Len Brown has announced that the city will be looking at using Public Private Partnerships (PPPs) to help fund building some of Auckland’s infrastructure. Here’s the press release.
Public-private partnerships an option for Auckland
Auckland needs to take a good hard look at public-private partnership models for funding infrastructure says Mayor Len Brown, to relieve the financial burden on ratepayers and taxpayers.
Len Brown today released a position paper on PPPs that may be suitable for civic projects in Auckland.
“As the country’s largest and fastest growing city, we have the need for both major investment in infrastructure and finding new, innovative and fiscally responsible ways for this to be delivered,” says Len Brown.
“Every dollar we invest in capital projects – and there will be many billions – needs to make economic sense and be backed by a robust business case. But the traditional procurement and delivery models cannot deliver the infrastructure Auckland needs, which is why I am not inclined to rule out any options that will help us.”
The Mayor says one of the benefits of the Auckland amalgamation was creating the scale to make PPPs at a civic level possible for the first time, and with the Government pursuing greater private sector involvement in infrastructure and services, the public also have a better understanding of PPPs, and why they are distinct from privatisation.
“We have a large and growing body of international experience to draw from – many successful, some not so successful. While PPPs seek to take advantage of private sector expertise and efficiency, a key difference – and a lesson learned early on in the UK’s experience – is that in most successful PPP models, ownership is retained by the public sector, while the risk falls to the private sector.
“That is important for a city like Auckland, where we are seeking to deliver on social as well as economic aspirations through our infrastructure investments.”
Len Brown says with his position paper he aims to kick-start a process of looking at options that might work for Auckland, that would clearly define PPP models and what they can – and can’t – deliver.
“I wanted a realistic, warts-and-all assessment of PPP models. I wanted to know exactly what value PPPs can deliver – both so that we don’t miss opportunities, but also so we don’t trip up.
“PPPs will seldom if ever deliver lower capital costs. We can borrow money at least as cheaply as the private sector. For a PPP to make sense, the prerequisite equation is the value that it delivers – whether it be through applied expertise, commercial synergy, improved service delivery or risk allocation – is greater than any additional cost of finance.
“If Auckland is to be ambitious and prudent, we need to be smart too. While our balance sheet is strong, it cannot sustain the pressure of the magnitude of investment Auckland needs. And the same is true of the Government.”
The position paper includes international examples of where PPPs have or haven’t worked and why. It also lists dozens of projects in Auckland as large as the City Rail Link and as small as the upgrading Auckland’s parking meters that might benefit from PPPs.
Len Brown will now ask council staff to use the framework presented in his position paper to create a work programme through which the council and wider community can have a good hard look at all the options and apply the ones that will deliver real benefits for Aucklanders.
And the position paper is here.
Now I obviously haven’t had time to go through the entire position paper however here are just some initial thoughts on it and the press release.
1. Work out what we actually need
Yes if Auckland is to grow as expected then it will obviously need to invest in more infrastructure and I don’t think anyone doubts that. This isn’t just from a transport point of view but also covers other infrastructure like water and community facilities. However on the issue of transport I think that before we start rushing ahead and working out how to pay for the massive wish list the council is proposing we first need to actually work out what projects re needed.
The list of projects and in the Auckland Plan and their priorities were largely decided at the political level and the modelling in the ITP showed that despite spending $68 billion that measures like congestion would still get worse. So let’s start by actually working out what projects and priorities will deliver the best outcomes for the city. I’m almost certain that if we did that, there would be some substantial changes to what is current planned and of course this is one of the key ideas behind the Congestion Free Network.
2. Different types of PPP
While we work out what is needed in 1. we can of course have a discussion about funding options and I guess that is where this release from Len Brown comes in. The press release does at least acknowledge a couple of key points in that building with PPPs will almost always be more expensive and risky. The question really becomes if the private operator is able to deliver other benefits that would not normally be available to the council/government.
Further not all PPPs are the same and there are different types and it’s important to marry the right type to the right project. The main types of PPP are shown in the chart below.
I have had a number of people from within different parts of the industry tell me that when it comes to just building infrastructure, that pretty much all of the benefits associated with a PPP from private sector innovation can be obtained through an alliance that sees risks shared. That type of model is already used in New Zealand on a number of projects including the likes of Waterview. An example of the type of innovation often talked about is that with more traditional contracts the client (e.g. council) may award a contract to a company that offers the cheapest price. As the project goes one and cost pressures come in they may substitute some materials for cheaper ones but that have higher maintenance costs. By comparison the alliance model apparently allows the builder and client to work though the longer term implications as issues invariably come up.
In short it’s incredibly important that if we go for a PPP that we get the right model for the right project (or part of the project).There may be opportunities for PPPs in some specific parts of projects but if it is just to build infrastructure then our existing contracting methods can likely do that much better.
As an example with the City Rail Link you might find that the council/government pay for the tunnel portion and the basic station box but do a PPP for actual station construction and operations. That might allow for the private partner to buy surrounding properties and integrate that with the station itself to maximise its use through the likes of providing retail and office space, similar to what is done in places like Hong Kong. If that were an option and the council structures the deal right it could significantly reduce the long term costs of building that part of the CRL.
Of course the council or government could do that itself however over the last few decades we have them shift away from these kinds of activities.
