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How Covid-19 is smashing councils

Written By: - Date published: 9:23 am, April 26th, 2020 - 69 comments
Categories: auckland supercity, Economy, infrastructure, jobs, Keynes, local government, Politics, supercity - Tags: ,

Just as most industries in New Zealand are firing thousands of people to cut costs, local government is getting ready to do the same.

It’s not unusual to consider Councils as stable objects that can be relied upon when times are tough. But what they are doing is cutting back, firing people, cutting projects, cutting whole businesses, but trying to be helpful ,and trying to stay coherent to their citizens struggling to hang in there.

Most every Council now has a recovery or revitalisation plan. Here’s Hamilton’s example.

But at the budget level choices are so tough as to be cruel.

Our Councils collectively employs multiple tens of thousands of people, with a huge economic footprint both directly through rates and services, and through those who have holding companies, and also through their massive networks of suppliers they purchase goods and services from.

Auckland Council has just put out its “Emergency Budget” proposal.

They have had a substantial reduction in non-rates revenue caused by the recession. As the Mayor notes, “already many temp or contracted staff have been given notice.” At the same time, “Aucklanders will also want us to partner with the government to invest in the construction that the city needs, and will contribute a stimulus to growth and jobs to assist our recover.” So they’re going for a 2.5% rate increase.

To make matters worse Aucklanders are in such a water deficit that they are about to impose serious region-wide restrictions. The industrial users will be getting the hard word.

The budget implications don’t appear to have hit Tauranga Council yet. They will.

Hamilton Council is enabling community groups to apply for three months free rent.

But the big budget debate hasn’t arrived, and is being postponed until they can make sense of it.

Kapiti Council is seeking to hold rates increases at 2.6%, and is figuring if it went any lower it would really have to cut core services hard.

Wellington Council is in really serious trouble. It is so dysfunctional that the Mayor has brought in a mediator to work with the entire Council. The Mayor proposed an emergency budget yesterday, but didn’t get a majority.

But Wellington Council has internal stakeholders that know how to successfully apply the pressure – so Wellington Airport got the underwrite they needed despite Infratil its minority owner still having bulkloads of liquidity. The pressure will soon be on Wellington Council to sell out for needed cash for its wastewater disasters.

Christchurch Council gets quite a lot of income from its holding company, Christchurch City Holdings, but it’s in for a real squeeze as its airport income and port income are chopped to barely a fraction of expected. Time to empty out those cash reserves just to keep things going as they are.

Big shoutout to Mayor Dalziell for leading a relief measure that will provide a rent holiday of up to three months from May 1 to its tenants including cafes, childcare facilities, and sports clubs. They will not have to pay the money back. That’s a pretty big impact to its 1,600 tenants.

Dunedin – being one of New Zealand’s last and loveliest citywide corporations through its holding company – has just had to lay off hundreds in its stadium and events business, stopped its rail business, and that’s before it even starts in earnest on its budget.

You can almost bet that Dunedin Airport will need a bailout as well.

Half the motels across the wider Dunedin region are empty and facing ruin.

Further into the South Island, Mayor Boult of Queenstown Lakes said that the local economy there is likely to shrink by 40%, the unemployment rate there is going to climb to 25-30% of the working population, and its great breadwinner airport is still unable to furnish a Statement of Intent so that they can be adequately held to account.

It’s hit Invercargill Council revenue hard as well. They are proposing a special rates postponement. The kicker will be whether the multi-block redevelopment of Invercargill town centre continues: the stimulus v debt v rates v optics conundrum.

Even at a city level, it’s clear that our Councils as a whole have very little capacity to act as economic or social shock absorbers to the scale of crisis hitting this country. Overall they are just starting to feel the upheaval that other industries are facing.

This crisis is hitting deep into the public sector of every region, and it’s only starting.

69 comments on “How Covid-19 is smashing councils ”

  1. millsy 1

    Get ready for a bonfire of services by local councils.

    1) Libaries closed

    2) Parks and play grounds closed down and sold off

    3) Pools closed and sold

    4) Toilets closed

    5) Roads get shittier and shittier as maintenance is cut back

    6) Pensioner flats flogged off

    7) water metering introduced and and reticulation sold off

    8) Sports stadiums sold off…wait..not a bad thing

    9) Infrastructure sold off

    10) etc.

    • Stunned Mullet 1.1

      I was going to respond to each and every item…. but too much work, will just comment that your list is in general at the absurd end of what we are actually likely to see.

