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Subsidies, slush funds, and secrecy

Airport Sing arrives
Photo: Wellington Airport

by Andy Foster
There was much excitement as Singapore Air flight SQ 291 arrived to a warm welcome last month. It made us, well those watching in and around the airport, feel a bit more connected to the rest of the world. The question is though – should ratepayer money be involved in getting these flights here? And what about the decision-making process?

Let’s start with the big picture. I think Councils absolutely have a role in a healthy economy. Until recently the Local Government Act specifically gave Councils responsibility for economic (and social, cultural and environmental) wellbeing. Economic development and jobs have been a strong audience theme in mayoral candidate meetings across the city.

I think our economic role is city planning, provision of infrastructure (physical and social), supporting a great lifestyle, promoting the hell out of the great things about our city, and at times investing directly in aspects of the economy.

That’s where projects like Film Museum/Convention Centre, runway extensions etc come in. It’s also where those ‘slush funds’ come in, of which so much has been said of late.

The Council has an Events Fund (currently $5million per annum), a City Growth Fund (currently $3million per annum) and a Destination Wellington Fund (currently $1.8million per annum). The funds are there to support activities judged to have benefits to the city (generally economic but also some arts/cultural/social).

The Events Fund’s largest investment is $1.45million annually to the International Festival of the Arts. It also supports Christmas/New Year events, sporting events like the Rugby and Cricket World Cups and Warriors, cultural events like the Edinburgh Tattoo, Elton John and Robbie Williams concerts, WOW, Homegrown, Jazz Festival, Cuba Dupa, Beervana etc. Looking ahead the Lions tour will be in there too. Without that expenditure, the blunt reality is that those events wouldn’t happen here. We require a return of $20 in economic benefit for every $1 invested, and the Council’s latest Annual Report says the actual return was $25 to 1.

The City Growth Fund‘s biggest investment by far has been in the Collider – Biz Dojo ($3m over 3 years). This is about providing a place/training programme to nurture emerging businesses especially in IT. A year in, it’s looking very good.

This sort of creative industry is a key part of Wellington’s future – IT is already worth approx. $2.5billion a year to Wellington. Other investments last year included Lux Festival ($150K), the 150 year celebrations of being the Capital ($106K), Miramar Film Event Trust ($95K), Phoenix marketing ($15K), Giles McIndoe cancer research ($95K), Creative HQ programmes ($42K). Previous investments include Cricket World Cup, Cuba Dupa, the Newcastle/West Ham visit, Enspiral (student tech sector programme), CallActive (that one wasn’t very flash), Giles McIndoe again, Phoenix and Pulse marketing, Urban Dream Brokerage (arts programme enlivening vacant buildings), conference bids, WW1 commemorations, Young Enterprise Trust, Bats Theatre restoration, Business case for mountain biking destination promotion, Hobbit Premiere, Roxy theatre event, Creative HQ events, Visa Wellington on a Plate, Bond St activation, Rugby League 4 nations, and Water Skiing World Champs.

Finally Destination Wellington. This fund was set up to promote Wellington as a place to locate and do business. This is where the Singapore Air money has come from.

What do we know about the Singapore deal?

The CEO negotiated it, and it sounds as if much of that was face to face. The Deputy Mayor signed it in January, at least ceremonially. Much of what we know found its way into the media at the time. It seems the current discussion is mostly about the limited nature of the supporting paper trail.

Was it within the CEO’s delegations? In essence, all expenditure is within CEO delegations to deliver what given project and programme lines say. Most of them are reasonably explicit – operate libraries, maintain parks, roads, etc. Destination Wellington is more about outcomes (economic benefit) than a means of achieving those outcomes. Does that make attracting an airline a legitimate means to achieving that outcome? I would have thought the answer was yes. Air connectivity has economic benefit. I stand to be corrected, but I understand it is fairly common for cities and airports to incentivise new airline connections to help overcome initial risks.

The obvious question is what is the economic return expected from the $ investment which the media says is approx. $800,000 a year? The economic benefit from 4 flights a week is said to be about $44-45million per annum from about 90,000 passengers (in and out) a year or $500 a head. That doesn’t seem far fetched and seems a brilliant return (55 to 1) on the $800,000 a year if that number is even remotely accurate. I know that Council staff and WIAL worked together on the economic numbers – probably fairly easy to derive for given passenger numbers. We’re also advised that the money is to be used to promote Wellington as a destination – which seems good for Wellington and good for Singapore Air. In economic terms if you reject this deal, then all the other events and activities mentioned above would not cut it either – at least economically.

