Here’s another angle on the super city issue that hasn’t had any airtime in the public debate so far: hundreds of jobs and hundreds of millions of dollars of economic output will be sucked out of Auckland’s peripheral cities.
Let me stress again that Labour is not campaigning against the super city per se. But one of the problems with the Government’s handling of the super city is their failure to front up and explain the costs of the project. They’ve been clear that Auckland ratepayers will pick up the tab for the transition but much less forthcoming about what the transition will cost. So I commissioned an economist to come up with some numbers by re-modelling the Royal Commission’s numbers based on the Government’s preferred super city model. That research found that ratepayers will pay up to $750 each for the transition costs. I also found that ratepayers in Manukau, Waitakere and North Shore will also face a hike in their water rates due to the imposition of volumetric pricing – that’s an extra $700 a year for a four-person family.
But these figures are dwarfed by the likely economic impact of the super city on the peripheral cities of Manukau, Franklin, Rodney, Waitakere and North Shore. University of Auckland public economics lecturer Rhema Vaithianathan has used the Royal Commission’s modelling and adapted it to reflect the changes the Government plans to impose, to determine the economic impacts on the cities and districts outside of Auckland City. The Government’s plans will result in a massive centralisation of resources within Auckland City and the research shows how detrimental this will be to the other cities and districts economically and in terms of jobs.
Dr Vaithianathan’s work calculates:
Rodney: annual regional GDP falls by up to $74 million and 270 job losses
Waitakere: annual regional GDP falls by up to $139m, over 680 job losses
Manukau: annual regional GDP falls by up to $189m, 702 job losses
Franklin: annual regional GDP falls by up to $41m, 113 job losses
North Shore: annual regional GDP falls by up to $162m, 658 job losses
The negative economic impact is likely to be even greater than this analysis shows, as it is also likely that council contracts that currently go to small local businesses will be lost. These contracts will be centralised and will probably go to larger firms which can operate across the entire region.
I think the Government hasn’t been upfront about this, but Aucklanders deserve to know how the changes will affect them and their communities. Labour has consistently supported the idea of a unitary council but, like the Royal Commission, supports a model which gives local councils the powers and resources to deal effectively with local issues. This would lead to less centralisation than the Government model, fewer lost jobs outside of Auckland City and less loss of spending in local communities.
* Dr Rhema Vaithianathan is a member of the Labour Party.
More rubbish Phil. Supercity Auckland need not centralise its administration at all. In fact the opposite. The new city’s administration will most likely use existing decentralised premises – why wouldn’t it?
Gilbert Peterson
“Job losses” = “Fewer useless bureaucrats”
Believe it or not, the greater Auckland region doesn’t need a dozen “Iwi Relations Officers,” “Politically Correct Enforcement Commissars,” “Kapo Haka choreographers” and all of the other pointless non-jobs that the Labour Statists created and forced ratepayers to pay for.
In fact, we don’t even need one of these.
Back to the pre election pre-amble, Labour bad, National bad. Of course these job losses will reduce GDP, in useless beauracratic waste. As Mitre 10 Say, bigger is better. Dr Rhema certainly would not be biased would he:).
I doubt if Mr Peterson will be proved correct. My expectation is that, in the neo-liberal paradise that will be the Supercity (lean, mean, core and well and truly cored), lipservice wil be played to decentralistaion initially, but cost structures will slowly and surely drive rationalisation to an ever-weaker regional presence. This is, of course, one reason why the RC suggested another, properly funded, tier of local governance.
Also, though I had not previously made the connection so starkly, Simon’s apparent fixation with thing Maori adds a whole new dimension to the Supercity debate – maybe Mr Hide and his oligrachy are not only bent on excluding the traditional owners of Tamaki Makaurau from direct involvement in regional governance, but also looking to the new model as a means to expunge all aspects of biculturalism therefrom.
