11 Sep 2019

Christchurch local council debate

From Morning Report, 8:10 am on 11 September 2019

Local body voting papers will be turning up in letter boxes in a couple of weeks, and on 12 October we'll know who's going to be in charge of the local councils and boards.

Lianne Dalziel is seeking a third term as Christchurch Mayor and is in the Morning Report studio along with her two main rivals - veteran social activist John Minto and a newcomer to local body politics, Christchurch businessman Darryll Park.

There are some big issues for Christchurch voters - progress on the rebuild, rates, asset sales and whether Christchurch residents can once again drink their prized water without added chlorine.

Morning Report's Corin Dann: I want to start first with a leadership question. It's a story ... about the ‘Christchurch Call’ it bears the name of your city. Our opposition leader Simon bridges has questioned whether the New Zealand government should be putting as much priority on it and whether it is a concern of every day New Zealanders. I'll start with you, Lianne Dalziel. Do you believe that there is too much emphasis on the Christchurch Call at the expense of other things like measles and other problems?

Dalziel: I think it's unreasonable for somebody to suggest that it's a priority one over the other. I think most New Zealanders stopped on that day, they were horrified to find that Facebook live streamed that atrocity, it took them longer to take it down than it took the police to track the offender down, to ram into his car, arrest him and take him into custody. That is appalling. Now, the Prime Minister's taken a leadership position. Sometimes you have to do that. And this is one of those occasions so I was actually quite shocked to hear that.

Okay, John Minto, do you agree?

Minto: I absolutely agree. I think this is a situation where New Zealand's had this appalling event occur. And if we can carry a message from that around the world that prevents anything like this from happening in future, then we're punching well above our weight and that's what we should do.

Okay. Darryll Park, do you believe that too much emphasis is put on the Christchurch Call? Or is that about right?

Park: I think it's about right. I think that the situation we’ve got is a major atrocity of huge proportions, and we need to learn from it and deal with it better, because as Lianne has said, certain things didn't work the way they should have and in the time that it took to bring it to action.

All right, very good. We're warmed up. Let's get into it. Lianne Dalziel, I want to start with you. A lot of focus in Christchurch is on the anchor projects, the stadium, the big new buildings, the new library. Yet I want to put it to you that your council under your leadership has failed in its duty to some of the most vulnerable in terms of social housing - 930 units without floor or ceiling insulation and they were supposed to have that in July 2016. Have you taken your eye off the ball?

Dalziel: No, and that's not the case. I mean, the criteria around insulating these units is pushed out to 2023 for social housing, and it's not something that I'm particularly happy about. And I guess the focus of our attention was on establishing a framework of running our social housing-

Have these people been cold over winter or not?

Dalziel: Look, there is no question that people have been affected. We had one of the individuals concerned, who was so concerned he's actually running for the mayoralty on the back of it. And he came to the council, and off the back of that we have asked for a report to come to council and it will come this week or next week, and it will be coming to council on the basis of fast tracking some of the insulation work - not the installation work but getting the units warm over the winter. What he talked about was an incredible bill. We were left in a difficult position by successive governments, two governments now, coinciding with the earthquakes. They took away our right to access income related rental subsidy. We've established a new format for running our social housing. We've never drawn on rates for it and that’s what needs to be looked at.

John Minto, you’re shaking your head, I want to come to you then I'll come to you Darryll. John Minto, has the council taken its eye off the ball for the most vulnerable?

Minto: Oh, absolutely, it has. I think ... we're now going backwards with social housing, just the numbers of social houses, for example. Yes, we lost some in the earthquakes. But every time a council rental housing complex needs upgrading or renovating, it's just boarded up and closed down. We've got 52 units at the moment in that condition - Cecil Courts ... and in Somerfield, we've got Carey Street - so 52 units, they just closed up because the council refuses to use any rates money to do them up. And what we're saying is the government has given Christchurch $300 million as of the last election, the prime minister said this is for Christchurch to decide how it should be used. The Council says –

Dalziel: Well, that’s not correct.

Minto: That is exactly what she said.

Dalziel: I know she said that but the money’s not available for social housing, you know that.

