Submissions A: Waterfront Plan

Introduction After the Rugby World Cup event there is much to celebrate in what has been achieved on Auckland’s waterfront. And there is much to support in the Waterfront Development Agency’s (WDA) first Draft Waterfront Plan. This DWP is fresh and appealing. It contains a well-presented set of goals and objectives, and a clearly described set of proposals and timelines – most of which will depend on Council agreement and Council funding. Fundamental to these submissions is an understanding of what is meant by the word “destination” and what constitutes a public waterfront that is best for Auckland. It is recognised that the WDA is not master of its own destiny – or of Auckland’s waterfront – and that the WDA is accountable to Auckland Council. However, the WDA has a leadership role in the development of Auckland’s waterfront, and Auckland requires the WDA to take that role, and to make recommendations that will deliver an Auckland waterfront which best meets the full diversity of expectations. That will include building a robust relationship with Ports of Auckland whose growth assumptions need to be challenged in Auckland’s overall best interests. The following submissions more or less follow the format of the WDA’s Draft Waterfront Plan (DWP). They begin with some consideration of the Waterfront Goals. There are detailed submissions relating to technical documents: Cruise and Port. The draft Waterfront Development Plan goals are: 1. A public waterfront 2. A working waterfront 3. A growing waterfront 4. A connected waterfront The first DWP objective is: “a sustainable area”. However the word “growth” or “growing” is problematic in the context of sustainability. In fact the DWP’s description of what the draft goal “A growing waterfront” means, emphasises the need for a significant lift in Auckland’s and New Zealand’s productivity. Productivity is central to many Government, local government and business development initiatives throughout New Zealand now. Productivity increase can be achieved without growth. But growth can occur without any improvement in productivity. At a time of fiscal stringency, the need for sustainability, and trends that allow growth only when it demonstrates high benefit/cost returns, it is my submission that Goal 3 should read: “A productive waterfront”. I note at the outset that in the DWP “Cruise” and “Ports” activities are both positioned under Goal 2: “A working waterfront”. This is appropriate in my view. The plan should be absolutely clear that provision for “Cruise” on Queens does conflict with Goal 1: “A public waterfront”.

Submission 1: Goal 3 should read: “A productive waterfront."

All that glitters is not economic gold...

We had the budget last week. Many expected a more savage set of cuts and a more concerted attack on the deficit. Most commentators who traditionally support the Key Government have been muted at best about it. It's really business as usual with the Christchurch earthquake being the only place where the rubber is really hitting the road. It's so public there. So many peoples' lives and assets affected.

The budget predicts GDP growth to be 4% in 2014. Though where that growth will come from is not clear. Even IRD don't agree with Government tax revenue forecasts. Burble burble. Economics, economics. Not my forte. Just trying to get lined up for my main message here.

What I'm picking up is that more and more commentators are asking the question: what is New Zealand's economic development going to be based on in future? What is the long term plan for that development? What do we need to be doing now, so we can be in good shape to deliver on that longer term economic development plan?

Fool's Gold hurts national wellbeing...False Gold. This is my main message. The National Government has - more than any other Government that I can remember - acted as if New Zealand has just been colonised. It's slash and burn and extract the quick gold. Emphasis has been on extraction at all costs - at any cost. These last few weeks the media has been chocka with stories about what dairy farming is doing to New Zealand's environment.

White Gold....The Business pages are stacked with graphs and tables about butter fat prices. White Gold. So worth having that landscapes no self-respecting farmer would ever have turned into a dairy farm - are now stacked with cows - and irrigated from dawn till dusk. I talked to an accountant mate about this. He told me about his training, "what we first got told was unwritten Rule Number 1. Rule number 1 in New Zealand is farmers pay no tax." I asked him about this and he said, "simple. They're in debt. They've got loans from overseas investors to buy their land and farm plant. All the revenues get ploughed back into interest payments. New Zealand doesn't see any of that money - bugger all anyway. Revenues from dairy don't benefit the New Zealand economy. And the IRD hardly gets a cent...."

And this is where the real cost is. For New Zealand. I'd like to see an honest benefit/cost calculation done on NZ's white gold industry. It makes a grown trout-fisherman cry to see what's happened to the lakes around Rotorua due to dairy farming. And long term data suggests it's doing the same to Lake Taupo and to rivers in parts of Southland. Nitrates from cow piss and poo that are in the ground now will flow into our natural water courses for another 20 years. Even if dairy farming stopped now. And as technology has transformed dairy farming (think of all those automated milking factories funded by overseas investment) it's not as if there's lots of farm labourers being paid, taking that wage into local shops and feeding the local economy. Far from it. They're unemployed now - lots of them - can barely afford a block of cheese and a litre of milk. Any capital gains once debt is repaid are not subject to tax either. Untaxed extraction benefits subsidised by nitrated natural waters and an increasingly methaned atmosphere.

