The last cruise ship has left our shores for this season leaving behind we are told, some $25 million spent by 80 000 passengers. This is an astonishing $312.50 for each passenger. Considering most are here for just a few hours, and spend nothing on accommodation, and not a lot on food, this figure seems highly suspect. Even if the passenger numbers are understated and the correct figure is nearer 100 000 this still equates to a dubious $250 each.
Just how well our visitor industry is doing is hard to determine. Some operators such as Splash Planet in Hastings and Horse of the year seem to have had a very good year. but others such as the Mission Concert were down significantly.
The visitor industry is vitally important to Hawke's Bay accounting for 5 - 10% of all economic activity. Our local economy is dominated by horticulture, viticulture, forestry, and pastoral farming, and much of our manufacturing is also closely aligned to these activities. Visitors provide diversification meaning not all is bad when adverse climatic events such as droughts happen.
Whilst all visitors are welcome they are not all equal in terms of their economic impact. The most valuable are the people who stay in paid accommodation, such as motels or hotels, and homestays, eat out in our many good food places and visit the various activities on offer including Art Deco, Horse of the year and the Mission.
Especially valuable are business travellers who mostly seem willing to splash out on food and accommodation. Those attending conferences are also very valuable and even a medium sized event can be worth $100 000 to our region. Conferences unfortunately seem to be bypassing Hawke's Bay these days.
Whilst we are very good at crowing about our successes we seem to be reluctant to acknowledge where we are not doing so well. The Statistics New Zealand Commercial Accommodation Monitor records the numbers staying in our motels, hotels, backpackers and camping grounds. For 2012 these reveal Napier Visitor arrivals were down -32,627 or -11.0% on just a year earlier and guest nights down -47,884 or -8.4%, continuing a trend that started in 2005. From the peak in 2005 Napier arrivals are now down 66 600 and bed nights down 90 400.
Hawke's Bay Tourism believe these official figures miss many who stay privately or in home stays, and now adjust the official numbers with the results of a Private Household Survey, a survey of unknown reliability and relevance. Certainly the official figures appear the ones with the consistency necessarily for regional comparisons, or comparisons over time. There is a risk we may be deluding ourselves if the results are simply being used to paint a better picture.
So we are getting mixed messages. If we look at passenger numbers through Hawke's Bay airport we see a reduction. Between 2008 and 2012 passenger numbers have declined from 449 126 to 444 708. We also know numbers were down for the Mission concert, and the Hawke's Bay Opera House is struggling to attract conferences that just a few years ago were quite regular.
We also need to be wary about the boom in cruise ship visitors because we have no control over their their itineraries or whether they continue calling here. After all when summer is over the ships simply leave for other destinations and for six months or more we are deserted. Additionally once Europe and North America move out of the economic doldrums the shipping companies may simply decide there are richer pickings elsewhere.
There are many hard working and very committed individuals trying to make this industry succeed yet there is evidence we are doing less well than we could be. Its timely we question whether we are handling our visitor promotion efforts in the most effective way. Ratepayers are providing $850 000 a year in funding to Hawke's Bay Tourism, and Napier and Hastings councils and individual businesses spend millions more.
Is the Hawke's Bay Regional Regional Council the appropriate organisation to be controlling Hawke's Bay Tourism? The councils previous efforts through Venture Hawke's Bay and Hawke's Bay Inc were not highly successful, though this should hardly be surprising since neither the staff or councillors appear to have serious tourism experience. It seems strange to hand over the right to market Hawke's Bay to an organisation with no other involvement in the visitor industry, when the Hastings and Napier Councils have invested a hundred million dollars or more on amenities.
Another potential conflict is the presence on the tourism board of Dave Simmons a senior Air New Zealand executive who clearly is not going to point the finger at Hawke's Bay air services as many others here and elsewhere appear to be doing.
One thing is certain. If Hawke's Bay is to capitalise on the potential of this vital sector, the true state of the visitor industry must be revealed, there needs to be better coordination between the players, and a clearly defined, and widely accepted strategy agreed on, so we are all moving in the same direction.
Tuesday, May 14, 2013
A timely exit
The decision by Napier Mayor Barbara Arnott to step aside shows excellent judgement. The situation is different in Hastings where the Mayor like his predecessor Jeremy Dwyer is seeking a 5th term.
Too often political leaders seem to think they are indispensable. They arrive with fresh ideas, enthusiasm, and without baggage, and are welcomed by electors. In time their support starts to slip with failures and a history of things that have annoyed voters.
Eventually if they do not accept their time is over and stand aside, the voters will make the decision for them. We saw it with Winston Churchill, Rob Muldoon, Helen Clarke, Kerry Prendergast, and our own Rick Barker. All failed to see they were trying to win one election too many.
Whilst there is no hard and fast rule on how long a politicians should stay in power it seems anything over eight or nine years is generally too much especially if they are in a leadership position.
Existing office holders have a clear advantage over those seeking office for the first time. Name recognition is very much stronger, and its possible to campaign continuously whilst simply doing the job. However there comes a time when hanging onto the power, prestige, and even the income predominates everything else.
All this raises the question of whether there should be legal limits on how long Prime Ministers, Mayors and even run of the mill MP's and councillors should be allowed to remain in office. In the United States after Franklin D Roosevelt died early into his 4th term Congress decided to amend the constitution and limit presidents to a maximum of two terms or eight years.
