WCC in austerity mode, or, “let them eat Lego blocks…”

EDIT: Since publishing, the WCC has announced they will be taking a 10% pay cut. Great news. It shows solidarity with the city and it also shows that the Council, when they put their mind to it, can act in unity.

The Council heads into an extraordinary meeting tomorrow to discuss rates and costs considering our ongoing pandemic. But strategy seems to be lacking, opportunities exist that are not being exploited, and the priorities still seem slightly off tone.

Hundreds of thousands of people are now accessing additional cash and benefits as they lose their jobs. Many of us that are still working have agreed to take pay cuts to keep our businesses alive. I’ve taken a decent pay cut so that the permanent staff in the company I work through can keep their jobs. Everyone I talk to has taken a financial hit.

Everyone is making sacrifices. Well, not quite everyone.

Despite calls for the WCC to take pay cuts themselves, those calls have been mainly ignored. When the Council has a wage bill of around $110m, and the CEO is being paid hundreds of thousands of dollars, there is undoubtedly some wiggle room to make temporary cuts to offset the loss of revenue.

WellingtonNZ (WREDA) has suddenly repurposed itself into an inward-looking organisation that will attempt to make us all feel better by providing colouring-in books, Lego competitions, gardening tips, and other such things. All well and good, but, surely, costs could also be cut here given that WellingtonNZ’s primary reason for existing is to advertise the City to the world?

Rumour has it that the WCC CEO, the CoC, and WREDA are off in their own little world away from the Councillors and Mayor themselves, who are about to struggle with a complex situation tomorrow in terms of how to get the City through this. Now is not the time to be divided. Now is the time for the Mayor to lead the Councillors in unity through this work and task their employees to focus on priorities.

Vanity projects, such as the Convention Centre, are not affected by these austerity measures that the WCC is trying to put in place. There is growing incredulity in the City over the fact that Council has not made statements about shutting down specific projects, or putting them on hold. In contrast, foodbank rates have gone up 400%, we are expected to take a substantial rate increase, and people are losing their jobs, some permanently.

Top tip. This subject is not going away.

The Council would be better to front the current list of projects and determine which of them are going to provide the most jobs once this lockdown is complete. Because that is the priority. Jobs.

Gardening tips, colouring books, and Lego are not a priority. Jobs are. And the discussion about employment after lockdown is missing, which is deeply concerning. We know that many jobs, particularly in the tourism and hospitality sectors are not going to return for years, and, as much as we are campaigned out by WellingtonNZ to “Love Wellington”, and get out and about, people are not going to want to go near a crowd for months.

Tourists will stay away, out of fear or because border controls may forbid it, and no one locally is going to have disposable cash to go on a tour of New Zealand.

Being creative about how we create jobs for Wellingtonians need to start now. Planning for the resumption of service and modelling the impact of the pandemic on our local economy is critical.

Here’s an example.

Before the pandemic, many businesses that have offices in the CBD, including government agencies, were making the slow move to working from home, otherwise known as flexible working. When the pandemic occurred, that was instantly accelerated to completion.

As we recover, those businesses are going to seek to keep their costs well done; there will be little discretionary spending for quite some time and one area that saves a lot of money is retaining the work from home model.

I’ve spoken with a few people over the last week about this situation, and the consensus is this. Even when lockdown is lifted, companies and agencies will likely seek to retain the work from home model where they can.

That’s thousands of workers that will not be coming into the CBD with any regularity as we saw previously. Some of that is cost-saving, many thousands of dollars per employee are saved each year because they do not need to be housed in an office. Some of that is because priorities for us personally have changed and being close to our bubbles in the future will be paramount. Some of it is because it’s just good sense; again, people are telling me that productivity has increased and that a lot of people are happier.

Of course, it won’t work for everyone, but I would expect to see around 80% of workers who work from home now, retaining that work from home ethos, 80% of the time.

That’s a potentially massive impact on the CBD. In terms of revenue for the City and the soul of the City itself. Where are the WCC and CoC planning to deal with this reality? How will they move their stance to build and support local urban areas, which have been largely ignored over the last decade, to make sure that there are infrastructure and jobs for people?

Let me give you another couple of examples.

In the City, both the airport and the Movie Industry are huge employers and massive generators of revenue. The future of the airport needs to be understood, we will need one, but what are we going to do with the crashing revenues and job losses?

I suspect the movie industry will not be back in the way that we have seen it in the past. This time last year it was at full capacity soaking up every production site in the region. Now, it is closed. Likely, people will not want to travel after the lockdown is lifted and that given the movie industry revenue generation capability, other countries are likely to subsidise the hell out of it just to retain them. What strategies is the City going to adopt to mitigate this?

Who knows how the property market will react, including our significant rental market? But here’s a thought, a contact of mine told me that over seven hundred houses in Wellington have been withdrawn from AirBnB. That’s a lot more rentals and properties coming available after lockdown.

It’s time we got real, and it’s time that the Councillors and Mayor told their employees to focus on what is essential. They need to have unity, group together and take control of this crazy train.

Because you can’t eat Lego blocks.

Footnote: This is not meant to be disrespectful to the hundreds of essential workers that the Council employees directly or via contract. They are keeping our city running in incredibly trying circumstances. This is about City leadership, or lack of it, because it effects every last one of us and the future of our City. I also note that Mayor and Councillors are now getting regular messaging out on a daily basis, which is an improvement.

4 thoughts on “WCC in austerity mode, or, “let them eat Lego blocks…”

  1. Could you update your piece? The WCC execs and Councillors agreed to a 10% pay cut yesterday.


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