News

Queenstown’s $1b wishlist: Council seeks Govt help

Massive growth and poor planning has left Queenstown’s council facing a $1 billion-plus infrastructure bill over the next 10 years.

Mayor Jim Boult confirms the figure – “somewhere north of $1 billion” over a decade – and tells Newsroom the programme of works can’t be done without Government help.

He’s adamant the best way to pay is with a visitor levy, which needs Government approval.

The new Government’s announcement of an Auckland regional fuel tax gives Boult hope.

“While it’s different to what we’re seeking, the principle of it is similar,” Boult says.

“The answer to our infrastructure spend here is a visitor levy and so that’s a good precedent and we’ll look forward to some debate with the new Government on that.”

A flurry of announcements from Queenstown's council in recent weeks sets out the scale of the problems.

A central Queenstown bypass is badly needed, there are plans for two new parking buildings on the town’s fringe, a town centre transport hub is planned and the council wants an expanded water taxi service on Lake Wakatipu to morph into a full-blown ferry operation.

Boult says another bridge over the Shotover River, near the single-lane Edith Cavell Bridge at Arthurs Point, is also a “requirement”.

The council will also intervene in the resort’s red-hot housing market, with promises of 1000 affordable homes to be built over the next 10 years.

That mirrors pre-election promises made by the ruling Labour Party for 1000 affordable homes in Queenstown to be built under its Kiwi Build policy.

Helpfully for Boult, Phil Twyford is not only the Minister of Transport but also the Housing Minister, making him a fruitful place to start.

Boult says he’s written to several senior politicians in the new Government – including Prime Minister Jacinda Ardern. He’s yet to hear back but intends to travel to Wellington soon for “good, meaningful discussions”.

No blame laid

Boult doesn’t lay blame for the council’s invidious position.

But the previous council, led by ex-mayor Vanessa van Uden and former chief executive Adam Feeley, held rates rises and put off staff as a tourism and building boom started taking off.

Queenstown has Australasia’s fastest-growing airport and it’s now said the resort is the second-fastest growing centre in the southern hemisphere.

The district’s population is predicted to be 38,000 next year – almost as many people as live in Upper Hutt, according to the 2013 census – a rise of 17.4 per cent in two years.

Yet on an average day, tourists swell the population to more than 50,000, making it a centre comparable with Invercargill or Porirua.

Queenstown-Lakes’ “peak population” this year is about 100,000 people – on a par with the population of Lower Hutt.

The take-off in tourism and influx in local workers, whether from around New Zealand or overseas, has led to a residential and commercial building boom in Queenstown, soaring house prices and clogged roads.

A hotel shortage in the resort has been eased by the rise of Airbnb, which now accounts for about 14 per cent of visitor accommodation.

But the loss of long-term rentals has left some tourism firms taking desperate measures to house staff, including skifield operator NZSki asking locals, through school newsletters, to open their homes to ski workers.

While Boult’s council failed to get a visitor levy over the line with the John Key/Bill English government, it did have some success.

A $26 million two-lane bridge is being built over the Kawarau River and a new high school, being built at Frankton, will open next year.

Queenstown’s council secured $46.5 million in interest-free loans from a contestable $1 billion infrastructure fund, for works in Frankton, Ladies Mile and Kingston to pave the way for up to 3200 homes.

Boult says Queenstown’s council was invited by the Government to apply for special funding, with proposals due with Treasury next month.

“What the new Government’s view on that is, I don’t know. We hope that they continue to support that. Or alternatively see the sense in introducing or fast-tracking a visitor levy.”

On The Nation last weekend, Finance Minister Grant Robertson spoke only generally about the possible uses of a $1 billion regional development fund. He talked up the role of rail in boosting economic growth and suggested the fund would be distributed to all regions.

Tax-take goldrush

A Government based on fairness has to listen to Queenstown.

In the last 12 months, it’s estimated international tourists spent about $2.2 billion in Queenstown. That’s $225 million in GST heading into Crown coffers so, as a net contributer to the Government tax take, there is an argument for Wellington to help.

But successive governments have shied away from giving councils the power to charge a local levy in case it sets a precedent for other councils, such as Mackenzie and those on the West Coast.

They didn't have to deal with Boult, however. The experienced businessman, a former chief executive of Christchurch International Airport, is a deal-maker with good government contacts (in the last regime, at least).

He's not immune to banging tables to get things done – a good example is the arm-twisting he did with the Otago Regional Council and NZ Transport Agency to get a new $2-a-ticket bus network in the Wakatipu Basin. It's fair to assume, however, he'll be more diplomatic with ministers.

Queenstown council’s latest annual report shows its revenue from rates, charges and subsidies (such as NZ Transport Agency money for state highways) is $112 million. Its debt, Boult says, is about $80 million.

“We’re quite lowly geared and, yes, there is the potential to raise some more debt.

“But equally the last thing in the world I want to do is swamp the district with debt – that wouldn’t be a prudent thing to do.”

Last week, Queenstown-Lakes councillors voted to open part of the so-called Lakeview site, in central Queenstown, for development with the private sector. The council is also mulling selling land on what’s known as The Commonage, on Queenstown Hill.

But, says Boult, the council isn’t swimming in assets (and he rules out the council selling a further stake in Queenstown Airport).

On its normal income, the council faces a shortfall for its 10-year wish-list of infrastructure projects.

Boult: “That’s why we are keen for the Government to recognise the very special circumstances of this district, where we have such a small ratepayer base and such an enormous number of visitors going through the place.”

Queenstown's council has started work on its 10-year plan. But it can’t just plug in big infrastructure projects in the hope of getting money. By mid-next year, Boult wants a clear view from the Government about a potential visitor levy.

“We have got something of a burning bridge. We’ve got to get an answer to these issues.”