Christine Fletcher: Troubling air pocket in flight to sell Auckland Airport shares

The Auckland Council is facing a deficit to the tune of $375 million and Wayne Brown says selling the council's shares in Auckland Airport is the easiest option. Photo / Jay Farnworth

OPINION

Auckland Mayor Wayne Brown has indicated he will rethink his unpopular budgetary cuts to environmental, cultural and social services, but only if councillors agree to sell their stake in Auckland Airport.

Every investment by the Auckland 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 certainly don’t wish essential volunteer services such as the 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 Auckland Airport shares.

The advice received on the sale of the airport shares at the time of writing is limited.

Auckland Airport has embarked on its biggest redevelopment since the airport opened in 1966, with a brand-new domestic terminal to be fully integrated with the international terminal. Illustration / Airport Authority

I regret that former mayor Phil Goff disposed of Auckland Council Investments Ltd during his term.

Previously Auckland Council Investments Ltd provided clear, independent and strategic advice on Auckland Council investments. That independence was invaluable in supporting councillors to make informed decisions on important Auckland Council assets.

Since the demise of Auckland Council Investments Ltd, 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 theAuckland Council was not facing a financial crisis.

They have not yet supplied options or alternatives on the sale of the Auckland Airport 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 per cent of the sale will go to brokers and costs, meaning up to $100 million in costs and commissions for the investment brokers.

It’s hardly surprising, then, that some are sniffing around the Auckland Council like bears around a honey jar.

If the mayor is determined to sell the Auckland Airport shares, why are officers not providing advice on all options, including a partial sale or a release to existing investors?

Christine Fletcher. Photo / Nick Reed

I am not in favour of selling now, partly as I don’t believe the systemic issues causing the Auckland 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 partial sale, available only in small holdings to Auckland residents. This might mitigate concerns that investment fund managers could manipulate the situation with an outcome that may not be in Auckland or New Zealand’s interests, for example, by providing a pathway for any investors to take advantage of the monopoly situation of the airport by price-fixing and other negative impacts.

Mayor Brown 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 the social services currently funded by the council, but there must be agreed processes that support such a transition - as indeed each and every item of investment or expenditure should rightly enjoy a proper process and not be linked to any threat.

- Christine Fletcher is an Auckland councillor for the Albert-Eden-Puketāpapa ward