Another city economic strategy? I can’t wait

Mayor Andy Foster says last Friday’s Economic Forum – two hours of discussion among a hundred handpicked business and community leaders – was just one step in the process to formulate a new economic development strategy for Wellington, with links to the wider region.

A new strategy is needed, he says, because the current one, dating from 2011, is out of date. My first question is: why has the Wellington City Council and the various versions of its economic development agency allowed this to happen?

The need is urgent. Wellington’s economy is the fourth-worst in the country. According to the latest Infometrics report, the regional economy shrank 1.5 per cent in the last quarter. The city is ‘‘hollowing out’’ as businesses relocate, people work from home and movement in the CBD is strangled with more restrictions.

The outgoing chief executive of the Chamber of Commerce, John Milford, says the council has been in denial about the city’s plight, and that the brief to the formerWellington Regional Economic Development Agency, or Wreda, was wrong.

He told me, ‘‘Wreda should be an entity that facilitates the development of the region with a strategic view to help businesses do business, not to do it for them. Iwant it to achieve outcomes, not outputs.’’ By outcomes, he means more businesses and people in the region paying rates, not just more visitors or low-paying service jobs.

In 1997 I joined John Dow (who runs the Gold Awards for Business and the Wellingtonian of the Year) to help prepare the region’s first economic development plan. We’d been hired by the Capital Development Agency, then part of the city council. We worked with the five councils in the region – Lower and Upper Hutt, Porirua, Ka¯piti Coast and Wellington – and came up with a plan, consulted the infrastructure providers, the airport, Energy Direct and the like, and got approval from all.

The central strategy was to attract more businesses to start up in Wellington. A small, specialised agency was established to focus almost exclusively on attracting inbound investment. Matters like tourist promotion were thought important, but better handled separately.

The five councils funded the new body, and a manager was hired. The venture wasn’t an immediate success, and so began a series of changes in scope, scale, ownership and strategic direction.

Twenty-three years on, and many incarnations later, the current economic development agency, called WellingtonNZ, is responsible for marketing the city, attracting tourists (yeah right), and taking bookings for council-owned venues. City ratepayers pay 88 per cent of its $25 million budget.

Milford says the brief is too wide, and the agency is underfunded. It also needs to be region-wide, not city-wide.

John Allen, WellingtonNZ’s chief executive, provides a robust defence of his agency’s performance, pointing to links, relationships, partnerships and support given to bodies in Porirua, Upper and Lower Hutt, Wairarapa and Wellington. The plan and the agency are working, hemaintains.

I remain an unrepentant advocate of seeking direct investment to create businesses and jobs in the region as the primary, if not the sole, role for a region-wide economic development agency. Promoting and positively positioning Wellington – the city and/or region – as a desirable place to visit or settle is all very well, but there is amissing link.

Promoting and positively positioning Wellington – the city and/or region – as a desirable place to visit or settle is all very well, but there is amissing link.

Someone needs to be talking to interested businesses to convert interest into intent, helping them seal the deal to start up in Wellington, or to invest in an existing business.

Ratepayers get their payback from more businesses paying more rates, and through providing more job opportunities for their children. That’s not happening enough.

Milford agrees that inbound investment is a key and central part of a regional development strategy and ‘‘it has to be linked to transport and housing, and right now we need more investment in both. We are not getting the fundamentals right. Wellington City Council is in denial about the challenges facing the city and region, and it’s not prepared to have that conversation with residents,’’ he says.

Dow suggests appointing an infrastructure champion, a leading business or community figure who can round up support among the region’s MPs (almost all Labour) and get them to press the Government for more funding for transport, housing and other infrastructure needs.

Good idea. Who will make it happen? It needs action now, not after June, which is the mayor’s deadline for completing the new strategy.

A final thought: the forum ended with some Wellington city councillors squabbling over who did or didn’t get invited. They forgetwhom they serve. Fractious, spiteful, self-centred exchanges are unhelpful. I hope voters will remember their names.