Businesses ‘deeply negative’ towards city council

Tuesday, 14 May 2024

In a scathing submission on the city council’s long-term plan, the Chamber of Commerce has questioned whether the council is accountable enough to the businesses that make up 44% of the rating pool.

The Chamber’s main concerns were the lack of consultation with businesses and the rising level of debt – which is forecast to exceed the council’s self-imposed debt cap next year.

With an 18% rates rise on the horizon and “egregiously high” increases to punish businesses for years to come, small and medium-sized businesses would find the city unaffordable, the submission reads.

“Currently business perspectives and priorities are not incorporated into decision-making, this is reflected in a LTP which doesn’t meet business needs or present value for our rates,” wrote chief executive Simon Arcus.

The city was synonymous with bureaucracy and politics, rather than business and innovation, the submission said.

On Monday Arcus said the mood of businesses was “deeply negative” towards Wellington City Council. Increasingly and worryingly, businesses saw engagement with the council as a pointless endeavour.

“The Reading debacle left businesses astonished and there is frustration and anger at pain points like Thorndon Quay, Cuba Street and Courtenay Place,” Arcus said.

“A number of councillors refuse repeat invitations from businesses to visit worksites and inspect the consequences of their decisions.”

The long-term plan came at a time when business confidence was sinking as public sector cuts hit. It provided nothing for businesses to aspire to or to galvanise the economy into action, said Arcus.

The Chamber’s submission noted there had been a lack of communication around the construction work on the Golden Mile and Thorndon Quay, both of which had left businesses unclear on what was happening.

Arcus said businesses were feeling disappointed with the direction of the city, after the council voted against a reduction in the proportion of rates they paid last year. The long-term plan only underscores that they were systemically “undervalued and underrepresented” within the city.

“This LTP has arrived against a backdrop of activity and decisions that means businesses struggle to trust the council, do not have confidence in its decision-making capability, and do not have confidence in its ability to manage the finances of the city moving forward.”

While the Chamber supported the council’s decision to cut projects which “do not represent value for money”, such as the Khandallah Pool upgrade and annual fireworks display, it wanted the council to go further in order to keep debt under control.

The council’s debt is forecast to exceed $2 billion in the next financial year, blowing out the self-imposed debt cap of 225% of revenue in the first two years of the plan.

The Chamber said this showed the council was not doing enough to keep debt under control.

High debt would mean the council had reduced ability respond to a disaster such as an earthquake, Arcus said.

“It’s vital that Council projects for public good are balanced with those that provide a true financial return on investment.”

The submission also asked for a “more measured approach” to cycleways, which were “not the only answer” to making Wellington a more liveable city.

Mayor Tory Whanau was unable to respond to specific aspects of the submission, because it was still being considered by council as part of the long-term plan.

“I know that it is a really tough time for some businesses in the city right now,” she said in a statement. “We know because the cost of living, prolonged impact of high interest rates, and uncertainty about jobs in the public sector that people are spending less.”

The long-term plan had been put together in an “extremely challenging environment” and had involved some “extremely tough decisions”.

Whanau looked forward to hearing from the public about the plan.