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The Mapp Report - 07 July 2006

The Mapp Report

New Zealanders can rise to the challenge

Last week I wrote about the level of rate increases in North Shore City and elsewhere. Overall these rate increases are well above the combination of inflation and economic growth. That means that local government is taking an ever-increasing share of the national output of the economy. That is clearly not sustainable.

Councils currently account for about 4% of GDP. On the current track of rate increases over the next several years, that is likely to rise to about 6% of GDP. That means 2% of New Zealand’s total income cannot be used elsewhere, either by individuals and families for their own personal circumstances, or by businesses looking to grow faster. Money paid to councils is money that cannot be reinvested by firms.

This week I have been talking to community and business leaders about the “Committee for Auckland”, which I also mentioned last week. The “Committee for Auckland” has a work programme to focus minds on the urgent tasks ahead, especially with the Rugby World Cup only five years away. How do we pay for the $300+ million upgrade of Eden Park? Will the transport infrastructure actually cope? Do certain projects need acceleration?

Later this month, 60 business, civic and community leaders will be meeting to set out the five critical things that have to be done to showcase our city for 2011. It is not just about rugby, although that is providing the impetus. It is actually about ways that Auckland (the whole city of 1.4 million) builds its position as a key Pacific Rim city. We and New Zealand cannot fail on this. If Auckland dropped out of that circle, New Zealand really would become a backwater.

We are at real risk of falling out of orbit. The latest Time Magazine (3 July) has an excellent article about New Zealand, the global laboratory for experiments – do they succeed or fail? This should be required reading for every thinking New Zealander, and especially policy makers.

The writer concludes that we are at risk; Helen Clark’s experiment is not succeeding. The only way to change that is to change the government.

07 July 2006

Dr Wayne Mapp

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