Auckland's Growth and the Government's Response

Hon. Judith Tizard

Minister Assisting the Prime Minister on Auckland Issues
Associate Minister of Transport
MP for Auckland Central

'Auckland's Growth and the Government's Response'

A speech to the Auckland Branch of the New Zealand Planning Institute and Guests marking the

World Town Planning Day Celebrations

Tuesday the 14th of November
Aotea Centre
Auckland.

Thank you for the opportunity to speak to you this evening.

Your conference is addressing one of New Zealand's major concerns - the future of our cities.

Cities are sources of ideas and innovation (not least in the artistic and creative sectors) and as a result, productivity and more and better-paid jobs. They attract migrants and a wide diversity of cultures, as well as investment from overseas. But high rates of growth in our cities can bring problems as well as opportunities for the future.

It is highly appropriate that this conference is being held in the centre of New Zealand's largest urban area, where all our current social and economic problems come into their sharpest focus. Today I will look briefly at the importance of Auckland to the national economy before discussing the problems facing the city and identifying what this Government is doing to tackle them, focussing particularly on transport and housing.

As planners, as most of you are, you are highly familiar with the challenges presented in Auckland and elsewhere by the often contrasting demands of development and growth on the one hand, and civic, social and environmental amenity on the other. In your work you are often having to find out the way that the built landscape can serve several functions and secure broad-based community support. In the process you grapple with a number of factors, not least the contrasting ideals people have for their communities and shared space. I know it to be at times trying but important work, and I would like to acknowledge tonight the work and the position of responsibility held by the planning profession.

Auckland and the New Zealand Economy

The Government sees Auckland as a key cog in NZ's economic machine - the statistics show it is a large contributor to the economy. Auckland City is home to around 10% of NZ's population, but in the year ended March 1999 it contributed around 17% of NZ's GDP.

The City's residents are also, on average, more highly paid and more highly educated that the average New Zealander. The average weekly wage for Auckland City residents was $757 as at May 1999, compared with $682 for NZ. The 1996 Census showed 19% of Auckland City residents had a university degree, compared with 9.5% nationally.

A 1997 survey by Deloitte & Touche Consulting Group found 96 of the top 200 businesses in NZ were located in Auckland. Many are company head offices and are involved in a wide range of industries across the country.

Auckland's strong presence in the service sector should put it in a good place to benefit from the adoption of new technologies by NZ firms - the e-commerce revolution. Transport and communications accounts for over 13% of the City's GDP and over 7% of the City's employment. Business and financial services account for over 24% of the City's GDP and over 23% of the City's employment.

So we can be in no doubt both of the importance of Auckland to the national economy and the benefits to the country as a whole of tackling and solving the problems faced by Auckland.

The problems of transport in Auckland today
The transport system in our city has become a major brake on economic growth - and it is economic growth, as much as anything else, that will help us to tackle the major social issues that we are all concerned about.
People often talk of "the" Auckland transport problem - yet, in reality, there is a series of transport problems. Drivers, passengers on public transport, cyclists, pedestrians - we all have different experiences. But in brief we can identify problems as
· congestion - the steady increase in journey times on our motorway and main road system is a growing source of deep frustration to people travelling to work; to parents taking their children to and from school; and to businesses for whom good road transport is fundamental to their financial success.

· safety - there have been substantial improvements in recent years, but no-one can feel that we have done all that we could do, including for pedestrians or cyclists, for whom improvements wold eb relatively inexpensive.

· rundown public transport - the argument that public transport is vital to improving accessibility to jobs and social opportunity in the Auckland Region is difficult promote when using public transport means you may have to make several slow bus journeys to get from where you live to where you work.

· environmental damage air, water and land resources in and around Auckland are being affected by the transport system, with runoff from the road system increasingly polluting our waterways and over 30% of the city's existing land area is already in use for transport purposes.

Auckland and the New Zealand infrastructure problem
One study estimates that Auckland's traffic congestion alone costs New Zealanders more than $800 million per year. I stress the importance of this cost, because it is one that every New Zealander shares. The transport network links us all and we all pay the costs for it.

If you live in Invercargill or Palmerston North, just as if you live in Waitakere or Manukau, you will probably never see a transport bill that includes an amount for "congestion in Auckland". Yet, such is the interlinked nature of our economy and its transport system that, wherever you live, you will be paying for some part of those costs.

Transport infrastructure problems are far from confined to Auckland. Many regional road networks are having difficulty keeping pace with the financial and operational demands of a growing and changing economy and society. The growth of dairying in Southland, forestry in Marlborough or on the East Coast and tourism in Coromandel or Northland put pressures on our transport system that local communities struggle to meet.
We have to do better in managing our total transport system. We must build a sustainable transport system. This is in which
· passengers, workers and the communities can expect a high level of personal safety.

· the needs of its customers, are meet in a timely and cost effective manner

· and manages its impacts on our air, water and land resources with care

· investors and shareholders can expect a reasonable return on their investments, through providing innovative services and infrastructure in the right place at the right time at the right price, while providing rewarding employment for their employees

· provides opportunities for all citizens.