    • Ad 1.2

      Each council will reflect on its services case by case at their own budget time.

      But toilets are essential services for public health and safety and have been maintained throughout, roads are mostly funded by NZTA subsidy, and water reticulation shows no signs of being sold off.

      You might see a few of the stadiums mothballed for a while if Level 2 prevents major events.

      In roads you are very likely to see a significant increase in quality and service, because the government has signaled that it will be funding an absolutely massive wish lost of transport projects both large and small. That's on top of the $12b of projects it outlined in February this year.

      You'll see the detail come out close to Budget on May 8th.

      • RedBaronCV 1.2.1

        I want to see plenty of funding for what is known as "three waters" too. Doing just roads is a ridiculous lop sided investment, when there are more urgent needs nationwide to provide good water, wastewater and sewage.

      • woodart 1.2.2

        good sensible reply. also hopefully ,many councils will follow my council and continue working from home. as the majority of my local councils employees drove a desk, that has continued. but from home. join the dots, get rid of the castle and save the ratepayers big dosh on office rental(huge percentage of running a castle?)I think one of the big changes will be working from home. treasury have six hundred employees at head office, all still working , only ten in the office. huge cost savings,HUGE!

        • Sabine 1.2.2.1

          huge cost savings,HUGE!

          costs now completly rolled over to the employee, toilet paper, heating, water usage for coffee/flushing toilet/washing hands/ etc now covered by said employee.

          yes, huge huge yuge costs saving even.

          Can landlords put a clause in residential contracts : Can not work from home, due to overuse of premises, running down the carpet etc?

          Will government provide a tax write of to said employees for office space, electricity use, water use, toilet paper, coffee/milk, soap and hand towels?

          really just asking for an essential employee doing office work from home taking up a full room in a two bedroom unit. 🙂

          • woodart 1.2.2.1.1

            sabine, you sound like a problem looking for a solution. if you want to be so negative, go talk to simon. he;s looking for back luck stories to publicise.

          • Descendant Of Smith 1.2.2.1.2

            I'm waiting to hear back from my insurance company if it impacts on premiums, etc. Like if the work laptop battery catches fire will my insurance pay for repairs to the house, etc or will it be up to works insurance.

  2. Sacha 2

    This situation will force central government to address local government funding after years of dithering. Income sources beyond (politically fraught) property rates are needed to keep the services and resources that people expect in their area.

    • Michael 2.1

      What about rates? That's how councils are meant to fund their activities. They borrow from financial lenders and take dividends from companies they own when they want to avoid charging ratepayers the full amount of their activities. Now those sources appear to have dried up, they'll be back to rating again. This time, they should charge churches, universities and polytechs too. They're all revenue generators that use council services.

  3. weka 3

    "They have had a substantial reduction in non-rates revenue caused by the recession"

    Can you please break this down a bit for the people that don't have a good sense of detail of what council income is non-rates/investment and likely to be affected?

    Airports are an obvious one. And hiring out facilities. The rentals on council own property. What other kinds of things?

    • Sacha 3.1

      Fees for services, especially consenting etc.

      • weka 3.1.1

        do we know what the projected downturn in that is? Builders are going back to work this week, but presumably we don't know yet just how many projects will stall because people don't have the income to keep them running.

      • Matiri 3.1.2

        Licences – alcohol, food businesses, funerals etc

        Consents – building and alteration, subdivision etc

        Tasman District Council are really in the shit now with their exposure to the Waimea Dam debacle.

        • weka 3.1.2.1

          Re the licences, is that a big drop in monthly payments, or project annual losses?

          Yep, the big thing standing out for me is how many of the systems being used by councils are not designed to be sustainable or resilient.

        • RedBaronCV 3.1.2.2

          Oh dear has Tasman gone down thee same road that Hawkes Bay did. Hawkes bay spent millions on the Tukituki dam proposal which benefited very few and when it was knocked back sold the background stuff etc to some stakeholders for $150K.

          • Matiri 3.1.2.2.1

            Construction has already started, there is already $25 million overrun of which Tasman District Council have to cover 90%, the other 'partners' ie the irrigators have their exposure very cleverly limited!

            https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=12311424

          • New view 3.1.2.2.2

            You should elaborate on your statement. Whose bullshit were you listening to when you decided the dam would benefit very few. That’s like saying the drought in CHB doesn’t affect me because I live in Napier. We do have a severe drought at present and the dam should have been built to the benefit of ALL the people of Hawke’s Bay. In my opinion.

