Strengthening the Opera House

Published HBT Friday 9 Dec 2015

The Hastings District Council is about to start the consulting process on the future of the Hawke’s Bay Opera House and former Municipal Buildings. These iconic Hastings structures are judged earthquake prone suggesting they could collapse with catastrophic consequences in a major shake. Initial indications suggest it will cost $10 million to fix the Opera House and $24 million for both buildings, depending partly on the extent of strengthening undertaken.  Whilst 34% of code for new structures will comply with the law, engineers regard 67% as the minimum acceptable target if strengthening work is undertaken. Nor do we want a repeat situation if standards are further enhanced. 

This is not an exact science and these are not precise figures. Different engineers have different interpretations, and in at least one other local instance a more invasive structural investigation has produced an entirely different assessment. It has also been suggested the council’s risk analysis is incorrect.

It is a great pity problems such as unreinforced brick columns were not identified when $15 million was spent on the previous major upgrade just a decade ago, even if council has been exonerated by a report it commissioned. This was the first of Mayor Yule’s think big projects and its perhaps worth remembering at the time both he and Chief executive were professional engineers.  

Clearly the softening up process has already started. The Mayor has claimed (HBT 24/11/15) that already $20 million is in the budget somehow implying there is already cash in hand. This is not true. It still has to be borrowed and Hastings debt, costs, and rates will increase as a result.  A statement “that keeping the Opera House is a no-brainer”   from internationally acclaimed urban designer and member of the independent work group, James Lunday (27/11/15) has no substance  and is simply intended to sway public opinion. The group has provided no financial estimates, no operating forecasts, no indications of proven public need, and has no councillor representation. Nor does there seem to have been any attempt to establish if the facility is still fit for purpose. For instance it appears the stage is not acceptable to either the National Orchestra or NZ Ballet company. 

Even more troubling is the apparent inclusion of the $12.5 million Civic Square upgrade that was initially put on hold following the Opera House assessment, plus additional money for a CBD hotel. Together these could easily cause council debt to increase by $40 million and the impact on rates will be profound. Once built these facilities will create even more as yet unspecified ongoing operating expenditures, and as before will likely contribute nothing towards interest costs or capital repayments.  Significantly the HDC has actually made significant savings since the Opera House doors were closed.  

With some councillors already claiming they have not heard a single voice in opposition to spending such a huge sum of ratepayers money it is clear the community needs to get involved or the decision will be foist upon them without their true involvement. People of all persuasions must make their views known if the decisions made by councillors are to reflect the communities views.

These are architecturally unique heritage buildings and visually Hastings would seem a very different place without them. However it is not entirely clear whether the enthusiasm is for the architecture or as a place of assembly. Inevitably the consultation process will be flawed because council will pitch it in a way that tilts opinion towards the outcome it wants, and most of those making submissions are likely to also be of that persuasion. We cannot listen to just the shrillest and most emotive voices.  

Ideally this decision should be decided by referendum but this option will likely be ignored because it might produce an unwanted outcome in the same way the referendum on amalgamation failed to produce the desired result.  

The airport name is important

Published HBT 31Oct 2015

The Airport directors have decided to accept the name Ahuriri Airport Hawkes Bay despite significant public opposition back in May when the idea was first mooted and rejection of the idea by the Hastings District Council. Certainly Napier City Councillors did approve the proposal with just one dissenting vote but, interestingly, there were no subsequent formal discussions between the airport board and HDC and NCC councillors. It is the Board’s failure to appreciate the commercial implications that should be of greatest concern. Apparently only three of the four directors were actually present when the decision was made though it has not been revealed who was absent.  

The issue of the airport name and ownership should not be confused. The claimant group Mana Ahuriri has first right of refusal on the crown’s 50%  share of the airport business so may become the major shareholder sometime in the future. However, so far there appears to be no formal agreement with government to sell, or the claimant to purchase. Unfortunately,  Mana Ahuriri has not disclosed it’s expectations and may simply be seeking a source of income which might impede airport services. Or it may be far less of an impediment to progress than the Crown has been. 

Most New Zealand airport names are aligned with their city locations, exceptions being Hood aerodrome in Masterton  where scheduled services have ceased and Richard Pearce airport in Timaru where flights are minimal. Similarly, in Australia names such as Mascot and Eagle farm have been displaced by Sydney and Brisbane, though in the worlds largest cities with multiple airports name alignment is often impractical. Interestingly the correct names for Heathrow and Gatwick are actually London Heathrow (LHR) and London Gatwick (LGW). 

Branding is crucial in the  commercial world. Think Coca Cola, McDonalds, The Warehouse and many other well known names. Branding is recognition and reputation. Millions are spent creating brands and protecting them. It is essential Hawke’s Bay also has a strong and consistent brand. We  promote Hawke’s Bay as a visitor destination, we have a Hawke’s Bay Chamber of Commerce and a Hawke’s Bay Regional Council, and had our councils  amalgamated we would have had a Hawke’s Bay Council. Other Maori organisations elsewhere have acknowledged the importance of effective branding. Ngai Tahu has retained the name Shotover Jet in Queestown, and are a major shareholder in Whale Watch Kaikoura.  Tainui does not add their tribal name to the country’s largest shopping mall in Hamilton, which is  simply called“The Base.” 

Airports need common sense, logical names because they are the gateways to destinations, not destinations in their own right. As the names Hawke’s Bay, Napier and Hastings are the only well recognised names outside of Hawke’s Bay these are the names we should stick to.  Sensibly, the airport name was changed from Beacons aerodrome to Hawke’s Bay Airport 50 years ago. Notice Jet Star only ever mentioned Napier as it's new destination and even Air New Zealand use the destination Napier/Hastings. 

This proposed name change is simply a continuation of the board’s very narrow focus on the airport business with little apparent concern about its wider and much more important infrastructural role. In 2004 I challenged the then board’s acceptance of the infamous PWC report on direct Trans Tasman services, which I considered inaccurate and highly misleading. Even when given details  of the inappropriate assumptions and erroneous statistics, the board failed to take any corrective action.  

Only a month ago I challenged Chairman Tony Porter’s claim that airport profitability was limited by the Commerce Commission to a 6.99% weighted average cost of capital. As I was aware of this claim I had previously approached the Commission and had obtained confirmation that there was no such limit on the profitability of Hawke’s Bay Airport. Perhaps significantly Mr Porter is the last remaining director from 2004. 

Of course the name issue might not have been a problem had Napier’s former  Mayor, Barbara Arnott and, current Hastings Mayor, Lawrence Yule, not effectively boosted airport profits and therefore its attractiveness to Mana Ahuriri by agreeing to lease the council owned airport land to the airport business for just $1 a year, rather than insisting on a realistic rate of return for the council owners. This action will effectively transfer millions of ratepayers dollars to the crown, and eventually to Mana Ahuriri if ownership is transferred,.

Lets not cause unnecessary confusion because of cultural expedience. Other than Hawke’s Bay Airport the only other names that should be considered are Napier Airport or Napier/Hastings Airport, which at least would provide consistency with the 3 letter IATA code NPE used world wide to identify our airport. 

Lets not cause unnecessary confusion because of cultural expedience. Other than Hawke’s Bay Airport the only other names that should be considered are Napier Airport or Napier/Hastings Airport, which at least would provide consistency with the 3 letter IATA code NPE,  which is used world wide to identify our airport. 