3. Demand Risk
Of course when it comes to transport the biggest issue of all is that of demand risk. In Australia the high profile failure of numerous toll roads due to woefully wrong projections on traffic volumes – especially when a toll is involved – has burnt the PPP sector strongly and now it seems they aren’t prepared to take on the demand risk. As such they have ingeniously worked out that they can push that risk back to the public sector which is why we are now seeing projects like Transmission Gully about to be built using an availability contract. That effectively means the private company builds it and the client (NZTA in this case) pays a fee to use it providing it is up to a certain standard. This kind of project is almost certainly a waste of time and money as it presents virtually no risk to the private sector yet is being paid for by more expensive private sector debt. The table below shows where the risk would site under a PPP with the council
It’s also worth considering what the shifting of the demand risk says about various projects. It basically confirms that we are in a period of change and we can no longer just assume traffic growth will always happen. If the private sector isn’t prepared to take on the risk on motorway projects themselves then perhaps it’s a good indication the government shouldn’t be either.
4. Deal Structure
When a PPP deal is put together the banks financing it will go through each aspect and work out how much risk it creates. Just like insurance the more risky you are to the company, the higher they charge you just in-case something goes wrong.
That means if we put out to tender vague documentation, we could end up paying a lot more over a 30+ year period compared to if we had just used more traditional methods. Any variations to the contract along the way can also lead to much higher costs. It also needs to be noted that the private sector can be incredibly tricky and will do anything to find loop holes to get out of deals. The paper notes the case of the Araat Prison in Australia where there were two building companies who set up a joint venture to build the project. However as the project hit difficulty the joint venture split up leaving little opportunity to tie any recourse back to the two parent companies.
Lastly it will be really important for the council to consider the reputational risks and its citizens expectations. For example if we were to build the CRL as a PPP and that involved the operation of the trains too then if something were to go wrong the trains would likely stop running. That could have serious impacts for the economy until the issue is resolved.
I think that in conclusion there might be some specific cases where a PPP might actually work for some projects but we are going to have to be extremely careful about how we do them. I have to imagine the NZCID has been pushing extremely hard for this announcement behind the scenes. Their members list contains most, if not all of the organisations involved in PPP industry in NZ. There is probably a lot more to talk about but I’ll end it with this.
At the end of the day PPPs are just another form of debt which is a way of spreading the costs out over a long period of time. It means those that get benefit in the future also contribute towards the cost. The millennials (1980-2000) like myself are the generation that will still primarily be paying for this infrastructure in 30 years-time. So perhaps we should also be considering a focus on the projects that enable the kind of city this group wants to be living in, not the infrastructure that reinforces the ideals of their parents.
Wow there’s so many bits of news I want to comment on today and I don’t have time for them all so as it kind of relates to my post this morning I’ll go with this one. In parliament today Green MP Julie Anne Genter asked Gerry Brownlee about his stance on emissions and transport. It was following this news story from TV3 where he said”
I think climate change is something that has happened always, so to simply come up and say it’s man-made is an interesting prospect
So here is the debate today
The transcript is here.
This was what I thought was the best bit.
Julie Anne Genter: Can he name one place in the world where carbon emissions have reduced or where peak congestion has reduced as a result of new motorway construction?
Hon GERRY BROWNLEE: As far as I know, I would be correct in saying—because there are no motorways there—the Antarctic.
Brilliant question and one that left Gerry stumped because the reality is there isn’t anywhere that has built its way out of traffic congestion or emissions. Although perhaps Brownlee suggested it because in his mind hell would have to freeze over before he would accept that urban motorways don’t solve emission and congestion issues.
Here are some shots I took while walking along one side of the River Nervión in Bilbao, Spain, on an autumnal Monday afternoon last month. The banks of the Nervión are Bilbao’s waterfront, but until recently this river had the unenviable reputation of being the most polluted in Europe. This was because until its stunning place-centred reinvention Bilbao was an extremely grim centre of little beside post-industrial decline and environmental damage. Unlovely and unvisited, although with great bones Bilbao, used to be known to the local Basques as ‘El Botxo’: The Hole.
Bilbao city has a population of around 370,000 but serves a wider area of about 1 million people. The latter metric is more comparable to the full Auckland Council region.
Yes, there in the background is the thing you all know about Bilbao: Frank Gehry’s Guggenheim Museum. The success of the Guggenheim in putting Bilbao on the world map is undeniable but it isn’t what makes this city, and the other Basque metropolitan areas, simply the most civilised urban places I have ever visited.
There are a whole lot of factors that contribute to the success of these urban places such as the natural environment, the architecture, the density of the habitation, the focus on quality public space, the efficient transit systems, and of course, the food, and I will cover these in other posts. But here I just want to look at the treatment of one city route.
All through northern Spain I was struck by the routine and seemingly effortless way that the public realm is built for all users. There are plenty of shared spaces in these cities too but this an important connecting road that demands throughput as well as place quality; it needs to support reasonable speed for all vehicles; trucks, cars, buses, and bikes while it is also a lovely riverside place to linger. These contradictory needs are met well through separation.
This route displays the classic deliniation of modes as defined by speed and mass into three zones each of increasing vulnerability and decreasing speed: Vehicles>Bikes>Pedestrians. I love the way that the bike lane has no elaborate and expensive barrier between it and the traffic lanes. There’s no need, and such a structure would only hem in both areas as well as block pedestrians from crossing randomly where and when possible.
Everyone catered for, the cycle lane is high enough quality [not intermittent] for the sporty as well as the slow riders, but also accommodates roller-bladers and joggers. Which means these faster moving humans are not bothering the slower walkers, families, or slumberers on the footpath, and nor are they holding up the traffic nor risking life and limb by having to mix it with those more lethal machines. Space is made for trees and benches, signage is unobtrusive:
Here is a perfect example of safety clearly being the first priority of the local authority and it being delivered efficiently through environmental design. This is a Complete Street. Looks easy doesn’t it?
Walking along here I found myself thinking about our streets and specifically our waterfront, Tamaki Drive in Auckland, and the enormous difficulty there seems to be to get that flagship place into a safe and efficient shape for everyone. Tamaki Drive has had recent improvements since a number of high profile tragedies there but these are fitful and have been very hard won. I think it is worth trying to unpack why civilising our streets in general is so difficult.
