Dunedin and the southern region’s business future

THE CLIMATE
(we’re sluggish, indebted and unproductive, working long hours for unremarkable results, there’s little or no ability to pay all our living expenses even if we can afford a mortgage — few Dunedin businesses are on the global map, very few of our citizens invest in ‘research and development’ or know what export truly involves — there is splendid isolation, no cohesion, and a striking absence of astute regional leadership)

Our economy is drifting in very dangerous shoals. The only plausible avenue to sustained growth will be export-led. The high value of the dollar precludes this. Unless we act now the painful process of rebalancing our economy will be forced upon us at some future stage. At that point the pain will be even greater.

### ODT Online Fri, 4 May 2012
Opinion
Boosting export sector only way out of malaise
By Peter Lyons
We are living in a world of zombie economies including our own. These economies are characterised by high debt levels, stagnant or shrinking economies and policies of austerity that offer no solution. Finance Minister Bill English is promising a budget of little hope. He offers austerity almost with relish. It fits his ideological bent towards smaller government. A further unexpected $1 billion budget shortfall precludes any positive spending initiatives. Meanwhile the governor of the Reserve Bank wrings his hands over the high New Zealand dollar which is shredding our export sector. He has maintained this ineffective stance for a number of years.

Positive economic management appears beyond the scope of our policy makers.

New Zealand has been in or on the verge of recession since 2007. Most of the Western world has followed a similar path.
Read more

****

LOCAL SENSELESSNESS
(where the ad hoc stadium spend has crippled the council, all the time missing the bigger outlook of how to serve the South Island’s contribution to export-led economic recovery — oh hey, the council’s junior bureaucrats and mayor say let’s play dress-ups with a few central city warehouses and six suburban amenity centres — the Dunedin City Council has to undergo major attitudinal and structural change)

Apart from the ongoing clusters, there has never seemed to be any straightforward strategy to push economic growth in the city or the region.

### ODT Online Sat, 5 May 2012
Planning for future of Dunedin Inc
By Dene Mackenzie
Dunedin’s economic development draft strategy will be released on Monday. For the first time, the document will be signed off by stakeholders representing diverse areas of the city. There are several things business editor Dene Mackenzie hopes will be included in the new 10-year plan. For about 25 years, Dunedin’s economic strategy has doddered along. Past plans have included Dunedin City Council officers travelling to visit large-scale manufacturing enterprises in a bid to persuade them to establish themselves within the city boundaries, through to catchy slogans and billboards at airports. During that time, the city has seen its large-scale manufacturing base shrink with the loss of thousands of jobs.

Reviews of city council funding strategies need to be undertaken and the strategy must be inclusive of the needs of the business community. It seems that, often, funding decisions are applied on an ad hoc basis, when better value could be extracted from ratepayer funds.

More than 90% of Dunedin businesses are said to have no intention of exporting in the future and the city captured only 2.5% of the country’s recent migrants. That must change for the city to grow and prosper.
Read more

Posted by Elizabeth Kerr

39 Comments

Filed under Architecture, Business, Construction, DCC, Design, Economics, Geography, Heritage, Innovation, Media, People, Politics, Project management, Property, Site, Stadiums, Town planning, Urban design

39 responses to “Dunedin and the southern region’s business future

  1. shiya

    Loved this article from Mackenzie. Lol, he actually writes about Dunedin’s economic sustainability without mentioning the massive spend on the Stadium. The biggest in the history of the city. Not mentioned. Why? Too awkward? Too glaringly obvious that this spend has no hope of bringing us anything but debt for the public and a profit for a few lucky ones? Mackenzie not even glancingly referring to the stadium debt speaks louder than words.

    • Elizabeth

      http://m.stuff.co.nz/business/industries/6867308/Auckland-Council-reviews-business-boards

      [Auckland Council] “The move for an external assessment follows a council committee’s review of its governance relationship with the CCOs, undertaken nine months after the new amalgamated super city was formed.