    • Carolyn_Nth 3.2

      I see from the Auckland Council documents linked to: there's mention or rates relief or holidays (I think especially for businesses).

      Also, a biggie – ATEED is not getting it's usual funding. ATEED is a council CCO (kind of a business-like, semi-autonomous entity), which includes a strong focus on tourism. So they are taking a hit, because tourism is taking a big hit. They have focused a lot on generating money to Auckland's economy via things like tourism. They will not get so much from targetted accommodation rates.

      https://www.aucklandnz.com/about-ateed

      • Stunned Mullet 3.2.1

        ATEED has been around 60M annual cost to Auckland ratepayers for many years – we seem to get little real return apart from bombastic pronouncements while the senior executives fly around the planet for cocktails and canapés.

        • Sacha 3.2.1.1

          Ateed are the same as every other regional development agency: they help secure direct business investment into the region. Only some of it is glamorous enough to attract media attention.

          • RedLogix 3.2.1.1.1

            Yes. Any reasonable size business looking to invest in a new region it isn't familiar with, is going to want to connect up with local govt in order to ensure it doesn't run into unforeseen problems.

            Approaching Councillors directly is fraught with opportunities for corruption, so most local govts set up organisations like ATEED to make the process a bit more arms length and transparent.

      • Ad 3.2.2

        ATEED has had several departments wiped out. For example, no one is making films for the next while, so the film promotion people are gone. ATEED are really badly hit inside.

    • Craig H 3.3

      Christchurch City Council's budget is 13% operational fees and 7% dividends and interest. Interest wouldn't be an issue currently (although we are dipping into reserves) but dividends and operational fees are going to suffer. Rates is 48% and our borrowing is already 21% of the budget, so borrowing more is not ideal although we might have to do a bit of that.

      Dividends are primarily Orion, City Care (the old Works division), Airport and Lyttelton Port – Airport will obviously take the biggest hit.

  4. RedBaronCV 4

    Please don't repeat the “Wellington City is dysfunctional mantra” -mostly that stems from the Mayor himself . There is a small group of right wing councillors and the mayor who are basically expecting to get their own way.

    The Mayor, at the beginning of covid, tried a power grab to reduce the decision making of the council to a small group of his own selection, rather than the zoom they are now using.

    The Mayor has labeled the bulk of the councillors as dysfunctional with problem behaviours when they are acting democratically and voting as they have indicated to electors. The Mayor is the cause of most of the problems but is trying blame shifting.

    The Mayor has already tried a give away of free parking for some months but been voted down by a fiscally responsible council.

    "However, my biggest challenge has been a divided council.

    "That is widely seen by our community. I am working with councillors to resolve those issues and address problem behaviours."

    https://www.stuff.co.nz/national/121076912/tensions-boil-over-as-wellington-mayor-accuses-councillors-of-putting-personal-ambitions-before-city?rm=m

    The council is -like most others- reaping the long term results of right wing policies where they have sold most other income earning assets, been dumped with extra duties by central government but no funding so are basically relying on rates .Wellington also has the earthquake damage .

    One thing they could do is chop the high end salaries – when it takes about 60-100 households to pay a CEO salary that is way out of whack- would save junior staff further down that are needed.

    • Ad 4.1

      Since the Mayor and a supportive minority is dysfunctional, then the Council is dysfunctional. The mayor of any council is supposed to unify the council so that it can ratify a budget. I agree that the Wellington mayor is a real problem.

      That Wellington Mayor should watch the movie City Hall and do the actual politics required to get a majority and pass a budget. It's a moment of massive national and regional crisis.

      Otherwise the Minister should appoint a commissioner.

      • RedBaronCV 4.1.1

        Disagree totally with appointing a commissioner. That subverts democracy and just rewards a small minority that are being totally intransigent. It plays right into their hands. It also means a commissioner may not reflect the centre left priority of the majority of those elected or may be subject to capture by the paid staff/CEO.

        There is a significant majority on the council that agree on various measures. The problem is the mayor & his cohort framing legitimate disagreement or majority votes as problem behaviours or dysfunctional and the news media amplifying this. If the Mayor can't deliver the expectations of his backers then tough. Democracy isn't meant to be bought. We don't appoint commissioners when parliament votes some in each direction.

