Rebuilder with a cause
Ateed’s chief is pushing Govt to help get nation’s Covid-battered economic giant back up and running, writes Liam Dann
Auckland will take a bigger hit from the Covid-19 downturn than New Zealand as a whole, says the man with the job of being a cheerleader for New Zealand’s biggest city.
Nick Hill, chief executive of Ateed (Auckland Tourism, Events and Economic Development) also feels Auckland’s role in the economy has not been well understood or properly acknowledged by central government.
“I think that Covid will hit Auckland more profoundly than a lot of the rest of New Zealand and I hope that we can persuade the Government that there are things that they can do to help Auckland respond,” he says.
Hill has fears for the CBD, which he feels could soon be dealing with empty shops and offices.
Auckland’s role in the economy is not necessarily understood or properly acknowledged, he says.
“What’s good for Auckland will be good for New Zealand,” says Hill. “We are a gateway to the rest of the world and that adds a lot of value.”
Ateed’s role as a booster for Auckland’s economic growth has been significantly shaken by the crisis.
Hill says the organisation has already begun to radically reshape its structure and purpose in response to the big changes the pandemic has wrought on the city’s economy.
The immediate loss of all international visitors as the border closed, and the removal of the targeted accommodation rate that was being charged, resulted in Ateed losing a quarter of its revenue. That has effectively meant downsizing by 25 per cent, although it is still too soon to talk about numbers of jobs, he says.
“We’re working through that right now. There’s also a review of CCOs (council-controlled organisations) due to report shortly and that may have some implications as well.” Ateed does have external sources of revenue and is looking to grow those, Hill says.
He is also working to get central government funding for work that Ateed could do to help with the national strategy to promote domestic tourism.
Questions about just how badly Auckland’s economy will be hit are difficult to answer right now, he says.
“I’m not an economist who can pick the numbers and there’s a whole range [of forecasts]. Some are optimistic and some are most pessimistic.”
But by any normal measure the impacts will be enormous, he says.
In fact, Hill has a passionate interest in economics and politics. At university he studied political philosophy as well as law.
“I’ve always been fascinated by politics and some of those deeper philosophical questions around the role of the state,” he says.
His career started at Treasury in the 1980s before taking him to roles with Electricorp and Fletcher Energy.
He has headed both Sport NZ and the Commerce Commission, where he was chief executive for three years.
“I decided I didn’t like being the regulator.”
Hill says the Ateed job offered aspects of everything he loved: events; sports; economics; and a creative entrepreneurial focus.
Unfortunately, the economic downturn will also put all those things under pressure.
There are impacts across the Auckland economy — on visitor numbers, events, retail and small business and manufacturing, Hill says.
If you just look at the foreign student sector, he says, it is clear how serious the situation is for the city.
“Foreign students are worth about $5 billion to New Zealand in foreign exchange earnings, $2.8 billion of that is in Auckland,” Hill says.
Following the lead of mayor Phil Goff, Ateed is now lobbying hard for a plan to get students safely back into the country as soon as possible.
“We are running very strong arguments to Wellington that if we can create a safe border and we can start to bring the students back, this is hugely important for, not just the universities, but for the CBD and indeed for the culture of what Auckland is.”
Hill says a commercial quarantining solution could be set up at no cost to taxpayers, while still meeting the Government’s standards for what safe entry to New Zealand should be. He cites the example of the Avatar movies, where key people were quietly allowed entry to New Zealand under strict quarantine requirements.
[Bringing back international students] is hugely important for, not just the universities, but for the CBD and, indeed, for the culture of what Auckland is.
Nick Hill
Auckland is a city of villages. Now is the time to get out and tell those stories.
Nick Hill
Hill is supportive, noting the value of the screen industry to Auckland and to New Zealand, but wants to see more industries afforded the same chance.
“There’s a similar debate around the America’s Cup,” he says. “Superyachts [will be worth] $120 million to Auckland.”
Due to run in March next year, the America’s Cup is one of a number of big events that Auckland City had been preparing to host in 2021.
The year had been billed as a big one for the city, with much of the short-term roading and infrastructure work timed to be finished by then.
Hill is realistic about the year’s prospects now.
“It [2021] will never be what it was originally conceived as,” he admits.
“We just won’t have the international visitors for starters, which was a lot of the benefit.
“But America’s Cup will happen. Whether it’s exactly as it’s been framed until this point remains to be seen.”
The lack of tourists and students and disruption to the big events adds up to very bad news for the Auckland central business district.
Ateed is working with CBD business group Heart of the City to try to keep people going out and spending.
“One of the things we’re talking about is how do you use micro events, night-time events to get people back into the city,” Hill says.
“But also we’re thinking more generally across Auckland about how ‘local’ becomes more important. All those small businesses, we need people to be supporting them. Auckland is a city of villages. Now is the time to get out and tell those stories”.
Another impact of our time in lockdown is that many of us got better at working from home.
The CBD now faces a double whammy, with the prospect that workers don’t return to the office in the numbers they did before the crisis.
“It is a bit scary,” Hill says. “The CBD may be somewhat deserted, there will be empty shops and offices with all the implications of that.”
But he remains optimistic that Auckland will recover in time.
And he’s hopeful that we might even fix some of the underlying issues with the economy.
“I think that, pre-Covid, Auckland and New Zealand had a real challenge with productivity,” he says.
“We’d add lots of workers, with migration really driving growth.
“The silver lining is that perhaps some of those productivity challenges will be dealt with and we’ll get more investment into industries with a higher knowledge quotient, the creative industries, education, services and so on.”
So can Auckland help lead New Zealand’s recovery?
The city is sometimes a target for criticism — often from the primary industry sector — that it doesn’t add real value for New Zealand.
Not surprisingly, Hill rejects that. “Auckland is 38 per cent of GDP — and a lot of it is also added value: manufacturing, technology,” he says.
That’s where he sees the opportunity for New Zealand to smarten up the economy by encouraging investment in the technology sector.
Does he feel Auckland has the support from central government to attract that kind of investment?
“It’s a fair question,” he says, somewhat diplomatically.
“The Government has addressed the health challenge exceptionally effectively and quickly.
“But increasingly, how we respond on the economic side requires the same level of discipline and focus and creativity.”
It’s going to actually be harder, he says.
“The tradeable sector of the economy is key. Infrastructure is important but it’s just an enabler.
“How can we grow that tradeable sector, the knowledge economy — that’s where the opportunity lies,” he says.
“And so that’s the challenge in front of whoever is in Government.”