Black Gold.... Whether it's fantastic coking coal from places like Pikes River coalmine, or lignite from Southland, the Government is right behind it. We might not burn it here, and if we don't then there's always China after a bit of cheap fossil fuel energy. I haven't seen recent financial analyses of this "economic" activity. But you can bet your bottom dollar that apart from a little bit of royalty that the government might be able to extract, coal mining's a bit like white gold mining because the mining companies have had to invest so much in building the mine, the tunnelling, and all of the other stuff, that the revenue from the coal will again be paying the bank, the overseas investor.

And where does this cost get factored in? What would happen if the coal companies were required to pay the carbon charge as soon as the black gold was hauled out of the ground? This picture shows the painful truth of what happens to that coal - and sometimes to the lignite when it can be forced to burn clean by blowing in lots of air, and by having pollution cleaners in the stacks. The truth is that clean-burning coal doesn't look as if it's doing anything bad. A bit like cow piss and poos. That nice white steam is chocka with Carbon Dioxide. Yes we breathe it out - but not on this scale. Look at this post: Earth's air before coal. That's the subsidy cost we give to our children.

Gold Gold.... And here we have the real McCoy. Gold gold. Sure I know gold is used for other activities. Funny how gold (and silver) prices rocket in a recession. The Government got pretty keen on allowing gold mining on the Dept of Conservation Estates. Gold mining still happens in New Zealand - quite big scale in MacCraes Flat, Central Otago. Is this what New Zealand has to do, to keep up with Australia? Thing is - our geology is very recent compared with Australia. The easy gold has gone from here. There never was that much in the first place. Went in a big rush in a few years. That wealth probably did do something for NZ's economy back then. Some miners stayed here to spend it. But today's gold mining operations are big investments. Again, overseas investors heavily involved. Largely automated operations. Not much employment...

Doesn't really matter which gold mine you look at in New Zealand, they're all pretty damaging. Just now the Government has agreed to spend millions cleaning up the Tui mine tailings at Te Aroha. This picture's at Waihi. The Martha Hill mine. Big deep pit in the heart of Waihi. In the background the tailings area. Heavy metal etc contaminated fines. Sure they're all contained behind tailings dams. But not very pretty. Risky. It's all so short term. That's the essence of a colonial approach to economic activity. Slash and burn. And for NZ it's death by a thousand cuts. None of this "gold rush" does New Zealand any real long term good. Because it's all going to come to a sticky end when the resource runs out. By definition.

Green Gold.... Which brings me to Green Gold. The last frontier outside most city metropolitan urban limits. So many hearts set on subdivision. The rhetoric is all about housing affordability and so on. But these arguments are fundamentally about freeing up rural land for another form of short-term wealth extraction. When it's over, it's over. Can't do it again. But that's not the plan. The plan is, now, we, want, to turn this paddock into money. Developers do it because they can. Serious quick profits can be made, and have been made. All it takes is to convince Government to change the laws around MULs, allow developers to take quick profits from subdivision, rather than requiring a true cost contribution to the real costs of the infrastructure that will network those new lots into the existing urban framework.

The true costs of the sort of unplanned sprawl that New Zealand developer larikans love and want and argue for, is hard to quantify and disputed. The apparent freedom that goes with living the lifestyle dream in the country is that somewhere else, someone has to dig up more of the black gold that is needed to power the cars that are needed to get you to the amenity most families rely on: schools, shops, cafes, entertainment. Let the new "happy" homeowners pay the true costs of their alienation from urban amenity, for decades. And don't forget: bail-out the development companies that took the biggest risks with this particular "gold mine".

As we know from going to the dentist, the thing about extractive economic activities is that they leave a great gaping hole. Tomorrow's children can't go to those places and do that thing again. It's gone.

Which brings us back to the start of this.

So when will we get some of that long term thinking that most are calling for from our Government? Some investment in economic development that is not so devastatingly extractive. And I haven't even talked about silver gold (fish), and pine gold (monoculture forestry).

Auckland and Wellington sit high in the Mercer Quality of Life Surveys - not because of our extractive approach to economic growth, but despite it. But boy oh boy, New Zealand's economic future is teetering on the brink of a black hole.