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Dick Hubbard Speech To Property Council Breakfast

Mayor Dick Hubbard’s Speech To Property Council Breakfast 8.00am 17 February 2005, Hyatt Auckland

Good morning. You are all very important stakeholders in this city. You make major investment decisions. We owe it to you to give you a very clear signal of the priorities and direction of council. You want certainty, I know that. We will do what we can to achieve that.

In some ways it is the best of times and the worst of times.

The best of times for Auckland because -

We have 4 per cent growth The lowest unemployment rate in 20 years The fastest influx of people from elsewhere in New Zealand and overseas: 140 new people arrive here every week. We’ll grow by 140,000 people before 2020. That’s about 50,000 households. The population of the CBD alone is expected to grow from 16,000 to 26,400 by 2013. The CBD is currently Auckland city's fastest growing "suburb".

But the best of times brings with it also, the worst of times. Or, if we are being positive, the best of challenges.

Our most important arterial roads are jammed, not only at peak times but many throughout the day as well. Our freight efficiency has fallen by about 40 per cent over the last decade. The cost of upgrading the city’s stormwater network over the next 10 years to cater for the increased population is estimated to be up to $500 million. It has been estimated that at least 23,000 households in the Auckland region are paying unaffordable rents by spending more than 30 per cent of their income on rent. This is the least affordable place to buy a house, not only for beneficiaries but for thousands of working families on modest incomes. This is forcing more to live away from their places of work, driving the lower paid from the thriving heart of the region. There is huge pressure to knock down what’s old, never mind that it’s precious. And at the same time we are experiencing a stampede to build what’s most economic, not the best – when doing both is possible.

We all know these challenges. It simply can’t be business as usual if we want to solve them. We have to make changes.

When I criss crossed this city campaigning last October, people told me they wanted the transport problem solved.

Every Aucklander knows transport needs work. Aucklanders want action.

They also told me they want growth, but managed in a way that we end up with a better place to live.

Growth is a vote of confidence in the future of Auckland city. Aucklanders want to feel proud of our city, to see it succeed and prosper.

We need a coherent vision for how to achieve a vibrant and integrated city. A strategy which acknowledges the complex intertwining of the economic, social, environmental and cultural elements of our city. We can no longer trade off one against the other, we must find win-win solutions. We must work alongside the regional council to find these solutions.

Planning for growth isn’t just something a council does. The benefits come from independent decisions made by households, firms and especially people like you. I would like to think we’re in this together.

We need to save our heritage, while enjoying prosperity. And I am a believer that prosperity can be enjoyed by all, not just a privileged few.

As a result of listening to Aucklanders I believe my council and I can deliver what they want.

Every Aucklander knows deep down – as I know you must know deep down – that taking action also carries with it a cost. We can’t have it both ways. To get action we’ve got to invest.

Auckland City has a very close relationship with the Property Council and we’ve been listening to what you’ve been saying. We have a huge amount in common. Like you, I know you have to spend a buck to make a buck.

For the city, unfortunately we have to rate to raise a buck to spend that buck. Just about everybody agrees that rating is an unfair way to raise money to fund the vast array of services we provide. In the past 13 years, there have been 27 reports to try to find alternative methods. I don’t see an easy solution, but we are committed to be part of a working group in Wellington discussing these issues seriously with central Government.

There has to be a fairer way. We want to help grow your businesses by getting the infrastructure right, and by making this a place in which people want to live, build their homes and raise their families - and we want a fairer way of funding these things.

In the meantime, we are stuck with the present rating system and with huge challenges.

So we are suggesting that we target the key areas and allocate an increased budget that can get results. No-one likes rate increases. But I will be doing all I can to put the dollars where they need to be spent.

Auckland city has had only one real rate increase in eight years. The year was 1999 when Auckland City Council made the tough decision to increase rates by 10 per cent. The decision raised $32 million to cover rapidly escalating depreciation costs.

In the years since 1997 Auckland City Council has had a rate increase level only with inflation. The belt in this organisation has been tightened for eight years. I’m continuing the policy of each department being asked to find savings every year and if there is fat or another way to pay for what is needed, I will find it.

But there is a limit to continuing to keep rates low if you want to solve some of our major challenges. We simply can’t follow the politically opportunistic methods of previous years. I believe that that is fiscally irresponsible.

Without another courageous decision on rates right now, we quite simply will not have the resources to create the city you want.