I have followed the advocacy of the Local Board for Tamaki Drive [see their plans on the AT website here and here] and the tireless work of our sister group Cycle Action Auckland here. Great work, but is there any sense we will ever see these changes along the whole route? Here is a visual from the Local Board doc:
This looks simple enough to achieve.
Except there is an expensive problem concealed in this graphic. As shown here this is no cheap and easy lick of paint but an expensive extension of the seawall on the right of the picture would be required to supply enough width for the missing Active spaces as well as the current vehicle ones. Major cost and an unwanted change to a functioning and complete sea wall.
But looking closer at the shots above and it is clear that pretty much the only difference between the Bilbao treatment and Tamaki Drive is that in Bilbao they have clearly used what would automatically be an on-street parking lane in Auckland for other modes. We are constantly told that there is very little budget for cycling. But really this is a road corridor safety issue not just a cycling one. To create competent Complete Streets we need to grow out of this narrow mode specific focus. Below, only the lower outcome can be quick and affordable:
On so many Auckland streets already existing space that could cheaply become bike and/or bus lanes or better pedestrian space are currently reserved for either on-street parking or painted medians. Yet there seems to be a default idea that the addition of the missing amenity can only ever occur without any reduction in these uses. This explains why when we do add the missing lanes they stop and start so much and why it seems to take for ever and costs so much to get any change. Yet pace of change and low cost are vital; as shown in this great explanation of this process from NYC.
The lesson from these other cities is that it is the priority given to the additional parking and turning space for vehicles that makes the completion of our streets so difficult and expensive. It is this culture that is the blockage in the way of completing our streets. And that this extra vehicle amenity should properly be considered secondary to competent safe road design for all users.
Of course I understand the desire for parking, especially free or rather publicly funded parking and of course it should be provided where possible but I think it is important to be clear what the costs of prioritising it over basic road safety design are. Both in terms of death and injury, and in infrastructure dollars and pace of improvement. The clear way forward for this and other Auckland roads is to fix the safety issue first, from road corridor budgets and existing space, and then address the community’s desire and willingness to pay for additional amenity like free waterfront parking as the extra ‘nice to have’ that it is. Here again is a visual from the local board document showing how quickly these streets can be fixed:
It seems to me that a very simple change in thinking needs to occur here. But we need clear leadership from senior people within AT and AC, from the Mayor, and especially from the AT board and chief executive, about what constitutes the priorities for competent street design, and the cost of any additional amenity, say like parking, be clearly expressed and not done on the cheap by failing to provide the basic safe and Complete Streets for all users.
A congested road with no transit priority or cycle lanes is a sign of technical incompetence and political failure.
And of course it’s not just waterside routes that need thinking about safety and parking supply to be more sophisticated than is currently the case; here is a look at Ponsonby Rd.
The Herald today has a large amount of op-eds on what is being called Project Auckland which is looking at how Auckland is going to develop and as you would expect, housing and transport features very heavily. Op-eds include
Now I’m not going to comment on every single article but rather some of the general themes within them, although I will pick out a few individual comments that have annoyed me (as I seem to be in a grumpy mood today which is quite unusual).
The really positive thing about all of the pieces is that in general people think the city is heading in the right direction and considering how much has had to be done by the council over the last few years to merge all of the various council plans and policies together. Things could have easily gone quite wrong and so the council staff (from all organisations) and the politicians need to be congratulated for that.
Of course not everything has been plain sailing and there have been (and still are) a number of issues that haven’t been handled ideally. The Unitary Plan is one of those where the lack of clear enough information about what was proposed led to the development of groups like Auckland 2040 that used misinformation and scare tactics to oppose the plan. In the article about the Unitary Plan I wanted to highlight some of the positive comments in relation to it. First from Penny Hulse
“It’s not about cramming in another one million people but having timely infrastructure, so people moving here are not shocked by bad planning. If people don’t arrive as we thought, then the houses won’t get built as fast. That’s life.
“But we can’t let Auckland languish with a housing crisis, and we can’t let shoddy design continue and building take place in the wrong places,” she says. “I’m comfortable where we have got to in the Unitary Plan process, and we can keep building trust about the whole concept of intensification.
“There are huge benefits about being able to walk to the shops and work, and live in a vibrant community. Some people see intensification as frightening but if it’s done well then it can be transformative.”
And from Chief Planning Officer, Roger Blakely
So the traffic problem is resolved within 30 years?
“Yes,” says Blakeley.
“We will have high quality, high frequency rail and bus services. We will have lots of dedicated cycling and walkways. They are more cost- effective than building more roads, and cars are an inefficient way of moving people around the city.
“The city rail link will be finished, and there will be rail to the airport and North Shore (via the second harbour crossing). Bus services will feed into the rail, and the Skypath on the existing harbour bridge will link up the cycling and walking network.
“The 1960s saw cars take over cities around the world with large freeways and parking lots. But the cities lost their human scale,” says Blakeley.
The residential plans are designed to bring a new face to Auckland. “We have to have a flexibility of choice in housing that meets different needs and different budgets. This need is with us now,” Blakeley says.
“Soon there will be more one or two person households than three persons plus – our present housing stock is not geared to meet that need. We need a mix of terraced and town houses, apartments and single houses on a section.”
Hear hear but how we get our transport agencies and the government to understand this is a different story. And this:
“What we noticed in the debate was the generational gap,” Blakeley says. “The older people who went to the meetings organised by Auckland 2040 objected loudly to the intensification.
“But the younger people who were active on social media wanted to live in a more intensified city – they wanted to experience the extra vibrancy that comes with that, including cultural, retail and recreational activity.
