GUEST BLOG: Mike Lee – Council’s asset stripping Long Term Plan – a long term disaster for Auckland
On 20 February, Auckland Council’s Budget Committee chaired by Mayor Wayne Brown signed off the Council’s draft $102 billion Long Term Plan.
The key feature this year, apart from the rates increases (7.5% this year, 3.5% in 2025 [election year] and 8% in 2026), is the proposed 35-year lease of the Port of Auckland, and the sell-down of the remaining shares in Auckland International Airport. The plan is out for public consultation – or should I say council’s version of public consultation – until 28 March.
Last year Wayne Brown despite having no popular mandate for asset sales (he never mentioned this once in his election campaign), tried to sell all the council’s shares in Auckland International Airport (18% of the company’s total shares), managing to muster enough votes to sell just under half (7% of the total shares). This was achieved only after much political arm-twisting and trading jobs for votes on the part of the mayor. At the same time the council pushed through the biggest general rates increase in the 22-year history of Auckland Council.
The Airport shares, gifted to Auckland Council in 2010 by the legacy Manukau City and Auckland Councils, are a sound inter-generational investment, being of both strategic significance and commercial value, the dividends providing long-term income supplementary to rates. Hard on the heels of his decision late last year to sell the Downtown Car Park Building, this year Mr Brown is determined to sell the remainder of the airport shares and also via a 35 -year plus? lease, to effectively sell the Port of Auckland, valued between $2-3 billion.
The stated reason for the sale of the airport shares last year was the need to repay council debt, however council debt levels and debt-to-income ratios, have ended up very much as they were before the sale. This is because, despite election promises to ‘fix Auckland’, Mr Brown has shown no interest in tackling the council’s and its CCO’s systemic spending and its totally inept procurement problem. This time he has come up with a completely new reason for pushing a massive sale of the council’s strategic assets – the biggest privatisation in New Zealand local government history – the pretext this year is to liquidate those income earning assets and put the cash into a ‘professionally managed Future Fund’.
Many of us will remember what happened in 2018 to the council Diversified Asset Fund (c $400m worth of international stocks, bonds and cash) inherited from the ARC and which until the council took it over had been managed by a small but highly competent CCO, Auckland Council Investments Ltd, earning an average 18% return. Once the council got its hands on this fund it was spent down within months. The chances of this ‘Future Fund’ (in reality a cash Slush Fund), avoiding the fate of the promptly looted Diversified Asset Fund and the predatory legal and accounting consultants the council pays so handsomely are slim indeed.
If the mayor gets his way, the remaining airport shares, still a very significant package, amounting to 11% of the AIAL total share-holding and worth c$1.4 billion, will be transferred to the ‘Future Fund’ but the predetermination, which lies beneath the glossy veneer of the ‘AK Have your Say’ Consultation Document, is revealed by the following statement which appears twice, on pages 9 and 59. “It is almost certain that most if not all of the AIAL shares, would be sold over time”. So much for consultation. So much for democracy.
Mayor Wayne Brown who came into office on a promise of ‘fixing Auckland’ is now halfway through his term. His actual record of fixing anything is modest indeed, (think road cones and AT). In his first year in office the mayor banged on eccentrically about moving the port from Auckland. That obsession has been replaced by a new one, moving not the port – but moving the ownership of the port company – from the people of Auckland, our children and grandchildren, to most likely to a foreign corporate. Once that lease is signed, it will almost certainly be extended at the convenience of the leasee. It’s effectively a sale.
Most troubling is that the council, as it did last year with the sale of the airport shares, and the Downtown Car Park Building (currently stalled by legal action) is trifling with its statutory public consultation obligations set out in the Local Government Act. Despite this being legally a ‘special consultative procedure’ relating to strategic assets, the consultation the public will be getting will not include the traditional right for ordinary citizens to present to their elected councillors in a formal public hearing. There will be hearings for selected ‘regional stakeholders’ of course – but not for the ordinary citizens of Auckland, the people who candidate Wayne Brown convinced was ‘Mr Fix-it’. Rather than Mr Fixit he has turned out to be ‘Mr Sell-it’. Please get involved. Say no to asset stripping and the disinheriting of future generations of Aucklanders.
Mike Lee is an Auckland City Councillor
Childs play compared to what the government has planed .Mr fix buger all has fixed nothing other than his own bank account and will leave a legacy of nothing .
My comment to Auckland is who complain about Brown is “We warned you!”
Dumb dumb Aucklanders put these red neck asset selling power hungry lot in power
I didn’t vote for him. I was reading your posts up until the election and trying to convince friends to see what would happen. We aren’t all dumb, only most of those who actually vote!
I don’t know why they vote because they don’t bother to find out what’s going on. They blindly carry on imagining old pale face men know what they are doing.
Pretty sure you supported him during the elections Mike.
https://thedailyblog.co.nz/2022/09/22/the-working-group-mayoralty-debate-final-curia-poll-list-of-journalists-wayne-brown-intends-to-ban/ this doesn’t read as support..
Mayor Brown has pulled the wool over the eyes of the most gullible, unintelligent and clearly those incapable of individual thinking.
Unsuccessful Mayor of Northland now Auckland.
Why should the nation’s taxpayers ever fund any future infrastructure in Auckland when it’s eventually going to be sold on the cheap to crony capitalist opportunists.
Most of the infrastructure my great grandparents, grandparents and parents built and paid for that belonged to the national commons has already been stolen.
I can understand why recent migrants might fall for the swindle but not the rest of us. You can fool us once.
You are exactly right R&C.
Those of us who were born here and had parents and grandparents born here should know the way this govt. behaves.
Unsurprisingly, it was obvious during the election campaign who Luxury Luxon was ingratiating himself with.
He also makes a play for children who don’t vote. If I knew my child or grandchild was about to be cornered by a politician in their classroom, for a photo opportunity, I’d have my hand out for an appearance fee. I think I’d be ‘entitled.’
Create a crisis….TINA….Exactly why Maurice Williamson is in there…to line up the cash cows for their mates to plunder….Watercare will be next when all that is spent….have you noticed that they have floated a diversion in the form of a downtown stadium to keep the sheeple happy while they rob the commons!
Actually, you are right. Williamson’s sole purpose for running was to promote an austerity agenda. He admits it himself. Once it is completed, he wil step down and enjoy his lavish ministerial pension while Auckland has to deal with the fact that it has no parks, libararies or any other assets.