Would Singapore Air have come regardless? The obvious answer is ‘no’ – they hadn’t to date, and there had been best part of a decade of pursuing airline connections. We know that Canberra also spent (much more) $A32 million on international terminal facilities as part of the arrangement.

What is in the contract in terms of performance criteria? I don’t know but I would expect performance to be in the mix – though of course Singapore Air are powerfully incentivised – as is any airline, or indeed any business – to maximise patronage.

Three final comments on the substance of Singapore Air deal:

First it is important to contemplate that the Council had budgeted $200,000 every year for about a decade to work to attract an airline like this. I cannot recall any great public concerns ever being expressed about this as a concept. A lot of work was done by the Council, PWT, and WIAL to try to land an airline or two. If you think about which airlines you’d want to get a commitment from, I would think Singapore would be at the top of the tree, both for the quality of the airline, and for the access to a hub which then connects to almost everywhere in the world.

Secondly – who actually pays? Destination Wellington is part of the WREDA (Wgtn Regional Economic Development Agency) budget. WCC’s component is paid 30% by targeted commercial rates across the whole city, 50% from the commercial downtown levy and 20% from the General Rate, of which just over half is paid by residents and just under half by business. So if the $800,000 is roughly right, the cost to residents is a touch over $80,000 a year or a fraction over $1 per household a year. (I make it $1.08)

Thirdly and finally for those who do not want to see the runway extension proceed: If we can achieve connectivity (the outcome wanted) through a deal(s) like this, then the obvious question will be whether this undermines the runway case.

In my view the numbers for the extension look marginal already, at a benefit to cost currently assessed by WIAL at only 2.3 to 1. (compared to 55 to 1 for Singapore Air and 25 to 1 for the Events Fund overall). Consider the low end benefit to the Wellington Region from a runway extension is assessed at $570 million (high end $1.9 billion). Even if that $45 million benefit for the Singapore Air deal remains static (unlikely), discounting that at 8% per annum still gets you to about $550 million.

When asked at election meetings about the runway extension, one of the things I’ve been saying is that we could do 16 or 17 Singapore Air type deals for the interest cost on the public money (not just Council money) proposed to go into the runway extension, yet on the face of it 3 or 4 such arrangements would equate to the benefit from the most optimistic expectations of the extension. Perhaps a drop hop via Perth to the Middle East, via Brisbane to Hong Kong or a Pacific stopover to East Coast North America? Job done? Clearly there’s further work to be done on the runway economic case should it survive the resource consent process, but it looks a big hurdle, and deals with airlines look like a much cheaper, more flexible proposition for the ratepayer, and avoid a lot of construction and environmental downsides.

Finally what about the process?

Councillors across the board have become increasingly unhappy about the delegations around all three of the funds I’ve talked about, and about the robustness of the decision making process.

Decisions on the Events and City Growth funds were delegated to the CEO, Mayor, Deputy and Economy and Arts Chair, and on Destination Wellington to the CEO. This has become much more important as the size of the funds have grown. ‘CallActive’ certainly highlighted that and there remain some questions to answer about that one. To be fair almost every other investment made to date has done well for the city, and there are going to be risks. The biggest risk to our city would be doing nothing.

I think also that everyone understands the need for confidentiality around some investments. We’d be mad to tell competing cities how much we are willing to invest to attract an event.

At the beginning of the 2013-16 term, Cr Pannett and myself said we wanted to amend some of the CEO’s delegations – the two substantive areas being flexibility around some spending and the resource consenting decision process. We didn’t get much support then, but I have no doubt minds will be more focused on this post-election when delegations again need to be considered.

However we have made changes during this triennium. The City Growth Fund spending is now publicly reported 6 monthly, and decisions since May have had to be made by a majority (8) of elected members, not just 3. We have collectively forced more openness to elected members about where the money is allocated from all the funds.

At the 11 May Council meeting when we moved to 8 councillors to consider City Growth Fund investments, I also successfully moved the following amendment to cover the other two funds, seconded by Mark Peck:

That the Council:
Request officers to review the governance arrangements of the Events Fund and Destination Wellington Programme.
Recommend improvements in future governance arrangements for the new triennium.

