We are in uncharted waters, going through something humanity has never experienced before. There have been many pandemics in history, but never has our modern, internationalised global economy and society been quarantined in this way.
As we emerge from the lockdown and partial lockdown of levels 4 and 3 we face significant potential business failure, job and income losses. There are varying estimates as to how many jobs will be lost. What we know is that businesses in tourism, hospitality, accommodation, events including arts and sports, retail and their many support businesses are, and will be, doing it particularly hard. The economy as a whole will shrink. We will be collectively worse off overall at least for some time. There is no question we face a recovery and rebuilding task, but it is one which we can and will achieve – together.
Council’s initial lockdown role was to ensure provision of essential services, like the three waters, transport, rubbish and information, and to ensure initially the orderly withdrawal, and now the reopening, of the huge range of services Council provides. It was also to work with community welfare organisations to look after the significantly increased number of people in need of accommodation or food.
During lockdown Wellington Water and its contractors have continued doing a fantastic job with operating and repairing essential services. In Wellington City the focus has been on three jobs deemed ‘essential’. The Willis Street replacement sewer was made operational and Willis Street reopened on time on 31 March. Contractors then switched to relining the critical Moa Point sewer interceptor. That is nearing completion. The third task is the complex Mount Albert tunnel sludge pipe replacement. German firm Amex Sanivar, and Kiwi firms Hadlee and Brunton, Brian Perry Civil and Stantec are doing an outstanding job. As I write the first new polyester pipe is now in place and will be operational within a few days. I expect to report more on this later this week.
Your Council is now very much focused on resuming services, and on helping our city reopen and return to life. We are focused on recovery, while not for a moment forgetting the ongoing longer term transformation of our city. Over these last few and the next few days we will resume recycling collection, public access to the landfill, and reopen a host of community services Council provides from libraries to sportsgrounds, pools to community centres.
Financially our immediate response was to allow for deferral of rates and many commercial/ community rentals, as well as freezing fees and charges, in the current quarter (April – June). Council as a business will lose up to $70 million in revenue from parking, recreation facilities, venues, rentals, airport dividend (etc) between 2019/20 and 2020/21. This is the rainy day, and we will debt-fund that, because that revenue will progressively recover. It will impact on future rates but spread over time. It is not so possible to make the case for debt funding the ongoing ‘groceries’ – that is, the Council’s operating expenditure.
Consultation is underway on the 2020/21 Annual Plan. Most importantly we are allowing for targeted rates deferral, which could allow ratepayers particularly badly affected by the Covid-19 lockdown to put off rates payments without the usual penalties.
Rates themselves will be a challenging balancing act. Our starting position for the next four years was agreed in the 2018/28 Long Term (10 year) Plan at increases of 7.1%, 6.8%, 6.2% and 7.0%, and that didn’t even include Let’s Get Wellington Moving, Civic Square/Central Library, temporary CBD libraries, additional 3 waters funding or, of course, Covid-19 impacts. We’ve started the engagement with 5.07%, achieved largely by capitalising the above specific additional costs for a year. I will be really interested in the feedback, and the ideas we get.
In my view we need to carefully examine every aspect of Council spending, both for this Annual Plan and for the Long Term Plan for next year. The Chief Executive has been tasked to do that, while elected members have agreed to make input too. In my view holding back operating costs (which need to be rates-funded in the current year) while increasing capital expenditure (the cost of which is spread over the lifetime of any given asset) is the right balance. There will certainly be a variety of views about that.
The most important actions though are all about recovery. What we expect is that only a proportion of the workforce will immediately return to downtown Wellington. We know that physical distancing rules under Level 2 will reduce the capacity of most service businesses including retail and especially hospitality. We are engaging daily with businesses and community organisations across the board. There is no substitute for that coalface intelligence to help guide our actions.
The key is drawing people back to support businesses, especially in the central city. The collective spending of a region of nearly 500,000 will have far greater impact than anything Council or even Government can do. Now is the time that our businesses need that team of 500,000 backing them.
Emerging into Level 2, it is essential we do this safely – and we all have to play our part. The Prime Minister has talked repeatedly about a ‘team of 5 million.’ This is still very much the time to be about us and about ‘we’.
‘We Wellington’ safety advice and decals are going into venues and businesses. We want our city to feel – and be – welcoming and safe.
Council and WellingtonNZ launched a new Wellington-developed contact tracing app this week, called Rippl, an essential tool for reopening safely. We are making it available free to all businesses and community organisations such as sports clubs.
