The logic behind John Tamihere’s water sale idea for Auckland


Well, hold on champ…

interesting proposal by John Tamihere today on Auckland’s water. His out of the park proposal is to sell 49% of Watercare to ACC or the New Zealand Superannuation Fund means that all the desperately needed water upgrades could be fixed NOW instead of, as Phil Goff promises, within 50 years.

Let’s not forget, the ACC and NZ Super fund are NZ owned and both are desperate to buy into infrastructure to speed up the desperately needed upgrades.

Claims of water rates spiking seem overblown because ACC and the NZ Super fund don’t have to produce corporate profit margins.

Auckland is crucified by a lack of infrastructure, because of debt limitations, the council cannot borrow more to fix these upgrades. Tamihere’s proposal finds the money now, get’s the upgrades done now while ensuing the asset remains owned by domestic forces.

This is actually surprisingly clever.


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  1. It has always been utterly obtuse to require the public pay into an insurance scheme, lent the funds out to “the market” and then turn around and borrow money from “the market” to fund the infrastructure we need.
    Nationalise the savings schemes and then do what John suggests and sense would return. Too bad if it makes it obvious that the super scheme and ACC are just another tax to pay for infrastructure, but why the hell do we have to subsidise the market middlemen in the process? It’s crazy.
    D J S

    • if hes going to sell the water it better go to kiwi saver funds that can hold it in perpetuity these are kinds of assets we need keep control of i have a feeling the pension funds would be better more stable owners and we have 40 50 60 year money its all of us these belong to us and if we cant trust the councils as guardians

  2. Am I reading this right? Martin Bomber Bradbury is defending a proposal to partially sell off local government assets? I can understand you disliking Phil Goff, but solving a temporary problem with what is effectively an irrevocable act (privatization) isn’t smart governance.

    Selling off utilities (partially or otherwise) leads to increased charges to consumers. The last thing a supposedly left-wing candidate should be doing is increasing the cost of living, which always hurts the poor the most.

    • Comrade

      It’s selling these assets to bigger domestic players who are capable of investing into the immediate infrastructure with the sale proceeds. Majority share is still with the council and it allows infrastructure investment – with the current debt restrictions on Council, how do you propose we find the money to upgrade our water network?

      • Auckland council wasted 1 billion on failed IT to integrate the supercity, no questions asked.

        Plenty of money for billionaire boat races that don’t have to rely on sponsorship or charities like America’s cup as well as stealing the harbour for the cruise ship tourists.

        Plenty of money for bailing out one of the world’s largest private recycling companies to the tune of $29 million after China stopped buying foreign waste.

        Not worried about selling off assets real cheap and not on the open market, like $3 million for fire sale of the Civic Administration Building (CAB), 22 levels, (19 floors and 3 basement levels), 14,000m2 of office space, and 5300m2 of land in the heart of the Auckland CBD.

        Petrol taxes not used for integrated modern public transport like rail but slushy projects under ‘public safety’!

        Maybe the council already has enough money, but it is how they are wasting it, that is the issue!

        And the council needs to stop the demand and obsession with growth causing all the pollution and problems! Personally I don’t lie awake at night worrying how Singapore, Chinese and OZ developers can make another billion dollar profit out of Auckland apartments most people living here can’t afford, especially when the Auckland ratepayers are the ones tasked with paying for for the above profits infrastructure!

        • I still hope you can agree with me that anything less than a billion dollars spent on basic services like water would be an insult.

      • We find the money the way it was always done. Borrowing repaid over a long period so that the costs of those services are spread fairly over those receiving them.

        Privatising the Water services to ACC or NZSuper is still privatising them. What happens when they at some point onsell those shares on the open market for a profit?

        I worked for Thames Water in the UK and the pritatisation of that public service was a utter crime.