        Frankly that mayor doesn;t seem to have a great reputation around Wellington but I don't want to get personal re this.

    • woodart 4.2

      your last paragraph is the killer, baron. responsible ceo's SHOULD be taking big haircuts, and so should many second tier managers.

  5. mickysavage 5

    Good post Ad.

    One issue Auckland Council is grappling with is debt. There is a 270% debt to income ratio that they regard as being somewhat sacrosanct and do not want to breach. This is imposed by credit rating agencies. Right now I would think that any credit rating agency with a real view of the world would regard the likes of Auckland Council as being gilt edged compared to, say any airline, airport, tourism provider, private tertiary education provider or oil company.

    They can manage through this with budget cuts and a temporary breaching of the requirement but not in an overly Kensian way.

    IMHO it is time to trash that ratio.

    • Stunned Mullet 5.1

      Agreed – Auckland council has a resident population that they can (and do) tax to their heart’s content for the foreseeable future it's not as if they are in danger of having their income disappear.

    • Carolyn_Nth 5.2

      Thanks, micky. Good point.

      As someone who just retired from working in Auckland Libraries at the end of January, I'd like to see more financial support for libraries in recognition of being a major provider of services to the community.

      The mantra in recent years has been for most Akl Council departments has been "doing more for less" resulting in increased work and stress for staff. The necessary focus has been on funding the major developments as indicated in the areas the mayor focused on during elections – transport, housing etc.

      During levels 3 & 4 libraries are closed, but e-services continue. Many staff are working from home. Some ex-colleagues have been moved from library work to working in the council's emergency welfare team – basically important essential workers.

  6. RedBaronCV 6

    BTW what's going on down in Queenstown. Apart from stories about the number of people needing on the ground relief and the high unemployment quoted I haven't seen many joined up dots. As far as I know it has always been very reliant on people from overseas with I assume the one year young person work permit. Longer term, when they can get away, I expect many will return home. Are their embassies making arrangements? If they don't go are they required to be self supporting?

    • weka 6.1

      The whole of Central Otago relies on imported labour. Some of that is what we think of traditionally as migrant workers eg people from poor countries working for less than locals will and often with poor employment conditions and rights. Some of it is people on working holidays, often up to 18 months, some of whom may also be trying for residency. Think young people here to party and working in hospo who are happy with low wages, variable hours, and picking up work as they can (a situation not tenable for locals who need consistent income to pay for housing, utilities and so on).

      It's a big problem economically, but is basically ignored because councils and central government are embedded in neoliberal ideas that businesses are the core of an economy rather than people.

      Chickens coming home to roost now. Essentially it's another extractive, non-sustainable set of industries, and the only surprise is that it's happening in 2020 rather than in another decade or so when CC really kicks in.

      Yes, afaik, people on working holidays are not eligible for welfare here. I don't have a good sense of the ones that chose to stay, but some people got stuck in the relatively fast shut down eg couldn't get from parts of the South Island to the remaining international airports that had outgoing flights.

      It's going to be interesting to see if the government extends their visas and on what basis. Given the massive unemployment rate about to hit NZ, it's hard to see the rationale. There's long been fudging of definitions of essential work that can't be done by locals when people have been applying for residency, but I would expect that to be a much tighter definition now.

      Otoh, there are some humanitarian and fairness issues involved as well.

      Regarding reliance by business, it's an ideal opportunity to create new business models that treat workers better, and prioritise locals to an extent. Put people in the centre of the problem and design out from that.

      • Matiri 6.1.1

        Some that chose to stay did so because the situation back home is worse. In my small SI town of 750 people we have 17 people here to my knowledge, mainly from the UK, hunkered down here

        • weka 6.1.1.1

          I'm guessing there are people in all sorts of different situations, and it's not going to be an easy one to remedy.

      • KJT 6.1.2

        Golriz Gahraman is looking into what can be done.

        Apparently more than a few, dumped by employers that no longer need them, without welfare, income, and/or accommodation.

        Then there are the stranded backpackers.

      • RedBaronCV 6.1.3

        From my visits down south it appeared as such. If we have lost a hospo industry then the workers on permits need to be encouraged away. The fruit picking industry that had seasonal workers coming from the Islands may be something we might like to keep in some form or another. It is short term / return home work for some of our closer neighbours and always seemed well run. Anyway the locals liked it and knitted woolly hats for them one year when it turned cold early.