That is why I am suggesting a budget package which will deliver an extra $60 million in directly targeted spending during the next three years: to pay for ACTION.

Action in transport. Our highest priority. So our budget package will deliver $42 million more in the next three years to get action on every major transport project within our boundary, within our power.

I am going to advocate relentlessly for multi-billion dollar spending on transport projects right across the region. You must help us in this advocacy. We will work as closely as we can with the Auckland Regional Transport Authority, Transit, roading funders and central government to get Auckland moving

As you all know in December 2003 the Auckland region – including this council – struck a deal with the Government.

The Government agreed to provide an extra $1.62 billion in funding over the next 10 years to help complete our transport network, including road, rail, bus and ferry projects. We also agreed to work together on introducing demand management measures, from more walking school buses, to road tolling.

We agreed there would be a new single transport authority, and ARTA was formally launched last week. Things are starting to happen.

We agreed that from this April there would be an extra 5 cents a litre petrol tax for the region, and other regions.

For Auckland, that would raise up to $720 million over 10 years. For the other regions, it would raise $1.3 billion over the next decade.

All of these are very helpful steps on a challenging path.

With our own proposed budget Auckland City Council has sent the strongest signal we can that we are serious about doing our bit to help bust congestion.

The benefits of transport expenditure are very great.

Just last August a report by the Allen Consulting Group showed, for example, that the economic multiplier effect of the Auckland western ring route package of works was $2.30 for every dollar spent. There are real and major gains to be had from reducing travel times and congestion.

During the next three years the extra $42 million dollar contribution through a targeted transport rate will also attract an extra $17 million in state subsidies. Therefore, this initiative delivers $59 million. Apply the multiplier – and we may well deliver economic benefits of $135.7 million.

Of course, multiplier benefits are far larger on some other projects.

So what sort of action can get this city moving? We need roads that can carry the busloads of people that will ease congestion in cars. We need proper and safe cycleways. We need train stations that people want to use every morning of the week and know they will get to work on time.

I want our children walking safely to school – to hundreds of schools throughout the region, lowering peak hour traffic a full 10 per cent. That is the most cost efficient traffic demand measure we can implement. So why delay? That’s why part of our extra $42 million ring fenced to transport will go towards getting more of those kids to walk to school every day.

So what of the rest of the region? Imagine the benefits in fast trip times and productivity, if available overnight, of dropping 10 vehicles out of every 100 out of the peak hour crush? Commonsense demands we push for it, do it. And at Auckland City we will. ARTA must too.

The budget will deliver new funding for improving the city’s volcanic cones, open space, urban design and heritage protection. It will also provide seed funding for partnerships with central government, NGOs and private enterprise to increase the amount of affordable housing in the city.

We’ve heard all the complaints that workers have to live too far from their workplace, the cheaper houses on the outskirts. And then they drive across the city making congestion even worse. Our budget package will bring workers closer to you, the employer. Not through Auckland City taking on full ownership of rental housing, but through partnerships that achieve the results we want, without going back to the ways of the past.

Auckland is playing the biggest and fastest game of catch up in the country. Successful cities need a critical mass of population. That population needs regulation, provision of services, infrastructure, advocacy, funding, partnerships and joint ventures. We regard you as partners, along with the community and other business groups in ensuring our city does this right.

Much of what we’re seeing happen here is unavoidable as a city grows. Some of it isn’t and we’ll be doing our utmost to ensure that uncontrolled, ugly growth is stopped in its tracks.

This is a beautiful city, poised on the brink of greatness. An adolescent if you like, with a great future but a lack of focus.

My job and the job of this council is to confirm what the diverse face of Aucklanders want for their city while at the same time, putting us on a fast track to get us there.

I was speaking the other day to one of the team who works with our building and resource consent customers. We all know Auckland City Council is creaking under the pressure of the sheer volume of development taking place in the city.

We’ve got people putting in huge hours to process consents and we’re recruiting as far away as the United Kingdom for qualified building inspectors to come down here and help ease the pressure.

The people of Auckland should no longer have to accept the ad hoc application of development controls. It is our job as council to manage this process and the chance to get it right was one of the driving forces behind my decision to run for mayor.

We know that both community spirit and urban design are key to the city’s growth strategy. Economic and population growth will result in a city of centres. We plan to grow the economy through wealth creating business investment as we manage change from suburban to urban quality living.

How do we do this while protecting our unique natural features, character and heritage areas? We need your help to create the face of a new Auckland city.

