The Dunedin City Council appears to have no intention of sending in a razor gang to cut council spending in the face of worldwide recession.
Instead, its first decision at yesterday's budget hearings was to add $461,000 to its economic development industry project contestable fund for the next two years.
The idea behind the move was to make the most of opportunities presented by the recession and gain ground on competitors, leaving the city in a strong position once the recession ended.
Councillors also voted in favour of setting a new goal for annual economic growth in Dunedin of 5% above the national average, despite criticisms from some the goal was unrealistic.
One of the major issues affecting the budget - the Otago Stadium - is likely to take less of councillors' time, with a February 9 date set for a decision on the project, after the Carisbrook Stadium Trust reports back on its progress.
But some councillors indicated they would look favourably on projects supporting employment in Dunedin, with that issue set to provide a fundamental shift in thinking on major projects.
The move to add to the contestable fund was driven by Cr Chris Staynes, who won his seat on the Greater Dunedin ticket in the 2007 election.
"The city needs to make sure it does not slip backwards at the same rate as the New Zealand economy," he told the meeting.
Cr Staynes said the contestable fund should be increased because difficult economic times presented "good opportunities to invest in our future".
"We need to be a wealthier city, and if we invest now for our future, we will be ahead of the game . . . when the good times come."
His suggestion won the support of the majority of councillors, including Cr Kate Wilson, who believed it would demonstrate the council's focus on the local economy as an important area for the city in tough economic times.
The initiative - along with others such as more accessible rates relief - could help lure home former Dunedin residents living abroad in places like the United Kingdom, who might be feeling the pressure of the credit crunch, she said.
Others, such as Cr Paul Hudson, wondered whether the money would be better off invested in other areas or used to lower the rates burden on existing businesses.
Cr Andrew Noone agreed, saying, "I think we should have faith in our economy and local businesspeople . . . with less costs associated with running their businesses."Despite the divisions, Cr Staynes' suggestion was adopted on a 10-5 vote.
Earlier, and fresh from Tuesday's briefing on the economy by four economists, there was a push during the first few hours of council discussion of its draft annual plan for a debate on what councillors heard at the meeting.
The economists told them local authorities had an important role to play in stimulating the city's economy, but they had to think long and hard about spending that would push the rates take up when households were dealing with falling house prices and unemployment.
Cr Michael Guest told the committee it should decide on whether "to spend or not to spend".
He said he had heard from the economists there was an argument for cutting budgets, but there was also an argument for spending.
Cr Richard Walls said he had heard a message from the economists there should be "no razor gangs".
"It's a new dimension - getting people employed," Cr Hudson said. "It's something we have to think about this year."
Earlier in the meeting, Mayor Peter Chin said councillors could expect to hold further meetings to discuss changes in policy direction from the new National Government.
In opening comments at the beginning of the budget hearing, he said details of the Government's policies - and their implications for local authorities - were still being unveiled.
So, too, was the full extent of economic challenges facing the country's economy. Both were "matters over which we have no control", but councillors needed to remember projects contained in the plan would not be finalised until the plan itself was completed, on June 22.
Council chief executive Jim Harland told the councillors they may need to put the question of the stadium to one side, as there was a February 9 council extraordinary meeting scheduled for that decision.
"The information is simply not going to be available until that time. Anything between now and then is speculative."
The Carisbrook Stadium Trust would meet on January 29, and a stakeholders group, containing representatives from the Dunedin City Council, Otago Regional Council, University of Otago and Carisbrook Stadium Trust, would meet the following day.
The stakeholders group would produce a report for the council from its meeting.
Two days after the February 9 DCC extraordinary meeting, the Otago Regional Council would meet to make its decision.
Mr Harland said the budget hearing would most likely focus on "big picture issues", and councillors needed to think about future generations, and whether they could afford the planned spending.
Mr Harland noted while the 10-year forecast was for a 69% increase in spending, the rise would average only 3% in the last five years of the decade.
As well, inflation assumptions were "conservative".
Mr Harland cautioned those assumptions should not be changed.
He said 60% of the rates increase was in core council areas, and if councillors wanted to make savings, they needed to be clear what the implications were.
"If you wish to maintain a very low rate of inflation, there will be implications downstream."
