Minister! Wellington is Not the 2nd Largest Region in NZ

In 2021 Wellington GDP was $41,041 million versus Canterbury’s of $41,138 (Stats NZ — Regional gross domestic product: Year ended March 2021)

If you are interested in regional development. If you believe in evidence-based policy making. Or if you worry about transport carbon emissions. If you are concerned about the lack of progress in improving the nation’s transport infrastructure. And if you believe that health care, manufacturing and construction workers deserve transport infrastructure as much as downtown office workers do — then this article is especially for you.

New Zealand has this weird city-size derangement syndrome about which city — Wellington or Christchurch — is New Zealand’s second city. Arguments on Wikipedia and social media have been quite intense. The issue appeared to be settled by journalist Charlie Mitchell back in 2020 with his article — Christchurch is New Zealand’s second city, deal with it and with population distance graphs such as below.

There is a growing gap between the populations of Greater Christchurch and Greater Wellington. Source

Yet if you read New Zealand’s national transport agency — Waka Kotahi’s recent report to the incoming Associate Transport Minister, especially the regional narrative from pages 8 to 12, you would believe that Wellington was New Zealand’s second largest regional economy with the growth prospects that accompanies that size and that Canterbury the province that contains Christchurch is just another rural South Island region.

This stated fact by Waka Kotahi is technically a lie but more seriously the detailed regional narrative to the Minister was grossly misleading.

The report was gushing and fulsome in its description of the Wellington region. There were two paragraphs discussing the issues Wellington faces and the various government plans and initiatives it will receive.

In comparison there was no paragraph — not even a sentence discussing Canterbury or Christchurch’s issues. Waka Kotahi ghosted the region with no explanation or rationale given. In the report the Canterbury’s regional section was bundled in with the West Coast, Otago, and Southland — rural issues were the focus. Waka Kotahi did not discuss how Canterbury’s GDP has for the last twenty years been catching Wellington’s GDP and in 2021 it finally overtook it — meaning Wellington is not New Zealand’s second largest regional economy.

Per capita GDP has long been higher in Wellington than Canterbury but not by enough to keep its overall GDP ahead. There are two reasons for this.

Firstly, population growth has been faster in Canterbury. The Wellington region had 424,000 people in 2001 which grew to 547,000 by 2021 (+123,000). While in Canterbury there lived 481,000 people in 2001 and 650,000 people in 2021 (+169,000).

In Canterbury, almost all of this growth has been in Greater Christchurch and in fact Selwyn and Waimakariri with its neighbouring towns close to Christchurch have consistently been among the fastest growing territorial authorities in New Zealand — growing much faster than the four Wellington ‘high growth’ cities.

Since at least 1991 Canterbury has been the second largest house building region. This graph illustrates that Auckland and Canterbury are the two New Zealand regions where the built environment is changing the fastest. Source

There is a good description on the TalkingTransport — Christchurch website discussing the house building consents for the growth of Greater Christchurch. The video mapping the cumulative consents since 1996 is great. Interestingly Greater Christchurch has been building faster in the last couple of years than it did in the earthquake rebuild years.

Projecting 25 years forward to 2048 Stats NZ estimate that the Wellington region will grow to between 612,000 and 701,000 people. While Canterbury will grow to between 780,000 and 900,000 people.

Secondly, Wellington’s economy is rather narrow. Of its top five industries only administration and professional services have really been growing. Whereas in Canterbury there is a broader growth pattern which includes manufacturing, construction, healthcare, and professional services.

Wellington only specialising in administration and professional services can provide high-income employment for some people, but a capital city region that only focuses on its governance function is not a recipe for supporting a larger regional economy.

A cynic would note that Wellington’s specialisation has a significant advantage though because administrators can write reports to support their industry while the manufacturing, construction and healthcare workers in Canterbury cannot.

One could further speculate that Wellington administrators may have some sort of confirmation bias. For example the officials at Waka Kotahi might believe a city is what they experience a city being — Wellington has lots of downtown office buildings so they may believe that is a quick visual measure of city success. Whereas more dispersed healthcare facilities, industrial manufacturing workspaces, and construction sites which Christchurch has in greater numbers are discounted. The officials then selectively interpret evidence about Wellington to confirm their initial thinking.

Christopher Lasch makes an accessible critique of what is wrong with the values and beliefs of America’s professional and managerial elites. The distinguished historian argues that democracy today is threatened not by the masses, but by the elites. These elites — mobile and increasingly global in outlook — refuse to accept limits or ties to nation and place. As they isolate themselves in their networks and enclaves, they abandon the middle class, divide the nation, and betray the idea of a democracy… Source

There are some commentators, such as Danyl McLauchlan an essayist and former Green Party staffer and Eric Crampton a think tank economist who have speculated (here and here) that the professional managerial class which serves governments may not be functional. That individually they are honourable and merit-based, but collectively they serve themselves rather than the public at large. That they are more interested in resources being allocated to discuss the abstract rather than deliver the tangible. The commentators explain and give examples of areas (including Waka Kotahi’s safety program) where funding has increased enormously, greatly benefiting consultants, comms staff and various other professional governance service providers, yet actual on the ground service delivery is tiny compared to the funding provided.

