more work for packhouses, transport shipping companies and anyone else involved in the horticultural industry.

Orchardists love them because they are here to work. They aim to take as much money home as they can so there is no unexpected absenteeism following pay day, no turning up late, just committed enthusiastic workers. Some are now returning for their 3rd season creating a growing pool of experienced workers.

Increasingly they are put up in permanent facilities such as budget motels where they are warm and dry, and where meals can be properly organised.

They pay around a $100 a week for accommodation. This income has made a huge difference to many accommodation providers at a time when our visitor industry is not doing all that well. Those providing this accommodation also describe them as top people, law abiding, polite, and a pleasure to have.

Paying for accommodation is just the start. In addition to the food they consume while living here they buy clothing, shoes and a whole range of other products to take back with them. One item that has proved very popular this season is solar cell power systems.

Each worker must be injecting a minimum of $200 a week into the Hawke's Bay economy, a total equal to at least half a million and perhaps as much as one million dollars a week, for 3 to 4 months. This has to be at least a partial explanation retail turnover statistics especially for Hastings have remained strong over the recession.

The gains don't stop with their work and the money they contribute. This money ends up with the families of these workers, without the ticket clipping deductions by officials and bureaucrats that is common with direct Government to Government aid. Help ends up where it is needed.

It is clearly a win - win – win situation. It can't get much better than that.

GST

Though not yet officially announced, this months budget looks likely to include an increase in GST from 12.5 to 15.0%.

It is clear we are being softened up with promises direct rates of income tax will be reduced at the same time.

Personally I feel cynical when I hear these arguments.


The same line was used in 1986 when 10% GST introduced and perhaps there was some truth in the promise because back then the maximum marginal rate introduced by Rob Muldoon was 66%. Lets hope we never get back to such incentive destroying levels, though I think Helen Clarke would have liked to have done so.

We also had to contend with sales taxes which were often around 20% for things like automotive parts and certain appliances. GST certainly removed many anomalies that existed at time. For instance the same item used for automotive uses was taxed but the same item used for something else was not.

The problem is new taxes are simply ratcheted up when ever there is a problem. Within 2 years new Finance Minister David Caygill solved his problems by increasing GST from 10% to 12.5%

In 1999 when Helen Clarke became Prime Minister the maximum marginal rate of personal tax was hiked up to 39%. No balancing reduction in GST of course. It was claimed only a small number of high earners would be affected. Nine years later a substantial number of workers found them selves on the maximum rate.

Now we are being spun the same old argument supporting a rise in GST so direct taxes can be lowered so there is an incentive for people to work, so there is less incentive for tax avoidance and so on.

One new element this time is the argument we need to be competitive with Australia who we are told might reduce direct taxes to 30% the same rate as company taxes. Australia has a maximum marginal rate of nearly 50%, plus capital gains tax so the fears seem unfounded. seems to have been forgotten. We are almost certainly loosing people to out neighbors cause of incomes, and lifestyle not taxes.

Of course the obvious question is: What is to stop some future Clarke/ Cullen type government increasing tax rates to 40% or more again? The only way to stop this happening is for a multi party commitment and that is highly unlikely.

Another argument wheeled out is how much lower our GST is than say Europe where it is around 20% .The Comparisons are always selective of course. In the USA there is no GST, just state sales taxes which are typically around 5% the mark.

In Australia GST is only 10% with exemptions for quite a few items such as non processed foods, medical expenses like doctors visits and the like. If Government is truly concerned about comparisons perhaps we should just match their GST rate.

The PM promises no one will be worse off.
Irrespective of his intentions I think there will be plenty of people who are worst off. Number one on my list is superannuates. National super is based on average wages (currently 66 percent of the net average wage) not costs so even if there is some sort of boost to super this will likely not be permanent unless super levels are set at a higher fraction of wages.

One of the most onerous effects will be the effect on peoples savings. If you have managed to put aside some reserves for major purchases unexpected expenses or retirement then on the day GST is increased the purchasing power of those savings will reduce by 2.5%.

Imagine a young family saving for a brand new house. On the day GST increases a $400 000 house suddenly jumps in price by $10 000. If they have managed to save $100 000 for their deposit then those saving will suddenly decrease in purchasing power by $2500.

It is almost a form of legalised theft.

Only way to ensure no one worse off will be a 2.5% government top up of all private savings. Let see if Prime Minister John Key believes his own rhetoric and makes sure no one is worse off by finding the money to do so.

Government Spending

The allocation of most Government services such as police, hospitals and social welfare is based on population tweaked a little to reflect specific regional differences.

However there are some areas of Government spending where the playing field seems far from level, and where Hawke's Bay seems to miss out rather badly.

The first of these is Government funded institutions.

For instance there are universities in Auckland, Hamilton, Palmerston North, ( Palmerston North also has a teachers training college ) Wellington, Christchurch ( where there are two universities ) and Dunedin. These are hugely beneficial to local economies through the employment of many well paid staff, as well as through general spending.

Local economies are also boosted by student spending, especially those students attracted from other parts of the country or from overseas.

Where there is a university the population is likely to be better educated giving these areas a competitive advantage when trying to attract new businesses. Undoubtedly lack of a university is one reason why we rank poorly for the number of people with tertiary qualifications.