Council Blighted by "Tight Five"

 A slightly edited version Published HBT 13 Oct 2015

The Hastings District Council decided recently by 10 votes to 3 that it would trial free parking in the CBD in the hope that it might lift the number of shoppers and boost retail spending. This, according to the Mayor, is a decision that will cost ratepayers $211 000 in lost revenue during the 4 month trial, and, depending on the extent of lost income from fines, could cost between $500 000 and $900 000 for a full year. The higher figure is nearly 2% of the Councils annual rates income. There was no research to support the claim of an increase in shoppers or retail turnover. In fact, one of the two other cities to have trialled free parking found it had made little difference. 

Now, whilst the parking issue was decided by 10 votes to 3 - and this is a significant majority, the votes in opposition were all urban ward councillors (including this writer) whilst of the 10 votes in favour, five were from the group I have nicknamed the “tight five” because of their unwavering support for Mayor Lawrence Yule. They include the Deputy Mayor and the Chairs of three of the four all powerful standing committees. Significantly, the Mayor has sole right to appoint these Chairmen and seems able to rely on their votes, perhaps because historically those who have taken an independent position have subsequently been demoted.  

A feature of this voting block is that, of the Mayor and 14 HDC councillors, five also have strong rural connections, either representing rural wards, living in or having close historical associations with the rural hinterland (i.e. retired farmers). Two of these are now starting their 3rd decade on council and one is approaching that milestone. Essentially the “tight five” and rural groups are the same people with just one addition or deletion. As a result of  their unwavering support the Mayor can normally count on six of the eight votes required for an outright decision and, on some occasions when councillors are absent, the decision has effectively already been made before any debate has occurred. In addition the Mayor has  a casting or additional half vote which allows him to force any issue in the event of a deadlock. 

Use of this block voting is a regular feature of HDC decision making. Recently the tight five  supported a resolution to use two million dollars of ratepayer’s money to fund the amalgamation of the RSA and National Service Club, without rigorous due diligence. Ratepayers were only saved from this expense because the National Service Club members rejected the proposal. 

In another example the same group has repeatedly supported the spending of $12.5 million upgrading Civic Square, the area surrounding the library and Art Gallery, plus a further $5 million supporting a CBD hotel, based on essentially emotive justification. For the moment, Civic Square is on hold because of the undefined but clearly substantial cost of strengthening the Opera House, However it has already cost ratepayers around a million dollars for design and consultation, and this amount looks likely to be written off. 

Yet again the rural/tight five group has without exception, supported the Mayors hard-line Animal Control policies that have resulted in many pets being euthanised and the reprehensible treatment of many owners. Rural folk seem to have a quite different view of animals to those living in urban areas. Of course all elected members do support the council position on menacing and dangerous dogs plus the registration of all dogs. 

Earlier this year the group also voted as a block to oppose the restoration of the 100Kph speed limits on Farndon and Brookfield Roads following widespread public objection when the lower limits were introduced a year earlier and despite the assessment by council roading engineers that the roads were suitable for the higher speeds. On this occasion the decision went against the wishes of the Mayor’s “tight five” by just one vote.

It must be remembered that most council spending and the vast majority of regulatory activities relate to urban activity which of course is where the majority of people live. Think of potable water, sewerage, storm water and rubbish collection, sports facilities and all the rest of council spending, then add all the regulatory issues such as parking wardens, liquor management, and animal control and its easy to see that councils are primarily involved in urban activity. In contrast, rural interest is mostly concentrated on roads and bridges, yet it is the councillors with rural loyalties who effectively are deciding the outcomes of many issues that are mainly urban, and often don’t affect rural communities at all.  

The repetitive block voting by the tight five/rural group means the Hastings District Council is making far too many poor decisions. Some are subsequently reversed, but often the outcome is higher costs and therefore higher rates and charges. Whilst most of this burden falls on urban ratepayers, rural ratepayers need to realise they are often required to contribute to these additional costs. 

Readers no doubt realise that five or six people do not total an absolute majority, but the reality on most issues is that this number is sufficient to decide the outcome. Interestingly, if Napier Mayor Bill Dalton is successful with his proposed boundary realignment, the rural power base that is deciding the outcome of many Hastings issues might be reduced. 

Amalgamation Postscript

 Published HBT 18/09/15

The votes are in and counted and the community has rejected a single council for Hawke’s Bay. Whilst many people agree change is necessary they were clearly not convinced amalgamation was the right way forward. It might have been a different result but for one official organisation, one group of people and one individual. 

The official organisation is, of course, the Local Government Commission which has made a complete hash of the whole process. It’s one standard plan for local government throughout the country was unimaginative, unrealistic and unjustified. The NO message was clear from the Far North, emphasised by Winston Peter’s bi-election win. It was also clear in Wellington where both the Wairarapa and the Hutt Valley were more than willing to combine into single councils, but the Commission’s determination to have just one council covering all of the lower North Island scuttled any chances of change. And now it has failed in Hawke’s Bay where the Commission was determined not to listen to the voices of concern and instead barged ahead. Stuart Nash’s election win was clear evidence of what was to follow. 

Including Wairoa, two hours driving from the Bay cities, was mad and shows  just how out of touch these people were. The LGC failed to provide the details necessary to help people make a decision. The promised cost savings kept shrinking and in any case were based on the Winder report for which neither the wider community nor most Councillors had any input, nor were they given any opportunity to question the author. In the case of the Hastings District Council those consulted were hand picked by the Mayor, clearly in the expectation they would kowtow to the official council position. Much was made of reducing in the number of councillors from the present 57 but the proposed plan had at least 56 and many of these were appointees and not elected. There was no democracy costing but independent estimates were the cost of democracy would increase by over $1 million a year. No management organisation was specified, no staff reductions detailed, and the likely salaries and other benefits for key staff in the new organisation were not mentioned.  

The  failure by the  LGC to release results of their telephone survey suggested they must have known it’s proposal was already dead in the water. Clearly by not reappointing Basil Morrison  and the other Commissioners, Government has signalled it’s lack of confidence in this failed team. 

The group that probably contributed most to the amalgamation defeat was, A Better Hawke’s Bay, and its successor Amalgamate Hawke’s Bay. If nothing else it’s campaign proved money is not everything. These people spent a huge but undisclosed sum pushing their agenda, but failed to appreciate the negative aspects of their campaign. The leaflets, hundreds of signs, excessive newspaper and radio advertising plus the audio assaulting mobile loud speakers left people asking just who was providing the funding, how much was being spent, and what did they hope to gain?  The slogans were seen as superficial, inappropriate, and meaningless. Even the claim that amalgamation would bring Jetstar to Hawke’s Bay had to be dropped when that outcome was achieved before the vote had even started. The claim of increased fish numbers was simply fanciful. Even the tone of much of their correspondence was a serious put off to many even though those of the opposite view used the same sort of language at times.  People expected better from those claiming to be the region’s elite.

A major mistake was the selection of speakers for the great amalgamation debate. While including Mayor Yule was predictable, Rick Barker seemed all bluster and no preparation, whilst Ngahiwi Tomoana apparently had nothing to say so he got out his guitar for a sing along. 

