Questioning of the value of all of the Council Controlled Organisations has been a constant in Wayne Brown’s mayorship. David White / STUFF
Auckland mayor Wayne Brown is several steps closer to disestablishing the city’s economic development agency ,saying in papers leaked to The Post “funding and facilitating the funding of major events, destination marketing and visitor attraction is not a required activity for council”.
The documents show Brown envisages bringing the functions of economic development agency Tātaki Auckland Unlimited (TAU) back into the council itself, although at a greatly reduced level. He is adamant that if a national bed tax is not implemented in time for the2025/26 year, as the hospitality industry wants, there will be a $20 million funding shortfall on top of the possible disestablishment of the agency.
The council has been approached with questions about the move, although has not yet responded.
A decision will likely be made by December.
Auckland mayor pushes for bridge over tunnel; faces struggles for support
The move would be a final blow for TAU, which has already seen 200 of its staff cut and a $35m budget drop in the past year. Concurrent with TAU’s budget being cut, events coming to the city have reduced significantly and some business groups have expressed concern about how few big events are scheduled for the near future.
The proposal to possibly disestablish TAU altogether is explained in a non-public document called a “Mayoral and council or direction to Council Group”, which feeds into decision-making about the city’s annual plan for 2025/26.The proposal has two options for TAU - one, to
disestablish both it and its Trust, formerly the Regional Facilities Auckland, and deliver all functions within the council, or retain the Trust as a facility manager, but disestablish TAU and bring all remaining functions into the Council.
As previously revealed, there is also a proposal to disestablish Council Controlled
Organisations (CCO) AT and property manager Eke Panuku on the table for serious discussion. But these two agencies also face the possibility of being modified while kept semi-independent, whereas TAU looks set to be scrapped under either option open for consideration.
Thousands turned out for Pasifika Festival in Tāmaki Makaurau Auckland in March, a festival run by Tātaki Auckland Unlimited. Supplied
Slagged off
TAU staff have suffered constant public slagging off from Brown since he started electioneering to become mayor in 2022, in a similar way to that copped by staff at Eke Panuku and AT, as well as Port of Auckland. Frequent outbursts against the head of AT in particular, and questioning of the value of all of the CCOs, has been a constant in Brown’s mayorship.
The organisations, run by civil servants, are effectively prohibited from defending themselves or picking a fight with the mayor and his allies.
But AT has proven harder for Brown to “take control” of, according to a council source who spoke to The Post confidentially. With his likely bid for re-election in 2025, the source said
Brown was keen to get rid of “low hanging fruit” like TAU and bolster his cost-out credentials.
Part of the reason TAU is considered “low hanging fruit”, according to the source, is that its remit is not well understood by the public or even some councillors, who regularly rail against its expenditure on things such as attracting foreign direct investment, tourism support and overseeing venues such as Auckland Art Gallery Toi o Tāmaki, Auckland Zoo, and the New Zealand Maritime Museum. TAU is also New Zealand’s largest conventions operator, delivering events across its portfolio of theatres and stadia.
Tātaki Auckland UnlimitedCEO Nick Hill. Brittany Keogh / The Post
With an annual budget of $124.5m,according to its annual report out today, TAU attracted $351 million in investment to the region -80% of that in the screen sector- in the past year. There were also two million ticketed attendees to TAU venues and events, and its events generated $142 million GDP contribution from major and business events the organisation supported. It also ran a roster of cultural festivals including the Diwali, Lantern and Pasifika festivals.
TAU Chief Executive Nick Hill said the body was “playing our part in the council’s drive to reduce costs by continuing to streamline our organisation, and identify and deliver efficiencies.”
Of the proposed disestablishment, Hill said it was “healthy for organisations to take stock and review performance, look for gaps, improvements and enhancements. There a realways opportunities to improve council group structures to get the best outcomes for Auckland.”
He said despitebudget and staff cuts in the previousyear, TAU had delivered “record attendances and [met] our financial targets.
“TAU is a responsive council-controlled organisation that has done everything asked of it by Auckland Council and continues to do a great job for Auckland.”
Tourism and hospo
The head of Tourism Industry Aotearoa Rebecca Ingram said while she had not seen the documents outlining the likely end of TAU, in terms of the part it played in bolstering Auckland’s tourism trade, it was important.
“Regional tourism organisations play a vital role in a healthy tourism system - they ensure valuable connections with international travel trade, provide destination stewardship, promote the region for both domestic and international travel, and foster new tourism product,” she said.
“This is particularly important in Auckland as about 70% of our international visitors enter through this city every year."
What Brown has proposed is that promotion and events functions still occur, but at a much reduced level and housed within the council itself rather than in the slightly separated agency.
At least one city councillor, Richard Hills, told The Post he was concerned the functions “in house” at the council might mean the philanthropic and partnership relationships that support events could be put at risk by the move.
Steve Armitage, head of Hospitality New Zealand, had also not seen the documents in question.
But he said there’s concern among many in and adjacent to the visitor and events economy about how the city may have lost some of its competitive edge against other cities that were spending more on promotion and events.
Steve Armitage, Hospitality NZ's Chief Executive Officer. Supplied
“The market has only become more competitive post-Covid, where content is at a premium and promoters are driving a particularly hard bargain in particular - and they’re looking for exclusivity, and so when you see what the likes of Sydney, Melbourne and Perth are prepared to put on the table to secure exclusive rights, Auckland can’t compete to the same level.”
He said it is not right for ratepayers to bear all the cost of a city’s promotional activities, and another revenue stream did need to be secured. The hospitality industry is in agreement about the need for a national bed tax, the proceeds of which would be paid back to the region in which it was generated.
“But[TAU] has done good job in setting up a fund that private sector operators have been able to contribute to, and that has generated a couple of million dollars of revenue they’ve been able to use this year for promotion, particularly into Australia - it’s a good achievement in very difficult
times.”
But with a reduced budget to play with, there also needs to be innovative thinking on the promotional side, he said.
He gave props to TAU for thinking outside the box in teaming up with the government to bring women’s sports to the country, a push that saw a string of events staged in Auckland and culminating in the FIFA Women’s World Cup in 2023.
Investors
Kate De Ridderis a senior portfolio investment manager with Bridgewest Ventures, a deep tech investor that was facilitated in setting up in to Auckland by TAU. De Ridder said while it was not Bridgewest’s place to weigh in on specific governance structures or upcoming decisions, the company could attest to the pivotal role the agency played in facilitating the company’s
establishment of a NZ presence in Auckland.
About 70% of international visitors enter through Auckland every year. Abigail Dougherty / Stuff
“For investors, especially those considering a move to Auckland, having a dedicated agency that can expertly navigate local business networks, facilitate deep dives into relevant industries, and understand the unique needs of businesses and investors is undoubtedly beneficial,” she said.
“Whether this is best achieved through a more independent agency or within the Council structure itself, is of course, a matter for public and political consideration. From our
perspective, what matters most is that Tāmaki Makaurau Auckland continues to present a welcoming and attractive environment for investors, businesses and educated/ innovative talent - regardless of the vehicle that delivers these services.”