        The skills shortage industry from what I have seen over the years is basically just a cheap labour/employers can't be bothered training racket. Where I have been in businesses that have generally needed someone highly skilled in a particular field they have arrived on a plane and left soon after as they are too valuable not to spread worldwide as needed.

        • weka 6.1.3.1

          That's how I see it too. Go for the low hanging fruit of people who were on working holidays and can return to a country with a reasonable standard of living. I'm good with actual migrant workers staying on as they need to but it probably should be worked out area by area. Not much point in sending those folk home if the businesses aren't ready to start treating local workers well either. Some big issues to sort out there.

      • Ian 6.1.4

        So you want us to employ locals and put people in the center of the problem and design out from there. Our farming business has been employing migrants for 12 years. No more P houses,on farm burglaries stopped and a very happy and safe workplace for everyone.Thankfully most of the guys have residents visa's or are now citizens.Maybe a better class of potential employees from the local pool may be available in the future ,but I have my doubts.

        • weka 6.1.4.1

          nope, I already said I was good with migrants keeping their jobs (and if they have residency they're already locals). Those people are people too, they are part of the centre. I'm glad that you treat your employees well. I wish that we had a general culture of that, but we don't.

          As for locals on P and nicking stuff, well if you run an economy that keeps a certain % of the population in poverty then it's a given there will be social problems.

    • Craig H 6.2

      Queenstown are looking at 40% GDP reduction and 20-25% unemployment (note that unemployment only counts NZ citizens/residents) – previous unemployment was something like 1-2%.

      Current options for migrants who didn't leave NZ and have lost their jobs are Civil Defence payments and, if necessary, housing through the temporary accommodation service (part of MBIE). Councils, consulates/embassies and charities/non-profits are also helping out.

      Government has the option to open up emergency benefits in an epidemic but has not done so to date.

      • weka 6.2.1

        Those are sobering numbers. I guess once we are in Level 3 it will be easier for people to travel to leave the country. Do we know how many non-residents are still here?

        • Craig H 6.2.1.1

          ~221,000 work visa holders, ~81,000 student visa holders as at 31 March 2020. Visitor visas isn't available on the MBIE website in the tool there, although no doubt they and Customs do know.

      • Graeme 6.2.2

        A stop to construction / development would give a 40% drop in Queenstown's GDP on it's own. So allowing for the re-alignment of tourism, there might be half, maybe more development shutting down with some core infrastructure continuing.

        We've also grown our population at 20% pa for most of this last cycle. A lot of our population are very recent arrivals from all over and have limited ties to the district, apart from a strong desire to remain here. While the decline figures are very stark they reflect a viciously cyclic economy with 20% pa growth.

        It's a very different picture to the thought of similar figures in say Gisborne, New Plymouth or Timaru where there would be deep family roots within the town. Once you get to third generation Queenstowners it's a very small town.

        • Craig H 6.2.2.1

          My calculations, from the Stats NZ tourism report for the year end September 2019, are that there are an average of just over 10,000 room nights per day in Queenstown, against a population of around 20,000, so on average, an additional 50%, or in other words, a reduction of a third of the normal daily population.

          • Graeme 6.2.2.1.1

            That's a pretty simplistic way of looking at it, we can have 80,000 visitors in town at extreme peaks. But totally unrelated to what I was saying.

            My comment related to the transient nature of most of Queenstown's residents. They are here for the boom times and will go just as quickly. The social impact will be very severe for those affected but it's not going deep into the whanu like it would in a more settled and multi-generational location like Gisborne or Timaru. The community effects will be the same as any construction town, everyone will go home when the job ends.

            Just like a large proportion of Queenstown at the end of every cycle.

    • Graeme 6.3

      Next week will be interesting in Queenstown. The lockdown has put the place into a sort of suspended animation and it all looks very secure, but closed. Totally.

      Once people can access their businesses anything could happen. It will be interesting to see which construction sites get back to work. And which ones don't. There will be some, maybe quite a few that don't, and that will get messy. I'm picking some people will have disappeared, leaving a bit of a mess, over the last five weeks. I have a friend with a longstanding concrete business, he's had a lot of calls from people looking for work, mostly people who have only been in town a couple of years. The layoffs / shutdowns have started.

