Auckland’s road to the future
Shamubeel Eaqub says regeneration of British cities shows what is possible here.
It is getting harder to live and move around in Auckland. In a new book about Britain’s cities, I see parallels and lessons for us.
Mainly in the need for devolution to better share in the dividends of growth, and longterm patient investment in infrastructure and housing.
Britain’s cities, Britain’s Future by Mike Emmerich discusses restarting past urban powerhouses such as Manchester.
But for me, the big messages were for Auckland.
The book traverses a familiar narrative of a changing economy that has favoured urban centres. Especially those that have adapted to new technologies well.
Many cities that were previously based around manufacturing haven’t adapted well to the decline of manufacturing jobs.
Emmerich suggests the critical factor is to ensure that even cities with declining industries can adapt. But to do so, cities need sufficient autonomy and control. In a very centralised form of government like the UK and New Zealand, cities don’t have sufficient sources of revenue and control to be able to make the long-term investments that make sense for the city.
Emmerich contends that ‘‘the centralised UK economy and state have not served large portions of the population at all well’’.
We are facing this dilemma in Auckland right now. When it comes to big bits of infrastructure like the Central Rail Loop, rail to the airport or other infrastructure to build houses – local government can’t afford it.
Except for rates, the benefits of the growth enabled by the infrastructure go to central government coffers, but many of the costs are borne upfront by locals, in the costs of housing or through local government borrowing.
Worse, central government politics can stand in the way of progressing long-term patient projects. Contrary to popular belief, Auckland does not drain taxes from other parts of New Zealand. But central government doesn’t bear the cost of underinvestment.
In net, Auckland pays more into central government coffers than it takes out. Auckland needs a mechanism to better capture the benefits of growth in local government revenues, to keep investing in the infrastructure to foster future growth and prosperity.
The benefits of Auckland’s growth and prosperity are shared out to the rest of New Zealand. That is not a bad thing in and of itself. Rather, it should not come at the cost of investing in the critical infrastructure that will enable long-term economic growth.
There is nothing to say that Auckland will inevitably succeed.
In Emmerich’s narrative, even London was not immune. It shed jobs and population after World War II. London’s recovery and eventual rise to a pre-eminent, global city really happened in the 1980s. Although Auckland is not facing the after-effects of war, it is facing massive shortages of housing and infrastructure.
The reasons for London’s resurgence are important and could apply to Auckland.
London’s rise had lots to do with the rise of market forces, but also a great deal to do with government investment in transport infrastructure, and pump-priming and planning through bodies such as the London Docklands Development Corporation.
We need to engage in massive city building in Auckland, and that requires significant capital injection. It would be best to use tools like targeted rates, so that beneficiaries pay, along with congestion charging, which will both manage congestion and raise revenue.
Constraints in London spilled over to the wider southern region, enabled by better transport connections, both in terms of commerce and commuter locations.
Arguably, Auckland’s economy is larger than the political boundary and increasingly encompasses large parts of Waikato and Bay of Plenty through business connections, logistics and commuters. We should massively increase Auckland’s connectivity with neighbouring regions to actively spread the burden of Auckland to the regions, where they would be a welcome benefit.
In reading a book about cities I found a sense of optimism in what is possible for Auckland.
The changes needed are not massive: a small devolution of power, better alignment of incentives and some long-term patient investment in city building. In the coming election, perhaps this is the manifesto Aucklanders should demand.
Contrary to popular belief, Auckland does not drain taxes from other parts of New Zealand.