The last put off was Mayor Yule himself. Whilst clearly a favourite of the pro-group, whose support could be taken for granted anyway, it did not work with many undecided voters many of whom  felt it was an attempt to create a further extension to his 21 years in Local Government, plus a means to disown many of Hastings well known problems. Additionally rushing off to China in the middle of voting may not have been wise. 

One matter is clear. This was a Government initiative and since it has failed so miserably and predictably, perhaps the Crown should now compensate local councils for the costs and disruption caused by the whole sordid and unnecessary business. 

Support Jetstar

Published HBT 2 Sept 2015

Jetstar’s imminent arrival with cheaper airfares is a fantastic Christmas present. Air New Zealand are already dropping their prices in response, despite claiming for years we were not being overcharged. Some may remember Group GM Louise Struthers (HBT Feb 10 & 23) denying Air New Zealand fares were excessive. 

Of course to retain Jetstar we must support them. Diehard Air New Zealand supporters should remember cheaper airfares have only arrived because of the new kid on the block, whilst those who suddenly find air travel is affordable, should remember last time they went by bus because the airfares were so high. 

Lower fares will grow the market for both airlines and whilst the national carrier might earn a bit less, they recently announced a $330m record profit. Air New Zealand is a ruthless organisation that has buried many competitors including Origin Pacific and Trans Air. They have also unceremoniously dumped unwanted destinations such as Westport and Whakatane, and would do so to us if it suited them. We owe them nothing and need to understand their only loyalty is to themselves.  

CBD in decline

Published HBT 31/08/15

The Hastings CBD has all the hallmarks of serious decline and a Mayoral symposium has been organised to explore future options.  However history suggests various Hastings Councils have in fact been major contributors to the CBD’s decline. One wonders if things will be any different this time. Recently the 300 Heretaunga West block has had up to 14 empty shops, and whilst there as been some recovery this improvement may not be permanent. Of course city centres elsewhere are facing similar difficulties. 

Almost 40 years ago, in 1976, the old Hastings City Council implemented the infamous CBD ring road traffic system which was supposed to solve both congestion and parking problems, but Instead proved highly confusing, especially for visitors. Gary McCormack once joked on TV that food parcels were being sent in to sustain motorists who were unable to escape the system. A decade and a half later, council wisely abandoned the ring road and replaced it with one way streets plus a pedestrian mall in the 100 East block. This simply replaced one unsatisfactory system with another, so finally in 1999 Council was forced to reinstate the two way streets, and open up the East Mall to traffic. 

In recent times there have been other proposals for reinvigorating the CBD such as shifting the railway station into the centre of town, though this was abandoned when an astute local pointed out the intended passenger train was significantly longer than the space available, meaning passengers would be alighting straight into the water feature. Another idea was to remove the water feature and replace it with a through road to connect the East and West sides of Heretaunga Street, effectively returning to the same layout as had existed 40 years earlier. Council street upgrades, whilst generally supported by retailers, have undoubtably been very damaging to their businesses. Its doubtful any extra shoppers have been attracted to the CBD  as a result of the approximately two million dollars spent. 

Without doubt the most significant council inspired changes have been the development of two new large retail zones, the K-Mart Plaza, and Nelson Park. There is nothing intrinsically wrong with providing for big box retailing because it is clear that is what many shoppers want. Actually, Hastings has been successful in attracting big names including K-Mart, Harvey Norman and Spotlight, but such a significant expansion of retailing was clearly going to impact on the fortunes of the original CBD shopping zone. Population growth in Hawke’s Bay is not great, and incomes are increasing quite slowly, so there is no obvious source of new money to replace that being syphoned off by the new bulk retailers. 

Obviously, online shopping is also putting pressures on traditional CBD retailing but again this should have been anticipated because Amazon and eBay have been around since 1995, and even Trademe started business in 1999. The new 5 star Havelock North Hotel will also incorporate more retail space.

A near complete collapse of the CBD may have been prevented only by Farmers relocating to Heretaunga St and the Wallace Development Company upgrades of the former Power Board building and Woolworth’s site. The new Civic Assist staff have also helped re-establish a more congenial environment  for shoppers after behavioural issues drove many elsewhere. . 

As most large retailers offer free parking, the CBD is disadvantaged by parking fees and fines. The 60 minute limit on meters is simply not enough for many shoppers. Of course messing up parking is a Hastings Council speciality. Many people will remember that the present Mayor and Deputy acting on the advice of external experts, supported selling  off council parking land in Havelock North, then tried to introduce meters because of the resulting shortage of parking.

Of course amalgamation will be an unmitigated disaster for Hastings. If $10 million a year is to be saved, at least 100 and as many as 150 council jobs will have go. With the new super council being based in Napier many jobs may be lost from Hastings. Together with relocations Hastings could lose perhaps 300 jobs, plus tens of millions of dollars in spending. Hasting retailers would be wise to have exit plans for their businesses in the event amalgamation goes ahead. 

Hastings was once the retail capital of Hawke’s Bay and back in the 1960’s trainloads of people would arrive from Napier to do their Christmas shopping. Its unlikely such days will ever return so we need to make absolutely sure shoppers can be enticed back to the CBD before any commitment is made to spend ratepayers money. Advisors are all very well, but they are not accountable and they have not always served council well in the past. 

Amalgamation Supporters Admission of Own Failures

Published HBT 11 Aug 2015

Very soon the people of Hawke’s Bay will have to decide on the future shape of local government in this area. 

A major claim made by the Local Government Commission and echoed by others is that one council will provide Hawke’s Bay with a stronger voice especially when dealing with Central Government. The interesting thing is many of those making such such a claim are, or have been, our representatives already, yet their performance seems seriously wanting.  Perhaps their support for amalgamation is actually an admission of failure and they are simply trying to bury their past failures by creating a new council. After all it will take many years before the failures or success of amalgamation become apparent. 

Both the Mayor of Hastings and Deputy Mayor Cynthia Bowers are about to start their 3rd decade on council, nearly fifteen of those in their present very powerful positions. For eight of those years the Mayor has also been President of Local Government New Zealand a position that he tells us puts him in weekly contact with the Prime Minister. This surely is as a strong a voice as we are ever likely to have. Remember the Mayor reminds ad nauseam of just how badly we are doing compared with the rest of New Zealand. 

There are others who also seem to have failed us. Since 2005 we have been represented in Parliament by Craig Foss and Chris Tremain two enthusiastic amalgamation supporters. Both emblazoned their vehicles with the statement “Supporting the Bay” and both were Cabinet Ministers, surely an excellent position to have pushed Hawke’s Bay’s case. There is scant evidence of their making any great achievements benefiting Hawke’s Bay.

Another recent writer casting aspersions on non amalgamation supporters was former Tuki Tuki MP Rick Barker who spent from 1993 to 2005  representing us, and also occupying a Cabinet position in the Clark/ Cullen Labour Government. For the record  Deputy Prime Minister and Minister of Finance Michael Cullen also resided here during this time. Other than building a new Courthouse in Hastings there is little evidence Rick made any significant difference to our economic performance. Even when he and Russell Fairbrother lost their seats, prompting a panic visit by Prime Minister Clarke, supported by an entourage of ministers and MP’s, nothing actually changed. 

