John Banks' State Of Auckland Speech
Speech notes: Hon John Banks QSO – Mayor of Auckland City Property Council Breakfast The Sheraton Hotel, Auckland
7.30am, Wednesday 5 February 2003
If New Zealand is to enjoy a standard of living everyone wants, a thriving Auckland is essential. If we can get it
right in Auckland, where the challenges and opportunities are the greatest, the rest of New Zealand can be optimistic.
I am working every day to deliver on my vision for Auckland: a truly successful multicultural city, internationally
competitive, with heart and soul.
Nothing less will do.
It is too easy for us all to slip into a false sense of security. Times are seemingly good:
The property market is booming as is the building industry
Retail sales are at record levels
The job market is healthy – our problem is not unemployment, rather a shortage of skills and experienced professionals
and tradespeople
The America’s Cup is injecting close to $1 billion into the country
And the economy’s doing relatively well.
I say ‘relatively’ because it is only relative to the fact that in the 10 years to 2000 Auckland’s real GDP growth per
capita was zero compared to other cities:
Singapore 41%; Brisbane 22%; Sydney 24%; Melbourne 17%; and Adelaide 18%.
Despite waves of knowledge and other ‘talkathons’ New Zealand remains at bottom half of the OECD.
In the last 30 years this country has fallen from 3rd to 21st. We are down with Spain and Portugal while Australia is
ranked 12th.
If New Zealand had achieved just an extra one percent of growth a year since 1970, every single full-time worker would
be earning an extra $175 a week.
The extra revenue gained would mean the Government could spend an additional $2.7 billion in health and $3.9 billion in
education – each year!
That is the importance of growth.
If we are to return to the top half of the OECD as the Prime Minister wants, New Zealand needs to experience real GDP
per capita of between 4.6% and 7.4% for the next 10 years – these are Treasury figures not mine.
Such growth can be achieved – just look at the success of two other small economies, Ireland and Singapore. Hard to
believe we used to give foreign aid to Singapore.
Being in the bottom half of the OECD means New Zealand spends less on health, education, law and order, and roading than
a lot of other OECD countries.
Let’s have a look at a commonly held assumption that our economy’s doing fine:
In the past two or three years our growth has been higher than the OECD average but we need to sustain an even higher
level to get us back into the top half.
Auckland must drive this growth. Rural regions and farming families have kept our country afloat for a long time, but
the agriculture sector is now bracing itself for lower export returns.
Where Auckland goes New Zealand will follow.
Auckland is responsible for a third of the country's economic worth, with Wellington and Christchurch contributing just
13% each.
Auckland has 35% of the country's businesses and employs half the country's workforce.
Auckland continues to have high population growth simply because everyone wants to live here.
The Auckland region grows by the size of Dunedin every four years. It will be home to two million by 2050, though in
reality it probably won't take this long.
Under my leadership, Auckland is now prepared to deal with the predicaments of growth. At the same time we need the
support of Wellington with sensible policies that will move Auckland forward.
I am working with this Labour Government to do just that.
All my advice is that compliance costs, taxation, the regulatory maze of the Resource Management Act and transport are
the top impediments to growth and prosperity. These are deterrents for offshore investors. They are stumbling blocks.
We can not sustain public spending equal to 40 percent of GDP forever. I am not necessarily suggesting cutting public
spending. I am suggesting growing a bigger and better performing economy.
It is worth noting that no country in the top half of the OECD has our level of public costs.
And let’s not forget that any government big enough to give us everything we want is a government big enough to take
from us everything we have.
We must be growth focused. It is the only way to social justice and social equity. It is the only way to get people off
welfare.
Abolishing the dole won’t solve our problems. Giving everyone looking for a job the dignity of work will.
New Zealand, driven by Auckland, has simply got to lift its productivity. Other countries are wealthier because they are
simply more productive.
Treasury is predicting a $3.5 billion surplus in the current year and reaching $5.2 billion over the next three years.
The time is now right for the Government to allocate an extra $250 million a year over the next 10 years to complete the
region’s integrated transport network. This would be an outstanding investment for New Zealand.
It does not make sense to deliver a $5 billion surplus when at best the economy is treading water while the country’s
engine-room splutters from third world infrastructure.
Another brave investment at this time would be substantial tax relief. New Zealand should be aiming for top personal and
business tax rates no higher than 25%.
This would be a huge boost to growth and help Auckland attract and retain capital and skilled people.
Income tax and the way we treat priority industries and foreign investors must not be viewed from a revenue perspective
but from that of growth.
Instead of more knowledge waves why not target support to specific sectors: communications technology, marine,
biotechology, and the creative industries.
We need to put success on a pedestal. We must attract investment and investors.
153 companies generate 80% of New Zealand’s foreign exchange.
Our economy is a mile wide and an inch deep.
Dangerously dependent on a few large exporters is no way to build a sustainable future. That is not good enough for
Auckland!
At the Town Hall we are commercially committed and business friendly. As leader of this city I accept there is a
responsibility to ensure Auckland has an attractive business environment.
Rates must be competitive to other cities
Council administration must be business friendly
We need to show regulatory responsiveness
Our economic infrastructure must be the best. To compete with Brisbane, Sydney and Melbourne we need to move fast.
For this city the biggest investment, with the greatest urgency and the best return is transport.
Traffic congestion is Auckland’s number one concern. It costs the economy at least $1 billion a year in wasted time and
wasted energy.
Car ownership is growing at twice the rate of our population – meaning in 20 years time the number of cars in Auckland
will double.
My mayoral campaign was simple and transparent: Transport network completion by 2010.
It is not just about building roads. It is about giving Auckland a modern, integrated transport network which embraces
the triple bypass with affordable public transport.
With Britomart opening in just a few months, I am committed to a modern, efficient, and affordable train service.
In the area of transport we are moving so fast that we’re now facing a funding lag and shortfall. We have nearly $1
billion worth of road work that could be started tomorrow.
As a region we need to find ways of raising the money for ourselves - and not just a little - a lot.
Auckland needs funding flexibility and funding options.
A united Auckland mayoral forum is critical – as is the support of the Employers and Manufacturers’ Association and the
Chamber of Commerce. I value the leadership of this Property Council.
The immediate focus is around the black boat and retaining the America’s Cup.
It is a great time to be Mayor of Auckland City.
Much work is needed.
This year is about action.
Auckland is the pride of New Zealand. It can be the envy of the world but words alone won’t get us there…
As Napoleon once said, words don’t even move the leaves in the trees.