Janine Baalbergen is editor of the Horowhenua Chronicle
OPINION
Is Horowhenua losing its edge? Economist Shamubeel Eaqub suggested we may have, or else are about to, though he said he believed geography spells destiny, at least for Horowhenua.
He was in Horowhenua again last week to speak to business leaders at the Business After Five function, organised by the Horowhenua Company.
“People move here and commute to Wellington because this is a great and affordable place to live. Do not lose that edge.”
For the first time in decades, Horowhenua is growing again and at unprecedented speeds. We are not keeping up with demand for houses and infrastructure and other services to deal with the growth, he said.
He said the exciting thing is not the coming of the expressway, but how we prepare for what happens after that. He suggested we are in no way ready to cope with the influx of business and people.
“O2NL will reshape the region, which will naturally become part of Wellington more and more, moving away from ties with Palmerston North. What happens in Wellington is important for Horowhenua.”
He estimates around 4000 people are currently commuting to Wellington for work from Horowhenua, so the current loss of jobs in Wellington will affect us sooner rather than later.
“You also do not want import urban problems, such as high house prices.”
The growth benefits from this region are going to Wellington, he warned. “Most local councils are at the brink of their borrowing power. The current system is designed to fail. While setting up a household in Horowhenua would have cost $30,000 a few years ago, now that is $107,000,” he said.
Good Government, rules and culture as well as geography cause prosperity, according to Eaqub.
He said new residents want a place to call home, and with that, they are looking for transport options out of town and affordable quality of life. “The council needs to enable development and ensure infrastructure needs are met.
“There is room for optimism for Horowhenua as long as it makes the right decisions dealing with this.”
When it comes to cost of living he said costs for shipping have gone up a lot, and so have oil prices and inventories. “Container costs went up from $2000 to $11,000 during Covid. That is also about insurance and security given the piracy that is happening on the oceans.?
Did you know New Zealand only has diesel for a day available on land?
“Did you know New Zealand only has diesel for a day available on land? The rest is on its way, somewhere.
“There is also a big slump in ships travelling through the Suez Canal. Going around the Cape of Good Hope, at the bottom of Africa, is pushing prices up and it takes much longer.”
He said New Zealand is at the end of the global supply chain and during the pandemic he noticed that a lot of ships were diverted away from us.
“China is experiencing a big downturn, so is importing less, including from New Zealand, but during Covid our wine exports to the USA skyrocketed.”
He said he sees Korea as a good barometer for the global economy and their trading is going up right now.
“Inflation is already going down here and by the end of the year the interest rates may come down too, but this all takes time.”
New Zealand also has an insurance problem. Until last year natural disaster loss to GDP (Gross Domestic Product) was 0.1 per cent. Last year it was 1 per cent, a significant increase. “Some regions in the USA cannot get flood insurance anymore, so we may have to rethink our insurances.”
He said the national supply chain tends to favour cities, “because economies of scale matter”.
He said a recent survey showed two thirds of us buy fresh fruit and vegetables now, as compared to 80 per cent some years ago. “Wages are not keeping tread with the cost of living now and catching up will be very hard to do.”
He said there is also plenty of armed conflict around the world. “The world today is at its most geopolitically active since World War II and all the lessons learnt during the world wars seem to have been forgotten.
“Years of underinvestment are now catching up with us,” Eaqub said.
“Since the early 1980s successive governments, including local councils, which wanted to keep rates low, have not invested in critical infrastructure and catching up is a very long-term project and very costly too.”
He said success for Horowhenua is not the jobs that are here, but thanks to people with jobs that choose to live here and commute.
