Let us imagine…
Following on from my previous article on co-operatives, imagine if the Aspiring Region (Queenstown, Wanaka, Cromwell, and Central Otago) had the opportunity to structure its laws, planning and regulatory framework in a way that truly unleashed it’s economic potential. An economic zone perhaps?
To explore this idea, I have created a hypothetical news article set twenty years from now. The Queenstown Lakes District and Central Otago District are now a joint entity called Aspiring. In exchange for greater autonomy, the Crown are expecting vast improvements in tourism productivity and are using a well-being framework to monitor performance.
There is no political motive here, nor is this an ideological manifesto… Rather, a desire for us to think a bit deeper on our challenges as a region. ‘Cos I’m sick of sitting in Queenstown traffic.
9th November 2038
Today marks the twenty-year anniversary of the Aspiring Economic Zone. Aspiring was formed as a legal entity to deliver greater overall performance from the tourism sector. Despite lifting the overall standards of living, Aspiring is still under pressure to deliver on its social and environmental expectations.
Economic policy breakers and makers
- Aspiring’s positive economic results are underpinned by continued growth in tourism revenues, up 6% to $22.49bn.
- This a tenfold increase since Aspiring’s formation in 2018, where MBIE reported $2.29bn in tourism spend.
- Total passenger arrivals across all three airports increased 4% to 10.2 million.
- Median household incomes are following in step with another annual rise from $202,000 to $212,000 this financial year, the second highest in the country behind Auckland.
But it’s Aspiring’s burgeoning research sector that holds the future for the region, with over $4bn in export earnings in the year to October, up 9%. With its generous tax breaks and immense conservation estate, Aspiring’s knowledge exports are at the forefront of Regenerative Economic policies.
Many regenerative economic policies would not be possible without the world leading research taking place in Aspiring’s conservation estate. Their research has enabled economic tools such as the, Assessed Value of Natural Capital (AVNC), Carbon Credits and Transferable Water Rights to become mainstream. Capitalism is now being unleashed as a powerful force for good.
The research sector is also generating synergistic value for the tourism industry. Many visitors are willing to pay higher prices to partake in regenerative research projects throughout the region. Despite continued calls for a cap on visitor numbers (largely from nostalgic locals), the region has increased income per visitor, to $22,500, up nearly ten-fold since 2018.
Environmental stewardship remains misunderstood
The state of the environment, as measured by AVNC delivered yet another flat line result for Aspiring. Despite their regenerative efforts, the value of the region’s landscape and ecosystem assets remained at $48.55 trillion with an increase in annual consumption (depreciation) to $33.6bn. The result will raise the ire of Wellington, where the predominant view of their economic performance is simply a result of ‘mortgaging mother nature’.
Shadow Minister for the Environment Lila Rose, expressed her frustration at the result;
“Aspiring region continues to consume natural capital faster than it can be replenished. They continue to bury themselves in natural debt. Its incredibly hypocritical, given what they are selling to tourists as being the heart of the regenerative economy. We all know that Fonterra was dissolved for the very same reasons. Aspiring needs to quickly replenish its natural capital if it’s to continue to receive its special treatment from the State.”
Despite becoming the wealthiest region in the South Island, it seems that the traditional capitalist model of growth and consumption still dominates much of Aspiring’s economic activity. Some tough decisions will need to be made by the elected and appointed stewards of the Aspiring region if they are to shake their reputation as the ‘zero-sum’ economy.
Efficient housing, happy people
Social well-being is strong with increases in the rates of virtual and spatial interaction (sourced from personal device data). Aspiring attributes the positive result to huge leaps in housing supply efficiency and transport connectivity, thanks largely to its UDA (Urban Development Authority) and its ability to raise capital for its infrastructure on the open market.
“Our Perpetual Land Supply Accord with the public, combined with automated house construction, now means the painfully slow supply of housing from twenty-years ago no longer underpins high house prices.”
Dominic George, the Director of People and Places for Aspiring has seen a fundamental shift in the function of housing. Mr George says;
“Housing is now largely valued for its utility as a warm and safe place to live. Location still drives a premium, but that reflects proximity to natural recreation as opposed to amenities. With big data analysis of the housing market, and our digital planning algorithms, we can now plan, consent and print a house within four weeks. Any large distortions in property prices are quickly met with supply.
All printed houses must legally adhere to the Printed Housing Design Standard, meaning our code of compliance and consenting process are no longer necessary. ”
The region attributes its amazing productivity growth to its ability to keep house prices stable, despite rampant population growth. With house prices now being largely pinned to human utility, housing and land are no longer seen to be the primary vehicle of wealth generation for the middle class.
“Rental incomes are there to make money from, but the incredible efficiency of housing supply means there is just too little promise of capital gains to attract the middle class into housing investment. Instead, much of the capital tied up in housing is from large, institutional investors seeking a steady, low-risk return.”
Mr George believes that affordable and stable house prices is the key reason that the regions social well-being indicators are so strong compared to other parts of New Zealand.
“The biggest shift we have witnessed is the attitudes towards population growth for instance. There is an acceptance of its inevitability and it’s probably shifted to an attitude of welcoming growth.”
“There is now a much deeper appreciation of the agglomerative benefits from more densely populated urban centres. We still have a lot of ‘NIMBY’ activity going on, but with over 80% of the population having lived here for less than 15 years, that type of behaviour is now treated as social prejudice.“
Big City, Few Worries
In other big news, the town of Cromwell has now hit city status. Resident population reached the 20,000 mark on the 21st of September, just two weeks off that predicted by Aspiring’s’ growth projection algorithm. The algorithm is projecting Cromwell to hit 30,000 at March 8th, 2047. The city now houses 34% of the region’s workforce thanks to the vast investment in high-speed transport corridors. Cromwell is now only fifteen-minutes from both Wanaka and Queenstown international airports and just another 90 minutes to Dunedin Airport.
Dominic George, believes Cromwell will continue to emerge as the centre for high value commerce as more and more tech firms and research institutes establish themselves in the area.
Cromwell boasts a well settled and very well-educated population. This is a very attractive proposition for companies wanting to establish themselves here. Mr George says it’s more than solid evidence that the Aspiring Economic Zone has been an overwhelming success.
Interesting fact: The Kawerau Gorge Tunnel Rail Corridor and WCAD Road Corridor (Wanaka-Cromwell-Alexandra-Dunedin) cost $24 billion in combined capital to construct ($5 billon economic, $12bn natural, $7bn social). This has been more than paid for by the $1.2 trillion uplift in land values and social well-being since their opening.
A seat at the table
Aspiring’s southern counterparts, comprising the populous of Invercargill, Gore, Balclutha, Te-Anau and Stewart Island have signalled that they now want more than just ‘the crumbs off the table’ from Aspiring. The Southern region are now entering negotiations with the Crown on their own co-governance agreement. Rather than simply being a carbon copy of Aspiring, the Southland region is much more economically complex. Their strong agricultural and industrial economies are at odds with their natural capital-dependent tourism industry. We can only hope that the Aspiring Canton are more than willing to share their lessons by placing Aotearoa – New Zealand back as their primary focus.
If you’re curious about this article or want to discuss it further, leave a comment or get in touch with Vaughn.
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