“We are talking about international best practice, here,” he says. “Vancouver has done it, and Copenhagen and Vienna are also following the quality, compact city strategy. As the Danish architect Jan Gehl (he’s an adviser to Auckland) said in his book Cities for People, ‘you can’t keep sprawling outwards’.”
Blakeley says “we saw a lot of Nimby (Not In My Backyard) during the Unitary Plan debate. I’m convinced that when more and more people see examples of housing development that embodies flexibility of choice, quality and affordability, they will become comfortable with the idea of intensification.”
He names developments by Hobsonville Land Company at Hobsonville Point and Ockham Investments at Kingsland, Ellerslie and Grey Lynn as examples of future living in Auckland. He says they have a range of sizes and types of housing, ensuring it’s quality at a price people can afford.
“We didn’t get all the intensification we hoped for in the proposed Unitary Plan this time, but it will be reviewed perhaps every five to 10 years, and there will be the opportunity to change the zoning of some areas.”
The generational issue is a serious one. Most of the older people who are objecting to the plan aren’t the ones who will be around in 30 years-time having to live with the outcomes of scaling back the Unitary Plan. We’ve also talked before about how the plan will need to be revisited in the future due to the downscaling that occurred. Once again Auckland 2040 has been allowed to spout a pile of rubbish in the article.
During the Unitary Plan debate, Takapuna neighbours Guy Haddleton and planner Richard Burton formed Auckland 2040 which finished up in an alliance with more than 70 residents’ associations and other groups, including Character Coalition.
Auckland 2040 was opposed to intensification in the suburbs.
Burton says Auckland 2040 “got 70 per cent of what we were after. The rest is detail in the Mixed Housing Suburban zone – that is still very intensive.
“Originally, the draft plan allowed unrestricted apartment building of three or four storeys over 56 per cent of the residential land in Auckland. That has come down to 15 per cent, and from that point of view there’s a degree of rational thinking in the council.
“Their desire is to focus higher intensity development around the town centres and along arterial routes, and I think that’s appropriate.”
Burton is concerned that rules for height to boundary, coverage and yards have been relaxed too much, particularly when they are applied to existing built-in neighbourhoods.
“They will have quite a significant impact – for instance, adjoining rear yards will be one metre each rather than 6 metres and there will be no room for plantings.
A couple of glaring errors in here, first 56% of the residential land in Auckland wasn’t allowed three or four storey apartment buildings, that figure was the amount of land covered by the centres, terraced house and apartment (THAB) zone and the Mixed Housing Zone (MHZ). The MHZ made up the vast majority of that and had a height limit of 8m which is roughly two storeys. Developers would only have been able to go above that with resource consent and even then only to 10m. As a result of the feedback the MHZ was split into two zones Urban (MHU) and Suburban (MHS).
The second major issue is the comment that backyards will be one metre from each other. While the rules for each of the Mixed Housing Zones have a 1m minimum setback on the sides and rear of a house, they also have a requirement for an outdoor living space off the main living area with set conditions i.e. if the living area is on the ground floor there has to be an area with a minimum of 20m² and no dimension less than 4m in length. So while there is technically a minimum of 1m other requirements also need to be taken into account to understand the full picture of what is proposed.
As mentioned the other major theme is transport and as we have come to expect from transport discussion in the city, most of the talk is about how we need to rapidly invest in infrastructure to “catch up”. However as Lester Levy notes, AT also need to improve the way it deals with it’s customer – us the general public.
The other half of the “walnut” essential to making Auckland’s transport system world-class is what I describe as the “software”. This is the mindset and culture within which Auckland Transport needs to deliver a customer-sensitive transport service, which means providing services that are characterised by precision (reliability and punctuality) and responsive service – we and our partners (the providers of our bus, ferry and train services) have much work to do in this area and I have made it my highest priority to finally get this fixed.
The HOP rollout has been dealt with shows we still have a long long way to go on this.
On the infrastructure side though there is a very clear push through quite a number of the pieces about the East-West Link. The project is one that came from obscurity to be ranked one of the most important in the region in The Auckland Plan a few years ago and there has been a strong indication that the council’s support of it was the price to pay for the business community supporting the CRL. It is now being moved well ahead of the CRL in the overall timeline and the government is expected to agree to a funding package for it next year despite there not having even been a business case completed for it yet, let alone a confirmed route – although I’m also hearing that option 4, the route that is the most destructive, most expensive and that has the least benefit for freight is the one that is now the front runner. It makes me wonder if all these mentions of it is part of a concerted effort to soften up the public on the need for it.
I also want to once again highlight one of my biggest bugbears of Auckland Transport underselling the benefits of the CRL.
CRL will mean Britomart becomes a through station, opening the way for 10-minute train services in peak times to Panmure, which in turn will be able to connect with more frequent feeder bus services to suburbs further to the east such as Pakuranga, Howick, Ti Rakau and Botany.
How many times to we have to remind AT that the frequency being talked about in the article is possible in the next year or two and that the CRL allows for double that i.e. 5 minute train services at peak times. It might not sound like that big of a deal but the way people perceive the difference between even 5 and 10 minute services can be quite substantial. The reason AT keep underselling it is they are afraid to promise anything in case they aren’t able to deliver it but they fail to realise that if they keep underselling the project then it risks losing public support.
As I said at the start, the good thing is that we are generally heading in the right direction but we do need some tweaks to get the best outcome.
On Tuesday night the new Council was officially sworn in and the Committee Structure announced, best covered here. We will discuss the Committee Structure further in future posts – because it is interesting to consider the slightly different approach that has been taken to transport compared to under the previous Council. In this post though it’s worthwhile touching on a few interesting elements of the speech given by Len Brown on Tuesday evening – which can be read in full here.
