Questions over holding firm

Despite some ratepayers' concerns that they had been handed a "fait accompli" with a proposed holding company, Hawke's Bay Regional Council chairman Alan Dick says the company is still "an if, not a when".
Submissions to the council questioned whether there had been enough consultation because details of the company were released after the deadline for submissions on the draft annual plan.
Submitters suggested the council planned to have a holding company regardless of public opinion and was only deciding on details, not the overall idea.
Councillors discussed whether the issue was important to the public and whether further consultation was required.
Some said prominent businessmen wondered why it had not happened sooner, others said ratepayers were concerned the council would lose control over its assets.
The current draft statement of intent has four councillors and three external directors, with one of the councillors as chair.
The Chamber of Commerce had said that as a commercial entity the holding company should have solely external directors.
Submitters had suggested the opposite, that there should be more council input on the board of directors.
Chairman Alan Dick said that the council could consider a transition process where all nine councillors sat on the board of directors until the company was at a point where external directors might be hired.
Councillors debated whether it was suitable to have a temporary measure as the public might see that as a way to get the company established quickly, brushing aside serious concerns.
The holding company would not make specific strategic decisions but would approve big decisions and monitor the operating companies' progress.
Consultant Robert Philpott said a commercial entity would be concerned only with making the best return possible, while the council hoped to meet environmental and community goals as well.
The council would have to decide what mix would best meet its goals.
Mr Philpott also told the council that while emphasis had been put on the tax advantages the real goal of a holding company was to improve investments and increase return.
"Increasing the return by just 1 per cent would make the tax difference look meaningless," he said.
"The first principle is return, if we don't want improved return then it can just sit there."
Councillor Christine Scott suggested that the councillors needed information about alternatives to a holding company and the advantages of having different numbers of councillors or external directors on the board.