      This paid particular attention to a report which was highly critical of the Dunedin City Council’s governance of Dunedin City Holdings.

      “[Auckland Council] officers note a recently released report on Dunedin City Council and its governance of Dunedin City Holdings Ltd [DCHL] and its subsidiaries, which illustrates the consequences of poor governance and a lack of clarity about roles,” the committee’s report said.”

      • Elizabeth

        The story concludes:

        “The report reveals a dysfunctional situation, which has allowed DCHL to meet council’s increased demands for dividends from borrowing rather than profits. While none of the major issues identified in the report, such as poor recruitment policies and ambiguous statement of intent goals, are applicable to the Auckland Council and its CCOs, the report highlights the importance of sound governance and practice.”

        Classic. DCC and DCHL are now ‘the measure’, clearly not as the business standard any council would hope to attain, least of all the Super city. I wonder how Cull’s mentor Stuart McLauchlan feels about this. We’re not fixed yet.

  2. Hype O'Thermia

    Dene Mackenzie writes about identity, “Dunedin has an identity crisis.
    Auckland is the biggest city, Wellington the capital city and Christchurch quake-damaged…”.

    Looks like we’ve got an identity, so no worries: Dunedin the basket-case-est city.

    Bring on the sign-writers: “Welcome to Dunedin……”

  3. shiya

    Yes, McLauchlan who is itching to sell off our assets because with his fabulous big boy business brain he thinks that is the smart way to go; he told us all this at the public meeting arguing for Key’s sell off of the country’s assets. I somehow think this will be the plan once our naughty debt situation (that somehow has occurred) makes it the ‘only way’ for the city ‘moving forward’.

  4. Anonymous

    That flawed philosophy is just corporate opportunity to make the rich richer.

    I’ve always suspected Stewie took losing at Monopoly way too seriously as a child. Companies register is off-line for maintenance presently but here’s a list from April 2010 to play Pick Up Stakeholders with: https://dunedinstadium.wordpress.com/2010/04/21/sh88-realignment-update/#comment-10948.

    These boys might as well just buy themselves a council. It will save so much time playing their little games emptying city finances, growing debt and waiting to pinch the assets. Everyone already knows what they are doing anyway (unlike the Sun’s suggestion we’re all oblivious based on a lack of public outcry – which, by the way, there is a well established reason WHY many people have stopped crying out for help in this city).

    So, oh well, back to owning a council. At least it would hurry up their pissing competition to fill Farry’s bucket and maybe, just maybe, someone will put a foot wrong and the whole damn lot of them slip up in it.

    • Elizabeth

      More important than new pavers and protrusions, businesses talking with each other!

      ### ODT Online Mon, 7 May 2012
      New South Dunedin business hub a hit
      By Sally Rae
      A business hub has been launched in South Dunedin. Westpac local business manager Mike Maguire, who is based in the bank’s South Dunedin branch, looks after a portfolio of business customers, with the majority being in the South Dunedin area. He got thinking about being in the “shoes” of business owners in the area – some were doing well, others were struggling – and the idea of the Westpac Southern Business Hub was formed.
      Read more

    • Elizabeth

      oh fudge, from the STEAKHOLDERS, well here we go to nowhere D:

      ### radionz.co.nz Updated 20 minutes ago
      Dunedin aims for 10,000 new jobs in decade
      Large Dunedin employers say the South Island city’s future lies in hundreds of new small businesses. A draft economic development plan launched on Monday aims to create 10,000 jobs and lift incomes by $10,000 over a decade. The plan is a rare partnership between the Dunedin City Council, university, polytechnic and business groups and says job growth of 2% a year could come from the city’s strongest sectors of education, health and information technology. The plan says Dunedin could become one of the world’s great little cities – but it is not exporting enough and relies heavily on central government spending and welfare. The jobs and money would come from new small and medium-sized businesses, innovation, education and tourism. John Scandrett, chief executive of the Otago Southland Employers’ Association, says Dunedin must put the large-scale manufacturing of the past behind it, because new jobs will be found mainly in smaller businesses. Mr Scandrett says the loss of skilled people to Australia must be reversed, and people coming in with new skills must be found opportunities that can build Dunedin’s economy. The University of Otago says it will not grow as fast as it has in the past, but its students will stay on and create new opportunities if they are linked into the city more deliberately. Otago Chamber of Commerce chairman Peter McIntyre is confident the plan can succeed.
      Link