A couple of other regular writers are former Regional councillor Ewan Mc Gregor who just happens to be the husband of Hastings Deputy Mayor Cynthia Bowers, and John Harrison who was a very successful businessman but now seems to have had a serious falling out with Napier Mayor Bill Dalton. I cannot remember either Ewan or John pushing for amalgamation when they were councillors. 

Clearly the idea we will have a stronger voice with Government after amalgamation is utter rubbish. The problem is not the structure of local government, but the very people who have convinced us they are the right people to represent us.  

As already mentioned the Mayor and Deputy Mayor of Hastings are now starting their third decade, Rick Barker has reinvented as a Regional Councillor, whilst Craig Foss is now in his 4th term as local MP. Perhaps these people who have already had their opportunity to give us a stronger voice with Central Government, could now explain why they have failed?

It should be remembered that Mayor Yule has expressed interest in the top elected position if all five councils are merged. Unfortunately he has not given an undertaking he will not take on other roles at the same time as he has done previously. There are no statutory limitations to stop this happening. History suggests if indeed he does become Mayor of Hawke’s Bay there will be no improvement in our fortunes.

Whilst the Mayor points out the Hastings District Council is the only one to support amalgamation, the full story has not being disclosed. For a start fully one third of councillors are either totally opposed or have serious reservations about the whole proposal, whilst about half have at least some concerns. The support is actually driven by a small “tight five”, group  who almost always vote as a block to support Mayor Yule, be it animal control, speed limits, or amalgamation. 

Its unclear at this stage what the likely outcome will be, though there are clear indications it could fail. The Local Government Commission refused to release the results of their phone survey, but a privately commissioned survey showed significant opposition. This issue will dictate the future of Hawke’s Bay. It must not be decided by a minority who may not represent the true feelings of the majority. Unlike the Auckland merger we at least have a choice and every one of us must ensure we take advantage of this opportunity to make our wished known. Then once the outcome is known we must all accept the result and get on with making Hawke’s Bay a better place.

Jetstar will boost Hawke's Bay

Published HBT 1/08/15

The recent visit by Jetstar senior managers was very encouraging and we rolled out a great welcome mat that must surely have impressed upon them that we are serious. This is a once in a lifetime opportunity and It is absolutely essential that Hawke’s Bay is one of the four new destinations to be included in the airlines new regional services. Both the costs and risks are minimal yet the economic benefit could well be of the order of $50 million annually. Its a pity those who have committed so much energy and money promoting amalgamation that offers a measly $10 million annual benefit, have not shown a modicum of interest in this issue. 

With over 120 000 urban population we are surely near the top of the list. We are the 5th largest urban area in the country, and of the areas under consideration second only to Hamilton, and way ahead of Rotorua, Palmerston North, New Plymouth, Nelson and Invercargill. 

Our Auckland flights already carry more passengers than any of the other routes under consideration. In fact the numbers out of Hamilton, Tauranga and Rotorua appear so low, one wonders why Jetstar are considering them at all.  

We need to get real. Six hours by car from Auckland or eight hours in a bus, or four hours from Wellington by car, and five in a bus, and goodness knows how long for Christchurch, is a big disincentive to people thinking of visiting. Assuming of course the roads are open and not closed as both SH5 and the Manawatu George have been of late. We not only compete with places that are conveniently close to Auckland by road, but also places much further away but with significantly lower air fares. 

High airfares have been our achilles heel for years. Hawke’s Bay travellers are generally well aware of our horror prices.  Air New Zealand have even effectively admitted  their prices are high by suddenly advertising a range of attractive specials the very day Jetstar executives arrived in town, demonstrating clearly the brighter future ahead of us, if only we can get them to come here. 

Further evidence of our high prices is illustrated by distorted travel statistics. One survey found 50% of local flyers were on business, yet nationwide surveys show this group make up only 15-20% over all. The reason for this disparity has to be that the most price sensitive categories, visiting friends and family, or holiday makers, are clearly choosing not to fly here. Perhaps we should be asking ourselves if they choosing not to come here at all. 

Jetstar will bring airfares down just as they did on main trunk flights six years ago and Hawke’s Bay travellers could save a whopping  $25 million a year. People who now drive will find flying affordable. At the same time reduced airfares will stimulate demand from both visitors and locals.  BERL research estimates air travel has a price elasticity of -1.6%.  meaning a 25% reduction in airfares could result in nearly 200 000 more people travelling by air each year. If just half are visitors and each each spends only $250 during their stay, the local economy will be another $25 million richer.  

Some of the 100 new jobs Jetstar expects to create will be here in Hawke’s Bay but Air New Zealand employment is unlikely to be affected because demand overall will increase.    

Fortunately we have built a longer runway despite the opposing efforts of a negative and visionless minority. It may not be required for the Q300 Jetstar aircraft, but the longer runway may be decisive as it means both Jetstar and Air New Zealand will be able to bring their larger A320 pure jets into Hawke’s Bay for either a scheduled or non scheduled services. Do not be surprised if Air New Zealand suddenly start flying jets into Hawke’s Bay despite claiming they will not do so. They have used this tactic before to counter increased competition and may well do so again.  

Increased Funding for Tourism

The Hastings District Council recently voted seven votes to six in favour of supporting a Hawke’s Bay Regional Council proposal to substantially increase funding for tourism promotion. This was part of the HDC submission to the Regional Councils draft Long Term Plan (LTP). The proposal will result in $900 000 of increased expenditure after 3 years of which about half or $450 000 annually could be charged to Hastings ratepayers. This is equivalent to about a 0.75 % average increase in Hastings rates, though the billing will come from the HBRC not the HDC.

That 6 councillors voted against shows real concern about the idea. Had just one councillor voted otherwise the outcome would have been different and this could have put pressure on the Regional Council and Hawke’s Bay Tourism for greater disclosure and more meaningful dialogue, though it would not necessarily have prevented the increase because that decision will be made by the Regional Council.

HDC has a duty of care to ensure ratepayers money is spent wisely. Clearly six councillors were not convinced this had happened. The concern was about insufficient consultation, lack of supporting information, and also failure to have a meaningful in-house discussion between Hastings councillors and staff. Whilst Hawke’s Bay Tourism did make a presentation some weeks ago, there had been no warning, no agenda, and no details. It must be remembered that this is not like purchases from the supermarket where there is a choice to buy or not to buy. When councils decide to do something ratepayers must pay whether they agree or not. 

The lack of meaningful discussion by HDC councillors is a real concern because suddenly we were told the submission had already been made without councillors having been involved. The choice was to withdraw it, make clear it was a staff not councillor submission, or accept the submission without a closer examination. Effectively Councillors were being asked to support something they had had no input into. The decision to uphold the submission was made by a majority of just one. Its probably worth mentioning that of the seven councillors supporting the proposal most were those representing or with close connections to the rural wards, whereas those who opposed were mainly from the urban wards, where of course most of the funding burden will fall.

The importance of tourism to the local economy was not being questioned, however any proposal to double funding to the tune of nearly a million dollars a year needs close examination. The increased funding presumably means advertising though there have been no details, no in depth examination of the proposals by either HDC staff or councillors, no specifics on how the money is to be used, nor has there been any opportunity to examine the past claims and the resulting performance of Hawke’s Bay Tourism. Effectively the decision was made on the basis of spurious, unsubstantiated, generalised claims.  