Minto: Well, I'm sorry, when the Prime Minister says to the whole country that this money is for the people of Christchurch to decide how it should be used –

Dalziel: No, it’s for regeneration activities, and that’s been decided.

Minto: No, well, I’m sorry, the money is there is what I’m saying, and it does not need to come out of rates.

So you would fight to get that money which is ring-fenced for something else, is what you’re saying?

Dalziel: Yes.

Minto: Absolutely.

Okay. Darryll Park –

Park: Coming back to it, it’s systematic failure. To be brutally frank, it's got to be affordable and it's not because of increases one lump sum of 20 percent increase recently. The other one is they’re not dry and inappropriate for council as a landlord  - [the council] cannot adjudicate over other landlords and say you're not appropriate when we're not appropriate.

Okay, the bill for this is in the millions of dollars. Are you comfortable with spending up to what – up to $6 million ... the council would have to borrow, would you do that?

Park: Yes, it's a must have - a human right to actually have dry, appropriate accommodation if you're the landlord and you’re supplying it.

So you would be comfortable with the borrowing? This is not something that would come out of rates, because you've said rates would have to be zero –

Park: It could come out of rates. It could be a ‘must have’ project. I've always said –

Minto: Absolutely.

Park: I've always said my zero raised rated increase on rates would be about ‘must have’ projects.

So what else would you cut then? Because if you have zero rates, you're going to have to cut a large amount of spending out of the council. You’re now saying you'll spend money on fixing social houses.

Park: [we] Need to. I mean, it's a case of - as a landlord - you’re required to.

Dalziel: But we don’t spend rates on social housing now.

Park: The other projects would be a proliferation of the stadium. There's money put aside for that. So that’s already there.

All right, well, that's a good place to pick up on that, on the stadium. Lianne Dalziel, this has been a long standing issue, will there be a stadium - a covered stadium with a decent capacity - for Christchurch?

Dalziel: Yes, there will. And the reason for that is that the government has allocated, under my watch, $300 million for Christchurch, $220 million of that is allocated to the multi-use arena that it will be. So this arena, when it is established, it is going to be supported by both council and government. I’ve said -

How many seats?

Dalziel: Well, that's in the investment case that is being put together at the moment, and will go to central government in the next four weeks.

Okay, let me put it another way. How often does it need to be full to capacity?

Dalziel: Well, I don't know what you mean by that.

What I mean by that is that, if it's 30,000 or 35,000-seat stadium, it might not ever be full except for All Blacks Test matches.

Dalziel: It depends what it's being used for. So there will be - I mean, obviously it's not going to be just a stadium for rugby, it is going to be a multi-use of arena that will attract many events, it will have other elements to it. And that's what the business case, the investment case, is all about. Government has to sign off on it and I'm confident that they will sign off on this for Christchurch.

I’ll come to Darryll in a second, and just go to John Minto, because you oppose the stadium, right?

Minto: Yeah, if there was a genuine business case for the stadium, the private sector would build it. There isn't a business case for it. And why would we sell assets - because that's what's being talked about - why would we sell our assets, which are bringing in income to reduce rates, in favour of building an asset which is going to be a constant drain on taxpayers, sorry, on ratepayers.

But isn’t this about the community, the spirit of the community, that building communities together, bringing people together, stadiums are a social good, aren’t they?

Minto: They can be a social good, but the stadium should go to the back of the queue for funding. We've got this enormous, you know, this problem with our council housing and social [housing]. We've got a social housing waiting list in Christchurch of over 1000 and the council is now 500 units short of what it had before the earthquake so we can rebuild down Lancaster Park, but we're not rebuilding our council housing?

Okay, Darryll Park, what's your position on the stadium? And you do have some role with the Crusaders, right?

Park: On the board of the Crusaders and Canterbury Rugby, but it's not about sport. It's been mentioned, it’s a multifaceted, a multi-purpose arena. And its other events, we need it for the well being and the betterment of our city. If we don't have that, and we’re only talking social housing, we’re doomed. We need to have that stadium, the multi-purpose arena, we also need to have a convention centre, which is on target for next year. So these are fundamental to our way forward. If we don't get them, we’ve got a problem.