      Listen to report on Checkpoint

      • Elizabeth

        Dunedin City Council
        Media Release
        Economic Development Strategy Maps Dunedin’s Future

        This item was published on 07 May 2012.

        A draft Economic Development Strategy for Dunedin will be presented to the Dunedin City Council on 14 May.

        The document advocates a range of new projects to spark job and income growth and has been developed collaboratively by the Otago Chamber of Commerce, Otago Southland Employers’ Association, University of Otago, Otago Polytechnic and the Dunedin City Council. It analyses Dunedin’s economy and its strengths and challenges, and then goes on to propose five themes for future efforts.

        Chair of the strategy steering group, Chris Staynes, says that, if the Council agrees the draft Strategy is acceptable for consultation, there will be a concerted effort to get public feedback.

        “How we can help create job opportunities and increase residents’ incomes is a crucial issue”, he said. “We have looked deeply at how our economy has evolved and many ideas have been gathered but, to refine the Strategy further, we want to hear where people think the city as a whole should put its efforts in future.”

        Stephen Knuckey, an experienced economist, has been working on the draft Strategy and has been impressed by both the economic data and consultation that Dunedin has already undertaken. Significant research and community input has been gathered with direct or indirect input from more than 5,000 people. International city development consultant, Greg Clark, has also contributed to the strategy.

        A website, Twitter feeds, LinkedIn groups and other tools have been developed to help engage with the public, along with the more traditional means like access to the document at Libraries and DCC Customer Services Centres. The steering group have also offered to present the Strategy to interested organisations. The commencement of formal public consultation will be confirmed at the Council’s meeting on 14 May.

        For more information, please contact:

        Cr Chris Staynes, Dunedin City Council: 021 523 682
        David Thomson, University of Otago: 479 7716
        Phil Ker, Otago Polytechnic: 021 448259
        John Scandrett. Employers Otago Southland: 456 1801
        John Christie, The Otago Chamber of Commerce: 479 0181

        DCC Link

  5. Anonymous

    Maybe they could sell the stadium to a group of Shanghai businessmen. I’d vote for that.

  6. Peter

    How about the Chinese Garden?! I know it sounds a bit like selling oil to Saudi Arabia, but you can never discount the sentimentality of somewhere familiar, away from home, that’s your own. This would save us over $500k a year.

    • Elizabeth

      Question: Have the same old players got the nous to see it through, having stagnated for so long ?

      ### ODT Online Tue, 8 May 2012
      Dunedin looks to China for economic growth
      By Chris Morris
      Dunedin businesses will be encouraged to seek their fortunes in China as part of a new 10-year economic plan designed to turn the Edinburgh of the South into one of the world’s great small cities. The strategy, unveiled at the Dunedin Public Art Gallery yesterday, followed two years of consultation and collaboration between the Dunedin City Council, the University of Otago, the Otago Polytechnic, the Otago Southland Employers’ Association and the Otago Chamber of Commerce. The strategy outlined initiatives designed to create 10,000 jobs, and boost individual incomes by $10,000 per annum, over the next decade. It was also expected to lead to more than $50 million in spending likely to boost the city’s fortunes – coming from existing council budgets, outside investment and other sources – over the same period.
      Read more

      The draft economic plan would be presented to the next full council meeting on May 14, with councillors asked to approve it for public consultation over the next month.

