by Concerned Ratepayers Kapiti

A few days ago we did an article about how KCDC claims all of the credit for the commercial success of Major Events in the district – such as the Kapiti Food Fair.  We pointed out that this was dishonest.  But more importantly, making such a claim is so disrespectful of the time, energy, financial investment and entrepreneurship of the private sector organisers and participants in these events.  What the Council has been saying its that the private sector effort brought no value at all – it’s all due to the Council.

But it gets worse — MUCH worse.

In December 2025, the new Council received a couple of PowerPoint briefings on the economic development strategy, as some of the new Councillors (to their credit) were questioning the value of this spending.  One slide in particular caught our eye.  It’s this one:

Now it’s a bit hard to read, but the really interesting bits are in the green boxes in this slide.  The boxes shaded green includes text that state:

• “For every $1 [of Council investment], $125 increase in GDP”, and
• “349 new businesses over 3 years, $6k [of Council investment] per business”, and
• “1,670 new jobs over 3 years, $1k [of Council investment] per job/$6k in savings”.

Think about that for a minute.  What this slide seems to be saying is that GDP (the value of all goods and services produced) in Kapiti increased by $165 million between 2021/22 and 2023/24 – and this was due to Council spending on something called “business innovation”. 

According to this slide, does private sector investment, entrepreneurship and risk taking in Kapiti have anything to do with GDP growth?  Nope.  Absolutely not.  According to this slide, it’s all due to the Council.

We thought surely this cannot be true. KCDC surely cannot believe that.  Surely.  So, we asked.  But it is true.  That’s what KCDC thinks.

KCDC’s detailed response of its calculations is in the attached Annex.  But in short, between 2021/22 and 2023/24, in its December 2025 briefing to Councillors KCDC claims that:

• all of the 394 new businesses in Kapiti were due to spending $2.094 million on “business attraction”.
• all of the 1,670 people newly employed in Kapiti could be attributed to KCDC’s $1.670 million on “business growth”.
• That all of the $165 million increase in Kapiti’s GDP was the result of the $1.320 million spent by KCDC on “business innovation”.

These are staggering claims.

There used to be a time when communist countries really believed that economic growth and prosperity was solely due to central government control and investment.  But China and Russia learnt a long time ago that’s not true, and so North Korea is now the only country is the world that would claim that economic growth and job grown are due solely to be benevolent North Korean state.

Except, it seems, KCDC now believes it too.

We think – and so does everyone else except North Korea and now KCDC – that economic growth and prosperity is the result of private individuals investing in their businesses or their skills, working hard, investing in new products and new technologies, taking risks.  It’s all about investing for the future and increasing productivity.  The best thing that central and local governments can do is create a stable and predictable platform so that people and businesses can invest in skills and new products/ technologies with confidence and have the incentive to take a chance and have a go.

But, according to its briefing to Councillors in December 2025, KCDC thinks that economic growth and job growth is all the result of its business subsidies.  And nothing else.

A charitable interpretation of KCDC’s advice is that someone got carried away when preparing this slide and didn’t stop to think about the numbers that he or she was crunching, and their implications. 

But we think it’s worse than that.

KCDC’s briefings to the incoming Council are carefully put together and are carefully checked before they are presented to Councillors.  GMs – second tier leaders – front the briefings and they will have signed them off.  What this says to us is that senior Council staff – including those responsible for the $3 million/year economic development programme – actually believe what they have put on this slide.  That KCDC – and only KCDC – is responsible for economic and job growth in the district.

This would be laughable if there wasn’t $3 million of Council spending involved.  The people who are responsible for the day to day management of this spending – and the people responsible for advising Councillors on why/whether they should keep on spending this money – are the ones who oversaw the drafting and presentation of this slide.  It’s on the basis of their advice that some Councillors are strongly advocating for continuing this spending.  Councillors who are sceptical of this spending are beaten back because they are advised that the spending is generating fantastic returns to the community.  Councillors who are unsure find they can’t argue with what they are being told by the Council, and so they go along with signing off this spending.

The truth of the matter is that KCDC actually doesn’t know what the returns to its economic development programme it.  There is no reliable methodology to assess what would have happened to growth and jobs without any KCDC spending, and what is the truly additional economic or job activity arising from KCDC subsidies.  All KCDC can actually do is present anecdotal stories from one or two subsidy recipients and then try to claim that these show the benefit of all of the $3 million/year that is spent.

We think that KCDC should fundamentally rethink its approach to economic development in its upcoming Long Term Plan.  And it needs to rethink what advice is put before Councillors about this programme.  And it certainly needs to stop claiming that Council subsidies are the only reason why the region is growing.

ANNEX: Detailed KCDC calculations from OIR 2526: 328