None of these goals can exist in isolation. To reach our goal of a sustainable transport system, we must carefully balance the interests of safety, customer needs, investment, the environment and social equity.

The challenges of sustainability are universal, but felt particularly keenly than in Auckland. The leaders of Auckland have a considerable responsibility in driving the response to those challenges - we must have an Auckland solution to an Auckland problem. But central government has the considerable responsibility of developing a policy framework of assistance to Auckland's leaders in their work.

The Government has made good progress in its work in that regard.
Short term and long term

Changing transport policy is not a rapid business.

Many of the decisions that led to the system that we have today - and its problems - were made as much as fifty or more years ago. We cannot turn the clock back - we have to ally our strategic approach to pragmatic responses to the situation as we confront it now.

The Government has therefore adopted a two-stage approach to the development of transport policy.

First we have taken a number of short term measures to begin the process of change in key areas such as road safety, the environment and passenger transport.

Secondly, we have begun a programme of consultation with communities and stakeholders to identify and implement a long term approach to addressing the problems I identified earlier.

It is important if we are to meet our social, economic and environmental goals that more of us use public transport.

Currently New Zealand is second only to the United States in terms of cars per person. Yet we often forget that many New Zealanders rely for social and economic opportunity on a public transport system that has been slowly running down for the last fifty years.

The Government has already announced a series of immediate measures to begin the improvement of public transport in Auckland and New Zealand.

The artificial limit on public transport spending imposed by the last Government has been abolished.

Beginning this month we have put in place a new system of patronage funding that pays money to Regional Councils in direct proportion to the number of passengers using public transport in their region. Peak hour trips will attract a higher level of funding

We estimate that if Regional Councils seize these opportunities passenger transport funding from the National Roads Fund will rise from $46 million last year to $93 million in 2003, with large benefits in terms of accessibility in our major cities.

This total includes the major share of the funding for the North Shore Busway, currently the largest single passenger transport project in New Zealand, which will provide greatly improved passenger transport services across the Auckland region.

Regional Councils, in close co-operation with City and District Councils can now get on with developing passenger transport services that attract more passengers, and begin to tackle some of the social, environmental and safety problems that our urban transport systems impose on our cities.

I look forward particularly to the progress in Auckland that results, and am sure the Regional Council has a wide range of initiatives in store that should demonstrate to Aucklanders the potential of a renewed emphasis on public transport. We need to convince people of the merits of public transport.

I envisage a future for public transport in Auckland in which people know that a wide variety of destinations can be reached from a number of key hubs at which quick connections and comfortable facilities are provided. Auckland City Council is well-advanced in its development of the concept of a Downtown termnal, and other potential hubs could be New Lynn, Panmure, Henderson, Mt. Eden, Manukau City, and Takapuna.

But for that future to come about, we need the right policy framework for the longer term.

The longer term solution

When it took office, the Government had already recognised that we needed to take a long hard look at the whole issue of land transport infrastructure management and investment. We saw a number of fundamental problems:

· We need to make sure that we are getting value for money from existing transport infrastructure before we build expensive new systems.

· We need to ensure that we get transport investment going to the place that it is needed when it is needed.

· We need to ensure that safety is built in to new infrastructure investment, and that existing systems are redeveloped to improve safety.

· We need to make sure that transport systems have a minimal impact on the environment.

· We need to ensure that future investments are innovative and allow for the rapid rate of technology change now under way in land transport systems

· We have to make sure that transport systems offer access to social and economic opportunities for all New Zealanders

Infrastructure solutions

The Government's manifesto set out a number of areas for land transport management and investment that we wanted to explore, and discussions between Mark Gosche and myself with local government and other groups have raised a number of other related issues.

From those discussions we believe that there is a general consensus that we need to change the way we manage and fund our land transport system. Many people believe that we need to find better ways of charging for road use, and that some changes to management structures are desirable.

An extensive development programme in consultation with local government, community groups and stakeholders is covering three fundamental issues:

· We need to put in place systems to manage the external impacts of the road system, including improving safety and environmental management and our public transport system. In doing this, we need to make it clear to decision makers that road corridors are for a wide variety of users, including pedestrians and cyclists. They, just as much as motorists, have a right to use road corridors in safety.

· Secondly, we need to examine the way in which we charge for roads. New technology now enables us to consider a wider range of options within the present Road User Charges system. We also need to consider whether the present funding system can be made simpler, while retaining its basic principle of cost effectiveness.

· Last, we also need to consider whether our present management structures can be improved in a pragmatic and gradual way, without generating any more of the upheavals that have characterised reforms in the past.

We are making good progress towards measures that should enable us to make sensible investment and management decisions, improve safety for all modes of transport, reduce the environmental impacts of the transport system, and maximise accessibility to opportunity for all New Zealanders.

The Government is on track to make decisions on a wide range of land transport issues soon. Those changes that need legislation will then be addressed in a Bill that we plan to introduce into Parliament next year.