One element touched upon early in the speech is how the creation of Auckland Council truly has enabled us to finally tackle the really big issues facing the city in a holistic sense:
We live well here in Auckland, but not as well as we could. We have jobs, but not as many as we could. We have houses, but not as many as we need. We have a transport system, but not nearly as good as it should be.
Some people believe that the less councils do, the better off we are. That is not a point of view I hold.
A council can, if it dares, be bold. It can imagine remarkable things and then it can find the way to make them real. We know what needs to be done.
The work began three years ago, and we start this new term today with many of the most important building blocks in place.
If you think about it, without the councils coming together the City Rail Link could have never advanced to the extent that it has – the project is simply too big and scary for any one of the previous Councils to have tackled, especially with a sceptical government. Having a single Council has enabled us to be bold and do things that simply weren’t possible before. But of course there is still a long way to go.
It’s also becoming increasingly evident that cities and their councils are far better at tackling many of the issues that impact people who live in them compared to central governments. A point made quite well in this piece.
Everywhere we look we see national governments struggling vainly to tackle the challenges of the modern world. Washington, hopelessly partisan and dysfunctional, is an extreme case. But Whitehall is in many ways clearly over-stretched. The Civil Service remains organised around silos and with a poor record of innovation. Insiders say relations between ministers and mandarins have never been as fraught.
Cities’ governments by contrast tend to display a pragmatic, can-do ethos. Their leaders are often personable mavericks — we know Ken and Boris by their first names — and good at brokering deals and forging unlikely partnerships. The remarkable improvement in London schools — once the worst in England, now the best — has been driven at least partly by the way schools, councils, businesses, charities, arts organisations and others have worked together.
Cities have always been crucibles of invention and their governments are likewise showing increasing signs of inventiveness. Think Ken’s Congestion Charge, bike rental schemes first pioneered by Paris, or the way the Brazilian city of Porto Alegre gave citizens the lead role in setting the city’s budget. Nations hang onto old identities and everywhere struggle to adapt to migration and globalisation. Cities are much more welcoming and forward-looking.
Further on from Len’s speech, there are some more fairly general statements about transport:
And linked in to that programme, at every driveway and every bus stop and every train station and every cycle path will be a transportation system that works as it should.
We are now delivering on an integrated transport system that balances quality public transport, roads, and walking and cycling.
Already we’ve revolutionised bussing, and ticketing, we’re electrifying the trains, and we have the government backing our key priorities, including the City Rail Link.
We have moved the discussion about the CRL along from “why?” to “when?”.
That’s a vital building block, and it’s a reason for Aucklanders to feel very pleased, because CRL is the precursor to everything that cures this city’s sclerosis.
If we can rebalance the transport system, with more people in trains and buses and ferries, on foot and on bikes, and with roads working as they ought to, we will all move freely.
Other cities have done it. So can Auckland.
In a 21st century economy, connectivity could not matter more. The money we invest in transportation – and more than half our entire budget is allocated to it – is an investment for generations to come.
I wouldn’t quite go as far as saying we have revolutionised bussing and ticketing just yet. If AT can get the new network rolled out and HOP working then maybe – but that still seems some way off yet. It’s interesting to note mention of “balancing modes”. Brent Toderian last night said that’s just a sneaky way of saying “business as usual” as in that situation the roading planners/engineers always manage to get their projects to the top of the list as needing to happen before the balancing can occur. The jury is still out over whether the Mayor is willing to sacrifice some of the many stupid roading projects in our current plans to help balance the budget better.
The other mention of transport is in relation to finding new ways to pay for infrastructure:
And I will be looking to alternative sources of funding – for example to help pay for investments in our transport infrastructure.
With that in mind, it’s my aim to lead a debate across New Zealand about the way we fund local government.
If it’s possible to do that in ways other than rates, let’s explore them.
As we’ve said on many occasions, raising money for transport in different ways potentially makes a lot of sense – especially if that process can cleverly manage demand. However with so much fat in the current transport budgets I think it will be a pretty tough ask convincing Aucklanders to pay an additional tax for transport infrastructure we don’t actually even need.
Overall the speech is perhaps a little disappointing in the lack of detail about what key goals the Mayor has over the next three years – a lot of general ‘fluff’ about how great Auckland is or could be. Perhaps that’s not surprising for this kind of speech, but there are many many unanswered questions that remain – particularly around how we’re going to afford the gigantic transport wishlist and when we’ll finally see someone taking a good hard look at whether the projects really deliver on making Auckland the world’s most liveable city.
I’m pretty annoyed about the comments Maurice Williamson made last week. In his capacity as Minister of Statistics, he has taken data produced by Statistics New Zealand, and misrepresented it. I know I’m being idealistic, but I don’t think statistics should be treated that way, and certainly not by the Minister. Quoting the Herald from earlier this week – and he also made similar comments on various news channels:
“Statistics Minister Maurice Williamson… declared the first Census data in seven years contained a surprise “bigger than Ben Hur”.
The finding that so enraptured the minister was that New Zealand’s population growth had halved since the last Census. The population had increased by 31,000 a year, or 0.75 per cent, over the past seven years, compared to 58,000 a year in the previous 2001-2006 period.
But this wasn’t news. As mentioned on the blog, the slower population growth is in large part due to lower migration (plus some other factors which I’ll look at below). It didn’t come as much of a surprise at all, to anyone who’s familiar with the information coming out of Statistics New Zealand. It’s possible that the Minister of Statistics is not included in this group!
“Net” International Migration into New Zealand (Immigration minus Emigration)
12 Months to February
12 Months to February
At the national level, at least, Statistics New Zealand have got a pretty good idea of how the country’s population changes over time, thanks to records of births, deaths and international migration.