We are working with hospitality, Police and transport providers to try to ensure our entertainment district reopens safely. The initial focus is on trialling closing Courtenay Place between 11pm and 4am, next Friday and Saturday night, to try to ensure safe physical distancing.
We are working with attractions and venues on plans to open up under Level 2. Obviously the significant health limitations will affect venues to different degrees, but it is exciting to be reopening.
Events are so important in drawing people to Wellington. The limitations of Level 2 are more severe than originally anticipated. (100 people outside was not expected – originally it was 500, and neither was the maximum of 10 people in a group) That means that any major relaunch is largely focused on Level 1. The expectation appears to be that this will be late winter – early spring. We are looking forward to showcasing the best of Wellington all the way through to Christmas. Winter events such as Matariki are being rethought potentially as we did Anzac commemorations. Extensive, collaborative work is being done on all of this.
Tourism clearly has to be domestic for some time, though we all hope our bubble will extend to Australia and the Pacific nations at some point. Wellington is relatively well placed as we were more domestic and Australia-focused than many parts of the country. Tourism marketing resources will focus on encouraging tourism back to Wellington when we approach Level 1.
The more we can all support our local businesses through this the better. Businesses employ us, sponsor events and organisations. This is their hour of need. That’s why through WellingtonNZ we launched the ‘Love Local’ concept, and then supported Visa Wellington on a Plate’s ‘At Yours’ initiative. WellingtonNZ has provided business advice assistance supported by NZ Trade and Enterprise to many hundreds of businesses already. WellingtonNZ offshoot Creative HQ is running a series called ‘Thrive’ to help businesses rethink their business models if required.
Sports reopening has been one of the more confusing areas. We will look forward to seeing our professional sports teams returning soon to the field or court albeit without spectators. At community level the 10-person limit obviously and frustratingly prevents team sports in particular resuming for now. The four local city councils will do all we can to make field and court space available to allow a decent winter code season for as long as is required. Our artificial turfs get heavily used during normal winter seasons, but much less during summer so that space in particular will be made available. I am also making what’s left of my Mayoral Relief Fund available particularly to help sports organisations financially impacted by Covid keep participants safe when sport resumes.
Jobs are critical. We all need constructive purpose too. Yesterday’s Budget included $1.1 billion to support employment in environmental restoration work. In recent weeks I have been talking with the Department of Conservation and others, and have written formally saying Wellington City wants to participate. The idea is to provide meaningful work while delivering an environmental legacy. We have been on a remarkable environmental restoration journey since 1992, and this would allow us together to supercharge the next steps.
Construction work is also important in keeping jobs. It is also critical in rediscovering our civic confidence. Absolutely Positively Wellington worked because it was built on the substance of Te Papa, the Stadium, a fantastic downtown hospitality economy and nation-leading events programme.
Construction is back underway on Council’s Town Hall, St James, and Convention and Exhibition Centre projects. We’re supporting heritage restoration and strengthening projects including St John’s and Wesley churches and the Athenic, National Bank and Hooson’s buildings at the corner of Tory and Courtenay Place. Karori’s Events Centre fitout is to finally be completed. We’re also investing in resilience, for example strengthening a major road wall on Grant Road, while the complex Ngaio Gorge project is about to start. We will discuss a paper on the Omaroro Reservoir next week.
We have sought Government support for a wide range of shovel-ready projects. This includes, with our GWRC and NZTA partners, accelerating some $350 million of transformative safety, walking, cycling and bus priority projects. This week we heard submissions on safer (30kph) speed limits for the central city by Zoom. We want to get things done! Submissions on the citywide Parking Policy close at the same time as the Annual Plan (8 June). Work is also proceeding at pace on the business cases for State Highway and Mass Transit investment. Among the shovel-ready projects we’ve also sought support for core water infrastructure investment and building projects like Te Ngakau Civic Square. On 27 May Council will discuss a public paper (at last I hear many people say!) on our Central Library. You’ll be able to look at the engineering information, and think about the opportunities for a 21st Century library, and the wider context of Civic Square.
Those are just some of the multitude of areas of work done in this Covid-19 environment to help our city get through, recover, and rebuild. There will be some tough times ahead, but we will get through, and if we learn the lessons from lockdown, we will come out kinder, stronger and better.
He waka eke noa.
Originally published in Wellington Scoop, 16 May 2020