There are no quick fixes in dealing with transport problems. Change has to be carefully managed, and has to have public support. But this Government is determined to put in place a range of measures that will allow Auckland to begin to solve its transport problems.

Housing Affordability and Availability in Auckland

Another key concern for Aucklanders, and one closely related to how we tackle the problems of transport, is housing.

The population of Auckland is growing rapidly, to the point where geographical limits are being reached. A process of urban intensification is underway, posing questions of how more people are going to move around the same space. New housing developments are in several cases quite deliberately being located next to sources of public transport.

Just as we have to confront problems with the Auckland transport system in order to meet our social and economic objectives, we have confront both the legacy of the past and the challenges of the future with regard to housing.

Housing is not a discretionary purchase, and housing affordability not just an economic problem. When housing is priced out of the reach of families, overcrowding and poor standards result. With overcrowding comes health problems. We have seen the rise of meningococcal and infectious diseases linked to overcrowding.

There are also wider social consequences. Families without secure affordable housing move house more than they would otherwise. This has an impact on the children's achievement at school, and can start another chain of disadvantage. It has added to the contribution to Auckland's congestion made by parents transporting their children across town to school. I have seen these circumstances time after time in my own electorate of Auckland Central.

Auckland's Affordability Problems
For Auckland, the problem of housing affordability has been especially acute. Between the census of 1991 and the census of 1996, median incomes in the Auckland region rose 14.6%. For the rest of New Zealand the increase was 8.2%.

In the same period, average house prices in Auckland increased 47.6%. For the rest of New Zealand the increase was half of that: 24.7%.

For some people, these figures represent a handy capital gain. For others, such as low-income renters, the consequences were much less welcome. In the 1990s, many people in the Auckland region were spending an increasing proportion of their incomes on rent. For the poorest, that could only mean that rent took money that was needed for food, clothing and other essentials.

Within those overall figures there are some important variations. Demographic trends among the Maori and Pacific Islands populations are significantly different from those for Pakeha. These trends will have a significant impact on the society we are talking about in the next few decades. Much of that impact will 2041.

Severe pressures on the affordability of housing are likely to be exerted in the future. It is likely that population increase combined with falling average household size will mean that the Auckland region will need over 165,000 new dwellings between 1996 and 2016. Another 168,000 will be needed by 2041.

That means the number of households will nearly double over the next 40 years.

So, notwithstanding the current subdued state of the housing market in Auckland the affordability of housing has been a decided issue in Auckland over the last decade and promises to be so over comings decade unless there is provision for quality low-cost housing. The threat posed by high housing costs to ability of Auckland citizens to take advantage of what the region has to offer is a considerable one.

The Government's Housing Policy
The government has In its housing policy given the highest priority to income-related rents for tenants of state houses, with the accomodation supplement continuing for those renting privately. When income-related rents come into effect, demand for state housing is expected to increase. We expect demand to increase in Auckland particularly because of the high cost of housing for low-income people in our city, and must make efforts to meet that demand.

The previous government sold off 11,000 houses, reducing the stock from around 70,000 to about 59,000. It is therefore more difficult to meet the demand with fewer houses. Compounding the problem, the existing stock needs serious maintenance, refurbishing and upgrading. The average age of Housing New Zealand properties is now over 35 years.

We will be unlikely to hang on to properties that remain vacant in areas of low demand, however this is likely to be in parts of New Zealand where property values are lower. The proceeds of these sales will be used to acquire properties in areas of greater demand like Auckland. The value of property in Auckland is far greater than areas where houses are untenanted. We cannot therefore expect to replace houses on a one for one basis. But we will be taking opportunties where we can to meet demand for state housing in Auckland.

The Government is also exploring new and innovative policies to assist low-income New Zealanders into home-ownership, and has the Special Housing Action Zones policy underway in Auckland.

A strategy on Maori housing is being developed that aims to give whanau better opportunities to own their own homes. Of further relevance to Auckland, a housing strategy for Pacific peoples is also being developed. I should point out that more than three-quarters of all Pacific people live in areas of worst housing affordability.

Conclusion

I have been talking tonight about the some of the actions the Government is taking across portfolios of particular relevance to the growing city of Auckland. The growth of Auckland is a recognition of the region's dynamism and the huge opportunities if offers. We are dealing in several senses with the problems and burdens of Auckland's success.

But as Auckland continues to grow we need ensure that the basis of its continued prosperity is secure, that all its citizens enjoy its social and economic opportunities, ensure that the region continues to offer a pleasant quality of life for its inhabitants. In order to do this we need to engage positively and in cooperation over vital issues such as transport and housing.

I believe that the election of the Labour-Alliance Government has seen a marked shift away from central government promoting and imposing free-market measures to it working constructively, intelligently and pragmatically with local governments and groups. This has been in the context of our recognition that Auckland can no longer grow on the basis of old assumptions about how people are housed and travel. Other approaches to urban planning and management have to be tried. Central government certainly doesn't have all the answers in those regard, but needs to be a willing partner.

You are in your work intimately involved in that absorbing and interesting process. I look to further work with you as the region of Auckland continues to progress.