      • Martyn you’ve forgotten one eentsy weentsy little thing. Once ACC or the Super Fund buy 49% of Auckland Water they are FREEE TO ON SELL IT AS THEY SEE FIT

        Just thought i’d point that out to you

        • Precisely. Once sold it is sold. Being infatuated with Tamahere is no reason to suddenly become a cheer leader for good old fashioned neo conservative tripe. And using the same arguments too!! Like how else do we afford it. Seems Ive heard that one somewhere else… Once again as savenz points out above it comes down to choices. If the water is a priority then some of the more frivolous expenditures above could perhaps go on the back burner.

  3. Maybe the government and Auckland council should have thought about the impacts before they encouraged record tourism and hundreds of thousands of open work permits and tens of thousands of new residents into NZ mostly in Auckland… weird it now seems to be local’s problem to pay for?

    Immigration is not an accident, it was deliberate, to overload the city with people to help banks, and privatisation and funded by debt with ways to extract more money from locals to pay for it.

    Look at the petrol tax that was supposed to help commuters. Umm sounds like the priority is to get more tourists and overseas people to the airport and back…. not paid for by those tourists and overseas people, but by the people who live in Auckland and don’t have the funds to be flying in and out.

    None of what the petrol tax is paying for seem to be rail for commuters… road safety, red light cameras, building a road, ferry terminal upgrades (not more ferries) a new bus interchange (not more buses or the rail we are supposed to get)…

    We are fucked!

    Then there is superannuation, you don’t actually need to work in NZ anymore to get it! So when the hundreds of thousands of people who now qualify for free super and free gold cards on the NZ taxpayer clogging up the transport on top of everything else.

    You may qualify for NZ Super if you:
    are 65 or over
    are a New Zealand citizen
    are a permanent resident, or
    hold a residence class visa
    are ordinarily resident in New Zealand, the Cook Islands, Niue or Tokelau when you apply
    have lived in New Zealand for at least 10 years since you turned 20
    have lived in New Zealand, the Cook Islands, Niue or Tokelau (or a combination of these) for at least 5 years since you turned 50.
    When we say ‘you live’ or ‘you’ve lived’, we mean you normally live in NZ, the Cook Islands, Niue or Tokelau and that’s where your home is.
    You may qualify for NZ Super with less than 10 years residence if you have migrated to New Zealand from a country that New Zealand has a social security agreement with.
    Note: You don’t have to be retired from work to get NZ Super as it’s not income tested.

    Other income you earn can affect other payments you get from us (over and above NZ Super/Veteran’s Pension).

    SuperGold Card
    Your SuperGold Card will be sent to you automatically once you have been granted New Zealand Superannuation.

    To hold an residence class visa

    There are several subcategories of residence class visa. The 2 most popular streams are the Skilled Migrant Stream and the Family stream.

    You may qualify for a visa under the Skilled Migrant Stream when you have qualifications, work experience and, even better, a job offer in an area which is in demand in New Zealand.

    A Family Stream Visa may be the right option for you when you have a partner, parent or adult child who lives in New Zealand as a citizen or permanent resident.


    Remember that we were told by government that NZ needed migration to pay for our retirement, seems like the policy worked the opposite way, as people became NZ permanent residents and citizens within a few years on low wages and then got their aged parents in, who can also get married while on the pension and get more people into NZ…

    The pension automatically qualifies people for gold card and free travel on the taxpayer.

    Time you have to live and work at least 50% of your life in NZ to qualify for super, aka 32.5 years!

    At the current rate, I’d give the super to run out within about 10 years, so by the time subsequent generations that are currently paying for the folly get old enough to qualify for super and free travel on the gold card, the cupboard will be bare and they will have been truely fucked by student loans at eye watering interest in the 1990’s, user pays and high taxes for everything they do, more and more taxes arriving like petrol taxes yearly, health care which is declining per person, and fucked transport and water and pollution.

    Even more annoying that they are always going on about spending the petrol tax on upgrading safety (pretty much slushy contracts for construction that literally do nothing but create congestion everywhere at great costs)

    Government don’t seem at all worried about public safety in other areas though!

    Work harder, NZ!

