Roosting chorus: Powell resigns
Tauranga Mayor resigns and calls on Minister to sack dysfunctional council and appoint a commissioner; Govt agrees to calls for emergency benefits for stranded migrant workers and students
TLDR: Tauranga City Council Mayor Tenby Powell resigned this afternoon after months of dysfunction and infighting among councillors. Tauranga is the country’s fastest growing city and in dire need of more than $2b of infrastructure, but councillors refuse to allow the debt and rates increase needed to fund it.
The ructions are symptomatic of the pressures in our highest-growth cities, where councillors elected by older, property-owned ratepayers in the suburbs are refusing the rates increases and extra debt needed to build infrastructure to handle the fastest population growth in Aotearoa’s modern history, let alone allow apartments to be built anywhere near them. And unlike the national Parliament, councillors cannot be whipped into line by parties.
Councils and ratepayers are increasingly angry at having no control over population settings or the GST and income tax benefits from population growth, but also having to pay for at least half of the roads, all of the new pipes and services to house and clean up after all the extra people. In essence, the Beehive can pull the migration growth lever and get all the tax and economic benefits, but only has to pay for a small share of the infrastructure needed for the extra people and economic activity.
Councils are then choosing to frustrate or slow the development needed to sustain the growth, often using the RMA, and adding extra fees and hurdles to new infrastructure. It is also a financially successful status quo for property-owning ratepayers, given the lack of new infrastructure and housing fuels rampant house price growth and the tax-free capital gains that go with it. Already lax governance at council level often implodes under the pressure and council bureaucrats end up fighting a type of Kafkaesque war of attrition with development interests amid a lack of leadership and funds for development. The losers in the end are renters, and future taxpayers who have to fund inevitable downstream effects of expensive and unhealthy housing and transport systems on education levels, health levels and societal dysfunction.
Mayors and Councillors who understand the pressures and eventually allow high rates increases and more debt are often voted out at the next election by leafy suburbanites revolting over the extra cost and disruption to their suburban idyll.
Local Government and Foreign Minister Nanaia Mahuta (who also now has her hands full tiptoeing around China, America and Australia) said she today she was considering appointing a Commissioner in Tauranga.
But ultimately, the root cause of this sort of grief is the lack of an equitable long-term settlement between the Beehive and Councils over who pays for population growth and the need to improve water quality and deal with climate change. The current standoff, where neither will pay for much of it and neither trust each other, is a major reason for the fast-growing infrastructure deficits that need to be filled to increase housing supply and start dealing with climate change.
‘We’ll pluck your (five) eyes out’
Elsewhere, National backed up New Zealand’s tougher stance within Five Eyes in protest at China’s actions in Hong Kong, which has prompted a backlash from China against all Five Eyes members. Beijing is currently focused on punishing Australia, which has been louder and earlier to challenge China’s expansionary and bullying approach on the global stage, but exporters here fear the CCP’s sights may soon turn further south.
Trump’s tantrums having real-world effects
Meanwhile, the global economy is deteriorating with a split opening up between the US Treasury and US Federal Reserve about future stimulus, and growing signs Donald Trump’s refusal to acknowledge defeat and hand over to Joe Biden will cripple the response of the world’s largest economy to the latest Covid-19 shocks until late January.
In our political economy today
In the global political economy today
Signs o’ the times news
Coming up
Sat Nov 21 - National Party AGM due to vote on re-election of President Peter Goodfellow. He has confirmed he will run again.
Mon Nov 23 - Stats NZ releases Retail trade survey for Sept quarter
Weds Nov 25 - 2pm - Reserve Bank to publish six monthly Financial Stability Report (FSR) . Expected to warn of re-imposition of high LVR lending limits from May 1, 2021.
Weds Nov 25 - Opening of Parliament for 53rd term, including swearing in of new MPs
Thurs Nov 26 - Speech from the throne in Parliament outlining Government’s agenda
Dec 1 - Landlords must include a Healthy Homes statement with any renewed tenancy agreement after this date. Landlords have until July 2024 to comply with new rules on heating, insulation and dampness.
Weds Dec 9 - Parliament rises for the year.
Mon Dec 21 - Tesla joins the S&P 500
Ngā Mihi
Bernard
PS: Great thanks to Marc again for the Kākā pic.