The Property Council needs to take responsibility alongside us to fix this up. The High Court has given us both a wake up call. Under my leadership, we will make every effort to ensure our urban design and regulatory platforms are strong enough to minimise the damage to our city’s heritage.

A huge challenge, in some cases, where the shape and form of older CBD buildings are sometimes a mismatch for the commercial need to optimise premium space in the CBD.

These are hard decisions. I make no pretence about that, but we will be doing our upmost to make wise decisions.

You can be a part of creating the city’s future by making sure your developments enhance the city. The kind of city that develops and attracts new investment because it is attractive and visitor-friendly in part depends on your actions from now on.

This council is clear that to have a vibrant CBD and accessible and alive suburban centres needs a careful combination of urban design, form and development, transport management and buildings which have a lighter impact on the earth.

Cities are set in a global context - not only in market terms but also in resource terms- global warming, the greenhouse effect, these global issues need to drive the shaping of our cities. Every building, every development needs to be seen in that bigger context.

You’ll be hearing more on the need for quality design. I make no apology for that. I know it can carry extra costs for you. But there’s a cost in getting it wrong too. A quality development attracts people and attracts investment.

This is one of the win-wins I spoke about earlier, for you, the council and the people of Auckland.

I want to set up a Mayoral Task force to report on how we can take some real action on improving urban design in Auckland city. I discussed this idea last night with members of the Committee for Auckland chaired by Sir Ron Carter. He made it clear they would like to work in partnership with us. The group would have a two month deadline to report back to me. I, along with the Deputy Mayor whom I have asked to chair the group, want to move fast on this critical issue for our city. We simply have to move fast on this critical issue for our city.

When it comes to paying for growth, there must be some equality in who gets out the chequebook. My council will be introducing a new way for developers to contribute to the costs of the massive infrastructure which must go in behind this growth. I am aware that many of you have been involved in these discussions.

The 2002 Local Government Act recognised that growth puts pressure on all infrastructure in a city and gave councils a fairer way to manage the costs of that growth.

Where previously you may have paid a financial contribution for open space for each new development, from July 1 this year we’ll also be looking at what impact your development will have on demand for things like community services, stormwater and in the future, transport.

This doesn’t apply to normal house extensions, only where entire new households are added to an area.

This will raise an additional $5 million in the next financial year and a projected additional $6 million the year following. There’s no avoiding the fact this money is vital to manage the costs of growth in our city and provide services for the new people those developments will house.

And it works both ways. At city hall I believe we have a duty to help your business grow.

Our budget package is aimed at supporting both the business and the community at large.

We will keep lowering the business rates differential We will go ahead with $200 million in CBD development over the next 10 years We will move forward every major city transport project over which we have control We will do all we can to see if we can encourage private and Government capital into housing more people closer to the jobs you provide. It can be argued our effort to investigate and deliver affordable housing is as much a business growth measure as a community one. The private sector companies, which are putting their hands up to be involved, certainly think so.

Don’t tell me councils are anti-business. Never tell me this council is opposed to growth. But it must be managed in a responsible way, looking long term not just the next three years of a political cycle. We are taking that long-term view.

We are pro-business and pro-community.

It may surprise some - but not me - that they are NOT mutually exclusive. We can - and will have - both business and community development under my council.

Many people told me on the campaign trail that one of the most frustrating and progress-stalling facts of life about local politics is that every new administration stamps its mark on a city and often u-turns on the most vital projects for the wrong reasons. But I vow to you I will use every vote I can cast - and so will the majority on this new council - to make sure these initiatives not only go ahead but gather pace under my leadership.

In the one case that we have changed direction - the eastern motorway - we will not just abandon the issue, we will take a much smarter and more modern approach that will deal with the growth of the eastern part of the city in a less damaging way than the crushing monster being pursued by the last council.

You asked for my vision for Auckland. I have given you my plan for a growing, efficient city in which life can be lived fully by every citizen.

A booming economy, fun and celebration and safe and healthy living environments.

I am suggesting a three-year package to help deliver that. It is a start. Now I need to know what you think. I will listen, I gave that commitment.

After that my council and I will try to reach a consensus view on the way ahead, but as you well know, in politics that is not often possible. I am quite clear that we will need to make the hard decisions and then make them happen.

So after the consultation, I will play my part by helping build majority agreement on the important initiatives. Only in this way will we actually get the action you and I most fervently desire.

I look forward to working with you.

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