For a leader such as a Mayor or Prime Minister 3 terms of 3 years seems about the maximum but of course the rule is not absolute. Generally to stay longer than desirable is to be remembered for failures and disasters.
Most political leaders want to be remembered for their successes and timing is critical to achieve that. Mrs Arnott seems to have picked the right moment to exit and her legacy includes the development of McLean Park for the Rugby World Cup, and the Museum extensions.
Too often political leaders seem to think they are indispensable. They arrive with fresh ideas, enthusiasm, and without baggage, and are welcomed by electors. In time their support starts to slip with failures and a history of things that have annoyed voters.
Eventually if they do not accept their time is over and stand aside, the voters will make the decision for them. We saw it with Winston Churchill, Rob Muldoon, Helen Clarke, Kerry Prendergast, and our own Rick Barker. All failed to see they were trying to win one election too many.
Whilst there is no hard and fast rule on how long a politicians should stay in power it seems anything over eight or nine years is generally too much especially if they are in a leadership position.
Existing office holders have a clear advantage over those seeking office for the first time. Name recognition is very much stronger, and its possible to campaign continuously whilst simply doing the job. However there comes a time when hanging onto the power, prestige, and even the income predominates everything else.
All this raises the question of whether there should be legal limits on how long Prime Ministers, Mayors and even run of the mill MP's and councillors should be allowed to remain in office. In the United States after Franklin D Roosevelt died early into his 4th term Congress decided to amend the constitution and limit presidents to a maximum of two terms or eight years.
For a leader such as a Mayor or Prime Minister 3 terms of 3 years seems about the maximum but of course the rule is not absolute. Generally to stay longer than desirable is to be remembered for failures and disasters.
Most political leaders want to be remembered for their successes and timing is critical to achieve that. Mrs Arnott seems to have picked the right moment to exit and her legacy includes the development of McLean Park for the Rugby World Cup, and the Museum extensions.
Saturday, April 20, 2013
Giving ratepayers money to the Crown
At the March meeting of the Hastings District Council, Hawke's Bay Airport Limited advised they hoped next year to pay an $84 000 dividend. Presumably in proportion to their shareholding Napier will receive about the same and the government double the sum.
Any return to councils will of course be appreciated, but it might have been very much higher were it not for an utterly extraordinary decision made a few years ago by the Napier and Hastings Councils.
Way back in 1963 the then five territorial councils, Napier, Hastings, Taradale, Havelock North, and the County signed an Joint Venture agreement with the Crown to upgrade the Beacons aerodrome just north of Napier to accommodate the soon to arrive NAC Fokker Friendship turboprops. The councils jointly provided nearly 500 acres of land and also funded half the cost of the construction.
The agreement contained some very significant clauses. The councils had sole right to appoint directors, the councils owned the land, and the councils could build anything they wanted on the land so long as it did not endanger aeronautical operations.
Roll on to 1989 and the County and Havelock North disappeared following a major local Government reorganisation. Napier had adsorbed Taradale many years earlier. The airport shares then consolidated into approximately quarter each for Napier and Hastings and half for the crown.
In 2008 the two councils agreed to replace the JV agreement with a new corporate structure. This agreement gave the Crown the right to appoint two of the four board members, and for the two councils to rent the land to the airport for 60 years at one dollar a year.
Effectively Hawke's Bay people lost control of their airport with corporatisation. More importantly it will transfer millions of dollars of future income from the councils to Government.
For a start if the councils had charged the airport rent for use of the land, that income would have been tax free in the hands of the councils. Instead it becomes taxable income to the airport businesses, effectively loosing 28% of its value.
The amount remaining after tax is then owned approximately 50/50 by the councils and Government meaning the crown has taken a total of 64% or nearly 2/3rds of the value of the rent, where as had the councils charged rent directly they would have received 100%.
So how much is all this worth. Well if the land was worth say $5 million and the councils charged 10% of that value annually, the rent would be worth $500, 000 a year, split 50/50 Napier/Hastings, or $250, 000 each.
That is the councils will receive only about one third of the rent had the airport been directly charged a fair rent for using the land. Even if the value of the land or the return less the councils would still have received significantly more than they will. The loss to our community of this arrangement over the 60 years could easily be a very substantial 30 million dollars.
The details that has led to this situation was kept away from public scrutiny with disclosure under the official information act denied, and delayed until it was a done deal following official requests to the ombudsman.
Any return to councils will of course be appreciated, but it might have been very much higher were it not for an utterly extraordinary decision made a few years ago by the Napier and Hastings Councils.
Way back in 1963 the then five territorial councils, Napier, Hastings, Taradale, Havelock North, and the County signed an Joint Venture agreement with the Crown to upgrade the Beacons aerodrome just north of Napier to accommodate the soon to arrive NAC Fokker Friendship turboprops. The councils jointly provided nearly 500 acres of land and also funded half the cost of the construction.
The agreement contained some very significant clauses. The councils had sole right to appoint directors, the councils owned the land, and the councils could build anything they wanted on the land so long as it did not endanger aeronautical operations.
Roll on to 1989 and the County and Havelock North disappeared following a major local Government reorganisation. Napier had adsorbed Taradale many years earlier. The airport shares then consolidated into approximately quarter each for Napier and Hastings and half for the crown.
In 2008 the two councils agreed to replace the JV agreement with a new corporate structure. This agreement gave the Crown the right to appoint two of the four board members, and for the two councils to rent the land to the airport for 60 years at one dollar a year.
