Editorial: Mayor shows courage under fire on port

Wharfies perform a haka during the Ports of Auckland protest march. Photo / Doug Sherring

Opinion

Courage in politics too often goes unnoticed, especially when it requires silence. Auckland's mayor has shown remarkable courage over the past week, resisting pressure to call the Auckland Council's port company to heel in the current dispute. Some of that pressure has been exerted in public, by commentators, union leaders and a protest march in sympathy with the sacked watersiders that the Labour Party's leader saw fit to attend. But just as much pressure will have been coming on him in private, from Labour members of the Auckland Council and party activists who helped him get elected.

Len Brown broke his silence at the weekend, but went only as far as to offer mediation. The offer was immediately rejected by the company, which has given up on bargaining after all this time and taken the first steps to appoint stevedoring contractors for the container wharves. If Mr Brown can maintain his fortitude he may be able to prove the port can be competitive in public ownership.

The contractual stevedoring arrangements the company wants to make would match those its nearest rival, the Port of Tauranga, has enjoyed for many years. They were introduced at Tauranga without the strife that has disrupted the Auckland port for so long now, and members of the Maritime Union are still employed on Tauranga's wharves.

The Port of Tauranga is only part-owned by its local authority. There can be little doubt partial privatisation makes a difference. Boards of directors can more easily resist political pressure when they owe a duty to private as well as public shareholders. More important perhaps, trade unions know this. They cannot as readily bring political pressure to bear in a dispute.

The Maritime Union would probably not have gone to the lengths it has to resist competitive stevedoring at Auckland if the port company's private shareholders had not been bought out by the council's antecedent regional council some years ago. Ironically, the union movement has tried to generate public support by portraying the issue as privatisation. The best argument for a partial sale of Ports of Auckland Ltd would be intervention by the mayor and council in this dispute.

Mr Brown knows this very well. It is he, almost alone in public now, who is doing the most to show that assets in full public ownership need not be a pushover in labour bargaining. This is the first step, and probably a necessary one, on the path to proving that assets in public ownership can be competitive with private enterprise in every way.

The mayor has given the port management a high profitability target, demanding a 12 per cent return on capital. The union points out that none of New Zealand's ports show this sort of return, but the mayor is assessing the investment as any other shareholder would. Generally investments should return at least 10 per cent.

The failure of ports to show this return is probably a reflection of the number of them, which in turn is a consequence of parochial public ownership.

All of them are at least half-owned by local councils. Had they been fully privatised there is no doubt we would have seen mergers and rationalisation that would have produced better returns for private shareholders, more efficient transport networks for the whole country and more bargaining strength for the ports in negotiations with shipping companies.

If this sort of rationalisation is possible with ports in council ownership, the largest port will need to lead the way. If Ports of Auckland Ltd can get close to the rate of return the mayor has set, it will be in a more dominant position than it has ever been.

But that all depends now on Mr Brown's courage. Can he see it through?