      In tourism and hospo we've got at least another month, maybe two before we're open again, and an unknown period before we've got and significant visitor numbers and cashflow. There were a lot of struggling businesses in town at 23 March, this year had quietened down a lot from last year and some businesses went into this in a bad way. I can see a lot of hospo business not re-opening, and probably of parts unknown right now.

      But that's Queenstown. People flock in here through the boom times and think they are on the pigs back. The the downturn hits. Businesses go broke, dreams are shattered, and most of the recent arrivals depart, often with really septic attitudes towards place. There will be some spectacular lineups of toys for sale along the roads with really good buying if you've got the money, and in property.

      The longer term residents will have seen it all before, some many times, although maybe not as abruptly as this time, although '87 was like someone just turned the lights out, 2008 wasn't much better. They will have been ready for it, this boom has gone on for too long and wasn't going to last, it was talked about a lot amongst the real locals. These people have kept their heads down knowing that hard times will follow the good, and these are often the best times to be here, we get our Whakatipu back.

      As for the council, they will be able to catch up on a lot of work in the pipeline and have a good list of shovel ready project along with most of the development community. How much of that makes sense in a post Covid world is to be seen.

      • Ad 6.3.1

        Well observed Graeme – you really are in the Ground Zero observation seat for this crisis. Great to engage with someone with a decent memory.

        In a month why don't you do us a post on what you see happening?

      • weka 6.3.2

        what's the thinking currently about domestic tourism saving the day? I'm struggling to see many people having the spare cash to afford big holidays this year. Will accommodation costs be dropping? How would that work for a large hotel compared to a small motel?

        What’s the ski industry thinking?

        • Graeme 6.3.2.1

          The ski industry is looking at opening if they can sustain it. There's a couple of aspects to this. If they don't open people will still go up there and ski, and it has potential to turn into mayhem, which would reflect badly on NZ Ski's leases, and still involve them in controlling it. So they may as well open in a limited way for locals and try and make a go of it with 500 people on the mountain. It'd probably just be Coronet with Meadows and Rocky Gully running, and just on the good days. But it would give people somewhere to play in a controlled manner. Real Journeys would be looking at a similar scenario with the Wanaka fields, I can envision a limited opening at Treble as well.

          Local tourism is totally dependant on the economic activity that remains once we go into Level 1. If there's discretionary spend out there people will want to re-create, and that's what Whakatipu is all about. There's a domestic component in most levels of our industry from the very top $10,000 a night places down to the motor camps. The only market that's almost exclusively international is the backpacker circuit. There should be more domestic travel than normal, as there will be no outbound travel which normally is close to equating inbound international. But these aren't normal times, it will still need discretionary spending out there.

          That's not to say there won't be a lot of business failure through this, a lot are in a bad way already and lots of business models have evaporated and won't come back. As I said, the next few weeks will be interesting.

          A Trans-Tasman bubble with discretionary spend both sides, happy days big time. Same with a subdued economy, just ticking over quietly. And that would be the same in the Australian industry for both economic scenarios.

          • KJT 6.3.2.1.1

            Some of my relations, the kind that jetset around the world in their holidays, are planning on Queenstown, or Rotovegas this year.

            We are wondering, about it ourselves, if prices drop enough?

            Not having hordes of tourists around, makes some destinations much more attractive.

        • Bearded Git 6.3.2.2

          The ski industry is desperately hoping for a trans-tasman bubble. Australians are a huge chunk of the market.

          The rumours to date are that only Coronet Peak and Cardrona will open this season, and then only partially. But if the Australians start coming in big numbers (all with their Covid tracing ap on their phones-more than a million downloaded this yesterday-NZ take note) then the situation might improve.

          My guess is that Cardrona and Coronet will be fully open but TC and the Remarks will take a year off, which will piss off the real skiers who call Cardrona "flat white".

          The ski-tourers, on the other hand, will be happy to have TC to themselves.

  7. Macro 7

    Good post Ad, and a very pertinent one. The image says it all really.

    Can I offer up another example of a Council that has been through this sort of crisis in a different time, because it is a salutary lesson for all involved in Local Govt.

    I reside in Thames as many here will already know. The town has a unique past and at one time had a population of around 40,000 residents. It was up until the Depression years a thriving community, and there was massive industry including gold mining, forestry, and foundry works. The Council had borrowed heavily for infrastructure and expansion and based their borrowing on a projected rate income in the years ahead.

    And then almost everyone lost their jobs.