  7. Hype O'Thermia

    I predict any successes will result from initiatives from people WITH initiative like Mike Maguire from Westpac in South Dunedin http://www.odt.co.nz/news/business/208226/new-south-dunedin-business-hub-hit and the bunch of people who do internet work – program and systems development’n’stuff, often tucked away in their ones and twos, many working at home. They got together to provide Makerspace with their own money because they saw a need for it.

    • Elizabeth

      ### ODT Online Tue, 8 May 2012
      Sale could hit 75 other firms: Labour
      By Rosie Manins
      Dunedin’s manufacturing industry could wind down if the Hillside Workshops are sold by KiwiRail, Labour MP David Cunliffe says. The party’s economic development and associate finance spokesman toured the South Dunedin business with local Labour MP Clare Curran yesterday morning. He told media the sale, closure or scaling down of Hillside could adversely affect about 75 other Dunedin-based companies involved in the manufacturing and engineering trades.
      Read more

      • Elizabeth

        ### guardian.co.uk Thursday 3 May 2012 20.00 BST
        Why it’s green growth or nothing
        By Chris Huhne
        High energy prices are here to stay and frugality with our resources is our only hope for a sustainable future. Much of our economic debate implies we must choose between going green or going for growth. That view may be the opposite of the truth. There is now hard evidence that the real choice is between green growth or no growth at all. For the first time in the postwar period, energy and other commodity prices are unusually high for this point of the global recovery. Normally the cost of basic materials falls in real terms for at least two years after a recovery begins. In the past, this boosted real incomes, supported spending and fuelled recovery.

        No more. Today there is a different phenomenon in the developed world: the “squeezed middle”. Far from boosting incomes and spending, high energy and material prices have undermined an already fragile recovery buffeted by financial crisis and the legacy of debt. The new pattern of high prices and squeezed incomes has enormous consequences for our future.

        Read more

        Chris Huhne is the Liberal Democrat MP for Eastleigh. He is secretary of state for energy and climate change.

        Mentioned at idealog.co.nz May 4, 2012 @ 11:26 am

        • Elizabeth

          By the by – check the figures in this article and think about Dunedin’s aging population…

          ### ODT Online Mon, 7 May 2012
          Falling interest rates hitting savers
          By Dene Mackenzie
          Some people are throwing up their hands in horror when they realise how much they need to save for retirement as interest rates continue to fall, Craigs Investment Partners broker Chris Timms says.

          Mr Timms recently spoke at a function and asked the audience how much they believed they would need in retirement to maintain their current lifestyle. Most answers were around the $1 million mark, he said. However, the audience was shocked when he produced the numbers to show what $1 million would produce on an average term deposit.

          Read more

        • Elizabeth

          MikeStk – what on earth has ODT Online abridged with your pertinent and proper comment for god’s sake ?
          http://www.odt.co.nz/news/dunedin/208396/china-key-fortunes#comment-29627

  8. Phil

    Unfortunately Paul Orders is falling into exactly the same trap as David Davies did when he first arrived. It took David nearly 12 months to figure out that New Zealand is not the UK. Paul hasn’t got there yet. Both men learned their trades in a region where there was a 700 million customer base within 2 hours of their operation. Location was not a limiting factor in attracting business. Two hours from Dunedin is Whangarei. Paul’s example in quoting places like Cambridge (1 hour from London) and Leuven (in a country whose immediate neighbours consist of 160 million people) illustrate that he has no concept yet of the issues involved in living in an isolated and inconvenient part of the world. He’ll learn, but it’s going to take him time to adapt to his new conditions.

    • Elizabeth

      Phil, if you get the chance please have a chat about this to Paul Orders himself. Very approachable or email him – he’s on iPhone. Believe me he likes constructive opinion.

      • Elizabeth

        ### ch9.co.nz May 8, 2012 – 5:51pm
        Representative says strong public resistance to any drilling
        Oil company representatives have been busy working behind the scenes in Dunedin, setting the platform for the possibility of off-shore drilling for gas. Shell New Zealand has met with councillors for what Mayor Dave Cull says is a ‘positive engagement with the community’. However, an Oil Free Otago Representative says there is still strong public resistance to any type of drilling, even if it’s for gas.
        Video

  9. Anonymous

    ‘The strategy outlined initiatives designed to create 10,000 jobs…’

    10,000 jobs in Dunedin or 10,000 jobs in China?

