Auckland Council Budget vs the selling of our Airport
Akl Council budget proposal ‘rips the heart’ out of city – Swarbrick
Auckland Central MP Chlöe Swarbrick has hit out at Auckland Council’s proposed budget, calling it “deficit politics” which would rip the heart out of the city and its services.
While Auckland slowly collapses in on itself as the immigration floodgates are thrown wide open to 100 000 new exploitable migrant workers all crushing onto our infrastructure that is already in groaning gridlock.
While KiwiRail goes from bad to worse, when Auckland Transport is a nightmare and rentals soaring.
As all that is happening, the Boomer King sharpens his knives for the budget privatisation agenda and seems to have convinced Richard Hill to back him in selling off the AirPort shares.
For Christ’s sake, the Airport is a monopoly asset that makes Auckland Council huge money, why the hell privatise it?
We chose like morons not to appoint anyone to the board and they screwed us!
Former Mayor of Manukau, Sir Barry Curtis is damning...
Unfortunately, in 2015, the Auckland Council chose not to follow this practice of nominating a board member, a matter I find totally mystifying. Before Easter in 2020, the Auckland International Airport company board utilised fast track Covid-19 rules to raise $1.2 billion in capital, specifically excluding all major shareholders including the Auckland Council. This resulted in the Auckland Council’s shareholding being reduced to 18.5 percent.
..we have poorly managed this asset and now Wayne Brown and Richard Hills want to privatise it…
Entry ports to our city, both air and sea, are vital infrastructure to the Auckland and national economies and indeed, our security interests. They must not be forsaken. Only local public ownership, in part or whole, can safely secure the long-term interests of our city.
To protect Manukau’s interests the council purchased additional shares to lift its shareholding above 10 percent. This provided us with a ‘blocking share’ to protect our ownership. We participated in capital raising to protect our value and stop the diluting of our significant shareholding.
We successfully lobbied Central Government to change the rules around foreign ownership. We received regular, ongoing and substantial dividends which assisted to achieve lower rates.
The value of Airport company shares continues to grow. At the time of the Canadian Pension Fund’s first bid in 2007 the shares were listed at $2.80 per share. The offer was for $3.65 a share. Dubai Aerospace bid was slightly more. Since amalgamation, the combined value of Manukau and Auckland’s shares have more than tripled, a gain of $1.2 billion to Aucklanders. The current value is over $8 a share.
The Auckland Council has received well over half a billion dollars in dividends and a share buy-back from 2010. While no dividends have been received during the Covid pandemic, AIAL has indicated a resumption shortly.
The value of the Auckland Airport company, with its very large commercial and retail interests, will continue to grow. The Auckland Airport was built with public monies. It was owned and developed by the former Auckland Regional Authority until corporatised by central government in 1988. The Company was established with local government in Auckland owning 51 percent, but unfortunately, all but Manukau and Auckland sold their ownership interests.
…look.
Privatising our assets to cover the enormous cost of running this city is stupid beyond reason.
There needs to be a means of expanding budgets and services and if that is through City Bonds financed through the Super Fund or ACC or any number of huge Government funds, so be it!
We need big solutions not petty and self defeating budget cuts!
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I think the mayor is doing the right thing – in that he’s highlighting that the Council is spending more than it’s earning. So suggesting a sale will either get agreement or (as here) a reaction.
Eventually income and expenditure need to agree – so either cuts to services (which hopefully is only the non-essential or even nice-to-have only) or rates go up (perhaps by a lot). Now I rent so I’m not directly affected but you can be sure my rent will adjust accordingly. Given my income isn’t rising at the rate of inflation – and if it was I’d still be losing $10 per week (thanks to no adjustment to the tax brackets) – I’m not that keen on having to make further cuts to my spending.
Selling an asset only works with strong financial oversight – which I don’t have much confidence that (local or central) government can manage. So they’ll squander the money and leave us with worse options in the future. Unless you can sell something like the Yellow Pages for a billion to some hedge fund which had to be the best decision ever.
I’d rather they didn’t sell airport shares because it represents flogging capital assets to avoid fixing the real problem – a bloated council bureaucracy with over twice the staff it should have. Address that and there would be no problem.
Before amalgamation the total headcount in the Auckland region including the ARC was ~4,500 people, yet now Auckland Council has a permanent staff of over 11,000!
Through local community projects I have to work with AC people and it’s evident to me that the council is totally dysfunctional. They’re not bad people but the organizational structure is overly complex, siloed and has too many management levels. Nobody seems to have authority to make a decision so all they do is write self-serving reports. Several in management I have had to work with clearly have an agenda that is not in the best interests of ratepayers; instead, it’s about empire building and ‘patch protection’. A lot of physical work has been contracted out to large Aussie based contractors, which I don’t object to, but the contracts are written in such a way that there is no visible auditing process or reporting on their performance.
Asset sales are like putting the furniture in the fireplace–a very short term measure and ultimately counterproductive.
Why Councillors would let Mr Magoo get away with this is mind boggling indeed.
A business in trouble would sell underperforming assets not it’s best performing assets. If Warren Buffet considers a toll bridge his best asset its pretty dumb of Wayne Brown to think the opposite.
However Auckland City could levy an arrivals & departure tax at the international airport. $50 to go through the airport if you don’t have a passport with an Auckland address. Around 8 million international passengers per year maybe a million are aucklanders so around $350mill tax revenue per year for the city. Budget problem solved. Too easy.
Actually Joseph, they don’t.
A business in trouble often sells its best assets because they’re the ones that fetch the better price.
Well that may or may not be the case for a business in trouble but Auckland is just a largish city with a bit of a deficit problem it’s not in trouble. As a city it has the power to levy taxes and an ability to borrow at lower interest rates than a business in trouble so why would it sell a toll bridge that is likely to enhance it’s capital value after the recent capital raising. I guess our positions vary on this. I think it’s a great idea for the people to recoup the profit on their investment and long term lower rates or lower rate rises on the other hand you would prefer the shares sold at a recession price to private interests so the wealthy receive the people’s profits.
Bomber, beyond asking for Government intervention for our councils poor fiscal management how do you propose to plug the $300 million hole left by the previous administration? If it doesn’t come from cutting expenditure or selling an asset that returns no dividend, what are the other so called solutions? we are in a real pickle financially
International arrivals & departures airport tax. $350 million.
Auckland has a heart? Really?
Next will be someone claiming this city has a soul.
No one would dare to say it has brains.
Auckland is a voracuios organism with main purpose to support the evergrowing Arschloch.