I expect this to mean that in future as much information as possible is made public on all three funds on a 6 monthly basis.

My view is that a certain level of investment might be appropriately decided by a delegated group of councillors, but beyond that it should come to a wider body. We really never anticipated ten year commitments or something equating to approximately $8 million being made in this fashion.

In summary:

I consider the Council should be involved in supporting economic activity.
Investments need to be made following robust assessment appropriate to the scale of the investment/risk.
The Singapore Air deal looks a really great investment for Wellington. In terms of return on dollars spent it appears to rank right at the top of the tree.
The cost per residential household is a fraction over $1 per year.
The process could have been better – and I have absolutely no doubt will be better in the future.

Councillor Andy Foster is a candidate for the Wellington mayoralty.

32 comments:

  1. Concerned Wellingtonian, 4. October 2016, 8:00

    It is news to me “that the Council had budgeted $200,000 every year for about a decade to work to attract an airline like this.” Surely it is up to elected people like Cr Foster to find out about this sort of nonsense and reduce the cost to ratepayers accordingly.

     
  2. KB, 4. October 2016, 8:32

    Not a bad article Andy – perhaps though you should have written it before most people had voted.

     
  3. Susan Says, 4. October 2016, 8:36

    I think we need more on this Cr Foster ‘ The economic benefit from 4 flights a week is said to be about $44-45million per annum from about 90,000 passengers (in and out) a year or $500 a head.’ Please explain these numbers in more detail. Who is saying that every Singapore Airlines passenger will spend $500 in Wellington? What is the evidence for this? Where is the money predicted to be spent by incoming passengers? How do outgoing passengers contribute to this – is it in airport fees?

     
  4. Ian Apperley, 4. October 2016, 8:45

    It’s a good summary Andy, however you miss one point.
    Was the process contestable? In other words, did the CEO go to the market to find the best deal with the best airline or not? If not, then that is very, very troublesome. Because on the face of it we have one man, with a wallet, negotiating with one airline, and no transparency. Perhaps the Council would like to publicly release the gift register showing all gifts made by WIAL and Singapore Airlines as a gesture toward transparency.

     
  5. Concerned Wellingtonian, 4. October 2016, 8:54

    $500 per head is two nights in a hotel. How is “economic benefit” calculated and why do residential ratepayers have to contribute so much?

     
  6. CC, 4. October 2016, 9:02

    Cr Foster says, “Until recently the Local Government Act specifically gave Councils responsibility for economic (and social, cultural and environmental) wellbeing.” Note the parentheses – what is their significance? Obviously, he and his councillor colleagues, along with the administration, consider that economic wellbeing is only for those who are ‘above the salt’. There was a time (now much forgotten) when the Wellington City Council was a world leader in funding social-good initiatives that enhanced the well-being of all, not just the better-off. Now we have something akin to a secret society that redistributes rates income as subsidies for private businesses and the financially comfortable. Classic examples have to be the $3m subsidy for the city’s big earning IT industry and the myriad of subsidies for events that living wage and highly mortgaged earners would never be able to afford to attend.

     
  7. Traveller, 4. October 2016, 9:14

    We subsidised the shows by Robbie Wiliams and Elton John? We’re subsiding the Lions tour? Their entrepreneurs wouldn’t bring them to Wellington unless we first promised to give them ratepayers’ money? Unbelievable.

     
  8. Ian Apperley, 4. October 2016, 9:34

    CC “Classic examples have to be the $3m subsidy for the city’s big earning IT industry.” Good point. There is also the effectiveness of the subsidy. In the case of IT, WCC has subsidised an office space, which happens to have IT people working in it. In the IT industry, this idea of a “hub” has since passed after poor results globally.
    I.e. Not a smart subsidy.

     
  9. Roger, 4. October 2016, 9:45

    Ian: don’t forget. It was not “one man negotiating with one airline”. Nick Leggett says he was instrumental in getting the deal over the line. Refer comments elsewhere on Wellington Scoop We also know that Lavery and Leggett were having secret discussions about amalgamation. What else did Leggett know about this airline deal? This is very disturbing.