    With widespread unemployment the townspeople could not afford to pay their rates. The council was unable to repay their loans. In 1931 the incoming mayor was presented with a town that was bankrupt. He went to the Prime Minister of the time to explain the situation that the the town could no longer repay their debt. The town was immediately placed into administration, and a govt appointed commissioner was placed in charge. Thames remained in administration until 1947. The effects of this are still evident today with some of the civil engineering around our town still in a substandard condition (as I know to my cost from a broken shoulder through stepping in an open drain where normally there would be a gutter).

    Hopefully the downstream economic cost of this pandemic will not be the wide scale unemployment of the Depression years, and thankfully our govt has reacted positively in this regard. But, there remains the old adage "When the US sneezes, the rest of us catch a cold". And with unemployment in the States already at 26 Million and growing, the knock-on effects around the world are not looking bright.

    Sure we can hunker down and work on our own local and regional economies and we are not so dependent as we once were on the US, but we are far from reaching the end of the tunnel at this stage, and the light has been switched off . So it is anyones guess just what awaits us at the end.

    Councils need to be approaching the future with some caution, and considering the ability of their rate payers to front up, because many may not be able to do so.

    • Ad 7.1

      I did not know that Thames local government history thankyou Macro.

      This time it's the towns with the greatest exposure to tourism that are going to get really close to the edge.

      I think your Saturday markets are awesome. Soon as we can drive down there again I'll be there.

      • Macro 7.1.1

        Sadly no Saturday Market at the moment obviously. I really feel for those people. Colin and Myrtle especially. He sells the best free range eggs to be had anywhere for $6 a doz, and Myrtle supplements their pension with her wide range of hand knitted items. A really lovely couple.

        I miss our Delish Bread shop as well with its hand made sour dough bread, and am eagerly waiting to see if they will be re-opening on Tuesday.

        If ever you are down this way on a Saturday I'm occasionally to be found in the St James Church (on the other side of Pahau Street from The Junction Hotel. The Pahau brothers donated the land in the 1870's) – we open it up on Market days. It is a Category 1 Historic building, built in 1898, and is regarded as a good example of Kauri neo-gothic. It's surprising to learn that it was built in just 6 months! The first public building in NZ to be installed with electric lighting.

        The Pearce pipe organ – recently restored – is also worth a view. It still retains the manual operation of the key board and stops. Most have been modified to electrical switching. We are very fortunate to have a couple of excellent organists in the area who love to play it.

        It's the second building on the site. The first church still stands, and is still in use as a Hall A category 2 building , it will be 150 years old next year. St Georges around the corner was built in 1872 when Vicesimus Lush was the parson. His parsonage is the majestic house opposite – now "The Lamp" and a respite centre for carers.

    • Anne 7.2

      Yes good post from Ad and an interesting response from Macro.

      Now, I'm likely to get booted off this post for being "off topic" but the mention of recessions and depressions by Macro and others brings me to my current situation. So, for all the TS experts out there:

      I gotta a car, Toyota Vitz – great little cars for anyone who doesn't have kids and dogs to cart around – but it's old and frail. Will have to spend around $3000 plus in due course to keep it going. Not worth it. In the event of a deep recession just around the corner, will the cost of updating become cheaper? If so, when is it likely to happen and how much cheaper do you reckon they might be?

      I'm all ears.

      Edit: I’m talking about a used car. New car out of my price range.

    • KJT 7.3

      It was said, Thames gold, and timber, "built Auckland".

      A good example of extractive industries enriching outsiders, who packed up and run when they couldn't extract any more.

      Leaving the locals jobless, bankrupt, the environment degraded, and the resources, gone.

  8. Treetop 8

    Just as well there are no council elections this year. Councils dodged that one.

  9. decile2 9

    Councils are a mechanism for the well-heeled in a small town to organise its affairs to their advantage. If u take 3 waters management from them and give local roads to NZTA there'd be no reason to have them. This would save money and constant updating of policy documents (required by law) and would not have changed the Covid 19 response. My small council does 90% of its bizo in workshops behind closed doors and the few actual council meetings are impossible to follow because they refer to what they talked about in workshops with fuller information. There are a few minor grandstands by individuals to get in the local paper and it's time for tea and cakes. No public engagement because it isn't live-streamed. They've outsourced to Belgravia and Recreational Services yet manage to have 100 staff in a designer office to serve a pop of 25,000. Stated goals of the team include positive media coverage. I could go on…

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