Dalziel: It’s about momentum and the truth is there’s a lot of private sector businesses -

Park: And the problem I’ve got is this has taken three years. This business case has taken three years to get to where it is now and we still haven’t got the business case to complete so the delay is tantamount to our way forward.

Okay quick response from Lianne to that.

Dalziel: Last year, the government signed off on the Christchurch Regeneration Acceleration Fund. So we didn't have the money from central government before then. So Darryll’s just completely off the planet as usual in that regard –

Park: No I’m not, no I’m not, this could’ve been started three years ago, three years ago.

Dalziel: But what I'm saying is there are a lot of private sector businesses who've invested heavily in the central city with an expectation that that multi-use arena will be built and it will be delivered. And I want to make sure that their investment does pay off.

Minto: What about the people in their houses having to put bubble wrap on their windows? They come before the stadium, they must do, because Christchurch is bigger than that- 

Park: The stadium’s an absolutely separate issue. It’s a separate issue -

Minto: And rugby will be the-

Park: It’s not about rugby-

Minto: It is absolutely, rugby is the core-

Park: It’s about all events and it’s the same thing with the convention centre, bringing critical mass in to the city. If we haven’t got that, we haven’t got prosperity going forward.

Let’s hear just hear a final comment from John and then I’ll have a quick fire question to you all.

Minto: Rugby will be the core business of the stadium.

Park: Wrong.

Minto: And this year,

Park: There’s only 17 events there.

Minto: We’ve got a rugby stadium now which has the capacity of around 20,000-

Park: It’s 17,000.

Minto: Right well that’s even worse. There was only once this year was it filled to capacity, and we’re building a brand new stadium.

Park: I don’t know where you’re getting your information from totally mis-

Okay I want to have a quick fire question to you all, I’ll start with you Darryll. Should the Crusaders drop their name? And bear in mind you're on the Crusaders board, but it's an interesting -

Park: Well I’m part of that process. So it would be inappropriate for me [to comment] and it's a process that’s still going through so I’m part of that.

Here's my follow up question then. So if you were to become mayor, you would leave all these positions that are associated with the Crusaders?

Park: I’ve been on record as saying, if I’m mayor I would be off the boards that I’m on – the travel, the two rugby boards and of course hospitality, I’ll withdraw from the hospitality industry.

And you don't want to offer a personal opinion on an ethical issue?

Park: I don't see that it's an ethical issue. I think what we've got here is a brand that is supported by - and it's come out in the surveys - by 80 percent of the public. It's been maneuvered in terms of the guard, the sword. It's now a fundamental - just a word. But at this point in time, we're still going through the process of identifying whether it's appropriate or not. And of course, our market is global now, and so the offshore markets sometimes dictate. It's one that will be decided upon at the end of the year.

Lianne Dalziel?

Dalziel: We have the best provincial rugby team in the entire world. So whatever the name is, the brand sits in behind it, it's red and black, you know, it's a relentless pursuit of excellence that’s straight from there –

Is that a yes or a no?

Dalziel: I'm saying that it is a decision for the Crusaders themselves –

Okay, but do you have a personal view on it? Because we’re trying to get to the heart of who you are as a person.

Dalziel: Yes, I do have a personal view and I’d like to get it out. I personally hope they do change the name, I understand that they couldn't make that change in the lead up to the season just completing because they had all of the sponsorship deals, but I'm hoping they do the right thing. And it is a hard issue but-

Any ideas on a new name?

Dalziel: No, and the underlying issue though, and I want people to know what the Crusaders stand for. They stand for a relentless pursuit of excellence all in the red and black and that’s their brand.

John Minto, your position on this?

Minto: I think it would be really good for the name to change and I think it should be a change that reflects the local area. So you know, New Zealand's a grown-up country now, Canterbury’s a grown-up region, we don't need to borrow these names from overseas we can develop our own local brand, which I think would better reflect the people of Canterbury.

All right. I want to come to the issue of around rates, the nitty gritty, and asset sales. I'll start with you first, Darryll Park. You've said you want zero rate increases. I don't know if there's any other council in the country proposing zero rates. Why would you propose that at a time or cutbacks in spending at a time when the economies is slowing, when in fact-

Park: Because in the last six years, there's been 49 percent increase in rates. We've got the highest rate base-

But zero rates? Nothing?