     
  10. CC, 4. October 2016, 11:06

    Ian – do you know if there is any substance to the rumour that the ratepayers will be financing the ‘hub’ into new premises that are being built on the waterfront? Also, what is with the crashing ninja name of the Council’s ego feeder showcase – Collider – Biz Dojo?

     
  11. Trevor Hughes, 4. October 2016, 11:08

    The council is dealing with public money levied by compulsion under the rating system. The council has responsibilities under the Public Finance Act 2005 which appear at first sight to have been breached in the case of the Singapore Airlines deal – hopefully the Auditor-General will determine whether this is the case or not. Special pleading for corporate welfare agreed in secret by a cabal of councillors sworn to secrecy is not credible.

     
  12. Ian Apperley, 4. October 2016, 11:24

    Roger, agreed. It is really weird.

     
  13. andy foster, 4. October 2016, 12:04

    Lots to answer here. I’ll do it in two posts:

    Concerned Wellingtonian: Aspirations to improve airline connections particularly to Asia have been very well signaled in multiple documents, which have in most cases been consulted on and reported on. For example – the Council’s Economic Development Strategy which is the overarching economic document Council has says among other things :
    From Economic Development Strategy
    “Strengthening our international linkages, particularly our air links and broadband connectivity, so that firms in Wellington can strengthen connections with international markets and increase exports
    “Specific actions
    High-priority actions 10.
    Put in place a Long Haul Attraction Fund in order to secure direct flights from Wellington to Asia by 2013
    “The strategy – at a glance
    The strategy has identified key six areas to be progressed immediately in order to maximise the economic growth potential of the city in the short-term. Where these actions have financial implications for the Council, they will be subject to the Council’s 2012/22 Long Term Plan process.
    The key initiatives are:
    • development of a Long Haul Attraction Fund to secure direct flights from Wellington to Asia by 2013.”

    It also regularly got reported in Positively Wellington Tourism’s published annual reports. I’ve picked one as an example the 2011/12 PWT Annual Report:
    Work continued in partnership with Wellington International Airport to position Wellington as a long haul destination with targeted international airlines. An update of the Economic Impact Analysis of the benefits of such a service to Wellington was carried out, estimating the direct impact of the additional visitors that a long haul service to Wellington would bring to the city would be worth NZ$43.5 million per year.
    Long Haul Airline Attraction
    • Market Wellington as a compelling visitor destination in target long haul markets such as China and South East Asia for holiday, convention and business visitors through partnering with Tourism New Zealand, tourism industry businesses and Wellington International Airport in trade show, international media programme and international familiarisation activities.
    • Work with WIAL and airlines to ensure better connectivity to long haul markets by working on the development of long hail air services from Asia, either via Australia or direct to Wellington through development of business cases, working with potential airline partners and utilising broader inter-sectoral relationships to lobby and advocate for improving Wellingtons international airline connectivity.

    Regards
    Andy

     
  14. andy foster, 4. October 2016, 12:27

    KB – yes might’ve been good to write this earlier – but it’s a little surprising it’s come up now given the bulk of the info on Singapore was public in January and about other funding in March. I suppose that’s election stuff from some candidates! I wanted to be reasonably comprehensive too.

    Susan Says and Concerned Wellingtonian – the $500 is an average between in and outgoing. There is plenty of info about levels of spending by visitors. Economic benefit is from spending – less cost of delivering that spending, and can include multiplier benefit (I don;t think these do – they seem very conservative)
    What would this include? Well think of everything you might spend money on when visiting another city/country – transport, accommodation, food and drink, attractions, retail etc. The benefits lie first with the commercial sector which is why they pay 90% of the cost. Obviously there are also employment benefits.

    Ian – contestable? This is certainly not the sort of situation where a city – especially of our size – can just say ‘here we are, we’d like an airline, please put in your proposals by such and such a date.’ What we do know is that there has been a lot of effort over several years in engaging with a lot of airlines. That’s certainly a competition over a fairly long period.

    cc – no significance in the brackets.

    Traveller – yes.

