Auckland’s plan to fight back
Should Auckland have a specific Government fund to stimulate its economy post Covid-19? The city's economic thinkers prepare a plan to create jobs beyond the downturn, Tim Murphy reports
Auckland is building a plan for economic recovery - including examining an Auckland Growth Fund similar to the Government's current provincial stimulus budget and looking at ways to expand border quarantine capacity to bring in essential workers and key investors.
The ideas form part of the actions arising from Auckland's Future Now, the emergency economic summit of 200 business, community and local government officials held last month. The organiser, Auckland Tourism, Events and Economic Development (Ateed) has distilled the day-long discussions down to five areas with significant opportunity to boost Auckland's recovery: investment attraction; workforce and skills; border management; domestic promotion; and new public funding mechanisms.
Chief executive Nick Hill said: “We are the economic engine room of New Zealand, something demonstrated by the impact around the country of Auckland being at Alert Level 3. Our business leaders don’t want to compromise safety, but they believe substantial economic activity is still possible through smart, responsive and shared management of New Zealand’s response, with our public and private sectors working together."
The agency, soon to be merged with sister Council Controlled Organisation (CCO) Regional Facilities Auckland after an external review, is setting up teams to work on the five priority areas and report to Auckland Mayor Phil Goff.
Hill believes some of the work is urgent. This week Ateed launches a new 'Auckland for Aucklanders' domestic tourism programme, funded with Tourism NZ, to boost economic activity.
Ateed had received concerted interest from potential investors since the Covid-19 crisis struck worldwide. "There's never been a better time to attract them. We are getting a lot of inquiries now. We need the investment and we have to people queueing up about foreign direct investment, people who know and want to be personally involved in the investments, bringing their relationships, supply chains and technology."
Such 'investor migrants' in the technology and creative sectors, for example looked to cities like Auckland to offer active help. "It is just 'turn up the bunsen burner' time," Hill says.
The focus for Auckland on technology investments could produce quality jobs at a time when forecasts indicated joblessness would rise and skill shortages increase.
Hill said those developing Auckland's economic response to the crisis were acutely aware of the need to prioritise public health and safety at the border and wanted to work with the Government to look at options for expanding the capacity for isolation and quarantine when appropriate.
The Labour Party announced on Friday that it would introduce a quota of 10 percent for essential workers and others coming into the isolation system, but did not extend that to expanding the total number of people in the system at any one time.
Hill, speaking before that announcement, said the Auckland's Future Now attendees felt border limitations needed to be more transparent, the process rational and capacity needed to grow.
"Nobody wants to compromise health security for economic outcomes. This was saying if we co-design a system and work with the Government there are ways of achieving better outcomes, with the highest value people coming through from an economic point of view - for example in construction, international students, the screen sector and sporting events."
The border working group wanted to "really understand what are the parameters and the rules and foster innovation there while respecting entirely the need to achieve the health objectives."
On looking at new ways of public funding for the city's needs, Hill said work had stalled on some Auckland projects during the crisis. "There's a lot of activity in Auckland that's stopped that is actually valuable to proceed with... How do we have better discussions with Wellington about that?
"We come up against the attitude that Auckland will look after itself and people say 'We need to go and help the West Coast or Hawkes Bay or somewhere else.
"But we think a growth fund for Auckland needs to be advanced quite urgently. The Provincial Growth Fund is the 'Everybody but Auckland' one," Hill said.
"The idea is there are potentially ways to provide capital into business opportunities that would not otherwise proceed, ones that may be not privately bankable and could we do something in the industries and sectors of the economy that have some kind of future."
Ateed itself had previously taken "a very small risk" to attract a major Amazon production to Auckland by providing film studio infrastructure. "If that had not been available, they would not have come," he said. "The Government says it doesn't fund infrastructure as it has the rebate system, but for a relatively small financial risk we were able to help stimulate economic activity.
"Risk capital and the need for investment is going to be critical for future jobs."
Funding from central government could target specific industries with defined benefits. "The world has moved on to understanding risk for cities. How do we deal with some of that risk that the market is not going to?"
Hill said those working on the Auckland's Future Now actions would aim to put a proposal for an Auckland Fund to the new government soon after it formed. "We need to have something reasonably concreted and compelling."
Goff said: “The private sector is ready and eager to partner with central and local government on initiatives to expand economic activity while upholding and enhancing border, testing and quarantine measures.
“What we are talking about is a new phase in the Covid-19 response. The first phase was about rapidly scaling up health, border and quarantine infrastructure needed to protect public health and contain the virus.
“Six months on from the start of the pandemic, that infrastructure is broadly in place. Now we need to look to the next phase of the response – how we continue to protect against incursion of the virus while leveraging the success of our Covid-19 response to boost economic growth and recovery, create jobs and enable our city and country to move forward.”
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