Council split over Christchurch

The Dunedin City Council is split over whether or not Dunedin should be proactively marketing itself as a destination for Christchurch business and families considering relocation.

Nine months after the first devastating quake, calls are now being voiced to debate whether Dunedin moves from being reactive to proactive to attract Christchurch businesses south, while a survey yesterday shows the quakes' effects appear to have spread through the country's business community.

Because of the differing views, councillors are scheduled to meet next week in a workshop and consider recommendations, which are being collated this week by senior council staff, the Otago Chamber of Commerce and Otago Southland Employers' Association.

The future for Christchurch business has been brought into sharp focus, not only in the wake of escalating and compounding damages from Christchurch's three major quakes, but the harsh reality this week that Canterbury's councils are struggling to secure crucial reinsurance policies.

Councillor John Bezett said while council staff had been looking specifically at the issue of businesses which could relocate south, the Government decision last week to pay out 5100 homeowners had prompted "several councillors to voice their opinion" in recent days.

"We don't want to be seen taking advantage of what is a tragedy for Christchurch," Mr Bezett said.

"[However] there is some conflict in council as to what could be done next," Mr Bezett said of some councillors who wanted the council to "proactively go out" and market Dunedin, while others were opposed to any sort of campaign.

In a survey by Grant Thornton New Zealand, compiled after the September and February quakes but before the June 13 quakes, found up to two-thirds of business around the country had been affected in some way, including a decline in demand, disruption to transport and other infrastructure services and a reduction in staff and management.

The survey found 18% of businesses had suffered long-term effects, 26% suffered a medium-term impact and 20% had suffered a short-term hit. Anecdotally, there has not been a flood of businesses relocating to Dunedin, but commercial agents are reporting increased inquiries and a small number of medium enterprises, and some professionals, with fewer than 20 employees, have moved south.

Chamber of Commerce chief executive John Christie said because nine months had elapsed since the first Christchurch quake in September, homeowners and businesses have had to deal with a "string of major problems" and were now considering their short- and long-term options differently.

"Dunedin doesn't want to pull businesses out of Christchurch, but the reality is things have changed up there over the months and businesses are now being pushed out," Mr Christie said.

Mr Christie said issues raised in the survey had been experienced in Dunedin, such as supply interruption, damaged goods, problems in distributing to Christchurch, a decline in sales and also tourismThe chamber's president, Peter McIntyre, said he did not believe central Government was giving enough regional emphasis to options; considering up to 20% of business, and or residents, are wanting to leave Christchurch.

"The Christchurch issues are bigger than Dunedin; they affect the whole South Island now," he said when contacted yesterday.

The relocation issue has been spurred in recent days by revelations reinsurance for council assets is not available, which means the likelihood of "through the roof" rates for Christchurch ratepayers.

"Dunedin is a viable option for them, as opposed to Auckland or Sydney.

"It has sound infrastructure in its port, airport, healthcare and education, which all leverages into the growing hinterland," he said.

Grant Thornton partner in Christchurch, Tim Keenan, said one of the overriding problems facing city businesses after the spate of earthquakes was the shrinking talent pool of staff and senior management.

"With it being unlikely that people, outside of the construction sector, will move to Christchurch in the medium term, the demand impact for talent and skills is likely to have an inflationary effect on wages and salaries," he said yesterday.

A critical focus of employers in the region is the retention strategies they are executing in their businesses as this demand for talent rises.

simon.hartley@odt.co.nz