Political battle lines drawn

A groundswell of grassroots demand for change and progress in Hawke’s Bay has pushed the region’s councils reluctantly into a game of political chess. Kathy Webb talks to some of the players.

It wasn’t exactly Occupy Wall Street. There wasn’t even any shouting.

Nevertheless, the ‘rebels’ who launched an advertising campaign demanding far-reaching political change in Hawke’s Bay hit their target. They shocked the halls of local government into calling special meetings.

The leadership was unimpressed. The sheer audacity of these people, calling themselves A Better Hawke’s Bay. How dare they besmirch the good name of the Garden of Eden by saying it had problems. Traitors, troublemakers. People outside the region might hear of this. It might hurt tourism. Why can’t these people focus on the good things we have?

In the end, it was nearly-agreed that the halls of local government should accede to the rebels’ demands and commission an independent, objective study of what is being done well, what is being done poorly, and what needs to be done to ensure that Hawke’s Bay thrives into the future. This study was to include the thorny issue of how effectively the region’s local councils are doing their job.

The rebels, it seemed, had won their battle, but it was never going to be so easy.

Napier has been dragged kicking and screaming into the study, with every councillor recently speaking against it, then voting unanimously to proceed because of the political pressure to at least appear cooperative.

Arnott refused an interview with BayBuzz.

The NCC, with its Pollyanna-like insistence that all is very-nearly-well within its own borders, might have hoped that A Better HB was little more than a band of fly-by-night troublemakers. That would be better, in its book, than the alternative as espoused by city councillor Bill Dalton (who also refused an interview with BayBuzz), blogging on his site www.dalton.net.nz

“Clearly I disagree vehemently with the whole programme being run by Better HB. It has been an appalling, negative project. We should be concentrating on the positive. It’s all going to unwind.”

“He accuses the group of being a Trojan horse for Hastings mayor Lawrence Yule.

“So Lawrence Yule and his cohorts came back with Plan B, to support a study on the economic future of HB, which would include governance. Many people have reluctantly agreed to it because they don’t want to appear negative.”

On the year ahead, Dalton states:

“Why then are there so many people in Hawke’s Bay bagging the place? Why do we have people in positions of influence, determined to make Hawke’s Bay look like the lawless, economic basket case of New Zealand?

“Whilst I vehemently disagree with them, Lawrence Yule and his cohorts in Better HB, have taken an understandable position. Appalling, but understandable. They are so determined to force amalgamation on Hawke’s Bay that they are prepared to blacken the image of our wonderful province. Their modus operandi is clearly one that endeavours to show that we are such an economic and social failure, that only amalgamation can save us.

“Their argument is lost on many and in my view, only undermines the good work that is going on in the Bay.”

The Tremains step forward

Napier MP Chris Tremain took a huge political risk in nailing his colours to the mast before last year’s election, and publicly appealing to the citizens of Hawke’s Bay to support a regional study that might potentially lead to recommendations for amalgamation. His opponent, Napier-based Labour list MP Stuart Nash, was pleased to make capital out of Tremain’s stance, and waged a concerted campaign to rally all loyal Napier citizens to the defence of its borders.

When the votes were counted, Nash was out and Tremain was in once again.

It was a result that heartened many in A Better Hawke’s Bay, including its spokesman, Chris Tremain’s real estate businessman brother, Simon.

Both sons of the late Kel Tremain, an All Black and Hawke’s Bay rugby hero, the Tremain brothers have an inherently high profile and proud family reputation.

It’s a family that has always been based in Napier but is a Hawke’s Bay identity in every way, says Simon Tremain.

For that reason, and the regional opportunities he has seen go begging, he put up his hand for A Better Hawke’s Bay. Another 1000 citizens, including some of the region’s most successful business people and entrepreneurs, have done the same. They are fed up with how things are, and the unfulfilled potential they see holding back the region.

“It came out of people wanting the region to perform so much better on all scales than we currently are,” says Simon Tremain.

On every front, from socio-economic issues to business development, the region is performing below average.

“I seriously believe that’s because we operate as Napier and Hastings, not as Hawke’s Bay,” he says. “People say it’s not broke, but it is. I have friends who would love to come and live here, but there aren’t any jobs for them. We have everything here in Hawke’s Bay – the climate, you’re five minutes to work and 30 minutes to the beach. Everything is here except the jobs.”

“We need to do whatever it takes to get more businesses here, do things differently to the rest of New Zealand, even if that means giving them a free five-year lease on some land. We need a massive brainstorming, and it starts with one voice for the whole province.”

“I don’t see any good reason as to why we want to stay separate.”

The reality is that Hawke’s Bay does have some serious problems. Its economy is too dependent on tourism and farming, there is no single, co-ordinated long-term grand plan among the councils to go out and grab economic development or cut the costs of the jobs they do. The population is ageing and barely above stagnation point because young people with talent and skills are leaving for Australia and decent pay packets. Those left behind too often achieve poorly in school before joining a large pool of beneficiaries or an even larger pool slogging for minimum wages in go-nowhere jobs. Bad health is endemic and burgeoning among poor communities.