    Trevor – This term of corporate welfare is an interesting one, and it is very easy to sling around pejorative terms. Not that I am suggesting you are doing that – but I have seen a few politicians doing it. Think of it a different way. The Council gets involved in this because of the prospective benefit to the city (civic welfare). That’s our responsibility. In this case the benefits compared to the costs look very high. Not unusually there is another party that benefits, but that is not why we are doing it. Of course if the other party to a voluntary transaction didn’t also see benefit they would not agree to it. That happens wheneverthe Council buys anything, from a library book to a building contract or from fuel to chemicals for a pool. When you go to the supermarket, do you buy things for reasons of ‘corporate welfare’ ? I don’t. It’s because they have things I want – for my benefit. I do agree with you about the need for more openness and a wider decision making process – as I hope my article makes clear. Hope that helps.

    Kind regards
    Andy

     
  15. Neil Douglas, 4. October 2016, 12:44

    Andy: Did you factor in the carbon emissions of ‘inducing’ a new long aviation service that will put over a ton of carbon per passenger (CO2e) into the atmosphere flying Wellington > Singapore (one way) a distance of 8,535 kms. I make it 12,200 tons of CO2e a year that will cause $160,000 a year in damage to the planet that we can thank WCC for.
    Enlightened Governments trying to cut global emissions TAX airlines not subsidise them. Compare and contrast with the European ETS. Certainly not the clean green image I thought WCC was trying to create for Wellington.

    Could you check to see whether climate change effects were even considered in the Business Case Andy?

    One ray of good news is that Singapore Airlines has joined (at last) an international airlines collaboration to offset global emissions. Maybe you could persuade Singapore Airlines to spend the WTN subsidy ($9 per passenger?) to invest in NZ renewables to offset all the tons of carbon you and your chums at WCC have induced.

     
  16. Ian Apperley, 4. October 2016, 16:04

    CC, no I hadn’t heard that rumour but it wouldn’t surprise me. Willis Bond seem to get some sweet deals from the Council with no contestability. i.e. The Convention Centre.

    The WCC’s record with technology is poor. They buy the majority of their IT services from multinationals rather than NZ companies and a lot of IT companies have blacklisted them, I hear anecdotally.

    Hubs don’t work. I sat on a plane a few months ago with one of the directors of a very large hub in New Zealand and he was complaining about the fact they have produced nothing in years. The primary reason is that they’ve tried to monetise the hubs. They take a piece of the company and force the companies to pay a monthly rate for “mentoring” plus real estate.

    The new move is to connect people virtually, nationally, and internationally. That is working a lot better.

     
  17. Ian Apperley, 4. October 2016, 16:12

    Andy: Thanks for your response. The issue as I see it is transparency. If this deal had been done by a central government agency, in the same manner, it would be likely people would be under investigation. Normal practice would be to tender for the work and employ an independent probity auditor from somewhere like Audit New Zealand to oversee the results. Paperwork would be extensive and include a Business Case. I understand a complaint has been laid with the Auditor General – outcome yet to be stated.

    The deal with the Convention Centre is incredible. I can’t believe that did not go to tender.

     
  18. Elaine Hampton, 4. October 2016, 17:57

    Fairly unbelievable Andy. You ask us to trust backroom deals with virtually no transparency or business case published. $200K per annum of our money ‘levied under compulsion’ is not something I can view with any sympathy. All too clever by half, if things are hidden there is usually a good reason. Money collected as rates is still the citizens’ money to be allocated wisely and fairly.

     
  19. andy foster, 5. October 2016, 6:46

    Hi Elaine: In the article above I spent quite a long time on both the issues you raise, and quite clearly said the process needs to be better and we have made changes already to make it more transparent. There will be more changes. Not everything in every commercial arrangement can be made public, and yes then there is an element of trust – that the Council is seeking to do things which are for the best for the city. That in my opinion is exactly what we are here for. As a matter of principle we should be making information available unless good reason exists to withhold aspects of it.

    So for example there is extensive information out today on the performance of the Festival of the Arts which comes from the Events Fund which I referred to. That spells out visitation, jobs and economic benefit.

    You are right that if things are hidden there is usually a good reason. Businesses operate in a competitive market, and do not want all their commercial arrangements broadcast to competitors.

    The Council has never hidden that it is seeking better airline connections – that has been well spelled out for years, – without any great concerns being expressed.

    Finally I agree completely that rates money should be allocated wisely and fairly. As I noted in my article residents are paying 10% of the cost, which on a per residential household basis is a fraction over $1 per year. Business is paying 90% of the cost.
    The Singapore Air deal seems to offer a return to the city economy of $55 for every dollar invested.