Effectively Hawke's Bay people lost control of their airport with corporatisation. More importantly it will transfer millions of dollars of future income from the councils to Government.
For a start if the councils had charged the airport rent for use of the land, that income would have been tax free in the hands of the councils. Instead it becomes taxable income to the airport businesses, effectively loosing 28% of its value.
The amount remaining after tax is then owned approximately 50/50 by the councils and Government meaning the crown has taken a total of 64% or nearly 2/3rds of the value of the rent, where as had the councils charged rent directly they would have received 100%.
So how much is all this worth. Well if the land was worth say $5 million and the councils charged 10% of that value annually, the rent would be worth $500, 000 a year, split 50/50 Napier/Hastings, or $250, 000 each.
That is the councils will receive only about one third of the rent had the airport been directly charged a fair rent for using the land. Even if the value of the land or the return less the councils would still have received significantly more than they will. The loss to our community of this arrangement over the 60 years could easily be a very substantial 30 million dollars.
The details that has led to this situation was kept away from public scrutiny with disclosure under the official information act denied, and delayed until it was a done deal following official requests to the ombudsman.
Tuesday, January 22, 2013
The way forward
The grand plan for Hawke's Bay is not working. Economic indices including recent retail turnover figures are mostly heading the wrong way, and we are regularly bottom ranked in regional comparisons.
Official population figures reveal near zero growth mainly because more people are leaving than arriving. We may no longer be the 5th largest urban area in the country and soon we could drop to 7th.
Whilst things will turn around as they always do this might just give us a false sense of well being. Sure we must stay positive, but if we don't acknowledge the problems, we will never find the solutions necessary to lift us from the bottom of the heap. We must find options for getting more money into our economy, more people, more factories, more retailers, more businesses, and more jobs, plus an increased share of the right sort of government spending.
While councils do have have a critical role to play, big ideas like the Civic Centre upgrade or the Museum will make little difference. The obligation on Councils to promote social, economic, environmental and cultural well being has been removed from local government responsibilities, but meeting these requirements often produced little of value despite costing ratepayers millions of dollars. Councils role in contributing to economic stimulus might be better concentrated on reducing costs, rates and fees, and leaving more money in peoples pockets, thereby improving the vitality of our businesses and rural enterprises.
The Regional Council's Ruatanawha Water storage project could make a difference and we are told it will create 2000 new jobs and add millions to our GDP. All good if it happens but the cost is estimated to be $230 million and the economics have yet to be verified. What will the water cost, and can farmers afford it? What risks are being imposed on ratepayers without their knowledge, and does the HBRC have the expertise to handle such an immense scheme. Most importantly it is a long term project that could take 10 years or more to bear fruit and we badly need a leg up before then.
Whilst we don't want to become another Auckland, we really do need more people living here, and more visiting. Cruise ships are delivering a very useful 100 000 day trippers each year but that is less than the reduction in recent years of our traditional customers, who stay longer, spend more, and provide a broader spread of benefits. Placing so much importance on ship visits is also a risky strategy as evidenced by Celebrity Cruises deciding to bypass us this season.
However boosting tourism is probably the only way we can get a lift in activity without taking huge risks. More visitors will create more jobs, encourage new businesses, and generally improve vitality. We particularly need to win back the very beneficial conference trade we seem to have lost.
Of course we are dreaming if we expect this to happen when we have some of the highest air fares in the country. International travellers from our traditional markets such as the USA, UK and Europe are also declining, but realistically we are unlikely to make up the losses from the fast growing Chinese segment. Australia still provides nearly half this countries international arrivals, and if we are to prosper we must have direct Aussie flights.
This means we must regain control of the airport, meaning the entire board needs to be replaced with people of vision who understand just how vitally important it is that we have competitive transport links.
We also need to coordinate our tourism activities. How is it all three councils have separate tourism operations, and why is the Regional Council even involved, when the Napier and Hastings Councils control almost every aspect of the visitor trade.
Whilst getting more people living here permanently is essential, actually making it happen is a huge challenge. Perhaps a simpler way might be to provide better educational opportunities so our young don't have to go elsewhere, often to never return. The 9 000 students at EIT is about the same number as polytechnics in Hamilton, Palmerston North and Dunedin, but all these centres also have universities. Otago University has a staggering 21 000 students, Waikato 12 000 students plus 2000 academic staff, and Massey Manawatu has 8500 students.
We need concrete proposals to add 10 000 additional full time equivalent academic places within 10 years. We cannot continue to accept excuses from Government(s) and others for not making it happen. A university level establishment could attract thousands of highly paid professionals, would bring in hundreds of millions of dollars of new spending each year, and would save Hawke's Bay families many tens of millions in accommodations costs that they are now having to spend elsewhere.
.
We must also give urgency to putting right the under achievement by far too many Maori and Pacifika. In just a few years these groups could comprise 40% of people entering our workforce. Welfare is a shrinking option. We must transform these people into an motivated, educated, and highly productive resource to create improved prosperity for us all.
Perhaps others have better ideas but what ever they are they must be achievable. If we don't change how we do things in the future, we are going to get the same outcomes as in the past. If we don't do something soon we are going to be asking the last person leaving to turn out the lights.
Official population figures reveal near zero growth mainly because more people are leaving than arriving. We may no longer be the 5th largest urban area in the country and soon we could drop to 7th.
