Sneaky wealth transfer behind rebuild plan

21:34, Aug 14 2012

The Christchurch Central Development Unit's city blueprint is a developer's plan, not a rebuild plan, says self-declared outsider Ian Maxwell*.

Dear, oh dear, New Zealand. Your Government's plan for the Christchurch rebuild has confirmed my worst fears.

But let's back up a bit first. You've heard that expression that the first casualty of war is the truth? And the first casualty of communism was, well, communism; any country that started practising communism morphed into a dictatorship about five minutes later.

In this context, let me say that the first casualty of neoliberalism is altruism.

Whether you realise it or not, you have the most pure neoliberal government that has yet to exist, with a single house of parliament and a ruling party with a prime minister who is an ex-Merrill Lynch boss. You are living in a sterilised petri dish of neoliberal nonsense, and you are about to pay the price.

So what is neoliberalism? In the context of political control it started back in the 1980s with Thatcher, Reagan and, oddly, also Deng Xiaoping. Closer to home we had Lange and Keating. Remember all that deregulation, selling off government monopolies, opening up the country to foreign investment and imports and the like? Yep, that is neoliberalism.

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It is the prevailing dominant political view in the West and parts of the developing world, and it is based on the principle that free markets are the best mechanism to process all the complex information about the world we live in. And by analogy, this means that most government regulation, control and ownership should be avoided where possible.

Like any political theory, the hype is very different from reality. The very minute neoliberalists got control of Western governments, special interest groups realised they had a great new mechanism to increase their personal wealth.

The sale of government monopolies enriched the few who got the bargain. Deregulation played into the hands of the financial marketeers. Control of loosely-monitored government by lobby groups favours those who have the means to lobby. Rent-seeking became the art form of the moneyed classes.

Countries overtaken by the neoliberal hordes soon found themselves at the mercy of governing cliques intent on selectively deregulating and regulating in order to effect a transfer of wealth from the many to the few. Does this all sound familiar?

So let's get back to your government's plan to rebuild Christchurch. Your government has stepped in to control the rebuild plan. You, the people, have absolutely no input into the plan. Nor does your city council. It is the complete opposite of a democratic process.

Can you see the inherent conflict here? On one hand the National Government is a champion of a deregulated economy. And yet, when it comes to rebuilding Christchurch, the process couldn't be more regulated and secret. Doesn't that just sniff of an unstated objective, like some sort of sneaky wealth transfer?

Wouldn't a wise government understand this and make sure the process was open and inclusive? And you are all going to pay for the plan that you had nothing to do with through increased rates, whether you like it or not. But is that the worst bit? Not by a long shot.

The city is going lie fallow for years, and compulsory acquisition will occur. Presumably this will allow sufficient period for the "market" values to be depressed so that the acquisition values are sufficiently low. We can then guess that the land will be on- sold at a profit to parties who will also profit from the fact that the amount of available land for commercial tenancy has been substantially reduced.

The current owners of the land and buildings may be absolutely creamed, financially, in the process.

As an aside, do you know how Chinese cities continue to invest in their own growth? They resume land from farmers at the edge of their cities, at low government-determined rural prices. They then rezone the land to industrial or residential use, sell it at much inflated prices, and use the profits to promote business activities and invest in infrastructure. This is all very good unless you happen to be one of the farmers getting ripped off in the process.

Can anyone see any parallels to the Christchurch rebuild? Maybe you had a very successful government fact-finding trip to China.

While you are waiting for all this to happen your city will re-configure itself around suburban malls. Many business owners will simply move to other cities, probably in Australia. And when the central business district does get re-constructed into the so- called hubs of IT, health and whatever, they will struggle to compete with the suburban centres that are well established.

You will lose just about any heritage building worth having in the process, including the cathedral, of course. And you might gain a white elephant or two - say an expo centre and a stadium - which may be a financial noose around the ratepayers' collective necks for the next few decades.

Aesthetically, the rebuild plan calls for a smaller Christchurch city. All glass and steel, seven stories high, and permanently shaded at street level. Building use will be dictated by some as yet unknown mechanism.

A bunch of surviving heritage buildings will be destroyed to create green space that you hardly need and that just has to be in geometric strips (they couldn't work around the odd perfectly-stable heritage building, now could they?). You can only guess that the interesting and quirky bits will be in the eastern city, outside the green frame and outside of the government plan.

You might think that the so-called free-marketeers in government would just let market forces decide the future of Christchurch. Let people rebuild or renovate now. Don't try to dictate what sorts of businesses are built in each area of the city. Let the people of Christchurch decide for themselves what public monuments they want to invest in; cathedral, stadium or expo centre. But where's the profit in that?

The primary problem with this plan is that it will not necessarily result in the best possible Christchurch.

Businesses are ready to invest and rebuild now, not in three years. Perfectly good buildings, both with and without heritage value, will be removed to create green belts you don't need and also for vacant land, which will much later be filled with seven-storey glass and steel boxes.

Any reason for tourists to visit Christchurch will be removed since who needs to visit a glass and steel box land when you go to China for that. Businesses will mysteriously be told where in the city they will be allowed to set up occupation and they might just choose not to wait for that privilege and go elsewhere in the meantime.

The plan is so silly one just knows it will be scrapped at some time in the future. The problem is the damage that will be done in the pursuit of the plan in the short term.

Don't be fooled Christchurch. You need to take back your city and country from the neoliberalists before it is too late.

* Ian Maxwell was born and raised in Australia, has a PhD in chemistry and is an entrepreneur and venture capitalist. He is married to a Cantabrian and has relatives living in Christchurch.

The Press