    Kind regards
    Andy

     
  20. CC, 5. October 2016, 11:43

    What is the return to the ratepayers on the annual $1.5m ‘investment’ in the NZ Festival? Just another slush fund subsidy for the business sector guised as an arts event, not an infrastructural investment or an income generating opportunity to reduce future rates raises.

     
  21. Keith Flinders, 5. October 2016, 15:33

    Such “investments” are not seen as generating income for the council. They are seen as stimulating spending on a variety of services provided by businesses within the city, so that the busnesses and their employees gain income which they use to pay their rates with.

    Just how the cost benefit return is determined is somewhat of a wild guess in my opinion. Not long ago we were expected to believe that every passenger off visiting cruise liners spent $350.

     
  22. Ben, 5. October 2016, 22:50

    @Keith; Well the employees will need all the income they can get as their rates have gone up a lot more than the commercial rates. It is their bosses who benefit the most from all this council spending.

     
  23. Henry Filth, 7. October 2016, 5:50

    “… the Council had budgeted $200,000 every year for about a decade to work to attract an airline like this.”
    Two million bucks over ten years … Only in WCC terms is that value. . .

     
  24. Dr Sea Rotmann, 7. October 2016, 23:52

    Dear Andy, thanks for continuing to be willing to engage with us in depth and detail and in public. However, quite a few of your opinions are worrisome from a ratepayer perspective.

    For example: your assertion that no one had a problem with the 200K pa slush fund to attract international airlines? The Guardians of the Bays have written and complained about this extensively for years, and have put in LGOIMA requests to find out where this money went and what happened to it and if the outcome – attract an international long-haul airline by 2013 – was met (it obviously wasn’t, so it cost us another $9m from another slush fund!). Do you know what happened to this $1.6m from 2006 – 2013 and how it was spent and by whom? Because from what little paper trail there seems to be on this quite significant waste of ratepayer money, it was used to send Council officers on jaunts around the world to ‘have breakfast’ with leaders from international airlines. If this is how you expect us to be happy and complacent with your Council doing ‘its job to attract international funding and economic growth’, you are probably going to be relatively alone in that assessment (though John Milford from the Chamber of Commerce seems to also agree that any corporate welfare is good even if the business community is disproportionately hit by this kind of spending).

    What you – and the airport’s various economists – ignore in your assessments of economic benefits are the costs of losing the same or higher number of Wellingtonians who will now spend their money in Singapore or Canberra instead of here; other economic costs associated with attracting greater number of visitors; and, as mentioned, the impacts on climate change and the Council’s aspirations to be a ‘low carbon capital’. This is always being ignored, both in terms of the impact ON our emissions (which will now be counted as part of the ETS, causing significant additional costs to NZ Inc) and the impact of climate change on the airport and associated infrastructure, e.g. the highly at-risk access roads to and from the airport. I like that you like to be open and engaging, but I don’t like your cherry-picking of facts and figures that suit your argument and excusing of inexcusable actions such as Dep Mayor Lester’s assertion that it’s perfectly OK that CEO Lavery ‘doesn’t write emails’ so as to avoid a paper trail ‘for commercial sensitivity’. People are still so upset by this subsidy.

     
  25. andy foster, 8. October 2016, 8:54

    Hi – thanks for your comments.

    CC – There was an extensive report on the economic benefit from the Festival yesterday. Not new news but good to reinforce the value – $106 million. Of course many many Wellingtonians also enjoyed many events during the Festival. On Festivals – just talking last night to an Australian family who have come to Wellington to see WOW. They reckoned they will spend $3000 – 4000 while they are here. That’s economic benefit.

    Henry and Sea -Thanks for your comments. I think it is important that we can use a valuable forum like Wellington.Scoop for constructive discussion. I will see what I can find about how the airline attraction money was spent in preceding years. The two bits I do recall were that it would include building a robust case for Wellington as a destination, and meeting with airlines to put that case. Like it or not, sometimes these things do take time. The key point I was making is that the Council was very very clear for many years that we wanted to improve long haul airline connectivity. Could not have been clearer. There was no great backlash against that concept – indeed the contrary. With Singapore Air we do have a first long haul (albeit a 90 minute hop) via Canberra. The evidence we have is that it looks a very very good investment as I have set out above. It is also already bringing a closer relationship on many levels with Canberra and also Singapore – and that’s a good thing too.