Whilst things will turn around as they always do this might just give us a false sense of well being. Sure we must stay positive, but if we don't acknowledge the problems, we will never find the solutions necessary to lift us from the bottom of the heap. We must find options for getting more money into our economy, more people, more factories, more retailers, more businesses, and more jobs, plus an increased share of the right sort of government spending.
While councils do have have a critical role to play, big ideas like the Civic Centre upgrade or the Museum will make little difference. The obligation on Councils to promote social, economic, environmental and cultural well being has been removed from local government responsibilities, but meeting these requirements often produced little of value despite costing ratepayers millions of dollars. Councils role in contributing to economic stimulus might be better concentrated on reducing costs, rates and fees, and leaving more money in peoples pockets, thereby improving the vitality of our businesses and rural enterprises.
The Regional Council's Ruatanawha Water storage project could make a difference and we are told it will create 2000 new jobs and add millions to our GDP. All good if it happens but the cost is estimated to be $230 million and the economics have yet to be verified. What will the water cost, and can farmers afford it? What risks are being imposed on ratepayers without their knowledge, and does the HBRC have the expertise to handle such an immense scheme. Most importantly it is a long term project that could take 10 years or more to bear fruit and we badly need a leg up before then.
Whilst we don't want to become another Auckland, we really do need more people living here, and more visiting. Cruise ships are delivering a very useful 100 000 day trippers each year but that is less than the reduction in recent years of our traditional customers, who stay longer, spend more, and provide a broader spread of benefits. Placing so much importance on ship visits is also a risky strategy as evidenced by Celebrity Cruises deciding to bypass us this season.
However boosting tourism is probably the only way we can get a lift in activity without taking huge risks. More visitors will create more jobs, encourage new businesses, and generally improve vitality. We particularly need to win back the very beneficial conference trade we seem to have lost.
Of course we are dreaming if we expect this to happen when we have some of the highest air fares in the country. International travellers from our traditional markets such as the USA, UK and Europe are also declining, but realistically we are unlikely to make up the losses from the fast growing Chinese segment. Australia still provides nearly half this countries international arrivals, and if we are to prosper we must have direct Aussie flights.
This means we must regain control of the airport, meaning the entire board needs to be replaced with people of vision who understand just how vitally important it is that we have competitive transport links.
We also need to coordinate our tourism activities. How is it all three councils have separate tourism operations, and why is the Regional Council even involved, when the Napier and Hastings Councils control almost every aspect of the visitor trade.
Whilst getting more people living here permanently is essential, actually making it happen is a huge challenge. Perhaps a simpler way might be to provide better educational opportunities so our young don't have to go elsewhere, often to never return. The 9 000 students at EIT is about the same number as polytechnics in Hamilton, Palmerston North and Dunedin, but all these centres also have universities. Otago University has a staggering 21 000 students, Waikato 12 000 students plus 2000 academic staff, and Massey Manawatu has 8500 students.
We need concrete proposals to add 10 000 additional full time equivalent academic places within 10 years. We cannot continue to accept excuses from Government(s) and others for not making it happen. A university level establishment could attract thousands of highly paid professionals, would bring in hundreds of millions of dollars of new spending each year, and would save Hawke's Bay families many tens of millions in accommodations costs that they are now having to spend elsewhere.
.
We must also give urgency to putting right the under achievement by far too many Maori and Pacifika. In just a few years these groups could comprise 40% of people entering our workforce. Welfare is a shrinking option. We must transform these people into an motivated, educated, and highly productive resource to create improved prosperity for us all.
Perhaps others have better ideas but what ever they are they must be achievable. If we don't change how we do things in the future, we are going to get the same outcomes as in the past. If we don't do something soon we are going to be asking the last person leaving to turn out the lights.
Friday, November 23, 2012
We need to get our act together
It's time we the people of Hawke's Bay and especially our leaders woke up to the true state of our local economy. The latest employment statistics are shocking but are probably an indication of our future direction unless we acknowledge the issues and develop strategies to deal with them.
The unemployment numbers are hardly surprising given fruit picking and other seasonal work has yet to yet to eventuate. Possibly the situation could even be worse if it were not for the thousands emigrating elsewhere in search of better opportunities. Alternatively its also possible the lack of population growth is a contributing cause of the malaise.
One statistic that stands out is Maori and Pacifica people are about 3 times more likely to be jobless. Since Maori comprise 24% of the total Hastings population and Pacifica a further 5%, there is clearly a relationship between our overall second highest unemployment ranking and ethnicity. The figures for Napier are only slightly lower.
The proportion of Maori in our community will continue to rise because already 35% of those in the 0–15 year age group are Maori. These young people will soon be looking for jobs, and the percentage of these groups will continue to increase significantly within just a few decades.
We also have a problem with our brightest and most talented young people departing for higher education and opportunities often to never return, or only to do so as a retirement option.
These are the demographic realities. Unless we change our thinking unemployment will become an ever more serious problem.
We need people to be better skilled, we need more jobs, and we need those jobs to be more lucrative. Whilst our farms, orchards and forestry are the backbone of our economy we cannot rely on primary industries to provide these improvements in the future. Pastoral farming is not a great creator of employment because increased production is the result of greater efficiency not more manpower. Nor will horticulture deliver because as we already know their jobs require limited skills and offer irregular and relatively poorly paid work that is subject to seasonality, weather and other disruptions. For many this is not the stuff of careers.