A Napier critique

As businessman and former Napier city councillor John Harrison puts it, “we are down there with Northland and Gisborne”. That being so, private funds will ensure the regional study goes ahead, with or without Napier’s consent or participation, he says.

“And if our representatives on the council go against supporting it, they will be unemployed in 18 months’ time. End of story. They can start heading for the dole queue straight away.”

Harrison, who was chairman of the NCC’s finance committee for six years, still keeps a close eye on it. A stack of council-related papers sits on his desk beside large windows overlooking Westshore beach. The smell of salt water and the lazy swish of gentle waves on the rocky beach drift in through the windows, but Harrison’s focus is elsewhere.

The city he adores is being run by a team of amateurs “who couldn’t get a job anywhere else”, he says. The council – “a $60 million business” – is losing money hand over fist. The aquarium, which cost more than it should have, and is attracting fewer visitors than it was supposed to, is costing Napier ratepayers $10,000 a week by the time depreciation is added in, he says.

The new museum, to which Napier is contributing $18m, has also run over budget, causing substantial changes in the plans. “It’ll be nothing like the pretty pictures put out 18 months ago.” And when it’s finished, and attendance figures fail to measure up because, unlike most of the other 250 museums around the country, it will charge an entry fee, “the losses on that $18 million will also be between $5,000 and $10,000 a week.”

Harrison says that thanks to 21-year leases, the commercial leasehold land that the council refuses to sell, because it brings in $1m-$2m a year, is actually returning only 1-2% on its value, while businesses shy away from it, with jobs and opportunities lost, because they stand to get a rent shock every 21 years, based on any value they’ve added.

Then there’s the debt. NCC likes to tell everyone it’s only $4.5m, but interest is paid on closer to $42m when internal borrowings are included, he says. The interest on that combined debt is absorbing 14% of Napier rates. In comparison, the servicing of Hastings debt is costing 9.06% of its rates, while Regional Council debt is costing 10.68% of its rates income.

Harrison produces more papers. These are the results of NCC’s own research, and show the city’s employment rose 230%, from 923 to 2155, between 2006 and 2011; new vehicle registrations dropped from 2970 to 1617, and visitor nights slumped from 612,445 to 534,773.

All that adds up to reasons that Hastings and other areas might be wary about amalgamating with Napier, rather than the other way around, suggests Harrison.

Can’t agree on bus signs

Regional councillor Neil Kirton says things are so bad that Napier, Hastings and the Hawke’s Bay Regional Council can’t even agree on where to put bus stop signs.

“Hawke’s Bay is unconnected. Everything is haphazard,” he says.

Nevertheless, he is surprised by Napier’s obvious reluctance to be involved in the regional study, and the suggestion it might even have opted out. “A more prudent political response would have been to go along with it. It’s only a study,” he says.

“To be overtly opposing it is indicative, from my observations, of some deep-seated problems in Hawke’s Bay’s local government.” Most of those problems stem, says Kirton, from the power in the hands of council chief executives and unelected bureaucrats. They’re “calling the shots” and they’re “skilled at being manipulative. The last thing they want is for councillors to have an alternative view.”

That is why “shared services have been stoutly resisted at every turn.” Kirton cites two examples of this:

• Some time ago, Wairoa District Council asked NCC for a contract to supply it with planning services. “But the cost quoted by [NCC chief executive] Neil Taylor made it cheaper for Wairoa to run its own planning department.”
• In recent years, Napier, Hastings and the regional council have all renewed their computer systems, at huge expense, but none of them is compatible with the others. “Deliberate decisions have been made for them to be incompatible. Engagements were made with contractors to ensure they were incompatible.”

The disconnection among the councils goes to the heart of almost everything, says Kirton. “They can’t agree on the most basic of decisions. The most symptomatic thing to me is that we can’t even agree on putting the bus signs up. The regional council is running the service but has trouble getting a bus stop or signs. We can’t even agree on what the signs should look like. We’ve got this absurdity going on.”

The response of some within local government to the demands of A Better HB was contemptuous, says Kirton. They were dismissed as fly-by-night troublemakers.

“But those politicians need to understand that it is not a Hastings-based group; the stakes have changed.

“Public thinking is changing. Politicians need to understand that change is coming and they need to get ready for it. The average person in Napier and Hastings is seeing the need for change.”

However, having said that, Kirton holds out no great hope that the study will be the catalyst. “The study will be delayed and its outcomes fudged. The most immediate prospect is a change of councillors at the next election, or central government intervention.”

Indeed, the study’s terms of reference are nebulous, and the words “local government” are nowhere to be seen. Reference to it is wrapped up as “analysis of current policies, priorities, interventions, legislative requirements and structural settings in or affecting Hawke’s Bay and any apparent gaps, inconsistencies or policy clashes.”

