Mood of the Boardroom: Joint funding agreements needed for Auckland

NZ Herald

26 Sep, 2016 04:00 PM4 mins to read

Simpson Grierson managing partner Kevin Jaffe.

The joint funding agreement between central government and the council for the City Rail Link (CRL) is an ideal business model for Auckland to get on and complete its infrastructure projects, says Kevin Jaffe, chairman of law firm Simpson Grierson.

The Government and Auckland Council are sharing the costs of building the city centre rail link, and Jaffe says the speed at which the deal was put together gives a lot of confidence to industry players when they see certainty around what is being planned.

The CRL arrangement, he says, has shown the government can play a key role in Auckland's development by providing direction and commitment.

"The difficulty of leaving it with local government is the process and time it takes to complete a project -- do we sell assets or do the rates go up? The outcome is that everyone sits on their hands, and one of the things that Auckland can't do is sit on its hands," he says.

"The Government has provided the impetus. It has used the right levers to directly or indirectly drive change. The actions around housing supply, the Unitary Plan concept and the City Rail Link are all initiatives that have benefited by the central and local governments working together.

"If it's inclusive and there is clear direction, then local government makes sensible decisions. It helps people avoid the failing of falling back into the bureaucratic process. The CRL is a good template for how people can work together on other infrastructure need."

Many of Auckland's infrastructure projects are massive and "if funding is not committed then there will be caution in the marketplace. The best message to the market is that there is a co-ordinated approach between central and local government."

Jaffe says living in Auckland at present has become more complex.

"The city can be quite gridlocked at times, and it has a cultural diversity that can bring some strains. But people have to live here -- it's where the growth, opportunities and jobs are.

"There is talk of steering immigration to the regions but if the jobs are not there, are people going to stay? Auckland and Christchurch have good growth; Wellington is tough and reliant on Government spending, and there is a regional gulf in economic growth.

"Take Taranaki, for instance ... it has had a double whammy with oil and gas and dairy, though dairy might come back.

"We are seeing people pushing into the Waikato and Bay of Plenty and the triangle (with Auckland) which will have some economic flow on. Maori are putting in a lot of investment in the Waikato economy."

The difficulty of leaving it with local government is the process and time it takes to complete a project -- do we sell assets or do the rates go up?

Jaffe says the water contamination problem in Havelock North is a reminder of how fragile environmental issues can be in New Zealand.

"That might get an increased focus -- the problem came pretty much out of the blue."

In his own profession, Jaffe sees a demand for more skills through digital disruption. "There is a lot of automated technology coming that will require different skills for interpreting and dealing with information."

But retaining skilled staff may have just become a little easier. Jaffe says the Brexit vote in Britain has slowed lawyers from going over "because the indications are that law firms have pulled up the ladder for recruitment".