We were told there had not been time to consult meaningfully with councillors but I had been asking repeatedly when were were going to examine the request and was assured each time that it was “in hand”. To suddenly have the matter sprung on councillors “as done” is simply not acceptable. 

I personally have concerns about the Regional Council ability to manage this activity. Historically the track record of tourism under Regional Council control has not been satisfactory. The Regional Council has no skin in the game as all publicly provided tourism facilities including the airport are owned by the Napier or Hastings councils. Nor do It see any relevant experience or expertise within Regional Councillors or Regional Council staff. It is not part of their core environmental responsibilities, but is the result of a historical inability of the Hastings and Napier Mayors and others to resolve priorities. As a result responsibility for governance and funding of tourism was handed over to the HBRC in a sort of cop-out. 

I have recently written other “Talking Points” highlighting poor decision making by the Hastings District Council and I believe this is a further failure by the Council to act in the best interests of their ratepayers. 

Charter Club Funding Fiasco

Published HBT 20 May 2015

The decision by the National Service Club members to reject a Hastings District Council merger proposal is an own goal for the council who seem to believe that if enough money is thrown at a problem it will go away. We have seen similar thinking with the Opera House and other recently delayed or cancelled projects. The most recent idea was to support a merger of various service clubs with nearly $2 million of ratepayer funding. 

Many chartered clubs are experiencing declining support. The Hastings, Napier and Napier Cosmopolitan Clubs have all closed. Members now tend to be older and a further strengthening of drink driving laws is likely to be eating into members involvement. The RSA, Hibernian and Heretaunga Clubs have already merged, the RSA premises in the centre of town have been sold and must soon be vacated, and new premises are proposed on the Heretaunga Club site away from the CBD. The National Service Club on edge of the Hastings CBD seem to be holding their own as evidenced by members rejection of the merger plan, although their premises will need some earthquake strengthening sometime in the future.  

The reasons for Council getting involved are unconvincing. The project was poorly conceived, poorly researched, and should never have been presented to council. The Mayor who was the driving force was in China and unable to attend the special council meeting called at short notice to supposedly discuss the issue. 

It has been reported that I had walked out of this public excluded council meeting when the issue was being discussed though I prefer to say I was not willing to continue taking part in a process I considered  farcical. I believed it wrong that both the media and public were prevented from hearing details of a proposal to spend nearly $2 million of ratepayers money. There was a lack of  transparency and an inability or unwillingness to answer many crucial questions, plus it was clear I was going to have no impact on the outcome. The entire process seemed staged to endorse an outcome that had already been decided on. 

Specifically some of my concerns were:

- The Clubs were not represented so councillors had no opportunity to question those running these organisations.

- The only accounts provided were for the RSA  March 2014 financial year. There were no forecasts, budgets or other estimates for the proposed combined clubs which meant councillors could not asses the financial viability of the new entity. 

- It was claimed a new city centre premises will benefit the Hastings CBD which clearly is already struggling, yet no evidence was provided to demonstrate linkage between the clubs and the CBD,  even though both the RSA and National Service Clubs are presently within walking distance of the shops. Additionally only the RSA will be shifting and the National Service Club will remain close to the CBD. 

- No membership history was provided so past and future trends could not be determined, nor was there any information on how many members use the facilities on a regular basis. 

- Claims the viability of the three clubs would have been enhanced failed to account for the additional risk of their taking on significant debt which could have imperilled rather than secured their future. 

- Some councillors claimed a similar combined facility in Blenheim proved it would work, yet no specifics on membership, financials, or other matters were provided. 

My own view is this matter has been handled in a highly unsatisfactory manor without councillors being given much of the information needed to make a wise decision. The cost in staff time is unknown but must be considerable and a figure of $10 000 seems possible. Whilst some public consultation had been proposed people are busy with their jobs, family and other issues, and rely on good governance by their councillors to make sure their money is spent wisely. Expecting widespread and representative community involvement in submissions is unrealistic. This yet another example of council being steamrolled into supporting an idea of doubtful benefit. Yet had it proceeded debt and rates for everyone would have increased. 

Council Wastes Ratepayer Funds

Published HBT 2 May 2015

The Te Mata Trust Board must be disappointed at having to abandon their proposed Peak Visitor Centre having already spent $320 000 on the project, but as Hastings District ratepayers will effectively be paying most of the bill, it is perhaps they who should be the most disappointed. 

At the same time the proposed $12.5 million Civic Square development also looks likely to be shelved, but again not before a million dollars has been spent. Shortly after I was first elected to the HDC in 2010 at least another $250 000 dollars was spent on the velodrome project, which was also abandoned when it failed to make even the short list for $7 million of government funding. 

The Hawke’s Bay Opera House also looks likely to cost ratepayers upwards of $20 million for earthquake strengthening, only a decade or so after $15 million was spent on a major upgrade. Since then ratepayers have been burdened with around $15 million more in operating grants and debt servicing costs, meaning with strengthening the total outlay will be around $50 million, or nearly the total rates income for the council for a whole year. 

These sorts of issues are not confined to the Hastings Council. The new $18 million museum in Napier has failed to deliver on it’s key promises with only about 5% of the annual 600 000 anticipated visitors actually paying to get in, whilst operating deficits could top $4 million annually. Also it is only able to store a fraction of the total collection, contrary to earlier assurances. 

There are other projects of questionable financial certainty embedded in the Hastings LTP including a proposed $5 million investment into a Hastings CBD hotel, surely suspect when no other developer appears interested, and especially risky when a similar competing private development is already underway in nearly Havelock North. A sixth aquatic facility costing between $10 - 20 million to build with unrevealed ongoing ratepayer implications is also included in Council Long Term Proposals.    

That Local government is responsible for providing parks, libraries, halls, infrastructure, and all manner of services is not in dispute. What needs to be questioned is the process councils use to decide on major investments when they fail to either deliver any meaningful benefit, or end up creating unplanned costs when completed. More basic and less ambitious projects generally seem to provide much greater value. The new facilities on Marine Parade in Napier, the new hockey turf at the Sports Park, the skate park in the Hastings CBD and the new BMX facility in Havelock North are all  examples of ratepayers money providing real and significant benefits with minimal on going cost implications.  

The enthusiasm behind these grand ideas seems to overwhelm both common sense and good governance. Rather than being demanded by the wider community, the drive for these ideas comes primarily from a small number of elected officials, frequently the Mayors, or council staff. Failure to correctly asses the risks and potential for costly failure, seem consistent with Local Government culture. Local government generally place the emphasis on cost control, because quite simply there are no corresponding income streams. Council staff are highly qualified, very skilled and very experienced in things to do with pipes, roads and many other areas, but generally lack experience in the world of consumers, markets, and competition. Unfortunately only a minority of councillors are experienced in the world of profit, loss, and risk as well. 

So in the case of both the Visitor Centre and Civic Square projects, funds were allocated and spent without any realistic consideration of market demand, operating costs, or other financial issues.  I also believe the justification for the proposed Aquatic Centre is superficial, inaccurate and misleading, and there have been no estimates of patronage, operating costs, revenues or the likely impact a new pool might have on the performance of existing pools. 

