We Built This City On Rock N Roll (Rockstar Economy Edition)

Yesterday morning, I had coffee with an economist who is writing a chapter for us for our book on the rebuild. We talked about a range of things, but what struck me was his analysis that without Christchurch, the economy would be growing at somewhere between 0 and 2%. Less than a day later, and Clint Smith tweeted this image:

It’s a pretty simple image: Auckland has been about treading water, every where else is starting to go backwards, and the only thing that is giving the economy an illusion of growth is the money going into the rebuild in Christchurch. There are few things to comment on about that. Firstly, imagine how much better the Canterbury figure – and thus, the economic fortunes of the whole country – would be if the rebuild was being managed even half competently. The Government’s blueprint is a failure, with the only development in the city happening outside of the areas that are in control of CERA. The play which the government made for foreign investment has returned almost nothing, leaving development up to a handful of almost comically rich Cantabrians. It’s no wonder that investors are looking elsewhere, when the cost per metre for office space is more expensive in a city which looks like Post-Tito Yugoslavia than in the centre of Auckland.

Secondly, if New Zealand’s economy is a “rock star”, it is one that has drunk the contents of the minibar, soiled the bed, and thrown the TV through the ranch slider and into the pool. Now the hotel is getting new sheets and some double-glazed windows on insurance, but that isn’t the structural change that it needs. With the National Party’s self-proclaimed economic expertise – hand-outs to multinational companies with billion dollar balance sheets, a sad interdependence, both economically and politically, on the dairy industry, flogging off state owned assets to paper over the cracks in the budget – their economy is effectively based on fixing some broken windows in a city destroyed by a natural disaster. If they’re a “safe pair of hands” for the Treasury benches, then I’m a heritage building crying out for demolition.