Hawke's Bay residents' unease over new investment company

Residents are concerned a proposed investment company will lead to high-risk investments and privatisation of council-owned assets.
But Hawke's Bay Regional Council says the company would improve a "lazy balance", increasing returns and lowering rates.
The council heard submissions about its proposed investment company at yesterday's council meeting.
The company would oversee the Port of Napier and other commercial assets with the goal of improving returns, and taking advantage of tax breaks for new projects which are not making money yet.
Submitters disagreed about whether the company was necessary.
Council commentator Tom Belford suggested the investment company structure was simply another bureaucratic layer and said the success of the Port of Napier showed it was unnecessary. Companies to manage forestry or water assets could have the same success, without needing another board to oversee them.
"Put the focus on the individual companies. Launch them when you have a good reason," he said. "I don't see what this smaller entity is adding to the equation. No one from Port has come forward to say there is a deficiency that will be fixed by adding a holding company."
Chamber of Commerce CEO Murray Douglas said it was "past time" an investment company was set up.
"The Chamber has been a strong supporter of the investment company for a long time," he said. "I can attest to how these work and they work well."
His main concern was ensuring the board of directors consisted of experienced experts, rather than a majority of councillors.
Concerns from last year over the council losing control of its assets led staff to suggest all nine councillors be directors. It was described as "absurd" and "bizarre" by commentators because the directors would have to report to themselves on council.
Former regional council chairman Ross Bramwell said nine directors would lead to a "top heavy" organisation.
Taradale resident Barrie Crabbe said he represented a number of people who did not support the idea of an investment company. He said there was no guarantee it would make more money.
"It is working well so why change it? How do you really know it's going to give you a greater rate of return?"
Other submitters were concerned about the added risk associated with more aggressive investing and some suggested start-up costs and the possibility of on-going financial support out-weighed possible tax savings.
Councillors will further discuss the proposal at next week's meeting with a final decision to be made in June.