Committed councillors and staff create a very powerful alliance, and when combined with council processes and procedures a situation is created that is almost impossible to stop. For the record I have consistently voted against both the Civic Square and aquatic proposals and many others because I could see no real justification for them. I sometimes get the impression that the most enthusiastic are keen to see these achievements added to their trophies 

The private sector also gets things wrong but both shareholders and customers can opt out when dissatisfied plus mistakes can be offset through tax losses. Council mistakes are backed up by the unlimited access to the bottomless pit of ratepayer funding, and there is nothing those who are forced to pay can do about it. Misadventures waste money that can never be recovered, and opportunities for better uses of the funds are lost.  For instance the estimated $1 million spent on Civic Square could have paid for an extension to the 80 metre rock wall protecting the road to the Clifton Motor Camp, whilst the money spent on architects and other aspects of the Peak Visitor Centre project could have provided  permanent shade at the new CBD skate Park. Both these alternative projects are affected by financial restraints. 

If these sorts of mistakes are to be avoided in the future there must be a change in governance. Proposals that are not accompanied by full financial details including whole of life cost estimates and other critical information should never reach the council debating chamber and must be rejected if they do.  Failures must be investigated by independent authorities such as the audit office, with appropriate penalties for non compliance. 

If those responsible for these unwise decisions had to pay for their mistakes they might be more inclined to take greater care with other peoples money

Missing Airport Directors

Published HBT 6 April 2015

The proposed name change for Hawke’s Bay Airport could be just a prelude of what may be following.  

At the recent March half year report to HDC Councillors, Board Deputy Chair Jim Scotland excused airport Chairman Tony Porter with the explanation he was in Christchurch. Six months previously board member Sarah Park provided a similar reason for the Chairman’s absence. These absences may or may not be connected but apparently Mr Porter is quite ill, and whilst we wish him a full recovery,  this situation is both irregular and highly unsatisfactory. 

It also appears that a second director Stuart Webster has left for the USA, without a return ticket. If so it means that two of the four appointed directors have ceased to function in their governance roles. Significantly there appears to have been no mention of either of these issues by the two remaining directors when meeting with either the Hastings District or Napier City Councils. It is not believable that the Mayors, senior staff and others are not aware of this situation. This raises a great many questions.

-Why have these issues been hidden from Councillors and the public?

-When did Mr Porter become ill?

-When did Mr Webster leave the country?

-When did either of these directors last attend a board meeting?

-Are the missing directors still being paid by the airport ?

-Why are they still listed as directors in the most recent airport accounts provided to councillors? (half year to 31/12/2014).  

-Are the Mayors and senior managers of the Hastings and Napier councils aware of the situation and if so when were they notified?

-What is the role of Government?

-Who else is aware of the situation?

Could it be that Government is planning to transfer their shares in the airport to Mana Ahuriri Inc as part of the Y55 settlement, and the failure to disclose is due to an expectation of the claimants taking up the board positions. Whilst this has been a possibility for some time it would effectively transfer total control of a vital piece of Hawke’s Bay infrastructure because Government actually owns slightly more than than 50% of the airport shares. The lack of transparency is unacceptable and it is high time those in the know, reveal what they know.

No Reason to Change Airport Name

Published HBT 27 March 2015

Meaningful consultation is needed before a final decision is made to change the name of Hawke’s Bay Airport. Discussions with Mana Ahuriri and the HDC were informal and in my view amounted to an ambush with insufficient warning given to consider the ramifications such as financial implications.

Most airports have aligned their names and 3 letter IATA codes with city names. Mangere was changed to Auckland(AKL), Rongotai to Wellington(WLG), Harewood to Christchurch(CHC), and Momona to Dunedin(DUD) to name a few. Hawke’s Bay Airport (NPE) is actually an exception though the brand Hawke’s Bay is well recognised. Australia also aligns airport and city names as in Sydney, Melbourne, and Brisbane. Whilst John F Kennedy Airport in New York (JFK) has been used to as an example of where alignment doesn’t apply, not naming airports after their host cities generally happens only in super cities with multiple airports such as in London (Heathrow, Gatwick, Luton, Stanford).

Adding the name Ahuriri to Hawke’s Bay Airport will be confusing and costly. To people outside of Hawke’s Bay the word is unknown except perhaps in North Otago where apparently there is another Ahuriri. The implications with GPS navigation systems, maps, telephone directories and all manor of things have not been considered, and the name may be ignored by the aviation industry.

By all means use the name Ahuriri for the access road to the airport industrial zone, the terminal building, or even the entire area of land uplifted during the1931 earthquake, but not the airport. That it is Te Reo is irrelevant. Renaming the airport Ahuriri simply has no merit. 

Big Income increases fora Few

Published HBT  10 March 2015

Government has overridden the Remuneration Authority decision to award a 5.5 % increase in MP’s salaries back dated to July last year. The Authority is an independent body established by Government to set the salaries of salaries for MP’s, Mayors, Councillors, Government Chief Executives, Heads of Crown Entities, and various tribunals.  

That a 5.5% increase was awarded means the Renumeration Authority had determined this was the extent of the movement in salaries for equivalent positions elsewhere. Clearly senior management have been receiving significant increases despite many other workers being limited to CPI increases, or changes in the minimum wage rate. 

Relativity is clearly the major driving force as demonstrated by the recent comment by authority chair John Errington “that the pay gap between ministers and executives in the private sector was growing and would have to be addressed”. To ensure the salaries under its durestriction are competitive the Authority consults with others, though exactly who is not clear. It seems likely however that professional salary surveys are a major tool, and it seems probably these surveys are contributing to the distortion of incomes that is occurring.  

These surveys are undertaken at regular intervals and produce a range of salaries for each category of job as defined by the knowledge and experience needed, certain dimensions such as turn over or number of staff, plus the freedom to make decisions, or level of authority. Most employers have a salary policy or preferred position in the range for senior staff. They may pay at the upper quartile, or the medium or somewhere else in the range. Few employer will admit to paying below the medium. 

When the review is undertaken the organisation inevitably finds it is paying below its preferred position, and as a result and almost automatically this becomes the reason for a salary hike. This of course is happening right across the country so there is a general upward movement. When the next survey is undertaken these increases are picked up, and again most organisations will find they are paying below their preferred position, thereby justifying yet another upward adjustment thereby ratcheting salaries to ever higher levels.  

Government may have justified the lust for fairness over MP’s salaries but the changes will do nothing to fix growing inequality.  Increases for Chief executives, judges, Government and Local Government Heads must also bought into line with the wider population. This must not stop some people being paid more because of greater the levels of skill and knowledge or stop salary increases for justifiable reasons including, improved performance and increased responsibilities. However the use of surveys is part of a system that feeds on itself to create compounding increases. 

Once those at the bottom were protected by trade union negotiated awards plus a more egalitarian attitude, but an abundance of lessor skilled workers means there is no pressure to improve their incomes. In fact the system now encourages those at the top to exploit those at the bottom with zero hour contracts and other income restraining measures. It also needs to be remembered that the people who have upheld this blatantly unfair system, including those in governance roles, are clearly part of the club that benefits. 

To some extent we should be grateful that we were alerted to the widening gap between the well paid and less well remunerated but doing something about this relatively small group does nothing to fix the growing disparity between those at the advantaged end of the gravy train and the rest. 

