Wednesday, 8 August 2012

The bill to “rebuild” Christchurch is starting to emerge—and it’s huge

There were at least two glaring omissions in the grand announcement last week of “The Government’s Grand Plan for Central Christchurch.”  The first was any acknowledgement at all of those whose land is to be confiscated to make the pretty pictures reality. The second was any numbers telling us how much the pretty pictures will cost us.

This Guest Post by Hugh Pavletich begins to explain why.

The bill to “rebuild” Christchurch is starting to emerge—and it’s huge
Guest post by Hugh Pavletich

The Press this week reports the first public meeting to discuss the plan for Christchurch's new central city drew few people.

No surprise, because without initial costings, feasibility studies and wider economic and social reports there is very little of substance to discuss. Simply pretty pictures.

Further research will likely find that things are not so pretty though.
Property journalist Chris Hutching reported in the NBR the cost of the governments “extravagant” Christchurch central city rebuild plan is a whopping $1.6 billion.

$1.6 billion.

Little wonder when the plan was announced last week by Prime Minister John Key and Earthquake Recovery Minister Gerry Brownlee there was no hint about costs, and any questions along those lines were deflected with comments the plan was "broad brush." A better word, with so much at stake, would be reckless.

A planners’ fantasy destroying existing and successful businesses. A very destructive, very expensive fantasy.

Hutching was supplied with his figures by a reliable source who cannot be identified due to possible repercussions.
Nonetheless, the covered rugby stadium is tipped to cost $506 million, the convention centre $460 million and the metro sports arena $227 million, Other elements of the plan make up the balance of the $1.6 billion.

By contrast the recent parallel city plan based on the "Share An Idea" programme with residents allocated about $200 million for a rugby centre, $150 million for a convention centre and $120 million for a metro arena.

According to Hutching’s informant, the government has indicated it would come up with “roughly half” the money for the Rolls Royce plan. But subsequently there have been calls for the city sell assets to pay a greater share.
Community leader Reverend Mike Coleman (a trained economist before becoming an Anglican priest) described the scale of the plan as "bizarre."

It's Emperor's clothes stuff. To even talk seriously about a rugby stadium or convention centre at these prices is absurd. We are not a big city in the scheme of things, we are a large town of about 300,000 people. We don't want to end up stuck with millstones like the Dunedin stadium.

It is neither a big, nor a rich city. The average annual earnings of Christchurch households was about $56,000 compared with Aucklands $72,000. In eastern Christchurch average annual earnings were about $46,000. I estimate the government plan would cost an additional $600 per year in rates for households—six-hundred dollars extra per year per household!—to say nothing of the unseen costs about which all students of the "Broken Windows Fallacy" will be aware.

When the government’s destructive fantasy plan was announced at a televised cocktail function in Christchurch last Monday, civic leaders, businesspeople and dignitaries were however universally supportive of the plan.

Canterbury Employers Chamber of Commerce chief executive Peter Townsend exhorted Christchurch City Councillors to sell assets such as the airport and Lyttelton Port to help pay for it. Property Council chief executive Connal Townsend also supported the plan.

Ironically, it was just three weeks ago that Mr Key told local government delegates at their annual conference  to rein in their spending.

"And just as central government does, local government also needs to work on delivering better services to New Zealanders within tight financial constraints."
"Times are tight and ratepayers just can't endure unaffordable rates rises. We are not telling you how to do your jobs but we would urge you to think carefully about the capacity of your communities during these difficult financial times.".
"I know it's not easy and its tempting to think your council is an exception or faces special circumstances, but we all have to face up to making difficult choices." Mr Key said three weeks ago.

The Property Council's Mr Townsend echoed this theme.

We have long been calling for restraint on local government spending for the benefit of New Zealand ratepayers and small businesses" Mr Townsend said a couple of months ago.
"There is an absolute need to hold down the costs of local government, which has spiralled out of control in recent years," Property Council's Mt Townsend said.

That was then. Now apparently both view Christchurch Council as “an exception,” and Christchurch’s already hard-pressed ratepayers cash cows.

Let’s be frank.  With this "fantasy" of gross bureaucratic overreach being promoted by politicians who should know better, the costs will not stop at $1.6 billion. We know that.

Further, there is a world of difference between a bureaucrat’s CGI-powered fantasy trip and a real recovery. We all know that too.

Does the CERA legislation really allow politicians to go on fantasy trips clearly retarding the real recovery? Well, yes it  does; it encourages it.

So no surprise that recent local polling by The Press suggests that even at this very early stage, a surprisingly high percentage of the public is growing increasingly concerned about the costs and affordability of these proposed projects.

Christchurch’s council is not alone in considering itself an exception to the rule of restraint—and unfortunately the  local government reforms proposed by central government are, again, in large measure only "tinkering around the edges."  Well respected local government consultant Phil McDermott reckons the government’s proposed restructuring puts the cart before the horse—instead of setting up barriers in the way of building large, remote bureaucracies, it instead  sets up forces for further council amalgamations.  And yet the Auckland Experiment “will demonstrate sooner rather than later that restructuring is not the silver bullet that might put an end to run-away council costs – or run-away councils.” Note the "cost blowouts" with respect to the idiotic decision to amalgamate the Auckland Councils. Auckland is the only major City in the western world to have just one Council. This is a disaster for New Zealand.......

The reality is that the real recovery process can only get underway in Christchurch, as and when the citizens, and property owners, decide to take back control.

The 5 major objectives that need to be focused on are set out within this announcement by Cantabrians Unite "Christchurch: The way forward":

  1. A fresh local election
  2. Replacing the Council’s Chief Executive
  3. Abolish Councils’ centralised local structure, replaced with a one-city many-communities model
  4. Make it possible to provide affordable land for housing and business
  5. Make rates affordable.

It is not just Christchurch’s future that is on the line. It is the future for you and your family, whether as ratepayer or taxpayer, Christchurch resident or New Zealander watching the country’s second-biggest city going down the tubes.

The choice is yours.

Hugh Pavletich is the Coordinator for Cantabrians Unite the co-author of the Annual Demographia International Housing Affordability Survey, and the webmaster for the archival website  Performance Urban Planning.

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