  4. ACC and the NZ Super Fund certainly ARE expected to produce profits on their investments: that’s the whole point of them. When politicians start looking to them as a honeypot for benevolent donations it will be time to wind them up.

  5. John Tamihere would get more traction if he wanted to rid the council and COO of all the corruption and wasting of money and hold them accountable… it’s not a policy winner to try to sell of water care for voters… quite the opposite, helping Phil Goff to stay.

    Why do the people have only privatisations trying to run everything?

    There really is very little choice for voters on policy which is why people are less and less voting.

    • I’m down with John due to Anyone But Goff but nah no-one wants water semi-Privatised. Take the advice John its vote loser.

  6. Water is a monopoly operation in Auckland. There is no escape, 100% of people need water. Flogging off even 49% for a one off cash flow is crazy talk. Blue skies entrepreneur talk.

    Power generation and supply is a monopoly operation nationally, or should be, but power had a market artificially imposed upon it. Result? ever higher prices for consumers which is also just about everyone. And a few free loaders like Tiwai aluminium.

    Burning the furniture to keep warm is a very short-lived solution. There is now a point of difference between Goff and Tamihere, the latter obviously now the proxy National candidate. I am no fan of Goff either, but privatisation of what little remains is a no no–what next Ports of Auckland and Airport?

  7. I don’t hate it, the locals pay for the water already. The necessary work gets done now – with no increase in debt. The NZSF gets half the dividends (they do not go offshore except as investment).

    Sure the assets will eventually go to private sale, but not for a generation. And any asset value gain over that time will be retained locally. Much better than the power company share sales – some went offshore.

    It also allows the dividends from the half share held by council (with the upgrade lower maintenance costs) to assist the wider budget.

  8. it’s refreshing to see that you have actually thought about the whole proposal Martyn, rather than just cherry picking part of the proposal to present a faux news slant a la les standard.

    The intellectual brawn of the non media left is best represented here, and John Tamihere is right on the money. All local government will be doing is removing a minority shareholding of a corporation by selling it to get the funds from central government to fund desperately needed infrastructure central government won’t fund.

    It’s clever in the extreme

  9. When I was an MP in Bolger’s opposition, we said:
    Privatization of Strategic Assets was a No No!

    Government Print was not a monopoly – many orienting houses abound – and was sold.

    But When we became government, we ALSO privatised Strategic Assets.

    Strategic assets might roughly be defined as , MONOPOLY PROVIDERS.

    Example: Selling the railway company (trains and things)was not selling a monopoly provider – anyone can by a train. BUT selling the railway lines – a monopoly by any definition- was but one pearl of perfidious politics – and utterly stupid to boot, perpetrated by Dim Jim and Bozo Birch (interestingly the architect of Think Big a decade earlier!!).

    Later Cullen had to buy back the monopoly railway lines so competition could flourish among owners of trains and things.

    Auckland water supply – given the limited reservoirs, seems to me to be a monopoly.

    They who don’t read history will repeat the same mistakes

    • Still I must protest. In any other situation I would naturally agree that experience trumps theory. But that’s with out ignoring a lot of other factors like rising population, creaking infrastructure, a lot of dishonest use of statistics and the fact that correlation doesn’t necessarily mean causation.

      I’d suggest that due to other factors since wave after wave of privatizing state owned assets pushed asset prices to skyrocket and the current reputation of the system is legendarily bad and those sort of things tend to drive people away from a service. Add to that the fact that the best performing franchise since privatization was telecom which had to be rebranded and a new name and philosophy introduced, and has produced something better.

      Although I feel this argument falls flat when you have the highs and then inevitably comes a low. So I’m am a bit thing about consistency when performance drops when introducing new technology or philosophy or what ever in the future. My only hope is everyone is making a decent amount of money to not care about the speed bumps.

    • I find it very ironic that Labour would lay this nest egg and call it the Cullen Fund only for Labours critics (Y’know national party apologists) to come along and say oh but Labour is such a poor economic manger. Of course Labour can manage there own beast egg.

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