We are the largest major centre in the country without a university. Many of Hawke's Bay's young people must travel outside the area to obtain skills and training. This is a huge drain on theirs, and their families finances, and extracts vital spending out of our own economy.

Military bases are another important boost to some areas, but not Hawke's Bay. Palmerston North is clearly a winner with two. An air base at Ohakea, and a major Army Base at Linton. Auckland also gains with an air force base at Whenuapai, plus the Navel facility at Devonport.

Of course the big winner from Government spending has to be Wellington as the capital city, where not surprisingly incomes are the highest in the country.

Some areas also seem to get a very generous share of Governments spending on one off projects. Te Papa museum in Wellington was built entirely with Government money and a major part of its annual running cost is also met by Government.

Helen Clark generously promised some 190 million dollars to upgrade Eden Part for the Rugby World Cup when she was Prime Minister. An upgrade that will provide huge long term advantages over other parts of the country when competing for major events in the future.

The present Government has thrown in another $20 million for a half share contribution to purchase Queens Wharf in Auckland to provide a giant party centre for the rugby world cup with more on promise.

Infrastructure spending by Government is also significant. Hardly a week goes by without an official announcement of some major new public works somewhere in the country.
Wellington looks likely to get a billion dollars to build a new motorway through transmission Gully to the north of the city, one of the seven roads of national significance to be given funding priority.

The new Victoria Park Viaduct & Tunnel Project in Auckland is expected to cost over $400m and there are several other huge roading projects proposed for our largest city.

Only a few years ago Tauranga was given a 250 million dollar harbour bridge as part of the deal to gain Winston Peters support for the minority Labor administration.

Commuter rail systems in our two major cities are also being upgraded at tax payers expense. Double tracking of the line north of Wellington and extending the electrification to Wakanae will cost $90 million.

These are all important projects which could not proceed without Government funding but Hawke's Bay seems to be missing out.

With 150 000 people Hawke's Bay is about 1/10th the size of Auckland. On a per capita basis we might expect to get about 1/10th as much as Auckland and perhaps a quarter to a third as much as Wellington. It doesn't seem to happen though.

For instance the $190 million spent on Eden Park equates to $19 million for McLean Park. Well as I recall we got just $2.1 million.

So who is responsible for this sad state of affairs?

Well I blame the politicians starting with our local Mayors and Councils. Compared to the endless string of demands coming out of Auckland we seem to insist on nothing.

For instance our two Mayors let the Crown refuse to contribute to the airport upgrade , when there was a legally binding agreement that specified Government was to pay half of any development costs.

Of course both our Mayors seem to have developed separate but parallel career paths in Wellington so perhaps their willingness to compromise Hawke's Bay's interests are understandable.

I think we also have a problem with our Parliamentary representatives. In spite of having up to five MP's including two cabinet ministers living locally until recently we seemed to have no effective voice.

Unless we start getting a better share of meaningful Government spending we can expect our local economy to continue performing poorly.

Population Growth

Recently released new population projections forecast the number of people in Hawke's Bay will increase by a maximum of 0.2% a year, until 2026 when numbers are expected to start falling. There are only 3 other areas where a decline is forecast.

Some people may think this is good news, after all the planet can only support so many of us. We are using up the worlds renewable, and finite resources at an alarming rate.

Water is under huge pressure and tap water is now obtained from purified sewerage in some places like the UK and parts of Australia. Some fish stocks have been cleaned out and may never recover. Oil production has also plateaued and will likely start declining within the next decade.

So there is a conflict between sustainability and economic survival, however we need a touch of realism.

Hawke's Bay could sink beneath the Pacific Ocean and it would not make a dot of difference to world sustainability. Unless the world at large is willing to grapple with the issue huge economic damage will be done by moving out of sync with the rest of the world.

By 2027 Hawke's Bay is forecast to have another 3000 people. This compares with another 600 000 people for the country overall so we will shrink compared to the rest of the country.

While these numbers are at odds with the 8200 increase expected by 2045, according to the Heretaunga Plains urban development strategy proposed by the Regional Council, both sources are effectively projecting low growth.

The problem with a low growth is two fold. As our share of the nations population diminishes our claim to resources will decline accordingly. Already we seem to miss out on Government spend ups. We have no university, so our young are forced elsewhere. Some of our hospital services are already sourced from Palmerston North and as specialisation intensifies more services could be relocated.

The second problem is population growth is a major driver of economic growth. As more people settle here the economy is stimulated by boosting demand for housing, and infrastructure, such as roads, water, sewerage, airports and so on.

To the people that matter we are recognised as the 5th largest urban area in the country. But by next census we may have slipped to 7th place behind Tauranga and Dunedin, and then suddenly we may find we are just not as important as we used to be.

Nothing will drive people away from an area faster than a lack of jobs, and if more people start leaving more jobs will be lost. Already people are leaving Hawke's Bay in droves and although births are helping off set these losses the net result is low growth.

Population stagnation will mean economic stagnation.

In the city of Detroit in the USA, once the center of American automobile manufacturing industries started leaving, so more businesses packed up. Then even more people lost their livelihood. Within about 40 years the population halved. Suburbs are derelict and abandoned. The city is broke, crime is rampant, and people are still leaving.

If we want a half decent future we must not allow this to happen to Hawke's Bay.

So how fast should we grow? That of course is the key question and I do not know the answer, but I firmly believe 0.2% is way too low.