    ‘It was also expected to lead to more than $50 million in spending likely to boost the city’s fortunes – coming from existing council budgets…’

    The council is going to spend another $50 million?

    It is the Dunedin City Council after all, the same place still infested with Stadium Councillors and Key Stakeholders.

  10. Mike

    No doubt the plan is to get Malcom to raise the $50m he promised

  11. Phil

    Yes, obviously the 10,000 jobs is nonsense. No one really believes that. It’s calculated the same way that they calculated the construction jobs at the stadium. It’s equivalent extra work for 10,000 people who are already employed. Not 10,000 brand new positions. The “new” part assumes that those 10,000 people wouldn’t have anything to do if it were not for this new work.

    The big winner, as you point out, is the small group who gets the $50 mllion from the DCC budget. Which sounds like a $50 million loss for someone else if the money is already budgeted for use elsewhere.

  12. Phil

    Excellent point, Mike. Maybe the plan is to “presell” $50 million worth of goods and services. Private sector funding and all that.

    • Elizabeth

      Um. Speaking of Malcolm, spotted this evening in the Koru Lounge at Wellington Airport, looking short.

      And “Slightly relatedly, pleased Otago First XV can afford petrol for brand new land/range rover…”

  13. Mike

    As I’ve noted elsewhere I think we should be doing something like this it’s where we should have spent the wealth we wasted on the stadium. But whatever we do do it should be setting things up so that whatever we spend is recoverable long term – buy shares in what we invest in don’t set it up like the stadium so the plan is that the ratepayers cough up but some bar owner profits

  14. Anonymous

    Absolutely Mike. The best trick in this city’s long term interests is to grow business that grows business. Instead of siphoning off public money to fill the pockets of stakeholders, actually use the money received in the short term to create industry that provides gains in the long term. But with the wants of Key Stakeholders and self-serving interests and gullibility of the Stadium Councillors – not forgetting Dave Cull’s record of ‘making it work at any cost’ – we are more likely to be lumbered with more debt than any real development.

    We need people at the council table who we can trust to work together in the bests interests of Dunedin. Presently that is not possible with the Stadium Councillors well past their best before date.

    • Elizabeth

      ### ch9.co.nz May 7, 2012 – 7:01pm
      Swift reactions to gas discovery
      The news of gas being discovered by OMV and Shell broke around midday, and reaction around town has been swift so far. The Chamber of Commerce believes as long as the company discusses the future with locals, a drilling platform off the Otago coast should provide jobs for the engineering sector for a start.
      Video

      • Elizabeth

        A small cluster of Dunedin biotech companies is quietly taking on the world.

        ### unlimited.co.nz Friday, April 27 2012
        Bright hopes
        By Matt Philp
        “Dunedin. Dunedin crashed while taking off,” yowled a female punk poet who enjoyed some minor notoriety in the 1980s. In brute economic terms the southern university town has had its ups and downs and still struggles in some regards due to distance and demographics. It does not, however, struggle in bioscience, where a small but solid cluster of firms has taken world class research and is running with it, opening export markets in sectors ranging from functional foods, pharmaceuticals and medical devices to probiotics and diagnostics.
        Read more

  15. JimmyJones

    The patient won’t recover until they stop the bleeding. The high rates (tax) especially for businesses, is a brake on the local economy. Because our intellectually flaccid councillors have failed to understand their very serious recent mistakes, they are bound to repeat them and so cause more blood-loss. The DCC has been detrimental to economic growth and I think, continues to be a very serious threat to future growth. An economic development strategy will be a perfect excuse to dream-up more money-sucking projects that achieve nothing except increase rates and enrich a selected few. The challenge is to get them to stop making decisions.