    Sea – I think the assessments will include all those things about Wellingtonians spending money out of Wellington. In all cases – and that includes economic impacts and CO2 emissions you do need to factor in the trips that would already have been taken via some other route. Almost implicit in some comments (Sea and Neil) is that perhaps people should not be travelling at all. I don’t think that is going to be very popular among Kiwis. Air travel keeps increasing. Aircraft are getting more efficient – Air NZ seems to say that one offsets the other in their fleet anyway – not sure about that.

    I would have thought that for you Sea the key focus point would be on whether Singapore Air type arrangements are an alternative to runway extensions.

    Finally, yes absolutely we do need to keep reducing emissions – and we are making very good progress on that front – I look forward to your active and vocal support for urban densification, public transport priority, walking and cycling initiatives – especially when the going gets tough – as it inevitably will.

    Warmest regards
    Andy

     
  26. Hel, 8. October 2016, 9:00

    Dr Rotman, from the quick look I had at the GWRC report it seems their officers are happy with the economics. Rather than accusing Foster of cherry picking facts or non facts, that seems to be your domain.

     
  27. CC, 8. October 2016, 12:40

    Andy – Yes there was a report published with all the usual bluff and bluster statistics and of course, there are people who will drop big dollars while here. However, you failed to explain why ratepayers, many of whom can’t afford to attend events, subsidise them so that the ‘haves’ and the business community get the economic benefits. No free lunches?

     
  28. Peter, 8. October 2016, 12:58

    Hel – your quick look at the Officer’s Report wasn’t enough. It is an environmental report, not a business case as you infer. A closer look would probably show you that the GWRC officer only weighed up the comparative costs of a south versus north extension. I think you will find you chosen adversary is extremely well informed and not wasting her time, money and expertise in a Quixotic endeavour.

     
  29. Keith Flinders, 8. October 2016, 13:06

    Ben : In the past 10 years my rates have increased by 60%. Average wage in same period up 35%. I addressed the WCC on this growing gap in 2014 and was more than disappointed with the reaction, which was generally one of disinterest.

    Two councillors said that those who couldn’t afford the rates ought to move to less expensive addresses, another was unable to believe how far short a single pension was for those trying survive under a multitude of increasing costs including rates. Others said such people ought to take advantage of deferring rates payments until death, and have them paid out of their estates.

    Whilst I was speaking some councillors were more interested in using their laptops, or eating their lunches even though they had just returned from a lunch break. Call me old fashioned but such behaviour I consider to be rude.

    Hopefully today the public will have voted for more suitable candidates.

     
  30. Hel, 8. October 2016, 14:15

    CC, I assume you realise these are funded primarily from the commercial rates not residential?

     
  31. CC, 8. October 2016, 20:55

    Hate to stated the obvious Hel, but unless a business is a commercial property owner, it doesn’t pay rates. If the business does own a commercial property, it passes on the rates component as part of the costs of doing business. So, those who use the services of the business will then be paying the rates – most often the same as pay the residential rates. Besides that, you will well know that the commercial rates are not ring-fenced as your statement implys. In reality, it is probably only the owner of a non-earning commercial property who actually pays rates. Do you think there are many of them around?

     
  32. Dr Sea Rotmann, 8. October 2016, 22:46

    Thanks Andy, I very much look forward to finally finding out what the $1.6m from the long-haul attraction fund was spent on. Quick rebuttal: you can’t have it both ways – your own reports state an INCREASED total number of visitors of 1.6m from the extension which will lead to >60m tonnes of extra CO2 for Wellington, where aviation emissions already make up a quarter of its emissions. Walking and cycling initiatives etc disappear in terms of impact once you add these extra long-haul emissions to our profile. And to imply that we are advocating against all flying is really lazy politicking. You have seen our detailed arguments and they do not advocate against all flying to and from NZ, naturally. And yes, I believe the Singapore-Canberra route will prove that the runway extension is moot, because I believe it will likely fail, especially once the subsidies stop. Singapore Airlines have also made it very clear they would not use an extended runway to fly direct routes. As did every other long-haul airline flying to New Zealand, by the way. What I, and so many other ratepayers, are upset about, is the secrecy of the deal and the absence of a proper analysis or business case. Congratulations on winning back your seat by the way! I still appreciate you trying to engage with the public more than most of your colleagues.