Tuesday, October 15, 2013

Wellington voters choose economic decline

The New Zealand local body election results are in, and here in Wellington we now have a slew of Green Party councillors on the city and regional councils as well as our Green mayor re-elected.  This is not entirely surprising. Wellington is the capital and many of its workforce are public servants.  They tend to hold left-wing political views and unsurprising support more government in the lives of citizens, not less.  The Green Party is, like most similar political groups worldwide, hard-left on economic matters.

Wellington as an economic centre is dying.  Even our Prime Minister, John Key, a man you would think would be sensitive to making such criticism of his seat of government, recently said so.  Wellington's problems started in the 1980s with the decline of its manufacturing base due to the (much-needed) reforms of the Lange-Douglas Government including the removal of protectionist trade policies.  The trend was exacerbated with a significant migration of corporate head offices and supporting service businesses to Auckland.   

The economic decline of the capital was disguised throughout the term of the Clark Labour Government in the 2000s because of the vast expansion of the public service with core employees increasing by about 40%. The majority of the increase was in Wellington and the spending of these public sector employees in the region drove up economic activity (and most notably property prices) during the nine years Labour was in power.  The Key National Government has stopped the expansion by limiting departmental budget increases and has even required some retrenchment of numbers.  This has meant Wellington's non-public-sector decline cannot be disguised any longer.

The Greens' policies, which are about socialistic redistribution of wealth and increasing compliance costs for development in pursuit of their environment agenda, are not likely to help matters.  Wellington can't afford the profligate, anti-growth economic policies of the Greens.  The city needs new businesses to generate employment and wealth to stem the decline of the past three decades.  The Greens offer only offer more economic blood-letting at a time when the patient needs vitamins.

If you want an example of what can happen at a local level after years of ill-advised policies you only need look at Detroit - a city that, like Wellington, once had the highest per capita income of any in the country, which has now filed for bankruptcy.  If Wellington is to avoid becoming another Detroit, its voters are going to have to choose politicians who value economic growth over fanciful socialist and environmental aims. Unfortunately I hold out little prospect of the capital's large public employee electorate making such a choice.

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