It’s going to be a glass half-full, half-empty year for Auckland and New Zealand businesses.
At one level, I’ve no doubt we will end the year better than we started, out of recession, due to several macro factors.
First, the effect of interest rates continuing to fallwill make a significant difference. My rough diagnosis of much of our malaise in the past year or more is that businesses and households have been entirely squeezed and cash-strapped by higher costs and lower cash levels. Lower interest rates obviously really help with this as, whether we are a shop on the high street or a regular Joe or Joanne paying off a loan, we all have lower repayments to make and more disposable income.
Second, again, at a helicopter level, is our low dollar against the US dollar.
There are probably plenty of reasons why farming in New Zealand is going better — actually, really well — right now. But a low dollar has to be right near the top, meaning more competitive pricing by us internationally and thus more sales and better margins for us at home.
The funds from this will, over time, slosh around our economy into more investment and consumer spending in regional New Zealand, and also more going into our one big city, whether that’s at large services firms or on a weekend away to watch the rugby or a concert.
Look slightly beyond and there are other “game changers” coming.
SkyCity’s convention centre will be a big deal, meaning hundreds more jobs and thousands more domestic and international tourists in our CBD.
The CRL, which I am biased about as a key progenitor of the project, will also be massive. Even with a few teething issues, it will make for much more efficient Auckland travel and will bring welcome commercial rejuvenation around the impressive stations at Aotea Square, just off K Rd, and at Mt Eden.
The Auckland Tennis Centre on Stanley St (the Mankua Doctor Arena).
But there are also reasons to note that the glass is still half empty. These positives I have mentioned are off the back of a very low starting point of recession and poor sentiment. Moreover, ongoing OCR cuts and our low dollar are evidence of how weak things have been, not much else. No one should be patting themselves on the back over these matters; they are hardly accomplishments.
Instead, we need to remain motivated to do more and fill our cup up, if not to overflowing any time real soon, at least to fuller than it is.
My discussions with many in Auckland business and wider civil society point to at least a couple of ways to achieve this.
Government and business need to act swiftly and boldly in key sectors — with Government reforming them and business stepping into them again in a big way and making them hum. The sectors I have in mind are ones I have written about for the Herald before — tourism and international education which are both low-hanging fruit and can add billions more into our region.
Our target shouldn’t simply be to get back to pre-Covid levels here (though this would be a start) but to well exceed the revenue made from those times.
This sectorial approach isn’t about “picking winners” but instead focusing on where quickest gains can be achieved.
Longer-term, we must continue pushing in on sectors such as our technology and innovation industries, our universities, and also our cultural sector. These can be big drivers of growth, and the way forward is to continue clearing away regulatory hurdles, to support and incentivise where practical, and to foster collaborative models whether this be in the form of physical hubs or more virtually.
Finally, we at the Auckland Business Chamber have also been thinking a heap about energy, transport (water is also significant), and our major events infrastructure. Congestion is unproductive and so finishing the network and then pricing it must be right. In energy, we need more abundant supply, more affordably.
A 10-point plan the Chamber put forward last month points to the reforms required to ensure this, as well as the industry and tech (think data centres, AI and more) that will be enabled to grow as a result.
All the talk of stadiums for events can be wearying.
The realist in me doesn’t see any Government stumping up billions for anything entirely new when they haven’t finished our roads or other more basic infrastructure yet. We should, however, keep chipping away at this and one small start would be roofing the Auckland Tennis Centre on Stanley St (the Manuka Doctor Arena).
When the cities of Australia have nearly all roofed their tennis stadiums and are attracting international events they didn’t use to as a result, our staying still is, in fact, going backwards and puts our Summer ASB Classic at risk. The answer to raise the inconsequential $14 million for the roof is simple.
Our Prime Minister should guarantee a third of the funding if Auckland can raise the rest. In terms of that other two-thirds, local government, business and philanthropic Auckland then all need to step up.
Simon Bridges. Photo / NZ Herald
Progress such as on this roof may seem small beer but would be meaningful in terms of economic impact on the city. It would also mean that when it rains in Tāmaki, no one would get wet at the tennis while the glass would certainly be more than half full.
Auckland Business Chamber is an advertising sponsor of the Herald’s Project Auckland report.
