Auckland’s Mayor has indicated he will rethink his unpopular budgetary cuts to the environment, cultural and social services, but only if councillors agree to sell their stake in Auckland International Airport.
Every investment by council should have careful consideration and evaluation for the contribution it brings to the public good and wellbeing of Auckland. Therefore, I welcome the Mayor being open to reconsideration.
I don’t wish essential volunteer services like Citizens Advice Bureau to fold, but nor do I want councillors coerced into something ill-considered for Auckland as might be the case with the airport shares.
The advice received on the sale of airport shares at the time of writing is limited. I regret Phil Goff disposed of Auckland Council Investments Ltd (ACIL) during his term. Previously, ACIL provided clear, independent and strategic advice on council investments.
That independence was invaluable in supporting councillors to take informed decisions on important council assets. Since the demise of ACIL, elected members now receive advice from council officers on investments.
Interestingly, these officers are the same who advised councillors less than a year ago that Auckland Council was not facing a financial crisis.
They have not yet supplied options or alternatives on the sale of the shares, and frankly this situation leaves me wondering why there is such indecent haste for a decision of such magnitude.
I have been told that approximately 5% of the sale will go to brokers and costs, meaning roughly $100 million in costs and commission for the investment brokers. Hardly surprising some are sniffing around council like bears around a honey jar.
If the Mayor is determined to sell shares, why are officers not providing advice on all options including partial sale or release to existing investors? I am not in favour of selling now, partly as I don’t believe the systemic issues causing the council’s current financial crisis have been adequately addressed and this could just be a short term 'sugar hit' fix.
If forced, I would prefer to see a part sale available only in small holdings to Auckland residents to mitigate concerns that investment fund managers could manipulate the situation with an outcome that may not be in Auckland's or New Zealand's interests by providing a pathway for investors to take advantage of the monopoly situation of the airport by price fixing and other negative impacts.
The Mayor has a great number of challenges before him and I wish him to succeed. He is right to call out Central Government to replace funding for social services currently funded by council, but there must be agreed processes that support transition.
As, indeed, each and every item of investment or expenditure should rightly enjoy proper process and not be linked to any threat.
Christine Fletcher
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29 May 2023