Wellington businesses are fighting back

18:59, Jul 22 2012
Wellington will look very different in another decade as this momentum continues.

If you want to know what Wellington used to look like, visit Auckland.

Their waterfront skyline - especially when viewed from the Waiheke ferry - bears an uncanny resemblance to Wellington 20 or so years ago.

Auckland's inner-city landmark high-rise buildings carry the names that once dominated our business district.

As Auckland has steadily increased its dominance of the country's business, a string of companies have moved north.

Many had their head offices in the capital for more than a century. The bright lights that stand out include the ANZ Bank, Westpac, Tower and Telecom.

Overlooking everything is the Sky casino tower, which former Brierley Investments chief executive Sir Selwyn Cushing has described as the lasting memorial to the once powerful Wellington investment firm.


The absolutely positive news is that a group of staunch entrepreneurial Wellingtonians are gradually filling the gaps left behind.

Much of the drift north was the presumably unintended consequence of the business liberalisation introduced by Rogernomics, under which many Wellington companies and state owned companies were sold.

In retrospect, the sale of the country's biggest bank, the Bank of New Zealand was - in spite of vociferous complaints by its small shareholders - a watershed moment in the country's banking history.

As the Post Office Savings and trustee banks were gobbled up by the major Australian banks, their managers realised they no longer needed to be in the capital to lobby powerful ministers like Rob Muldoon.

To highly paid Australian chief executives, Auckland looks more like Sydney or Melbourne, and they can travel back and forth first-class during their usually brief stints here gaining experience in a “foreign” country before landing a bigger job back home.

It is easy to forget how powerful Wellington used to be in the country's financial and business life. Most insurance companies were based here, including AMP and AXA (National Mutual). Guinness Peat ensured Tower, formerly Government Life, went north after profitably splitting off its Australian subsidiaries.

Aucklanders like to say Wellington's power was solely based on the government and state-owned companies. This is not true: the city always had a vibrant private sector.

Its geographic position ensured its port remained the country's most important for decades.

The Union Steam Ship Company was dominant - but other British-owned shipping lines maintained substantial offices here including the New Zealand Shipping Company, and Shaw Savill, which used to run the city's best hotel, now largely forgotten, in Kilbirnie.

Wellington's central position was an advantage when the population was evenly balanced between north and south. Most of the primary industries were headquartered here - including the Dairy Board, a casualty of farmer infighting that led to the setting up of Fonterra.

So were WrighstonNMA , Dalgety and Crown. The city was a major employer in the car industry, with the Todd Corporation, the New Zealand Motor Corp, Ford, General Motors and Toyota based here.

Like the railways they were significant employers and centres for trade training. Building and engineering companies like Cable Price Downer (now Australian-run Downer) were based here.

Independent Newspapers was the country's biggest publishing company, and state-owned radio and television services dominated.

It was true part of Wellington's economic power came from government ownership of the country's energy and telecommunications.

The biggest player, Telecom, was one of the last major companies to move north. On the face of things this is a dreary tale.

Happily, recovering from these shocks Wellington is fighting back and rebuilding its fortunes.

There are exciting individuals working in a host of businesses who remain in the city because they prefer it to Auckland.

These include John Holdsworth - who started his career as a reporter at Dunedin's Evening Star with me years ago before carving out an illustrious business career that includes Datacom, a company with revenues of $667 million and 3000 staff here and in Australia and Malaysia.

Campbell Gower runs his international baby buggy business from Newtown.

Infratil remains a key driver in infrastructure investment.

Most energy companies, including the Todd family's extensive interests and associated company Cue, have strong Wellington links.

The railways' head office has returned from Auckland after failing under Australian control.

If well-managed - and providing the government millions are successfully reinvested - it will carve out a viable future in urban transport and in serving ports like Tauranga, Lyttelton, and hopefully Wellington.

Wellington-based engineers have brought former Telecom subsidiary Chorus back to the capital, recognising the importance of the city's natural advantage at the centre for rolling out new telecommunications links.

Xero is winning international recognition in accounting software. Sam Morgan, another tried and true Wellingtonian, has been the driving force behind the success of Trade Me.

The NZX has proved you don't need to be in Auckland to succeed in the finance sector.

Former government engineers now operating in listed company Opus are carving out key roles for their company in Christchurch but also in other parts of the country and overseas.

The partial privatisation of Meridian Energy - a highly innovative company - will be another positive.

Wellington will look very different in another decade as this momentum continues. It has a lot going for it.

The Dominion Post