Park: Going back 20 years it's been since there's been a zero budget process.

And how much would that mean the council would have to shave in spending on services that it provides?

Park: About $100 million over three years.

You're going to cut out $100 million of spending in three years?

Park: Yes.

And you believe that is possible?

Park: Yes, with my background in change management, in dealing with business and coming on board with the council as a business entity for the first time in 40 years – yes. There's some business principles that need to be brought in here.

Dalziel: What would you cut? Just name one thing.

I think Lianne’s got a point, can you just give an example or couple of examples of what you would cut?

Park: What I would cut, I would cut non-essential services.


Dalziel: Libraries?

Park: No, libraries are a must have,

Dalziel: Swimming pools?

Park: I'm not going to be drawn into this, because-

Well, no, you do need to be drawn into this, because the people of Christchurch need to have a rough idea. If you're just going to say ‘trust me, I'm going to go through it line by line and make cuts’, they need to have a rough idea of what you're going cut.

Park: There’s a raft of community spend that sits within council,


Park: Like neighborhood barbecues.

And how much does that spend?

Dalziel: How much will that save?

Park: Again, there are a proliferation of those budgets that sit there.

Dalziel: No, but seriously, we support neighbourhood week, I mean for goodness sake, it's a couple of thousand dollars for a group of communities - streets to come together and have a neighbourly barbecue, for goodness sake.

Okay, Lianne Dalziel, you are proposing to raise rates by nearly 5 percent.

Dalziel: Well, that is the budget, and I have said that we are committed every single year to bringing that budget down. And every year we have managed to achieve that.

Park: No, you haven’t, no you haven’t -

Dalziel: We started at 7 percent but we're now below 5 percent. So, you know, and we have to get lower still, so the pressure is going to continue. But every single year, we've faced additional expenditure. The latest expenditure has been the chlorination situation, and it has been a direct response to government shifting the goalposts in relation to the drinking water standards.

Park: The government haven’t shifted the goal posts, there’s broken pipes, there’s a raft of issues.

Dalziel: They have shifted the goalposts, that’s not true, you don’t even know what you’re talking about.

I’ll come to water in a minute. John Minto, I think you've said you would look to increase rates at the rate of inflation, is that right? So what would you cut?

Minto: We wouldn't cut anything. Our policies are all cost neutral and that includes providing free public transport, reducing our carbon emissions quite dramatically with free public transport.

And where’s the revenue for that?

Dalziel: You should stand for ECan, we don’t cover public transport.

Minto: This is right here, say in Auckland-

Dalziel: This is so unfair, council does not run public transport.

Minto: No- no- Hang on a minute – it’s a negotiation.

Wait, wait, I want to hear John’s answer, where does the revenue come for this so that you can keep rates to inflation?

Minto: If I can do it without getting interrupting, yes, but it comes from central government. At the moment in Auckland, public transport 2-to-1 in favour of public transport as opposed to roads. In Christchurch it’s funded 3-to-1 against public transport, we want to rebalance that.

So your strategy is that you will get the money out of central government?

Minto: Absolutely, with a mandate,

And how would you do that?

Minto: With a mandate from the people of Christchurch.

Okay, I want to come to the issue of climate change –

Park: Also, can I just touch on the revenue earning because you’ve talked about expenditure. We haven't addressed assets. There’s eight companies within council, three are making a dollar, five aren’t. There's an issue there. In September last year, council chose not to do a report on the market value of those assets, that needs to be addressed.

Dalziel: Do you think CCHL doesn’t do that every single month?

Park: CCHL has borrowed an extra billion dollars in the last four years.

Dalziel: And that has been the capital release programme.

Are you saying that you would look to value those companies so that you could sell them down partially?

Park: I would value those companies to identify whether they’re being managed correctly. Now, if they’re not, get them managed appropriately and fit for purpose

Can give an assurance that it's not in order to sell them?

Park: Correct. I give that assurance, if management are failing, the issue is: fix management.

So no asset sales from you?