  16. Hype O'Thermia

    As long as decisions are in the hands of people who never got their heads around alternatives to “when in debt, get ANOTHER credit card”………
    If only the DCC had a fairy godmother or a rich uncle to pay off its debts. They manage these things so much better in fairytales and, actually, in some real families. Which is probably how that mindset keeps on keeping on.

    • Elizabeth

      If you’re good at business even the DCC can’t stop you. You simply walk right through them. Why let the deaf dumb and blind at the council table curtail your fun. I remember I yelled at Deputy Mayor Elizabeth Hanan in a full council meeting when she erred on the potential of the Otago Farmers Market set up. “I’m a person who supports good ideas!” I thundered onwards. She meekly stepped back into line. Sukhi always said if I got Elizabeth sorted the rest of the councillors would follow, and they did. As it turns out, Elizabeth shopped at the market most weekends from the day we opened.

      I believe we can beat the present councillor knuckleheads, with sheer force and full height. By offering them no choice.

  17. Hype O'Thermia

    “If we could turn back time” – that deserves to be on Youtube!

  18. Hype O'Thermia

    The trouble is we’re not only against knuckleheads, there are ingrained habits of behaviour that block fresh thinking. “It went wrong last time and the time before, and the time before that, and… and…” so obviously it is due to work THIS time. There are assorted people fostering their own career growth; avoiding displaying that they ascended to their level of incompetence a promotion or two ago; devious and greedy; cheerfully unconsciously incompetent; and/or muddled in their own lives (see below for an example) in ways that one can see reflected in their discussions and votes within Council.
    ” Dunedin city councillor Bill Acklin is facing an unpaid tax bill of $190,000, with the Inland Revenue Department filing a court claim for judgement on money owed.
    Cr Acklin said last night the issue related to a failed business partnership “following the demise of a company owned by my former wife and I”.
    But he said the issue had not dulled his passion to continue as a councillor. ” http://www.odt.co.nz/news/dunedin/188583/acklin-working-190000-tax-debt

  19. Anonymous

    Given $50 million, I could create 10,000 jobs overnight. I would simply employ 10,000 people at the rate of $15 per hour. They would have jobs for about 300 hours.

    The role of Government, ESPECIALLY local government, is NOT to create jobs directly; it is to create an environment in which jobs can be created.

    • Elizabeth

      Anonymous, you are correct! It is not the role of Dunedin City Council to create jobs, they must enable us to do so reasonably and freely.

  20. Hype O'Thermia

    …and refrain from preventing, delaying and jerking around with nitpicking pedantry, those who wish to establish enterprises.

  21. Amanda

    Basically the hope only for Dunedin to survive the debt crises is to remove from council the councillors whose stupidity put us in this situation. With those seven councillors still in decision making positions of power the city has no hope of any sort of recovery. We will be hamstrung by their proven ineptitude and lack of business nous. All of Mr Orders ideas are pie in the sky until Hudson and mates are gone from council.

    • Elizabeth

      The sale of the Crafar farms exposes the fault line in the world economy, writes Peter Lyons. The Chinese approach to international trade contains the seeds for its own demise.

      ### ODT Online Wed, 9 May 2012
      Opinion
      Crafar sale highlights China’s game
      By Peter Lyons
      I am opposed to the sale of the Crafar farms to Chinese interests on purely economic grounds. This is not to say that I favour a lower bid by New Zealand interests. I would like to share my reasoning because it underlies the economic malaise that most Western economies are experiencing. New Zealand has embraced the concept of free trade in recent decades. As a relatively insignificant country on international markets, that relies on exports, a world with no artificial trade barriers would suit our interests. Unfortunately, like world peace and the elimination of global poverty the attainment of free trade flounders on political realities. While New Zealand has pursued the chimera of free trade , China has adopted a trade policy called mercantilism. To understand what this means for the world economy it is necessary to explore a bit of the history behind global trade.
      Read more

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