These figures are released on a regular basis, and Statistics New Zealand uses them to produce national population estimates on a quarterly basis. They’re released without much fanfare, and they don’t tend to make headlines, but plenty of people rely on them. The estimates get rejigged every five years, when census data comes out, as that is considered to be the most accurate source of population information.
As at 31 March 2006, New Zealand’s estimated resident population was 4,176,100. This is 3.67% higher than the “usually resident population” figure from the 2006 census of 4,027,947 people. The difference reflects census undercount and another few weeks of population growth (the census was held on 7 March 2006).
As at 31 March 2013, New Zealand’s estimated resident population was 4,463,900. This estimate will be revised in the future, but let’s look at the figure as it currently stands, and see if the Minister’s claims stand up to scrutiny.
The estimate is 5.23% higher than the “usually resident population” figure from the 2013 census of 4,242,048 people. The same factors are in play here as in 2006 (census undercount and a few weeks of population growth). So it’s possible that Statistics New Zealand had slightly overestimated the population, and those estimates could now be revised downwards slightly. Emphasis on the “slightly”.
Regardless, the difference between what we’ve just counted in the census and those population estimates is hardly “bigger than Ben Hur”. And there are some other issues as well.
New Zealanders travel a bit more these days, so there would have been more people overseas on census night (this is shown up in “average number of short-term NZ travellers overseas by purpose” statistics) – in March 2006, there were an average of 62,928 Kiwis overseas at any one time. In March 2013, the figure was 78,125.
However, I think it’s also quite likely that the non-response rate of the census has increased. My understanding is that statistical authorities are dealing with this issue around the world – even a quick Google brings up articles like this one, suggesting that countries were achieving response rates of around 98% in the early ’90s. Today, it’s more like 96%: Statistics New Zealand estimate that they achieved 96.2% coverage in 2001, and 96.0% in 2006. On current release schedules, Statistics New Zealand won’t let us know their latest estimate until early next year. But the general trend internationally has been towards lower response rates.
Overall, New Zealand’s population seems to be more or less in line with the estimates that were already in the public domain, and Auckland’s population growth has also been similar to what those estimates say (at more than 50% of national population growth).
So, in conclusion, it’s very misleading for Maurice Williamson to say that population growth has declined significantly and then act as if this is a major surprise. The people of New Zealand deserve better from the Minister of Statistics. So do the staff at Statistics New Zealand, many of whom I’ve dealt with over the years. These kinds of statements can undermine confidence in the statistics. They could even undermine investment, because investors think that it’s just been discovered that population growth is way lower than everyone thought. As I’ve written above, though, that’s not the real story.
Anyway, that’s enough of that. There will be a bit more census info released today – population counts all the way down to meshblock level (these are often similar in size to a city block, so pretty detailed). The more interesting stuff will start to come out over the next few months, and it’s good to see that Statistics New Zealand seem to be running ahead of schedule with the census releases. We’ll bring you more coverage as new information is released.
The first three years of the Auckland council were always going to be dominated by the need to address some fairly hefty pieces of work – the types of things that wouldn’t normally come up in a single electoral cycle. In particular there has been the need to set a long term vision which came in the form of the Auckland Plan. Following on from that was the need to align all different district plans which was the Unitary Plan. Then there has been the need move all ratepayers on to a single rating system – a process which was always going to create some winners and some losers. On top of all of that has been the need to amalgamate all of the various council functions and services to reflect that we are all one city. And let’s not forget that while all of this was going on, those involved in the council have had to adapt to the new structures at a political and technical level – for example how the council, local boards and council staff interact with each other and the CCO’s.
When you consider just how difficult all of that must have been on so many levels you have to say that on the whole, the council has done fairly well. But with most of those really hefty issues now completed or well on their way to being completed I hope that over the next three years the council will be able to focus much more on implementation and fine tuning the various council functions. Just how successful the council is will come down to views and positions taken of the people sitting in the council chamber.
The media have already started beating up the results of the election as a left vs right issue and suggesting that with the changes to councillors will now have a much tougher fight on his hands. However I think that the previous three years have shown that in local body politics at least, that the left and right groupings are at best clunky and have often had little overall impact. For example seen Penny Webster – a former ACT mp – be one of Len Browns biggest supporters. We have also seen many of the “right wing” councillors support projects like the City Rail Link. Further in the recent Unitary Plan debates we have seen the likes of Mike Lee and Cameron Brewer voting together to oppose the plan.
Perhaps unlike central government, the councillors have been much more willing to vote for what they actually believe rather than having to stick to a rigid party/political ideology. I would expect the returning councillors will probably be fairly consistent in their stance on the various issues however all of this makes it even more important to try and understand the positions each of the new councillors will take. So with this post I am going to take a look at the new councillors and what we may know about them on issues we follow on the blog and especially what impact the new councillors may have on future support for the CRL.
John Watson – Albany Ward
When it comes to transport, John seems to focus almost exclusively on roads with his bio here even including “Penlink First” in his party name. Along with Penlink his top transport priorities seem to be widening both Albany Highway and Whangaparaoa Rd while in his pitch for the local board he is also pushing for another motorway interchange at Wainui Rd. He says that the projects are needed to deal with the growing population however with the Unitary Plan effectively baring any intensification from happening on the Whangaparaoa Peninsula it really calls into question how much many of these projects will be needed. His bio does suggest that he may support the CRL.
Bill Cashmore – Franklin
Bill seems to have been handpicked by retiring councillor Des Morrison – who I personally thought was one of the better councillors during the last term – so if Bill is anything like Des then he will be a quite good addition to the council. His voting profile doesn’t give much away about his thoughts but in this herald article gives strong support for the extension of electrification to Pukekohe (something likely even more needed following the special housing area announcement).
