Converting Chadwickian ‘Progress’ into Community Well-Being
On the 5th of December, members of Rotorua’s Chamber of Commerce and guests heard the Mayor describe progress achieved since her election in 2013.[1] Given the President’s immediate endorsement of her platform, the Council’s annual subsidy of about $14K pa to the Chamber, and the Chamber’s uncritical support for her in the 2016 election, it was, in style and substance, a political rally launching her re-election campaign for 2019.
Are members are interested in considering the limitations of her approach to encouraging growth, with special reference to the business sector? If not, read no more.
If so, we can begin with her justification for the “massive disruption in our thinking” she prescribed in 2013. We were, she claimed, a community worried about “how were we going to cope with the Global Financial Crisis (GFC)” and “how were we going to get growth together.” These claims are inaccurate exaggerations intended to justify her “seismic shift” approach to generating growth, and copies David Lange’s ‘crash through or crash’ tactics.
The GFC started in 2007 and had stabilised by 2009. In 2009, Rotorua suffered a minus 3.5% growth in GDP. StatsNZ has confirmed that Rotorua has averaged 1.2% growth over the decade to 2017 compared with an average of 2.0% in the national economy. The recent growth of 4.2% pa compared to national growth of 2.9% is reminiscent of 2012 when Rotorua’s GDP rose by 5%. Looking at trends instead of selecting high and low points shows that Rotorua’s economy normally tracks alongside New Zealand’s economy, sometimes slightly ahead and sometimes slightly behind largely dependent on international market forces in forestry and wood processing, tourism and agribusiness – the three largest contributors to Rotorua’s GDP.
The point here is that the Mayor cherry picked GDP points to flatter the business sector, indirectly claim credit for growth, and ‘lock in’ a presumed alliance. I doubt that Rotorua’s business owners are that gullible. Rotorua’s GDP growth is far more reflective of the dynamics of national and international trade, than the actions of a local government which has very few and quite modest economic development levers to pull.
Similarly, the most recent annual population growth estimates of 1.1% pa are down from a year ago when net immigration was measured at 1.8%. But again, two data points do not a trend make. So, it is wiser, from a business perspective, to consider the multiple causal stories behind immigration in wider contexts in order to anticipate consequences, such as housing demand and retail marketing.
Hence my pragmatic view is that business success in Rotorua is unevenly distributed within sectors and tends to come to companies that continuously update their business model and investment strategies. They do this in many ways, including through systematic analyses of competitive advantages and changing technologies, in a much wider context than our district.
Given the inadequacy of growth statistics used by the Mayor, let’s look a little more critically at her strategy of ‘seismic shifts.’ Why? Self-styled ‘visionaries’ often promise major breakthroughs that damage old institutions, like democratic decision systems, and create instability, generate inequities and then seek to excuse their increasingly tyrannical behaviours.
The first ‘seismic shift’, a renaming spree without consultations, was widely interpreted as payback to major campaign contributors without a broader economic justification. The second, cancelling decades of planning for an Easter Arterial bypass – instead of seeking a fair ruling in the Environment Court – has caused traffic congestion and almost certainly discouraged investment and economic development. A third, awarding disproportionate co-governance powers to mana whenua, has probably discouraged external investment, needlessly divided our community and enabled nepotism. There are many more examples.
Why assert the need for a “massive disruption in our thinking” when sophisticated strategic planning would have avoided these and other mistakes? One reason, I suggest, is to legitimate visionary, charismatic and autocratic leadership rather than strategic, transformational, cross-cultural and democratic leadership.
To illustrate, the Mayor’s mock-heroic determination to “manage through” unanticipated “wicked challenges” such as extreme weather events and infrastructure shortfalls, indicates a persistent belief in intuitive, exclusive, and closed decision making, despite the random and often negative outcomes. The public interest, with millions of ratepayers’ and taxpayers’ dollars at stake, demands instead access to trustworthy knowledge created by research, expert strategic analyses, and inclusionary public policy making that constantly refines public understandings and mobilizes political support.
Unfortunately, ‘managing through’ has turned out to mean ‘blundering through’, lurching from one financial disaster to another, intensified narrative control, and cynical demands that critics show greater ‘positivity’. What is there to be positive about losing $1.23M to convert the City Focus into Te Manawa, losing about $9M to convert one third of the Library into non-public medical space, losing about $14M by investing in Terax’s obsolete technology, losing $1.9M on Cyways that almost nobody uses, and losing $500K plus on the Hemo sculpture? Running up another $20M in debt last year, and planning to repeat this every year for the next five, means that Council intends ‘losing’ scarce public resources on an unsustainable scale.
The Council’s loss-making ventures to date include Crankworx, Night Market and the Farmers’ Sunday Market, all of which ignore the successful business model of the Kuirau Market that is run by volunteer business owners. Sadly, the Auditor General’s refusal to review the management and transactions of the Mutopian disaster – that amused the world – underlined the point that business incompetence, maladministration and family nepotism are not crimes. We will have to wait for corrections to come through the ballot box in October 2019.
The string of failed business ventures by Council must concern many members of the Chamber who are simultaneously mana whenua, ratepayers, parents and grandparents, and volunteers. They are as concerned about community well-being, as they are about business profits and economic development. They are equally concerned about the people, the planet and ensuring progress over generations. The point here is that Council’s business failures highlight ineffective consultations when determining public priorities, incompetent risk and business case analyses, and ad hoc project planning, costing, governance and management. If Chamber members ran their businesses like Council, they would go broke.
