Rodney Hide - The Power Of One
The Power Of One
Rodney Hide Speech to the Auckland Company Accounts Special Interest Group; The New Zealand Institute of Chartered Accountants; 27-33 Ohinerau St, Remuera, Auckland; Wednesday July 17 2007
As we meet here today, I'd like to take this opportunity to speak to you about something that is so very near and dear to my heart - and, I'll wager, near and dear to the hearts of each and every person in this room.
That issue is Auckland - in my humble opinion one of the most beautiful cities on Earth; a city that I am proud to cal home, and one that is home to probably the most diverse range of peoples and cultures in New Zealand.
Of late, however, my pride in living in here has been tainted by the fact that Auckland is probably one of the most mis-managed cities in the world - one that has been set up to fail.
Nearly everyone knows that, almost 150 years ago, Charles Dickens wrote 'A Tale of Two Cities'. Here in Auckland we are living a tale not of two, but of four cities ... not to mention three district Councils, one Regional Council, a swag of community boards, seven Mayors and around 6,000 bureaucrats - al scrambling around wildly trying to make a difference and, in the process, making little or none at all.
Tell anyone on the street this simple fact and they will agree that this is why Auckland is such a mess.
Not that all these well-meaning folk are making a shambles of Auckland on purpose - don't get me wrong, each and every one of them is doing their very best. But they're fighting an uphill battle - rolling a giant slippery stone up Mt Everest - because, in reality, they have been set up to fail.
They have been set up to fail by the nation's capital. That's right: Wellington. Why? Well, simply put, because Wellington is afraid. Wellington fears Auckland's might - always has; always will.
Since the beginning of time our capital city has resented the fact that, while it is the one busily making the rules, it is Auckland that is making the money. It is Auckland that provides New Zealand with its beating industrial and commercial heart; it is Auckland that keeps the lifeblood of money, trade and commerce pumping through the veins of New Zealand.
Auckland is where the nation's economic might lies - and it is because of this that Wellington has always viewed us with a 'divide and conquer' mentality. United we stand, divided we fall - and with eight councils, seven Mayors and 6,000 bureaucrats there's not a whole lot of standing going on.
In essence, the plan itself is very simple - the best plans always are - set them up to squabble amongst themselves. That way they will never be united enough to demand their fair slice of the national pie - because, God forbid, they might actually get it. Because, shock horror, Auckland might start demanding that Auckland taxes actually be spent on Auckland!
And, so, they had to erode Auckland's power; make Auckland easy to ignore. That's the Wellington approach; the pen-pushers' approach: keep those traders, entrepreneurs and highly skilled workers in their place.
And, make no mistake, they've done it - and in doing so they've choked Auckland's infrastructure and strangled the national economy.
You see, the fact is that Auckland is an economic powerhouse that contains a third of the nation's population within its boundary and as such: what is good for Auckland is good for the entire country.
Of course, Wellington refuses to acknowledge this. And that means that we in Auckland can expect no help from that quarter. Rather, Auckland must do what it has always done: we must help ourselves.
And we can do this by following one simple precedent: One Mayor and One Council. We can stand united and direct our own destiny for a change. That way we can be sure that when Auckland calls, someone in Wellington will pick up the phone.
You see, as it is, Auckland is in real danger of failing as a city. It's been said before and it bears repeating. The three things the Auckland region requires are: infrastructure, infrastructure and infrastructure - and it needs all three urgently.
Michael Bassett has made the point that, while Auckland's population has exploded, all the various city halls have managed to do is fix a few potholes - rather than providing a motorway system that can cope, and a public transport system that allows people the freedom to use it.
No, instead, Auckland's raft of local bodies and bureaucrats are gumming up the works and making it impossible for roading infrastructure to move forward - and if roading infrastructure can't move forward, then neither can traffic!
Did you know that currently Auckland roading contractors currently need to produce separate safety plans, road management plans, and even separate-sized signs in order to operate in different parts of the region? Or that Auckland has a total of 19 separate entities with some responsibility for transport planning?
How about the fact that Transit has had to apply for 17 separate consents to build the new Manukau Harbour Crossing - consents from Manukau City Council, consents from Auckland City Council and consents from Auckland Regional Council?
Added to this is the fact that Transit has had to spend two years negotiating with the Auckland and Waitakere City Councils on the route of the Waterview connection (SH20) through Helen Clark's electorate - and as soon as they reach an agreement, the Auckland Regional Council objects.
For a city to grow, to evolve, to flourish - rather than stagnate - we need progress. To get that we need one place for approvals, one funding body and one body responsible for Transport policy. We need one Council.
At the moment, as everyone knows, we don't have that. Auckland isn't swimming; it's treading water - over-priced water at that - and soon it will sink. Why? Because where we need a single guiding voice, we have a mass of councils without a co-ordinated plan - an ever-growing band of bureaucrats and their self-serving masters pulling us down with their endless meddling.
But do you know what's even worse? What's even more ironic? I'll tell you: we're actually PAYING them to drag us down. We're financing their - albeit, well-meaning - attempts to sabotage us: Auckland councils collected over $3 billion in revenue in 2006/07 and spent more than $2 billion on operating costs like staffing and consultants.
And, now that the question of One City has been raised, what do the councils suggest? Well, let's see: they want a Greater Auckland Council . and a Regional Development Forum ... and they want to keep all the existing City Councils, the Regional Council all the Mayors - and they want MORE community boards!
They're all so busy clinging on to power and influence that they're actually achieving diddly-squat.
What we need is to stop fiddling and elect one Council to run the whole shooting match. Fifteen Councillors for all of Auckland and One Mayor - all elected by the people. Then we could turn the existing Councils into community boards with much reduced numbers and clearly defined powers and responsibility - and put an end to this nonsense of seven mayors from four cities and three district Councils.