Mr Cashmore said what most people in the ward wanted addressed was better public transport in and out of the city, fair business rates and improved social services in the area.
He said train and bus services needed to improve to help the 50 per cent of Franklin locals who travelled into the city for work every day.
“If you’re living in Pukekohe, it’s not easy getting to the city via public transport. We need that electrification through to Pukekohe and the train timetables need to be a little bit more suitable for people out here,” he said. “It’s a work in progress.”
Denise Krum - Maungakiekie-Tamaki
During the debates about the unitary plan it was quite noticeable how much Denise was scaremongering about building heights and intensification including putting out the graph below suggesting that 90% of the ward would have multi storey housing. I guess she was counting everything over two storeys.
Her bio however suggests she wants more affordable housing, I wonder if she has linked together that allowing for more intensification helps improve housing affordability.
Understanding the challenges facing our diverse and fast growing city, I’ll back initiatives that contribute to Auckland’s economic success, create affordable housing and provide you with infrastructure expected of a major international city.
This also suggests she would support some PT projects but Generation Zero found she wasn’t very clear about what she would actually support. The most concrete thing about transport from Denise was last week where C&R put out a press release stating that they would still support the CRL, clearly in response to the calls by some (Maurice Williamson, Dick Quax and John Palino) to drop the CRL following the initial census results.
It will be very much a case of wait and see with Denise.
Chris Darby – North Shore
In the past Chris has been incredibly supportive of projects like the CRL and I would expect that to continue based on his website. He has also been very supportive of projects like Skypath and as such did very well on Generation Zero’s scorecards. In addition he has really supported the Congestion Free Network, even going as far as presenting his own mini version for the North Shore using the same style as our CFN maps.
Chris should be an excellent addition to the council and for pushing to get better transport solutions.
Linda Cooper – Waitakere
There isn’t a huge amount of info on exactly what transport projects Linda stands for other than saying she wants a cohesive system that combines all modes and I would be surprised if she didn’t support the CRL. Generation Zero noted that she was positive about some public transport investment including a north-west busway. As we have seen with other West Auckland politicians (from all sides), Linda is quite supportive of intensification and the benefits it can bring which is a big positive. I have heard from people who used to work at Waitakere City Council that she was quite good so is hopefully be fairly objective.
Ross Clow – Whau
Ross has edged ahead of Nolene Raffils following the second count of votes, I’m not sure if the result can still change and with the votes so close a recount is probably not out of the question. Again there isn’t a lot of information out there on exactly what Ross will support other than saying he thinks that public transport should be prioritised. I know he was part of the Waitakere City Council that set up the redevelopment of New Lynn as a Transit Oriented Development and he says wants similar developments in Avondale.
All up it appears that there will still be plenty of support for to keep the CRL going on its current course which is great news. Within the next three years we will have seen the EMUs rolled out and we should also have started to see some patronage gains as a result which will give us a good indication as to whether we are on track to meet the targets the government has set.
The next question that we will wait to find out is what structure Len goes with for the committees. Will he retain things as they are or shake them up? For example these days the transport committee seems quite toothless and with the councils role being high level strategy rather than implementation (which sits with AT) then there is probably a good case for rolling it into the Auckland Plan/Future vision committee. However we might also see Len retain it for political reasons to keep Mike Lee happy and onside.
Lastly congratulations to all of the new councillors (and returning ones).
This post will be updated throughout the afternoon as the Council election results come in. Key areas of interest include:
- Obviously the mayoral result. Seems very unlikely that Len Brown won’t win but after the America’s Cup I’m hesitant to ever count chickens before they hatch.
- Key council wards like the North Shore (can Chris Darby unseat George Wood?), Albert-Eden-Roskill (Christine Fletcher and who?) and Albany (perhaps one of the most open races)
- Specific Local Boards will probably be interesting to follow.
- The Wellington mayoral race might be quite interesting too – as polls show it’s pretty close.
We’ll be updating this post from 2pm onwards.
1.47pm – NZ Herald saying Len Brown has been re-elected as Mayor.
1.51pm – Penny Hulse back in, looks like Christine Rose might miss out.
1.53pm – All current Councillors for Manurewa-Papkura & Manukau seem to have been re-elected.
1.55pm – Mike Lee back in. Sounds like Chris Darby & George Wood might have won on the Shore. Ann Hartley’s sudden dislike of intensification backfired perhaps?
2.08pm – Wayne Walker reelected for Albany. Plus his running mate John Watson. Perhaps a bit of a surprise there.
2.13pm – Penny Webster reelected in Rodney. No surprise there. Looking close in Whau and Tamaki-Maungakiekie.
2.27pm – Preliminary Auckland Election Results: Brown (Mayor), Hulse, Cooper, Darby, Wood, Watson, W Walker, Lee, Krum, Raffils, , Fillpanina, Anue, J Walker and Penrose. (Plus Brewer, Quax & Stewart).
2.30pm – Mayoral progress results here. Councillors results here. Local Board results here.
2.57pm – Hard to be sure (especially before Whau & Tamaki-Maungakiekie are finalised) but seems like there should be sufficient support for the City Rail Link on the new council to ensure it happens.
Wow who is this and what have they done with the real Herald. The editorial this morning nails the issues surrounding Maurice Williamson’s statements following the early release of the census data.
According to a phrase usually attributed to Mark Twain, there are “lies, damned lies and statistics”. It was his way of saying we should be wary of figures that are used to boost weak arguments. Perhaps, most particularly, we should be cautious about statistics given so dogmatically there is no apparent room for debate. Pronouncements like, for example, that of Statistics Minister Maurice Williamson, who declared the first Census data in seven years contained a surprise “bigger than Ben Hur”.