The Mayor’s ringing rhetoric about being ‘business-case ready’ – to exploit national funding opportunities – reveals that ‘The Rotorua Way’ is a scheme of adopting central government priorities to grab subsidies, with hooks, and running up matching debt for ratepayers to off, to achieve ‘any old growth’, instead of listening to everyone’s priorities and ‘getting on with their knitting’.
This helps explains why the RDRR would urge Chamber members, if it was given the opportunity, to join with ratepayers in boosting Council’s business skills, corporate management expertise and administrative proficiency. Recall, confidence in Council’s policy-making and policy-implementation capacities had fallen so badly by early 2018 that the RDRR decided to contribute an alternative draft spatial plan[2] and a rates review[3]. Sadly, both contributions were summarily dismissed by Council with childish invective.
Much was made by the Mayor about the ‘boldness’ of getting ‘Out of the Forest by 2019.’ This rash ‘boldness’ ignored best science in favour of one iwitocracy’s preferences, agreed to a false deadline that now can’t be met, and led to Council’s proposal to pump treated effluent into Lake Rotorua. The science is clear: a full-scale membrane bioreactor will remove about 97 per cent of phosphorous and about 90 per cent of nitrogen, which means that the discharge would add pollution to the lake and accumulate. The politics are equally clear: RDRR and Te Arawa Lakes Trust have flatly rejected the proposal, leaving Council’s co-governors Te Tatau o Te Arawa marginalized and “surprised but supportive of the consultations.”
Unfortunately, the Deputy Mayor has stated boldly that Council has “been unable to find a suitable land-based discharge alternative.” Not so. Council already has resource consent #RM16-0384 for the Rotoiti/ Rotoma scheme which has a land-based discharge system. It could be copied in the Whakarewarewa Forest as part of new resource consent application, in place of the application to discharge treated effluent into Lake Rotorua – which is soon to be contested before the Environment Court potentially at massive cost to ratepayers. Given the public benefits of not discharging treated effluent into the Lake, I suggest that Council negotiate an appropriate rental agreement with the Whakarewarewa Forest owners.
The other ‘Big Move’ driven by rash ‘boldness’ is the Lakefront Redevelopment and the Whakarewarewa Forest Development Plan. The Mayor claimed that it will “make us a destination second to none in New Zealand. And you have to be pretty smart to be business-case ready. And we are smart because we partnered in Whakarewarewa with iwi and with the operations down here and to come with up with a plan that is second to none.”
The Trump-like ‘smartness’ rhetoric aside, being ‘business-case ready’ with iwi partners is an indicator of exclusive opportunism. It is not an indicator of inclusive strategic community development that balances four sets of needs around people, profits, planet and progress.
For example, while most in our community appear to be supportive of upgrading the tourist facilities at Whakarewarewa, the RDRR’s petition uncovered substantial resistance to the Lakefront Redevelopment. While 53% originally signalled support for the concept during LTP consultations, a recent and fairly random sample of nearly 1600 indicated disapproval by a ratio of about 25: 1. The most frequent reasons people gave for signing the petition referred to the irresponsible scale of expenditure ($40m, which is about one third of Council’s annual turnover), that higher priority should be given to reopening the Museum and the Civic Centre, and that the lakefront needs cleaning and maintenance, not redevelopment.
Signatories also held it to be immoral for Council’s ‘co-governance partners’ (Pukeroa Lakefront Holdings Ltd., termed by some mana whenua as an iwitocracy) to co-plan public investment to become the main beneficiaries. New revenue streams have been speculated to include lakebed rents, arts and sports subsidies and improved sight lines for the new hotel. It was also considered to be immoral for Council to ignore the rates affordability crisis and to borrow yet more to continue ‘buying’ an exclusiove form of ‘growth’.
The final question raised by the Mayor’s re-election campaign launch at BA5 is how the limitations of her eccentric ‘growth’ strategy can be rectified. The question is a little premature for RDRR because it will not be endorsing mayoral and councillor candidates and consulting to refine its policies for another few months.
It is, however, already clear that a policy of austerity – by constraining service delivery to core services – will not satisfy imminent legislation restoring the purposes of local governments to promoting the social, economic, environmental, and cultural well-being of communities in the present and for the future.[4]
This sharp change in legislated purposes, in a context of increasingly scarce resources, implies the need for far greater coherence between Council’s purposes, strategic options (strengths, weaknesses, opportunities and threats) and district priorities. The Council’s Spatial Plan, Long-Term Plan and organisation will all need refining to maximise ‘progress’ towards developing the well-being of our community. This calls for democratic, strategic and transformational leadership to boost commitment, productivity and continuous improvement. Not idiosyncratic ‘seismic shifts’ intended to cause ‘massive disruptions in our thinking’. Businesses need stability, predictability and rational decision making from Council.
Reynold Macpherson, 11 December 2018.
[1] https://www.youtube.com/watch?v=8vJIzhA_9n0
[2] Original at https://www.rdrr.nz/wp/2017/05/30/spacial-plan-press-release/ Reports at https://www.nzherald.co.nz/rotorua-daily-post/news/article.cfm?c_id=1503438&objectid=11866583 and http://www.scoop.co.nz/stories/AK1705/S00731/alternative-spatial-plan-for-rotorua.htm
[3] Original at http://www.rdrr.nz/wp/2018/08/20/rates-review-14-august-2018/
[4] Local Government (Community Well-being) Amendment Bill, 2018, Section 10, http://www.legislation.govt.nz/bill/government/2018/0048/latest/LMS30987.html