Air New Zealand final word

Published 13 March 2015

I must thank Air New Zealand’s Louise Struthers for her recent “Talking Point (23/02/15) plus the accolade of mentioning my name on 10 occasions.  Apparently she is upset by my comments regarding Hawke’s Bay air services,  yet actually confirms as accurate all the points I raised, including this area not being included in the new $29 “Night Rider” special fare deals, and the effective doubling the price of “stand by fares”. 

Later this year we will test her claimed commitment to Hawke’s Bay when Australian league teams the Dragons and Storm face off in Napier, an event that could easily be damaged by the lack of affordable airfares. Even the most committed supporters from Sydney or Melbourne are likely to baulk at paying $500 for return domestic flights.  

Ms Strutters needs to wake up to widespread dissatisfaction as often expressed in this newspaper including recent comments by 60 minutes TV Producer Belinda Henley(5/03/15). We need uncomplicated, affordable, readily available fares so we are no longer disadvantaged compared to the main centres,  Dunedin and Queenstown, where competition is better providing for travellers needs. 

Air New Zealand Must be Audited

Published 17 Feb 2015

Air New Zealand’s Louise Strutters latest effort to deflect criticism of their high Hawke’s Bay airfares have resulted in a response that is full of inconsistencies and inaccuracies, and is lacking in credibility. 

Their claims include:

1. Hawke’s Bay has not missed out on new nightrider flights.

This contradicts the company’s own official announcement that from February 20 through until March 19, every seat on additional late night services on selected regional and trunk routes linking Auckland, Nelson and Christchurch will be priced at $29 one way and Manawatu may included  later. We are now told that due to problems with Airways New Zealand, Hawke’s Bay presents challenges beyond their control.

2. Replacing 50 seat Q300 Bombardier aircraft with 68 seat ATR’s has increased capacity by 19% over the past 5 years. 

In fact if all flights had been upgraded the increase would be 36%. There is no way of knowing if their figures are true but the claimed increase does not tally with actual numbers through HB Airport. For 2014 there were 456 672 passengers compared with 406 000 in 2009, a 12.3% increase over 5 years.  However for 6 years from 2008 when passengers totalled 449 126 the increase was only 1.7%. 

3. Over the past year airfares on all three Hawke’s Bay routes, Auckland Wellington and Christchurch have been 10% lower than 5 years ago.  

In contrast on Feb 10 last year CEO Christopher Luxton was reported as claiming that average  fares from Hawke’s Bay to Wellington and Auckland had not changed in the previous 5 years. Additionally on Sept 1 he was reported as claiming regional fares had not changed significantly over the past 6 years,  yet at that time Informetrics pointed out official Statistics showed domestic fares had increased by 9.1% in the previous year alone. 

4. Hawkes Bay is benefiting from their new $ 169  “Got to Go “ fares available 90 minute before departure and introduced from Feb 1. 

In fact the airline discontinued $ 69 stand by fares on May 6 2013, and abandoned the Starfish program offering discounts of 15 & 30% for regular flyers on Feb 12 2014 meaning travellers are now actually worse off than previously.

Clearly the airline is simply plucking figures out of thin air every time they are challenged on the issue. In the light of these inconsistencies and widespread dissatisfaction it is high time the Commerce Commission, Government or some other official agency conducted a full audit of Air New Zealand’s regional operations. 

High Airfares Hurting Tourism

Published 5 Feb 2015 

Good news for some travellers now that Air New Zealand $29 Night rider fares are to be reintroduced and even extended to some provincial regions. Unfortunately it seems Hawke’s Bay is not included. This region always seems to miss out on meaningful improvements to air services and reductions in airfares. Airfares here are excessive and typically it is cheaper to fly over 1000Km to Dunedin and Queenstown than the just over 300Km from Auckland to Hawke’s Bay. 

Over the holiday period I endured the inconvenience of this issue first hand and I suspect this experience is fairly typical. I received about a months warning of visitors planning to arrive in Auckland from the UK, with a request that I arrange connecting domestic travel. The plan was to use Hawke’s Bay as a base to explore other parts of the North Island, but the only suitable flight to Hawke's Bay was to cost an outrageous  $269 one way, each. Palmerston North and Wanganui were no better, but Wellington was only $79 ( $45 with Jetstar) and Rotorua $89. Interestingly Christchurch was only $179, and Dunedin $169.  

So rather than travelling direct to Hawke’s Bay the visitors chose to instead start in Rotorua. The problem was repeated when trying to arrange return flights, and with fares still in excess of $200 they further reduced their stay in Hawke’s Bay and decided again to use Rotorua as a base. Just how much Hawke’s Bay missed out on is uncertain, but they were spending up to $1000 a day, suggesting a significant loss to this area.

This of course is just a continuation of Air New Zealand’s exploitation of Hawke’s Bay. It’s normal behaviour for monopolies to exploit a lack of competition but that does not make it right. The airline can continue these practices only because Hawke’s Bay’s leaders appear disinterested  in stopping this outrageous situation. Perhaps this is because their own travel is being paid for by taxpayers and ratepayers, or perhaps there are other motives such as the possibility of a seat on the airline’s board. 

Government, and not just the present administration also seems totally disinterested, despite owning over half the airline shares. Perhaps this easy money makes doing nothing more appealing than taking action. Strange because competition has been forced on many areas in the economy including electricity, telecommunications, and education just to name a few. All we are told in the interests of a better performing  economy.

It is about time the NZ Commerce Commission also showed some gumption and used their initiative to investigate this clear example of monopoly manipulation, instead of just coat tailing other regulators. This unimaginative copying happened again this week when they suddenly decided to look into Air NZ’s “drip pricing” practices. The fact the ACCC (Australia) had already started looking into these same practices  in their country shows our ComCom lacks either the knowledge or willingness necessary to stamp out uncompetitive actions in the transport sector. The same happened a few years ago when they discovered easy pickings by following the actions of overseas regulators over air freight charges.

For years Air New Zealand have been blaming high high regional airfares on high fuel prices including claims that jetfuel makes up a third of the airlines costs. Well perhaps they have not noticed the price of crude oil has halved in recent months and one assumes aviation fuel has fallen steeply inline with petrol and diesel. If the airline has got its hedging arrangements wrong this should not be a burden on travellers. The  Commission might like to start by forcing the airline to pass on reductions in jet fuel prices in the same way they forced down the price of  copper based broadband.   

We need to get it into our heads that Hawke’s Bay is highly dependant on air travel because of our relative remoteness. The few bogus experts that always seem to emerge when the subject arises need to be ignored. They clearly lack expertise on the subject are are simply condoning unconscionable  behaviour. 

With the endless regurgitation of statistics confirming our poor economic performance, we should start by looking at the unnecessary barrier being created by high airfares. Surely reducing airfares is one of the easiest ways to make Hawke’s Bay more attractive to visitors and business, and as a place to live.   

Air NZ aviation prices

Published DomPost Jan 2015

When fuel prices are on the up Air New Zealand are quick to tell us about it to justify their airfares, but now crude is plummeting the silence is deafening. It’s high time  the airline started to share with their customers the hundreds of millions of dollars they must now be saving from the halving of crude oil especially on regional services where fares are often in the range of excessive to obscene.  

