Fran O'Sullivan: Closer eye needed on power of mayor

Powerful position allows too many personal policy platforms without them being appropriately put to the test.

Auckland mayor Len Brown pledged he would order a review of the seven CCOs during his second term as mayor. Photo / Richard Robinson
Auckland mayor Len Brown pledged he would order a review of the seven CCOs during his second term as mayor. Photo / Richard Robinson

There is a suspicion that the mayor's office is now charging ahead with too many initiatives simply to take the heat off [Len] Brown on other fronts. The manner in which Len Brown deploys his considerable powers as Mayor of Auckland deserves greater scrutiny by elected members of the Auckland Council.

Formally the Mayor of Auckland is legislatively tasked with promoting and leading a vision for Auckland, as well as leading the development of council plans, policies and budgets.

Brown occupies one of the most powerful positions in New Zealand. It is a position which clearly vests a great deal of trust in any incumbent - far too much, in my view - allowing them to push through too many personal policy platforms without requiring them to be appropriately put to the test other than support from councillors.

In Brown's case, the most recent example was his advocacy for a living wage policy which he managed to get through the council's budget committee, with help from a couple of Independent Maori Statutory Board members (including John Tamihere), to give him the requisite majority of 11 to nine in a vote.

A substantial policy initiative - like a living wage - should be debated thoroughly on the basis of full background papers on its implications for the broader council finances.

Brown has said implementing a living wage will be "fair" to 1600 council staff currently earning less than the proposed $18.40 an hour.

Estimates bandied about suggest the policy will cost $3.75 million to implement, which the mayor wants found from savings elsewhere in council and phased in over three years, starting next year.

But budget committee members say the decision was made without an expected report from Auckland Council chief executive Doug McKay on the implications of bringing in such a policy. They hope for greater scrutiny when the full council gets to ratify the plan on December 19.

This is not good governance.

Further, there is a suspicion that the mayor's office is now charging ahead with too many initiatives simply to take the heat off Brown on other fronts.

But what should concern John Key's Government - which established the new Auckland governance structure more than three years ago - is the mayor's move to curtail the power of council-controlled organisations (CCOs).

Brown pledged he would order a review of the seven CCOs during his second term as mayor.

The CCOs include: Auckland Transport, Watercare, Auckland Council Investments, Auckland Tourism, Events and Economic Development (Ateed), Regional Facilities Auckland, Auckland Council Property and the Auckland Waterfront Development Agency.

There is always room for efficiencies in any organisation or business. But the big issue is whether the intent of the CCO review is at its heart political - whether Brown simply wants to bring the organisations more directly under the control of the council/mayor, rather than produce greater cost-effectiveness and efficiencies.

Judging by a mayoral letter which went to CCOs this month, the control imperative factors high up in Brown's thinking.

The CCOs were given the message that it was not appropriate for them to make formal submissions on the Unitary Plan.

For an organisation such as Watercare - required to plan, invest in and deliver water and take care of sewage for Auckland - this is plainly ridiculous.

It is entirely appropriate that such a CCO does make its own submissions and not fall into council group-think.

Ports of Auckland has also come in for criticism because it has hired legal assistance in its own issue with the council over its expansion plan which the company believes was a strategic leak.

Also at issue is the fact that CCOs have been told they will have to find savings over the next three years.

The council CCOs are independent bodies. Council appoints the directors and the CCOs are accountable through statements of intent which set performance measures. At issue is whether the budget process and governance channels are being short-circuited.

Unfortunately Auckland Councillors appear to have had a collective brain bypass during this period when the mayor's credibility has been sorely tested through the many revelations over his affair with a previous member of the council's ethnic advisory panel.

Yesterday Councillor Cameron Brewer again broke ranks on the EY (previously Ernst & Young) inquiry into Brown's actions in relation to his affair with Bevan Chuang, saying he wanted it expanded to cover Brown's Hong Kong trip, which was not disclosed in the usual fashion when it took place last January.

Council chief executive Doug McKay - who ordered the inquiry - said he had reviewed the trip and found no improper use of council resources. Hong Kong Government contacts confirmed to me yesterday that Brown took part in their Government-funded visitors programme.

The EY inquiry should have reported by now. Sources suggest McKay has brought in a top outside lawyer to advise him in his dealings with the mayor's office.

The big issue is the freebies Chuang alleges Brown received from Auckland hotels (Langham, Hilton and Sky) where they conducted their trysts. EY needs to ask the questions of the hotels. And the mayor's office needs to give the hotels clearance to spell out whether or not they did. If the inquiry does not move into this fraught area it will have no credibility.

Then there are the donations. When Brown was first elected in 2010 he declared donations totalling $581,900.95, of which $499,000 was to the New Auckland Council Trust. Such trusts enable donors to hide their identities.

As Brown moves to take more power off the CCOs and centralise it in the mayor's office, it is time to question whether he should ensure greater transparency over the identities of his political backers.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

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