Capital future uncertain but likely to be expensive
‘‘We just don’t know’’. That’s the summation from Wellington City mayor Andy Foster when asked how the coronavirus pandemic will affect New Zealand’s capital city in the long term.
Like all cities across the country, and around the world, Wellington is staring into the unknown as it emerges from the global pandemic, which has halted projects, dented the economy, and put a virtual stop to international travel.
And it is that last point which provides the greatest uncertainty for the Wellington City Council as it assesses how to move forward in the months and years to come.
According to 2018 Census figures, Wellington welcomed almost 19,000 overseas migrants in the five years since 2013. It also welcomed another 29,307 people from New Zealand cities outside Wellington, out of a total population of more than 200,000 residents.
It is these sorts of figures that led city planners to forecast that another 50,000 to 80,000 people would make Wellington City home over the next 30 years.
But those predictions have now been thrown up in the air.
‘‘There is a degree of uncertainty,’’ Foster said. ‘‘We’ve been predicting 50,000 to 80,000 more people coming into our city over the next 30 years, but how much does closed borders have an impact on numbers of people coming into the country?
‘‘The unknown is how long these circumstances continue. And then following that, how long they take to ease. The reality is none of us know.’’
Talking to RNZ yesterday, Massey University Professor Paul Spoonley, a humanities and social sciences academic, said he expected tourism and migration to New Zealand to be affected for the next two to four years.
That’s a possibility not lost on Foster. ‘‘If we have no migration, it stands to reason that your population growth must be lower than it was going to be otherwise.’’
The council had been due to consult on its Planning for Growth programme, including the city-shaping Spatial Plan framework, last April. But the coronavirus disruption meant those plans have been delayed.
The programme outlines the council’s proposed response to the projected population growth, including things like housing, resilience, and city amenities.
While specific numbers had not yet been discussed, Foster said the drop in people likely to move to Wellington would be a ‘‘material number’’.
‘‘We also have no idea what behaviour changes we might see as a result of Covid. What happens with working from home? Maybe some people will say, ‘Hey that wasn’t so bad’. We have no idea how that’s going to pan out.’’
‘‘We’ve been predicting 50,000 to 80,000 more people coming into our city over the next 30 years but how much does closed borders have an impact?’’
Andy Foster Wellington mayor
‘‘This [migration drop] will be an ongoing thing. But there’s a possibility there will be a lot of New Zealanders returning home after this event.’’
Wayne Guppy
Wellington Mayoral Forum chairman
The answers are likely to bring challenges for the region, he said.
‘‘The growth in our ratepayer base is almost certain to be lower for a while.’’
Which raises the question: What does that mean for rates?
The city council is forecasting a $70 million loss in revenue as a result of Covid-19 because of the closure of some services during the lockdown, and ongoing temporary fee freezes and rebates in other areas.
Other councils in the region are also looking at significant shortfalls.
Some Wellington City councillors wanted a zero rates increase in the 2020-21 financial year, but in the end settled on a proposed 5.07 per cent hike.
But Foster said forecast rates increases in future years could go up, to pay for the likes of the first two years of the $6.4 billion Let’s Get Wellington Moving programme, revamping Civic Square, extra funding for water infrastructure, and pop-up libraries.
Recouping the lost revenue from Covid-19 would also need to be spread out over several years, Foster said.
‘‘If we wanted to recover that $70m in one year, we would be looking at an increase of around 15 per cent.’’
In the meantime, the council is awaiting a decision from the New Zealand Transport Agency on a funding bid for a list of infrastructure projects it hopes will stimulate the economy.
The projects include building the convention centre, improvements to the Island Bay cycleway, central city stormwater upgrades, a water reservoir above Mt Cook, and the redevelopment of the Wellington Museum and Municipal Office Building.
Wellington Mayoral Forum chairman Wayne Guppy said population growth forecasts had not been discussed, but a drop in migrants could be offset by returning New Zealanders.
‘‘This will be an ongoing thing. But there’s a possibility there will be a lot of New Zealanders returning home after this event,’’ he said.
‘‘Most of them will be qualified and skilled and we want them here.’’