Another cynical speculation is the new Associate Transport Minister — Kieran McNulty — is from the Wellington region so perhaps a reason Waka Kotahi wrote a pro Wellington report was to gain some sort of political favour. For example, Waka Kotahi by ghosting Canterbury could provide political cover to Labour (and itself) for failing to deliver on the 2017 and 2020 election promises to provide passenger rail from Rolleston to Addington.

Passenger rail could easily be built in Canterbury if the region received the same transport funding as the Wellington region because there would almost be $2 billion in additional funding to allocate. In the period 2021 to 2024 the Wellington region is budgeted to receive $3.1 billion from the regional allocation of the National Land Transport Fund while the Canterbury region will only receive $1.2 billion.

There is a danger of going down a conspiracy rabbit-hole with these speculations but the point is the civil service need to maintain the highest performative standards so accusations of bias and a lack of professionalism are not possible.

This article can speculate but not determine why Waka Kotahi wrote a misleading report to the incoming Minister. Probably the explanation is a lack of expertise rather than deliberate malice. The reason for failure is usually incompetence not conspiracy. This article does though provide the evidence that the report was misleading and discusses some of the reasons why this is important.

Transport spending has increased significantly over the last decade. Canterbury and Greater Christchurch should receive its share of this expenditure. If Canterbury pays general and transport specific taxes and levies but doesn’t receive beneficial public services in return then this will undermine public support for government delivery of public services.

Canterbury contains something that is unique in New Zealand — Greater Christchurch — a commercially oriented mid-size city that is competitive in the free movement Australasian labour market. A topic that is expanded upon in the Christchurch the Chicago of New Zealand paper. New Zealand cannot just have a successful New York (Auckland) and a Washington DC (Wellington) it needs other supporting cities too.

I am currently on holiday in Scandinavia. Passenger trains are well established here.

I recently visited a friend in Cork which is Ireland’s second largest city. A wonderful lively place. Economic prospects look good — pharmaceutical manufacturing is booming. I liked the place — compared to Dublin it has the same underdog feel that I like about Christchurch.

One thing I noticed that is different in Ireland is there is no left/right culture clash over transport projects. Like Michael Wood the Irish see the war against the car angst as a red herring. Ireland simply built inter-regional motorways a decade or two ago and now they are expanding urban rail networks and concentrating urban development along railway lines. Both the right and left agree on this — what the Irish fear is complacency — not doing what is required (on all sorts of issues) — then falling back into poverty which was all too prevalent for previous generations.

Source: The eight new train stations planned for Cork’s new ‘metropolitan rail network’

Cork like Christchurch had Victorian era train lines that they closed down — they are gradually bringing them back into service, double tracking and electrifying them. New stations are being planned for former industrial areas where brownfield housing and commercial development is being designed.

An example of what MRT in Christchurch could look like based on the existing rail corridors with an eventual city centre tunnel to the bus exchange and extending a rail line around Prebbleton to Lincoln. Further discussion here. The overall cost for this would be comparable to Wellington’s LGWM transit project. Although the initial stages would be much cheaper.

Christchurch would benefit from the same transit-oriented development model that Cork is progressing because it addresses both the accommodating growth problem and the transport emissions problem. In Australasia Christchurch is the largest city without a mass rapid transit service.

Miro Rail a Christchurch based private sector company with a software and manufacturing background would like to make fast battery electric railcars to re-introduce passenger services back onto existing tracks. Miro would like to provide services nationwide not just for Canterbury.

In the 1920s and 30s NZ Rail experimented with a battery electric railcar running from Christchurch to Little River via Lincoln — despite this being very popular the Wellington based NZR decided not to take the experiment further. I have argued this failure to invest in electrification ended Christchurch’s rail-era and began the transition to an automobile dominated city.

Given how improved battery technology has become Wellington transport officials should consider partnering with Canterbury local governments and Miro Rail to start another trial. Arguably battery electric railcars utilising existing rail corridors would be more affordable and provide higher quality public transport services than other choices, especially at the initial restarting rail stage — skipping the need for slow to accelerate, noisy, and smelly diesel locomotives.

A render of Auckland’s first hybrid electric ferry, which will carry up to 300 passengers on the Devonport-CBD run from late 2023 or early 2024. It will run on two battery-powered engines, but also have a backup diesel generator. A 200-passenger version is in the works for the Half Moon Bay and Hobsonville Point runs from 2024 or 2025. Five hybrids have been funded so far. Owner: AT. Operator: Fullers. Boat builder: Whanganui’s Q-West. Propulsion system: Christchurch’s HamiltonJet. Source NZ Herald

Central and regional government have invested in battery electric vehicle technology for Auckland’s ferry service — so there is precedence for what Miro Rail is proposing. Auckland transport contributed $80m to fund five hybrid ferries (electric ferries with diesel generators for backup) and central government provided $27m to fund two fully-electric ferries.