To move forward we need to do a number of things. Firstly attitudes to education must change. Those who have yet to join the work force need to develop the skills that an employer can use to meet the needs of their customers. In particular they need to be able to communicate orally and in writing, in english. There are too many who cannot construct a simple sentence without excessive expletives and meaningless expressions such as “like”, and “yknow what I mean”.Second they must have skills in basic arithmetic so they can add, subtract and have some appreciation of basic logic. They also need to be reliable.
Next we need to improve our educational offering. Whilst the EIT provides tertiary courses the numbers attending are a fraction of those at Otago University, a city with a smaller urban population than Napier and Hastings combined. We must provide study options that encourage more of our brightest to stay, and more from other parts of the country to come here to study. Suggesting we will never get a university because we don't already have one is not just defeatist, it condemns us to second ranking in perpetuity.
Population growth is a major driver of economic growth. We are close to shrinking and if we do not face reality and stop pretending how great the place is, we will enter an endless downward spiral. Recently we ceased being the 5th largest urban area in the country and soon we are likely to slip to 7th behind both Tauranga and Dunedin. We must find out exactly why people are leaving and not returning, why they are not flocking here, then develop strategies to reverse the situation.
We need more manufacturing and distribution jobs and not just those connected to the core primary output. We need to grow our visitor industry because it creates jobs and does not require a huge investment, and can be made to happen quickly. People claim to like coming here so why have the numbers dropped so significantly.
Then we need serious leadership from our leaders. I recently commented on the Mayor of Napier's statement that we don't want better air services because it will just allow locals to spend their money elsewhere. This is symptomatic of the elitist attitude of too many of those who control our destiny. We need to do everything we can to make Hawke's Bay a better place to stay, to shift to, and to visit. True, some very high profile business people have shifted here in recent times but where are the jobs? They might like living here but clearly they do not like Hawke's Bay as a place to do business.
It is also time we stopped building monuments that pamper leaders vanity and concentrate instead on providing the infrastructure and other things that will actually make a difference.
We need to get our act together. The recent departure of the heads of the Hastings Business Association, and the Chamber of Commerce after scarcely a few weeks in the job suggests not only that we are seriously dysfunctional, but essential initiatives are being delayed. We have an Airport Board determined to sit tight and prevent more able people taking over, whilst building an industrial park instead of concentrating on the core business of ensuring we have competitive links with the rest of the world. We also need leaders who ensure we get a better deal from Government rather than a better deal for themselves.
Wake up Hawke's Bay before we discover we have morphed into a gigantic retirement village where the dominant occupation is looking after the elderly.
The unemployment numbers are hardly surprising given fruit picking and other seasonal work has yet to yet to eventuate. Possibly the situation could even be worse if it were not for the thousands emigrating elsewhere in search of better opportunities. Alternatively its also possible the lack of population growth is a contributing cause of the malaise.
One statistic that stands out is Maori and Pacifica people are about 3 times more likely to be jobless. Since Maori comprise 24% of the total Hastings population and Pacifica a further 5%, there is clearly a relationship between our overall second highest unemployment ranking and ethnicity. The figures for Napier are only slightly lower.
The proportion of Maori in our community will continue to rise because already 35% of those in the 0–15 year age group are Maori. These young people will soon be looking for jobs, and the percentage of these groups will continue to increase significantly within just a few decades.
We also have a problem with our brightest and most talented young people departing for higher education and opportunities often to never return, or only to do so as a retirement option.
These are the demographic realities. Unless we change our thinking unemployment will become an ever more serious problem.
We need people to be better skilled, we need more jobs, and we need those jobs to be more lucrative. Whilst our farms, orchards and forestry are the backbone of our economy we cannot rely on primary industries to provide these improvements in the future. Pastoral farming is not a great creator of employment because increased production is the result of greater efficiency not more manpower. Nor will horticulture deliver because as we already know their jobs require limited skills and offer irregular and relatively poorly paid work that is subject to seasonality, weather and other disruptions. For many this is not the stuff of careers.
To move forward we need to do a number of things. Firstly attitudes to education must change. Those who have yet to join the work force need to develop the skills that an employer can use to meet the needs of their customers. In particular they need to be able to communicate orally and in writing, in english. There are too many who cannot construct a simple sentence without excessive expletives and meaningless expressions such as “like”, and “yknow what I mean”.Second they must have skills in basic arithmetic so they can add, subtract and have some appreciation of basic logic. They also need to be reliable.
Next we need to improve our educational offering. Whilst the EIT provides tertiary courses the numbers attending are a fraction of those at Otago University, a city with a smaller urban population than Napier and Hastings combined. We must provide study options that encourage more of our brightest to stay, and more from other parts of the country to come here to study. Suggesting we will never get a university because we don't already have one is not just defeatist, it condemns us to second ranking in perpetuity.
Population growth is a major driver of economic growth. We are close to shrinking and if we do not face reality and stop pretending how great the place is, we will enter an endless downward spiral. Recently we ceased being the 5th largest urban area in the country and soon we are likely to slip to 7th behind both Tauranga and Dunedin. We must find out exactly why people are leaving and not returning, why they are not flocking here, then develop strategies to reverse the situation.
We need more manufacturing and distribution jobs and not just those connected to the core primary output. We need to grow our visitor industry because it creates jobs and does not require a huge investment, and can be made to happen quickly. People claim to like coming here so why have the numbers dropped so significantly.