Nevertheless, despite the tip-toe language, the sub-text is clear. It’s all about the potential for amalgamation, and Napier is upset. All the way through negotiations for the study’s terms of reference, Arnott protested that there was no real need for the study because the councils already had enough information between them, in their incompatible computer systems, on which to base constructive progress and increased service-sharing.

BayBuzz asked regional council chairman Fenton Wilson for an opportunity to share his thoughts about the study, but Wilson said he did not see any “value proposition” in deviating from his long-held policy of refusing to talk to BayBuzz about, well … anything.

The Black Knight

Lawrence Yule, the mayor of Hastings District, president of Local Government NZ, and Black Knight of Arnott’s amalgamation nightmares, is fighting a drawn-out campaign for regionalism. His early, upfront approaches to Napier were rebuffed outright, but he believes Hawke’s Bay must confront its shortcomings, and develop a co-ordinated, long-term and cohesive regional plan. The first step toward that is the proposed study — to identify where the region is getting it right, and where it’s not.

“This is a genuine opportunity to look at ourselves and position ourselves for the next 20 years.”

Yule says Hawke’s Bay is crying out for a stronger, unified voice from its 150,000 residents. In fact it needs that if it is going to have anything approaching a rosy future.

“We seem to be in this view that somehow everything is going to be all right here. I disagree. We are in hard times. There are structural problems in this community. Low wages are just one example.

“If we don’t get our heads around that, and take some aggressive and drastic action, we won’t be in a very good space in 20 years.

“If you talk to the average punter on the street, and ask them whether their children see a long-term and viable future with a good income in Hawke’s Bay, a lot of parents can’t see it. They’re leaving for opportunities in Australia. I hear of it all the time.”

Hawke’s Bay must find out whether it is thinking along the right lines to maximise its prospects for the long-term. The time has gone for heads in sand, and patch-protection, says Yule.

“If we can’t even get somebody of high calibre to do a long-term report to look at ourselves, then I’m at a loss as to the future leadership of this region.”

Failure even to agree on the need for such a study would lead many to conclude the region is dysfunctional, he says.

The Hawke’s Bay Chamber of Commerce is itself an example of Napier and Hastings come together, and chief executive Murray Douglas speaks only in regional terms.

“Hawke’s Bay is one economic landscape and local government boundaries are largely irrelevant. I say largely, but in truth they are often a problem with different and sometimes baffling differences between close neighbours which add cost and confusion to economic processes and we need growth,” he says on the Chamber’s website www.hawkesbaychamber.co.nz

“The Chamber’s view is that it makes sense to review a local government to ensure it is fit for purpose. There is no doubt that each of our current councils have strengths but it is equally true that they have weaknesses especially when it comes to uniformity of service and function. These can be potentially more expensive when singularly operated and certainly as we have often seen in Hawke’s Bay, they can be strategically unaligned and militate against the best interests of all Hawke’s Bay.”

National: councils on watch

Entering from stage left has come another player, one with more than a bit part. The new Minister of Local Government, Nick Smith, delivered his first lines in late January, with a warning to councils nationwide that they were on watch.

Smith said he was worried about their effectiveness and efficiency, and the debt they were racking up on behalf of ratepayers.

During the past decade, councils’ collective debt had soared from $1.8 billion to $7 billion, and the rates bills they were sending out to property owners had gone up by an average of 6.8% – more than twice the rate of inflation and more than any other basic cost of living. During the same period, food went up 3.3%, transport 2.6%, clothing 0.1%, and housing 5%.

“The 6.8% rates rise figure is just unsustainable,” Smith told his Nelson audience.

“I want to stress at the outset Government’s view that an efficient, responsive and well-focused local government sector is absolutely vital to New Zealand. Our 78 councils are responsible for $100 billion worth of public assets, employ 23,000 people, spend $7.5 billion each year of public money and everyday make thousands of regulatory decisions.

“If they do these jobs well, they can be a turbocharger for New Zealand Incorporated, but poorly and they become a handbrake on this country’s success. My ambition is to work with councils to ensure they are a help, not a hindrance to New Zealand getting ahead.”

Smith says his review, which will be assisted by Yule and Local Government NZ, would inevitably raise the question of council amalgamations, although “I wish to make it plain that the Government is not going to embark on a central-government-led, nationwide programme of forced change as occurred in the 1980s. Nor do we take the view that bigger is better.”

Smith’s cautious language is understandable. He doesn’t want a repeat of the hysteria whipped up by councils intent on their own survival during the nationwide 1989 amalgamations.

It is also unlikely he has revealed his full hand for this latest review, given the resentment still lingering in parts of newly and forcibly-amalgamated Auckland.

Whatever his agenda, mere carrots dangled in front of Hawke’s Bay council noses are unlikely to achieve the efficiencies and streamlining he seeks. More likely, Smith will need some stout sticks. Yule and Local Government NZ might turn out to be the suppliers.

There will be shouting.