Perhaps it is time for Government Ministers to have a quiet word in the ear of senior management and board members including perhaps a mention of the word “price control”. 

Shabby Treatment Shackles Bay

Published  5 Jan 2015 

Hawke’s Bay’s economic performance is not great.  We have near the highest unemployment figures in the country, and lowest wages. Our qualifications profile show we have one of the lowest proportion of university graduates, and highest numbers of people with few if any formal qualifications. 

Our influence in the affairs of the nation is declining as our lack of population growth makes us less relevant. Hawke’s Bay may have already lost its 5th place population ranking to Tauranga and Dunedin.

If we are going to have any hope of turning things around we must drop the pretence that everything is all right. It may be all right for some but far too many people are seriously disadvantaged by subsistence incomes and the inevitable deprivation, while our brightest young leave, either because we do not offer attractive education opportunities, or because they see no future in remaining. Those who think amalgamating our councils into a single administrative juggernaut will fix everything are delusional. We are controlled by a very influential, mutually supportive and well off elite who are either not capable or not interested in supporting changes that might not improve their own wellbeing. Amalgamation is a side show designed to divert attention from the real issues. 

Pastoral farming, viticulture, forestry and especially horticulture are the backbone of our economy but they are also a major part of our problem. Two many jobs are seasonal and are therefore unreliable and poorly paid. If it rains, or the crop is not ready the workers are simply not needed and not paid. Nor does the repetitious work appeal to our brightest and most talented.  That’s why the industry has become dependant on RSE  workers from overseas. We need to diversify our economy.

The new  Kiwi Bank call centre in Hastings is the best thing that has happened in decades but will only replace a few of the well paying skilled employment opportunities that have been lost with the departure of PDL,  Ericssons and the head offices of Richmond’s, Wliiiams and Kettle, and Farmlands. 

Our tertiary education offerings do not meet the expectations of many of our young. We are the largest urban population centre in the country without a university campus. It is a huge problem for a number of reasons. Firstly our young leave to obtain an education elsewhere and often don’t return. Secondly this vacuums millions of dollars from our region as parents fund their children’s living and education expenses in places like Dunedin, Palmerston North and elsewhere. But perhaps the biggest cost is we fail to get the economic injection of hundreds of millions of dollars each year from government and student spending, plus we miss out on the employment and other opportunities that a university campus would provide.

Our fundamental disadvantage is our isolation and this is exacerbated by Air New Zealand’s monopoly pricing and service levels. Whilst we think of ourselves as a tourist and conference destination  progress is stifled by air services that are simply not competitive in price or quality.  Its generally possible to fly a thousand kilometres from Auckland to Queenstown or Dunedin for less than the 300 Km to Hawke’s Bay. A year ago the Hastings and Napier Councils buckled when told it could require a $4 million annual subsidy and possible $10 million upgrade of airport facilities to implement trans-Tasman flights. Yet Napier has spent $18 million on a museum with a $4 million annual operating deficit that attracts fewer patrons than the facility it replaced, whilst Hastings has poured nearly $30 million into the Opera House in renovation costs, interest on borrowings and operating subsidies. It now needs millions more to make it safe in an earthquake. 

  

Other instances of unwise Council spending include the disasterous Art Deco buses and $12 million Civic Square development plus the $5 million ratepayer contribution towards a new CBD hotel in Hastings. Both will add significantly to both council debt and interest costs. Money that could instead be used to accelerate additional industrial development that will create jobs.  

 

We have too many representatives claiming to be working for us when in fact they are simply furthering their own vested interests. We need new people who will take us forward instead of trying to cover their past inacation and mistakes. It’s a long time since Michael Laws got Flaxmere a College, and Jeff Whitticar opened up Sunday trading for our wineries.

We are also far too willing to accept excuses from Government, and others for not doing the things that need to be done. To put it bluntly we get a shabby deal. There seems to be no problem finding the money for billion dollar motorways, subway rail systems, stadiums, and all sorts of other flash projects elsewhere, but Hawke’s Bay gets nothing. Its time our MP’s came to the party and obtained firm commitments for Government  starting with funding for improved air services, and a university campus. 

Amalgamation slaging match

Published `15 Nov 2014

The slanging match over debt is sidetracking the amalgamation debate. In the end debt will have very little impact on whether or not Hawke’s Bay will be better off with a single council. If amalgamation turns out to be wrong there will be no chance of going back to what we have now.

Is surely the supporters who must prove their case because it is they who are agitating for change and their motives are questionable. Some may be bitter because they have already been rejected as representatives by the community.  Others are members of the wealthy and influential provincial elite who crave more power than they already have, while others appear to be seeking a way to continue holding office without seeming like stale bread.

Where is the proof amalgamation is going to make us more efficient?  Centres with comparable populations to the proposed Hawke’s Bay Super Council such as Hamilton, Tauranga, and Dunedin have debt levels that are multiples of our combined debt, plus their rates are higher. 

The Winder report claimed at least 100 jobs could be eliminated with one council but similar staff reduction claims were made about Auckland, though these seem to have been conveniently forgotten now our largest city employs over 1000 more staff than before amalgamation, while salary levels have exploded with over 1500 staff earning more than $100 000. If this was the private sector such expectations would be realised, but in Local Government such savings are unlikely. For example we could see five chief executives being replaced with one earning double the present highest salary, plus four additional lieutenants each earning at least as much as the people they are displacing. 

Cost reductions in other areas such as roads, and the three waters are also unlikely because most of the spending in these areas by the existing councils is awarded by competitive tender meaning there is little if any opportunity for further cost reductions. 

Those claiming the Hawke’s Bay economy will perform better under one council need to provide evidence to support their position. Yes we have lost businesses and jobs. Yes our wages are low and unemployment high. But can those proposing amalgamation provide a single verifiable example of a business that has decided not to come here, or one that has left because of our Local Government structure?

The Local Government Commissions had a myopic view of the issue. Both Winder and the Commission seemed interested only in proving a predetermined outcome and in doing so completely ignored the concerns of the four councils opposing amalgamation. It is loss of control  over funding arrangements and spending priorities that that people are worried about not who actually does the work. The present structure actually has some advantages. We now have an element of competition( rare in local Government), and each area is able to concentrate on their strengths and needs. Perhaps it was this concentration of effort that made the difference in helping attract Kiwitbank to bring over 100 jobs to Hastings. 

The Local Government Commission and Winder could have looked at the possibility that poor quality investment decisions by our councils is a better explanation for Hawke’s Bay’s anaemic economic performance. The $18 million museum upgrade with $4 million annual running cost, plus the nearly $30 million( total cost to date) poured into Opera House are costly spend ups that have contributed very little to our economic performance. If we add the Art Deco Buses plus the cost of the proposed Civic Square upgrade it’s not difficult to tote up nearly $100 million of wasted opportunity. 

 

It’s actually possible many things could get worse with a single Council. We have only to look at Auckland to appreciate the sort of things that might happen here. The people who have been running our affairs for many years have the best chance getting elected to any amalgamated Council and If that happens why will the outcomes be any different?  

Hastings cavalier takeover attitude could also backfire. It will have a maximum of just one third of the representatives on both the Transition Board and the merged council and its representatives will easily be out voted by those whose concerns have until now been ignored.   

Amalgamation will be expensive and disruptive. We need to make sure it is worth it.