Open for business

Open for business

Open for Business is focused on supporting the success and growth of existing and new Wellington businesses, to grow the revenue coming into Wellington and the number of well-paid, meaningful jobs in our city. Open for business includes a refocused Business Development Agency, funded via reprioritisation of council costs; and a Mayors Taskforce on Business Development. It is part of my package of policies focused at controlling costs per person by getting Wellington growing.

Open for Business is a package focused on Wellington becoming a city that has job opportunities that people stay here for and move here for. 

Economic context

Rates per person in Wellington are expensive. Making matters worse, people are leaving, which is amplifying rates increases for those who stay. Most people love Wellington, but many are struggling to find well paid and meaningful work here. A resilient job market requires a strong business sector. Something that our Council has been ineffectual at supporting in our recent past. We need to turn this around.

Wellington has a strong track record on innovation, tech and successful businesses. Xero, Trademe and OpenSmart being a more well known example. Volpara or Hnry maybe less well known, or Goodnature and Sharesies which are locally iconic. However, New Zealand (and Wellington) has some fundamental challenges that hold back our ability to be a global innovation powerhouse. We need to be bold and brave to solve these.

It is tough for start ups and small, medium sized businesses with intangible assets, such as intellectual property or software to access capital. This is because there are tax advantages to investing in non-productive land assets, and banks prefer to lend to households or businesses with physical assets. This discourages investment in software and intellectual property by New Zealand businesses, contributing to notoriously low labour productivity here. Combined with NZ workers receiving comparatively low worker share of profits this means in New Zealand workers have less time and less motive to innovate.

We also have poor educational outcomes in key areas. Poor financial literacy contributes to a relatively high proportion of business failures. Comparatively few science and tech graduates, limits capacity for tech growth and jobs.

Wellington city has significant economic challenges to navigate. Our Council’s operating costs and rates are ~50% higher per person than other cities and WCC has 50% more assets per person than other councils. A significant contributor to high per person costs and assets are the lack of population growth in our city. Since 2000 our city and region has grown at half the rate of Auckland and Hamilton. Since 2017 our population hasn’t grown at all while Auckland has grown by 15%.

Austerity is not going to turn this around. To bring our rates per person down to Christchurch’s level ($1,170 per person cheaper) would require $246m (45%) a year being taken out of Council operating costs – equivalent to firing 50% of staff and cutting maintenance spending by 50%. To achieve this through asset sales would require selling $6.1bn of assets – meaning sale of all Council owned facilities and 50% of the roads and pipes. Taking extreme measures such as these would cripple our city and are not feasible. 

The only way to turn the situation around and remain a vibrant and great place to live is through growth. Open for Business is a package focused on Wellington becoming a city that has job opportunities that people stay here for and move here for. 

Business Development Agency

This includes refocusing Creative HQ and WellingtonNZ into a Business Development Agency that works with Wellington businesses to grow their revenue and operations in Wellington, so that they have greater capacity to employ people.  

This Business Development Agency will also have a reinvigorated focus on growing our start-up sector. The goal is to increase the number and viability of start up proposals, number and value of venture capital deals and improving the ability for these businesses to successfully reach maturity. Current funding to CreativeHQ of around $1m per year can be increased by reprioritising from the overall budget for city promotions and business support of over $35m per year. 

Mayors taskforce on Business Development

I also propose a new Mayors Taskforce on Business Development. A strategic advisory group, made up of business leaders from the Wellington community and established to drive innovation, productivity, and long-term prosperity in the city. Wellington has some outstanding business leaders, but they are infrequently consulted or listened to in developing our business environment and the conditions required for success. 

The Taskforce’s focus is on ensuring Council decisions create the conditions for technology-driven businesses, entrepreneurs, and knowledge industries to thrive, while ensuring that productivity gains are widely shared across the local economy. It will also provide independent, expert advice to the Mayor and Council on policies, regulations, and opportunities that impact the local business environment and act as a sounding board for major economic development initiatives and investment decisions.