Then we need serious leadership from our leaders. I recently commented on the Mayor of Napier's statement that we don't want better air services because it will just allow locals to spend their money elsewhere. This is symptomatic of the elitist attitude of too many of those who control our destiny. We need to do everything we can to make Hawke's Bay a better place to stay, to shift to, and to visit. True, some very high profile business people have shifted here in recent times but where are the jobs? They might like living here but clearly they do not like Hawke's Bay as a place to do business.
It is also time we stopped building monuments that pamper leaders vanity and concentrate instead on providing the infrastructure and other things that will actually make a difference.
We need to get our act together. The recent departure of the heads of the Hastings Business Association, and the Chamber of Commerce after scarcely a few weeks in the job suggests not only that we are seriously dysfunctional, but essential initiatives are being delayed. We have an Airport Board determined to sit tight and prevent more able people taking over, whilst building an industrial park instead of concentrating on the core business of ensuring we have competitive links with the rest of the world. We also need leaders who ensure we get a better deal from Government rather than a better deal for themselves.
Wake up Hawke's Bay before we discover we have morphed into a gigantic retirement village where the dominant occupation is looking after the elderly.
Monday, October 29, 2012
Realism needed by Napier Mayor
The suggestion we might have flights to Oz (HBT17/10/12) is premature knowing the background of those involved, though Hawke's Bay's struggling economy could certainly do with the lift in spirit and trade it would provide.
Official accommodation figures for August reveal a whopping 27.8% reduction in motel guest nights this year compared to last. One motel has been liquidated, many others are struggling. Retailers are hurting as is the conference trade. Opera House Chairman John Buck has commented that excessive air fares had made Hawke's Bay unattractive.
Passenger numbers through our airport have have been static compared to four years ago. In comparison during the same period Queenstown airport has experienced a 46% increase in travellers.
Only the thousands of cruise ship passengers visiting us is preventing a meltdown, but we need to be realistic. The ships look fantastic, deliver essential spending but are not a replacement for our traditional visitors. The reduction in bed nights for August alone was 16 000, about the same number as cruise passengers for an average month during the six month season.
Cruising is likely a major cause of self drive and coach touring dropping off but is more seasonal, and probably less valuable. Nor can we control whether they continue to come here since the reason they do is for scheduling convenience rather than anything else.
I consider the Mayor of Napier to be the single biggest impediment to more destinations plus better and cheaper air services. Surely the state of our economy is a wake up call to the Mayor. We are the bottom ranked economy in the latest ASB regional comparison, the only area in the country with a one star ranking. High unemployment might even be worse if so many people were not leaving to live elsewhere.
Art Deco is great and brings in a lot of people but it seems nothing else matters to Mrs Arnott and it's an excessively narrow focus.
This will probably astonish many people but she recently stated she did not favour better air services for Hawke's Bay people because it would allow them to spend their money elsewhere. At least a couple dozen others heard it as well. This confirms my long held suspicion she opposes better air services and always has.
In 2004 I wrote to her detailing the grossly inaccurate and seriously misleading content in a council report on trans-Tasman air services. She responded by stating “the media do not know everything”, apparently referring to my working in the media, but completely ignoring the sound and indisputable information I provided.
Incredibly in June 2006 she then effectively gave the discredited report credibility by writing “One report on the airport has been considered by Napier and Hastings which concluded that Hawke's Bay did not have the infrastructure in place to attract and sustain international flights. All existing trans-Tasman airlines have confirmed this.
In 2007when the privately funded $40 000 BERL report was released and calculated there were already sufficient passengers to support direct services to Australia, plus a potential $43 million improvement to regional GDP she simply commented “it was in the public domain”.
Recently (28/07/12 HBT) she was reported as claiming “ to have canvassed every alternative international carrier in terms of flights and none of them have been interested in flying to Hawke's Bay”
Frankly I don't believe it and challenge her to provide proof by way of correspondence, proposals, reports, or minutes, plus appropriate responses rejecting them, to support her claims. Some chance encounter at a flash Air New Zealand sponsored lunch counts for nothing in my view.
For eight years since I first became involved Hawke's Bay people have been forced to pay the outrageous airfares inflicted by a monopoly supplier. It seems those who don't live here have decided to travel elsewhere and unless we restore our competitiveness with other visitor destinations, we will continue to go backwards. We have so much to offer and its a great pity she has not supported the airport with the same enthusiasm as the museum and McLean Park grandstand projects.
Mrs Arnott believes the Local Government reforms will force amalgamation because Hastings has more voters. It seems the only way to progress the airport issue and get all of Hawke's Bay moving again is to remove Mrs Arnott's influence, and it seems the easiest way of doing this is amalgamation.
Official accommodation figures for August reveal a whopping 27.8% reduction in motel guest nights this year compared to last. One motel has been liquidated, many others are struggling. Retailers are hurting as is the conference trade. Opera House Chairman John Buck has commented that excessive air fares had made Hawke's Bay unattractive.
Passenger numbers through our airport have have been static compared to four years ago. In comparison during the same period Queenstown airport has experienced a 46% increase in travellers.
Only the thousands of cruise ship passengers visiting us is preventing a meltdown, but we need to be realistic. The ships look fantastic, deliver essential spending but are not a replacement for our traditional visitors. The reduction in bed nights for August alone was 16 000, about the same number as cruise passengers for an average month during the six month season.