The finding that so enraptured the minister was that New Zealand’s population growth had halved since the last Census. The population had increased by 31,000 a year, or 0.75 per cent, over the past seven years, compared to 58,000 a year in the previous 2001-2006 period. This, trumpeted Mr Williamson, should prompt a revision of Auckland’s infrastructure plans, such as an increase in high-rise apartments and the construction of an inner-city rail loop.
The growth rate is, indeed, surprisingly slow. But what that means for Auckland must be subject to a couple of important caveats. First, the data so far released – annoyingly, the Census findings are being drip-fed – does not reveal the extent of Auckland’s long-term growth.
It then goes on to talk about some of the likely reasons why the population figures are lower than expected including the large amount of migration that has occurred in recent years. But the key point is below
This doesn’t mean no notice should be taken of the Census data. The council’s planning for the next 30 years, as outlined in its Unitary Plan, is based on the prediction that the number of Auckland residents will grow by one million, or 2.2 per cent a year. The plan is hugely important because of the impact on Auckland of constraining most of the city’s growth within existing urban limits and encouraging higher-density development close to public transport. The prospect of intensified housing is by no means universally applauded, and the Census findings for Auckland, when they are finally released, warrant close attention in terms of the population assumption.
Contrary to Mr Williamson’s view, however, the same cannot be said of the inner-city rail loop. Its construction is not predicated on population growth. Rather, it is about the shape of Auckland, the number of people who live and work in the central city, and creating an essential and efficient public transport artery. Debate over it should revolve primarily around issues such as potential patronage and funding options, not projected population.
This distinction has never been appreciated by the Government. While endorsing the rail loop in principle in June, it scheduled it for 2020, five years later than the council wants. The Government said a start could be made earlier if Auckland’s population growth led to increased inner-city employment. It needs to understand that a start on the project should not depend on such a link.
Clearly, much of Mr Williamson’s gusto doesn’t withstand too much scrutiny. Nonetheless, he has ensured that attention will be paid to Census regional growth findings when they are released next week. If there are genuine reasons to question the assumptions underpinning the Unitary Plan, they will be found there.
Spot on, the business case for the CRL isn’t based on high growth projections and more important than population growth is just how many people might use it. As the post this morning on Calgary shows, you don’t have to have a high population to get high patronage or CBD employment, what you need is a strong, connected network that works together and that provides real options and on that front the CRL is crucial to the future development of the network. To be honest I’m even sceptical of the patronage projections and suspect they are way under estimated and we have seen with past investments – like with Britomart – that we way underestimated the demand
They also make a valid point that the shape of the city is also important in the discussion on the need for the CRL. We have seen from the Unitary Plan that a huge amount of growth has been allowed for out west along the rail line, and even if only a small amount of it every fully happens, it will add huge demand for travel which the CRL can greatly assist with. Further the greenfields developments in the South have a similar effect and I have heard in the past that ironically the more sprawl that happens down that way, the greater the demand for the CRL becomes.
It’s so nice and refreshing to see this stance from the Herald for a change, even if they still refer to the project as a loop.
People in many parts of the country love to make claims that Auckland sucks up the majority of government spending to the detriment of their own regions. It is false and probably always has been but in the past details have been hard to come by to say with certainty.
Yesterday the government released information indicating how much money they spent in region for the first time. Personally I think this is a really positive step and something that should have happened a long time ago (this applies to previous governments too). I imagine the key reason why it hasn’t happened before is that it can be incredibly difficult to work out where some spending is actually going. For example many government departments are based in Wellington and so the spending happens there even though the outputs from that department will likely have impacts elsewhere. For this reason the authors of the report have come up with two ways of measuring government spending. The first known as the Expenditure Approach assigns expenditure to a region according to where money is spent. The second approach known as the Service Approach assigns expenditure according to the region for which a service is provided and therefore addresses one of the key issues with the first approach. Both are to measure though.
Steven Joyce is quite happy and claims it shows that money is spent evenly across the nation and by and large that is true, perhaps except for Auckland. Here is the high level break down of the results. Spending in this table includes both CAPEX and OPEX however other tables break those figures out separately and by the area of spending.
The service approach is probably the fairer of the two measures and suggests that Auckland receives about 2% less funding its share of population. As a total Auckland receives the second lowest amount of overall government spending per capita and around $1,000 less per person that the national average. Due to Auckland’s size that equates to over $1.4 billion a year and while that is across the all sectors, it would certainly pay for a few key projects.
Drilling down to the different funding categories transport and communications have been grouped together although the report notes transport makes 96% of the results. The CAPEX table (bottom) shows Auckland getting a substantial amount of current spending, a trend that has been seen a over recent years after years, probably decades of underinvestment. However I was surprised to see that Auckland’s percentage of OPEX was down quite a bit. Many of the rural regions have quite high OPEX per capita which likely reflects the need to maintain a lot of roads to serve small populations.
Looking at Auckland across all sectors the authors have highlighted the areas where the region receives above the national average per capita. You can see that it is only in defence that Auckland receives more OPEX spending than the national average however as a total we do get more CAPEX spending. This reflects that while it costs more to build stuff in Auckland, it tends to be more efficient to run due to service more people. For example one school with 2,000 students will be cheaper to run per capita than 10 schools 200 students.
The report also estimates expenditure in Auckland over the last 7 years.
All up an interesting report and hopefully it is something that is repeated every year or two. In my mind it certainly debunks the myths that the rest of the nation is missing out on funding due to Auckland sucking it all up. When combined with the fact Auckland is growing at a much faster rate than the rest of the country it does raise questions as to whether the amount of funding Auckland receives is at the right level but that is a much more complex question as giving Auckland more funding also means taking it away from somewhere else.
Next time someone claims Auckland is sucking up the countries spending, you can now point them to this report.