There is a point in a city’s growth where alternative more spatially efficient transport modes need to enter the mix. The average vehicle travel speed peaks, congestion rises, and demand for locations closer to the inner-city increases. Infrastructure Commission modelling showed Auckland left this adaption phase too late causing excessive congestion, increased infrastructure costs, a reduced house building rate and house price inflation. It is neglectful that Waka Kotahi discusses the accommodating growth issues for Wellington but not the infrastructure deficits that the larger and faster growing Canterbury is accumulating.

The way Waka Kotahi structured their report was misleading. New Zealand has five regions that make up 77% of New Zealand’s economic activity.

Auckland 37.3%

Canterbury 12.6% (up from 11.6% in 2001)

Wellington 12.6%

Waikato 8.9%

Bay of Plenty 5.9%

No other region exceeds 5% and these other regions have declined from 24.1% to 22.7% of economic activity.

Of the top five regions only Wellington has declined in its relative contribution to economic activity — falling from 15.2% in 2001 to 12.6% in 2021.

Waka Kotahi correctly identified the growing importance of Auckland, Waikato and the Bay of Plenty. Together this golden triangle makes up over half the economy — 52.1% up from 49.1% in 2001. Yet Waka Kotahi’s report to the incoming Minister overstated the economic importance and future prospects of Wellington whilst completely neglecting to tell the regional importance of Canterbury or Greater Christchurch.

Maybe Waka Kotahi will argue that they haven’t kept up to date with the latest regional economic and population data from Stats NZ. And in any case it is not just Stats NZ data that they base their advice on — there are other issues, such as, resiliency, safety, congestion, and reducing carbon emissions, to consider.

I would have a problem with that excuse though. Waka Kotahi should be aware of where there funding comes from — their own data — corroborates the Stats NZ data.

The Ministry of Transport is the only Ministry to have hypothecated funding. Waka Kotahi’s largest source of funding is fuel taxes and road user charges — which the MoT collect regional data on. Given this is the transport financing system Waka Kotahi uses it should honour the people who provide them with their funding. Regionally Canterbury is by far their second largest funder — they should be aware of this and respond with the appropriate degree of accountability.

I have some issues with how sensible it is fund the national transport agency by fuel taxes really is — I think that we could learn from overseas and use land value capture techniques as a better source of funding. New Zealand Herald’s Thomas Coughlan revealed in an article title — Officials float green bonds, ETS money, or more fuel taxes to fund light rail — that despite much communication among officials and to Cabinet there is no agreed upon financing mechanism for the multi-billion dollar cost of the Let’s Get Wellington Moving (LGWM) scheme. Transport officials noting that the fuel tax funding scheme is over extended. Which would be another explanation for why Waka Kotahi ghosted Canterbury — it suppresses demand which is necessary because of their stretched financial resources.

In general Waka Kotahi being funded largely by fuel taxes might be distorting its evidence based decision making ability. It might be leading Waka Kotahi to make contradictory statements as detailed in the article — One simple trick to get more people on trains and buses: run them more often. Waka Kotahi’s board chair claimed to be unaware of the overwhelming evidence that higher frequency public transport supports the attractiveness of such services, that it facilitates mode shift, and leads to higher public transport patronage. Even though its own website says so in multiple places. Waka Kotahi used this claimed lack of evidence for the benefits of higher frequency public transport to reject Waikato’s Regional council’s request to increase the frequency of its Auckland to Hamilton train service — Te Huia.

Business journalist Bernard Hickey gives the big picture national and international context for this inability to finance basic public infrastructure in a podcast called — Magical thinking hits the physical and financial buffers.

Note vehicle kilometres travelled (VKT) are a proxy for (1) fuel taxes paid and (2) CO2 emissions. Transport alongside agriculture is the nation’s highest source of greenhouse gas emissions. Source MoT 2019 data

The above regional transport data has implications not just for supporting economic activity. Perhaps more importantly it shows where the most transport related carbon emissions are occurring.

Canterbury’s population (0.65m) is just 37% of Auckland’s (1.7m), yet the region has 45% of Auckland’s vehicle movements. This fact means for New Zealand to achieve its best possible carbon emission reduction result then Canterbury has to be part of a transport emission reduction strategy. This point at least should have been discussed in the report to the incoming Minister.

Waka Kotahi’s CEO in her opening foreword to the Minister wrote

Unfortunately, there is little evidence Waka Kotahi — at least in the advice it gives to Ministers — sees itself in partnership with Canterbury to achieve this sustainable future.



When cities erect barriers that make it harder to build houses, I think this is landowners lobbying lawmakers so they can earn without toil.

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Brendon Harre

When cities erect barriers that make it harder to build houses, I think this is landowners lobbying lawmakers so they can earn without toil.