Park: At this stage, until they're evaluated? No.

Hang on, hang on, you just said that’s-

Park: You can’t say you’re going to sell something if you don't know the condition of them.

Dalziel: But you do know the condition.

Okay, so you get the value, then are you ruling asset sales in or out?

Park: If that asset is being driven correctly by management, and they're making a loss? Yes, that'd be up for sale.

Okay, so yes to asset sales.

Park: No, it’s not asset sales on that basis.

Lianne Dalziel, are you open, I think you’ve said, to conversation about asset sales?

Dalziel: This is completely unfair, because he has made statements about our holdings company, which is in fact, it's the politically neutral company that sits in between the council and these valuable asset base –

We’re talking the port, the airport and other assets?

Dalziel: We’re talking the port, the airport, [electricity company] Orion,

Park: They’re the three that make a dollar, the other five don’t.

Dalziel: If you’re saying that –

Park: And City Holdings have borrowed $1 billion in four years –

Dalziel: Leaving all that aside, I want to know from Darryll, what is it about the continuous disclosure rules of the stock exchange that he thinks he needs more information from? We have listed the –

Park: Do you know the condition of those companies?

Dalziel: Of course I do! I sit on the CCHL board –

Park: Well you obviously don’t know the business –

Dalziel: Well I do know the –

Park: Why are five of them not making a dollar?

Dalziel: Look, there’s a very good reason why.

Park: Why is Citycare not making a dollar? It’s got a diverse number of businesses.

Dalziel: There’s a very good reason why -

Park: Why? You know more than anyone else - 

Daryll – hang on – let her answer this then I’m moving on to John.

Dalziel: You don’t know anything [to Park], because you haven’t even looked at any of the information.

Park: Well, tell us.

Dalziel: If we haven’t had the asset base that we had had when hit the earthquakes. I mean, prior to the earthquakes, we had the lowest rates in the country, and the asset base is what has seen us through. We have borrowed against our assets, that's how we've managed our capital program, and that's how we've managed capital release. It is fully overseen by CCHL.

Okay, John Minto I want to come to you for a response on this issue of asset sales - because correct if I’m wrong Lianne Dalziel, you have said you’re open to a conversation on asset sales?

Dalziel: There’s no need, if you –

Park: That’s a turn around from a month ago, where there’s no asset sales and now she’s saying there will be asset sales.

Dalziel: No, hang on – if you sell the assets, where will the money go? It will go to pay down the debt. So all that will happen is that it will pay down the debt. And then we'll have less revenue - 

John Minto, your view on this, I take it, are not in favour of asset sales?

Minto: No, not in favour at all. He kaupapa koretake – it’s a useless policy. Why would we sell assets which are bringing in income to reduce rates in favour of assets, which are going to cost us money?

Park: Five of them aren’t bringing an income. Five of them are costing money.

I really wanted to get to climate, we'll have to save that for another day. So I do want a quick comment from all three of you on what can you offer people in terms of how you will prepare Christchurch for the impacts of climate change? I'll start with you, John Minto.

Minto: We would reduce our greenhouse gas emissions with free and frequent public transport, and we would bring in a local zone in centre of town to showcase Christchurch-produced - by local businesses and local cooperatives - products and services. And that would be focusing on local production, local consumption, which is the way of the future.

Lianne Dalziel?

Dalziel: We're focused very much on getting that carbon footprint down and as a council have endorsed a policy of coming down to net zero emissions in 2030, which is an enormous challenge for a large organisation. But it's something that we're determined to meet, we need to lead the way in this regard. And we're also looking at how do we prepare our coastal communities for the impacts of sea level rise. We think that enabling communities to take control themselves, to have an understanding of the adaptive management tools – the markers that they need to look out for - so that they can plan for the future.

Okay, Darryll Park?

Park: In addition to what been said, bring on board the green space. We’ve got a concrete jungle in Christchurch, we need to have green space and we need to have people aware what's going to be appropriate going forward to manage the carbon footprint.

We’ve run out of time. Plenty more issues we could talk about, perhaps for another time. Darryll Park, thank you very much. John Minto, thank you very much. And Lianne Dalziel, thank you very much.