Small cost reduction could mean massive gain after a quake
OPINION: The announcement this week that Wellington is to get its own version of the Monopoly board game rounded off an interesting period of discussion about the capital’s identity.
While I’m reluctant to say the news was a defining moment in the city’s history, even the most cynical among us would have to concede that choosing Wellington, with its many identifiable landmarks, for the next version of the world-famous game is something of a vote of confidence in what we have here.
It was great to see the enthusiasm at the launch, as the public were sent on their way to somehow choose the names for the 22 free property squares.
Things weren’t so upbeat last week when Deloitte published its Forgotten Impact report, examining the effect of the Kaikoura earthquake on Wellington.
It was sobering reading. It talked about a $1.25 million hit on our regional GDP for every week Wellingtonians are working away from their primary office. After 25 weeks that’s about $30m.
It said a similar-size earthquake under Wellington would have ‘‘a catastrophic impact’’, with modelling showing that a shock similar in size to the 2011 Christchurch quake would hit our region’s GDP by $26 billion between 2017 and 2030 – a total of $29b nationally.
Impacts would include cost of damage estimates of around 2.5 per cent of the country’s capital stock, a reduction in employment of 9 per cent in the two years after the quake, and doubling the cost of house insurance.
Unsurprisingly, these numbers were seized on. Structural engineering company Miyamoto International was one quoted as saying Wellington may never fully recover from such an event.
This prompted questions about would happen if the Government couldn’t function here for the short term, and would it be worth the cost or even be wise to return for the long term.
The response was as fast as it was unequivocal. Wellington would be rebuilt, Finance Minister Steven Joyce assured us.
There was a contingency plan to move the government to the Devonport Naval Base temporarily, ‘‘but it would be our intention to return to Wellington’’.
The Government could afford a $29b invoice to fix Wellington, as
I'm going to agree with the mayor and vote for our harbour. Nothing defines us like it does.
long as it could pay down debt to enable it to borrow.
That was the best possible answer from any Wellingtonian’s point of view.
When you look at the numbers you can see how vital the Government’s presence is:
Parliament, departments, and ministries employ just more than 19,000 public servants who contribute about $1.1 billion to our economy each year.
Government contributes 18 per cent of the CBD’s GDP, and 14.7 per cent in the wider city.
Nine per cent of jobs created in the city last year were in central government. There was a further vital point in Deloitte’s report: just a 1 per cent reduction in the costs of building damage, labour supply, and insurance would limit the hit to regional GDP by $260m.
That’s a small movement for a big gain, and it’s a huge incentive for us all to redouble our efforts to build resiliency right across the city – roads, port, buildings, water, electricity.
The Government said it would rebuild in the event of a big quake, and we will hold it to that.
I’d like to think it has noted from the Deloitte report how small moves around resilience can make a massive difference to the ongoing impact of a big quake, and seriously consider further help to future-proof the city.
And my pick for the prestigious dark blue position on the Monopoly board? I’m going to agree with the mayor and vote for our harbour.
Nothing defines us like it does. It jams us closer together and makes us what we are.
John Milford is the chief executive of the Wellington Chamber of Commerce.