Why Wellington Will Never Die As A City

John Key has backtracked on his comments that Wellington is a dying city that the government has no idea how to resuscitate. He told “business leaders” in Takapuna that Wellington only had the government, Victoria University and Weta Workshops. His comments show that it is possible to be in politics for a decade and become Prime Minister without understanding how New Zealand works.

The BBC series Yes Minister with its obfuscatory Sir Humphrey is funny because it is pretty close to how things really work in government. John Key’s temporary government – composed of farmers and lawyers – does not have that much power. But the permanent government – composed of public servants, academics and the media – has an awful lot of power that goes unrecognised. In fact, this cathedral is the real government of New Zealand.

A prime example of a powerful family in this arena would be Sir Geoffrey Palmer and his son Matthew Palmer. They are essentially the Only People Whose Opinions Matter when it comes to constitutional reform and it will be fascinating to see how the outcome of the so-called “constitutional conversation” adheres to what they have written in their various books and publications.

Just because the temporary government wants to reduce the personnel count in the public sector doesn’t mean that it actually happened. Many jobs that were disestablished were recreated in the same departments or in new Crown sector agencies. The behemoth Ministry of Business, Innovation and Employment is so large that it will siphon up as many laidoff public servants it can find simply in order to fulfil its statutory obligations. That “mega ministry” alone is indicative of the National government having no desire to reduce the size of government – because it simply can’t!

Furthermore, the creation of the Auckland supercity has done nothing more than centralise power in the central planners and their champion Len Brown. The upcoming mayoral election has no credible alternative candidates who stand a chance of winning now that the unique demographic characteristics of Auckland can be leveraged into perpetual left wing local governments. The lack of outcry at how the Auckland plan proposes to seize private property and turn it all into high density housing shows that people realise there is no hope for property rights in New Zealand.

But what does this have to do with why Wellington will never die as a city? Well, if you have had a discussion with anyone my age recently you will find that central planning, environmental protection and higher tax rates on the rich are all that matters. The number of young people who will not alter their political leanings as they age will result in a massive expansion of the popular vote for the Green Party.

Labour will survive for at least the next 2-3 elections, but anecdotally, almost every young person I know is a Green voter! This means that the Labour/Greens/NZ First hydra will lead to a massive expansion in the size of government once they are elected. Bob Jones knows that Labour governments are great for commercial property in Wellington, and he’s damn right. Wellington can never die as a city commercially because every government has at least one “think big” project that the private sector can profit from.

In terms of economic thinking, each additional government project creates a swathe of complementary new job roles and contracts to be awarded to the private sector. There is a logarithmic growth rate, and public sector procurement policy is nowhere near being capable of delivering value for money in the long-run because the preferred supplier/vendor policy functions as a restriction on competition for public sector contracts! The all-of-government contracts ensure that smaller agencies will be paying more than they need to for systems more suited to larger agencies and much of the savings will be lost in the wash.

That John Key can be in his second term of government and still believe that “the government” needs to resuscitate a “flat lining” Wellington is disturbing. Wellington is doing just fine – as long as you are connected in some way, shape or form to central or local government. There will never be any significant changes to Wellington because with each change of government comes a whole new flurry of activity to fix “the mistakes” of the last government.

Like I have written about previously, Wellington is not a backwater and there is no need to be worried about its economic future. MMP and trendy collectivism will see to that. The reforms of the National government are cosmetic – the money is still flowing for most people in Wellington and shows no signs of abating anytime soon.

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