Cruising is likely a major cause of self drive and coach touring dropping off but is more seasonal, and probably less valuable. Nor can we control whether they continue to come here since the reason they do is for scheduling convenience rather than anything else.
I consider the Mayor of Napier to be the single biggest impediment to more destinations plus better and cheaper air services. Surely the state of our economy is a wake up call to the Mayor. We are the bottom ranked economy in the latest ASB regional comparison, the only area in the country with a one star ranking. High unemployment might even be worse if so many people were not leaving to live elsewhere.
Art Deco is great and brings in a lot of people but it seems nothing else matters to Mrs Arnott and it's an excessively narrow focus.
This will probably astonish many people but she recently stated she did not favour better air services for Hawke's Bay people because it would allow them to spend their money elsewhere. At least a couple dozen others heard it as well. This confirms my long held suspicion she opposes better air services and always has.
In 2004 I wrote to her detailing the grossly inaccurate and seriously misleading content in a council report on trans-Tasman air services. She responded by stating “the media do not know everything”, apparently referring to my working in the media, but completely ignoring the sound and indisputable information I provided.
Incredibly in June 2006 she then effectively gave the discredited report credibility by writing “One report on the airport has been considered by Napier and Hastings which concluded that Hawke's Bay did not have the infrastructure in place to attract and sustain international flights. All existing trans-Tasman airlines have confirmed this.
In 2007when the privately funded $40 000 BERL report was released and calculated there were already sufficient passengers to support direct services to Australia, plus a potential $43 million improvement to regional GDP she simply commented “it was in the public domain”.
Recently (28/07/12 HBT) she was reported as claiming “ to have canvassed every alternative international carrier in terms of flights and none of them have been interested in flying to Hawke's Bay”
Frankly I don't believe it and challenge her to provide proof by way of correspondence, proposals, reports, or minutes, plus appropriate responses rejecting them, to support her claims. Some chance encounter at a flash Air New Zealand sponsored lunch counts for nothing in my view.
For eight years since I first became involved Hawke's Bay people have been forced to pay the outrageous airfares inflicted by a monopoly supplier. It seems those who don't live here have decided to travel elsewhere and unless we restore our competitiveness with other visitor destinations, we will continue to go backwards. We have so much to offer and its a great pity she has not supported the airport with the same enthusiasm as the museum and McLean Park grandstand projects.
Mrs Arnott believes the Local Government reforms will force amalgamation because Hastings has more voters. It seems the only way to progress the airport issue and get all of Hawke's Bay moving again is to remove Mrs Arnott's influence, and it seems the easiest way of doing this is amalgamation.
Tuesday, October 9, 2012
Closing the Gisborne Railway
This weeks KiwiRail decision to mothball the railway line between Napier and Gisborne, was not unexpected but is disappointing. Money is being raised to fund an investigation into the decision but the reality is this line has been troublesome for many years, has probably never been profitable , and therefore would require support from either ratepayers or taxpayers.
Perhaps we might better understand the situation if we look at the history and the many problems experienced . I have some knowledge of the issues as a result of providing media coverage of many of the issues over the past 25 years.
Although development started in 1910 more or less towards the end of the great railway construction period work in earnest did not get underway until the 1920's . The job was not finished until1942 having been seriously disrupted by the great depression and a major flood in 1938 when 21 construction workers died. It was the last major line to be built in this country.
In the 1980's the closure of Wattie's Gisborne's processing plant and the meat freezing works probably reduced freight volumes quite severely.
In 1987 Cyclone Bola scoured out the south bank just south of Gisborne resulting in a significant length of track left dangling in mid air. Effectively the terminus ended up 15 Km or more south of the city until the bridge was extended at a cost of manymillions. I can still remember the official opening by then then Minister of railways Richard Prebble.
Of course while this was happening more shippers must have discovered road was both a cost effective and convenient alternative.
In yet another incident about 10 years ago a large railway crane collapsed the bridge over the Nuhaka river, again putting the line was out of commission for several months and requiring millions more on repairs.
The most recent has been a huge washout that's estimated to cost at least $4 million to repair. Significant track and bridge work will also be required in the future. That's why KiwiRail seemed to have decided to call it a day.
Whether the line will ever be recommissioned is far from clear. While rail does have an important place in the economy, and in some countries is even making a comeback, these conditions may not ever exist for this particular line. Rail suits commodities such as coal, iron ore and bulk liquids, especially where terminal facilities can be provided to minimise handling costs. Controversially if fracking could possibly create an oil industry the rail may be needed again.
Rail also has an advantage on longer distances where fuel and other efficiencies can be realised. The ability to electrify rail systems is also an issue as fossil fuels become more expensive and the environmental impact of their use more significant.
Whilst 200Km seems a long way when driving its probably well short of ideal for rail. Undoubtedly however the greatest difficulty is the lack of meaningful traffic volumes. The long touted wall of wood seems never to arrive and its possible if it ever does that it will be shipped overseas direct from Gisborne's port.
Unlike roads that can be used for freight, buses, and private vehicles, rail has only one use and that is trains.
Trucks are also getting larger, more powerful, and more efficient. More importantly road transport is point to point, eliminating the multiple handling that is inevitable with rail, and often involves travelling shorter distance overall. For many it is simply more convenient.