Deleted off topic Trevor
@Gilbert
Gilbert, have a read of the report. You’ll see the analysis is not based on whether the super city uses the current premises of councils or not. The methodology takes the projected efficiency savings (based on a re-working of the Royal Commission’s numbers factoring in the Government’s model) and distributes those reductions in jobs and expenditure around the peripheral cities and districts – not including Auckland City because inevitably with the inherent centralisation it is likely to be a net winner. The projected job and spending losses don’t include the likely effect of contracting shifting away from smaller local mum and dad type contractors to larger firms who can deliver services across the region, so they are pretty conservative.
it so bad to save money isnt it labour
@ Simon, gidday, graham lowe
You are missing the point rather badly. The post and Dr Vaithianathan’s analysis are not about the merits or otherwise of cutting unnecessary jobs. They assume there will be cost efficiencies using the Royal Commission’s modelling and then factoring in the Government’s changes. The point is the contractionary effect of the Government’s extreme centralisation model on the peripheral cities and districts.
Deleted off topic Trevor.
* Dr Rhema Vaithianathan is a member of the Labour Party.
With any study or report like this – the golden rule is the “Independence” of the study.
If you cannot even get the basics like that covered – how can you expect us to take it seriously?
I’m not biased : Yeah right!
No The golden rule is transparency. Vaithianathan is an academic who puts her reputation on the line every time she writes a report. Phil declared that he had commissioned the report. Her membership was declared. Now treat the report on its (considerable) merits or argue the substance.
There seems to have been little transparency with Labour Party activist Neelam Choudar and what she submitted via Labour. Unfortunately, when its obvious you are putting some biased documents into the public arena – others get smeared with the same ‘bad taste’.
It would have been smarter and given credibility for a independent person to have completed this report.
I’m happy to stand behind my report and I’m happy for anyone to read it for themselves – it is available here. As an academic I contribute to debates and expect others to present their own arguments, conduct their own analyses and to criticise mine. What astonishes and concerns me is that no-one else has undertaken such research, or hasn’t made it public if they have done it. I can’t imagine any similarly sized private entity contemplating such a major reform without a very careful cost-benefit study. We know from evidence that over 50% of mergers in the private sector fail even after careful study and planning. What chance do we have in the absence of such care?
@BikerKiwi
In regards the report of Dr Vaithianathan: you believe that the report to be bias. Dr Vaithianathan’s does work as an independent economics consultant as well as teaching public economics. Her career is entirely based on her professional integrity. I would think she would be a fool to present anything but her best independent work on a report that she knew would be published publicly.
I don’t believe she is a fool. If her report needs refuting, it should be not simply based on her political beliefs, it should be based on reviewing her analysis. It is easy to attack someone’s reputation on the internet, but all statements made are in the public domain and need therefore to be qualified and supported.
In regards Dr Worth: what lack of transparency over the allegations against Dr Worth? It is my understanding Mr Key knew about the allegations, the name of the woman making them, and that she source was a Labour party activist, in early May.
To his credit, there is no evidence that Mr Key ever intended that name should become public. Dr Worth’s resignation relates to a separate incident with a different woman, and is presently with the police.
@Sean:
“It is easy to attack someone’s reputation on the internet, but all statements made are in the public domain and need therefore to be qualified and supported.”
That would be like going off 1/2 cocked and naming and publishing publishing that a person was “Just Stupid” and “lacking judgment” for parking in a handicapped spot.
I didn’t see much qualification and support going on there? Or even an “sorry” when it was proven that it was totally incorrect.
off topic – deleted (Phil)
[And take a week off from commenting since you seem to struggle to participate here constructively - admin]
@ bikerkiwi
I’m sorry BikerKiwi, you seemed to have lost me.
Are you abusing me, about the comments ‘“Just Stupid” and “lacking judgment” for parking in a handicapped spot.’ – or are you questioning Trevor Mallard, for comments that he withdrew and apologised for some days ago?
My view: Mallard made a public statement that he found to be insupportable, and had to withdraw and apologise for a statement. As a cost he wore a fair bit of online flack. You can go to that post, still available on ‘Red Alert’, and add any comment you want to make.
Along these lines, I notice Dr Vaithianathan stated on this thread that she is eager to stand by the validity of her report. Do you want to question her directly on her report’s methodology, or do you want to re-think your position of questioning her analysis?
Either of these approaches would seem more constructive than discussing it with a third person.
[...] economist at Auckland University’s Business School, who is a friend of mine and has done some work on the economic impact of the Government’s super city plans, was in Tokyo recently and did some research with a [...]
Couldn’t get past the title ‘Whats that suckings sound’