It's time to have one Mayor for all of Auckland, and a single Council - one Council to look after the motorways and public transport, and one rating system. This would be the start of a city that sets its own agenda, sets its own vision and determines its own destiny. We need elected politicians and managers who are up the task - because we certainly don't have too many of those right now.
I mean, just look at North Shore City with its escalating expenditure, climbing debt, ballooning bureaucracy, loose governance and the highest rate increase of any city in the region at 6.9 percent this year - not to mention a 10-year plan showing annual rates increases in excess of eight percent.
And where's the money going? Well, let's see: Council staff numbers are up 37.9 percent in five years - costing more than $47 million - with a staggering 50 percent more consultants gathered at the public trough.
But surely all these staff and consultants must have achieved something with all our money? The short answer is no. In the past five years, North Shore's debt levels have soared from $66 million to $268 million - all put down to inefficiency, poor planning, and unbridled spending.
The story is the same with all the other Councils and the 5,862 staff they employ. That's nearly 6,000 bureaucrats that we're paying to run the Auckland area into the ground.
Well, I don't know about you, but I'm tired of it. I'm tired of paying for my city to be run into the ground. I'm tired of paying for my city to fail - and I know for a fact that I'm not alone.
What Aucklanders need is for all their rates to go to a single Council that will spend the money on making this into a world-class city - one with clean streets; well cared for beaches; a well-integrated public transport system that people will want to use because - contrary to what we have now - it actually takes them where they want to go.
Now, I'm not saying that running a decent-sized city is easy - of course it isn't. In many ways it's just like running a country - just without the hassle of foreign affairs. But this brings us back to the single most important characteristic of any successful city or nation: good management and a flourishing economy.
And that's exactly what Auckland needs - and needs now; desperately. And only a single Council and a sole Mayor will deliver that.
Put simply, we need the rates that Aucklanders pay to be spent on enriching their lives and enriching their city. As it is, darn near a third of Auckland City Council's rates go on paying close to 2,000 staff - that works out to be one staffmember for every 200 residents! Waitakere is no better, with its wage bill of more than $47 million.
It's the same wherever you look: over staffed and over managed.
The time has come to have a single authority for Auckland: no more mayors of Rodney, Franklin, North Shore, Waitakere, Auckland, Manukau and Papakura. No more Auckland Regional Council.
Just One Council and One Mayor - Councillors elected by wards, and a Mayor elected at large from Auckland; a Council that would ensure Auckland is delivered the health, education and roading services it is entitled to; a Council developing and implementing policy designed with Aucklanders in mind; a Council working to a budget that was completely transparent; a Council that decided Auckland's priorities and how and when services are delivered.
My Local Government Bill aimed to limit rate increases to the level of inflation plus two percent in any one year, or by inflation plus four percent over three years. I have to say, I now wonder if that was going far enough.
I now believe a Council should be answerable to the people, with rates pegged to allow no increases other than to match inflation and population growth; a Council that would have to go back to the people and ask permission, by way of a referendum, if it wanted to spend a cent more.
Without these limits, Auckland's residential rates are set to rise 11.2 percent over the next two years.
Local body politicians should work within a budget, just like Kiwi families do; they shouldn't just dip more deeply into ratepayers' pockets. Capping rates would give Kiwis security that the cost of local government wasn't going to increase year after year.
Like any family, Councils should have to budget and prioritise.
Central government should have to stop dumping tough problems on local communities, and local politicians should become more accountable to the ratepayers who fund them. There has been much talk of late about the woeful performance of New Zealand's economic growth and how the country is being held back. The same can be said for Auckland - that is suffering not from over investment but lack of it.
And if you're waiting for me to mention lower taxes, here it comes - only, now, I'm referring to rates.
We are seeing Councils proposing rate increases of three to four times the rate of inflation. Much more of this, and the Reserve Bank Governor will warn that increases in local government rates could prompt interest rate rises.
Well, it would make a change from blaming house prices
The fact is that, like taxes, rates represent money taken out of the community; money households can neither save, nor spend on providing for themselves and their families.
The average household cannot expect wage rises of three times the rate of inflation, and those on retirement incomes have their increases pegged to the rate of inflation. Likewise, businesses cannot survive in an increasingly competitive global environment when faced with unjustified or unnecessary additional rates and taxes that force up the cost of doing business and drive down their competitiveness.
Hence the need for a cap on the level of rates increases that local authorities may impose on residents.
There is another requirement - the focus of my attention today:
Our major city - the powerhouse of the economy - must, as I have outlined, be well managed. I've already outlined the problem: too many Councils, too many bureaucrats, too many Mayors. Not only do we need an effective growth strategy for the nation, but for Auckland too. And that can only come from a single Council with a focus on ensuring a worthwhile return on rates.
A return on rates? Yes, a return. Rates that are invested back into the city to generate a profitable return through improved infrastructure and quality services at every level. This should ensure a Council that does not neglect its responsibilities to run ports, airports, and property development projects. These are all activities that should be left to the private sector.
A well-managed Council should focus on infrastructure - such as stormwater systems, world-class roads, libraries, parks, effective public transport and fail-safe power. In the past 20 years, rates have increased by over 220 percent while the consumers' price index increased by just 98 per cent. And is Auckland any better for all of that?
Fat chance. Eight councils, seven Mayors and 6,000 bureaucrats ... costing a whole lot of money to achieve a whole lot of nothing. No more.
ONE is the number we should be thinking of. ONE should be our watchword, our keystone, our mantra. Auckland should have ONE Mayor, ONE Council and be managed as ONE City.
The sooner the better!