There have been some attempts to boost usage. In the early 1990's Wattie's used rail to ship tomatoes from Poverty Bay to their factory in Hastings for processing. Using rail might seem logical but it wasn't attractive. Before starting the journey loads had to be shipped in the opposite direction just to get to the rail head. There was also extra handling as the loads were transferred from trucks to rail wagons. Also it needed an awful lot of tomatoes to make up a train load, so a lot of produce sat in the sun. And at times the factory ground to a stop awaiting the train, then when it did arrive was swamped by hundreds of tonnes of tomatoes waiting processing.
It didn't stop Wattie's growing tomatoes in Gisborrne, but they found trickling loads direct from field to factory by individuals truck a better option.
Whilst Gisborne is very isolated and therefore dependent on transport links improving road transport has had a major impact on the railway. It may have even forced the overnight Gisborne to Napier ferry service to cease operating.
In reality rail was probably only viable when the 40 mile limitation on road transport was in force.
Whilst the road between Napier and Gisborne is narrow, has many hill sections and is also subject to slips and disruptions but these are significantly less serious than those experienced by the rail line and it can be improved. The recently opened Matahorua gorge bi pass has already eliminated a very slow and slip prone section, saving trucks perhaps 10 minutes. An extra $4 million has been allocated to building additional passing lanes.
Whilst good transport links are vital for any modern community this does not necessarily mean rail. Nelson at the top of the South Island is every bit as isolated as Gisborne, yet seems to do well despite not having rail links.
Also judging by the huge number of trucks operating travelling between Hawke's Bay and either Taupo or Palmerston North and points south, its clear that significant volumes of freight are still sent by road even when an functioning railway is available.
Perhaps we might better understand the situation if we look at the history and the many problems experienced . I have some knowledge of the issues as a result of providing media coverage of many of the issues over the past 25 years.
Although development started in 1910 more or less towards the end of the great railway construction period work in earnest did not get underway until the 1920's . The job was not finished until1942 having been seriously disrupted by the great depression and a major flood in 1938 when 21 construction workers died. It was the last major line to be built in this country.
In the 1980's the closure of Wattie's Gisborne's processing plant and the meat freezing works probably reduced freight volumes quite severely.
In 1987 Cyclone Bola scoured out the south bank just south of Gisborne resulting in a significant length of track left dangling in mid air. Effectively the terminus ended up 15 Km or more south of the city until the bridge was extended at a cost of manymillions. I can still remember the official opening by then then Minister of railways Richard Prebble.
Of course while this was happening more shippers must have discovered road was both a cost effective and convenient alternative.
In yet another incident about 10 years ago a large railway crane collapsed the bridge over the Nuhaka river, again putting the line was out of commission for several months and requiring millions more on repairs.
The most recent has been a huge washout that's estimated to cost at least $4 million to repair. Significant track and bridge work will also be required in the future. That's why KiwiRail seemed to have decided to call it a day.
Whether the line will ever be recommissioned is far from clear. While rail does have an important place in the economy, and in some countries is even making a comeback, these conditions may not ever exist for this particular line. Rail suits commodities such as coal, iron ore and bulk liquids, especially where terminal facilities can be provided to minimise handling costs. Controversially if fracking could possibly create an oil industry the rail may be needed again.
Rail also has an advantage on longer distances where fuel and other efficiencies can be realised. The ability to electrify rail systems is also an issue as fossil fuels become more expensive and the environmental impact of their use more significant.
Whilst 200Km seems a long way when driving its probably well short of ideal for rail. Undoubtedly however the greatest difficulty is the lack of meaningful traffic volumes. The long touted wall of wood seems never to arrive and its possible if it ever does that it will be shipped overseas direct from Gisborne's port.
Unlike roads that can be used for freight, buses, and private vehicles, rail has only one use and that is trains.
Trucks are also getting larger, more powerful, and more efficient. More importantly road transport is point to point, eliminating the multiple handling that is inevitable with rail, and often involves travelling shorter distance overall. For many it is simply more convenient.
There have been some attempts to boost usage. In the early 1990's Wattie's used rail to ship tomatoes from Poverty Bay to their factory in Hastings for processing. Using rail might seem logical but it wasn't attractive. Before starting the journey loads had to be shipped in the opposite direction just to get to the rail head. There was also extra handling as the loads were transferred from trucks to rail wagons. Also it needed an awful lot of tomatoes to make up a train load, so a lot of produce sat in the sun. And at times the factory ground to a stop awaiting the train, then when it did arrive was swamped by hundreds of tonnes of tomatoes waiting processing.
It didn't stop Wattie's growing tomatoes in Gisborrne, but they found trickling loads direct from field to factory by individuals truck a better option.
Whilst Gisborne is very isolated and therefore dependent on transport links improving road transport has had a major impact on the railway. It may have even forced the overnight Gisborne to Napier ferry service to cease operating.
In reality rail was probably only viable when the 40 mile limitation on road transport was in force.
Whilst the road between Napier and Gisborne is narrow, has many hill sections and is also subject to slips and disruptions but these are significantly less serious than those experienced by the rail line and it can be improved. The recently opened Matahorua gorge bi pass has already eliminated a very slow and slip prone section, saving trucks perhaps 10 minutes. An extra $4 million has been allocated to building additional passing lanes.
Whilst good transport links are vital for any modern community this does not necessarily mean rail. Nelson at the top of the South Island is every bit as isolated as Gisborne, yet seems to do well despite not having rail links.
Also judging by the huge number of trucks operating travelling between Hawke's Bay and either Taupo or Palmerston North and points south, its clear that significant volumes of freight are still sent by road even when an functioning railway is available.
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