The report was commissioned to achieve two things: a reduction of $25 million in Auckland City's non-core expenditure, and holding the rates at their present levels for three years.
These financial parameters provide the focus for the recommendations. Absent from the report is a triple bottom-line approach that would have linked the policy proposals with their social, economic and environmental implications.
The themes are clear. The Birch report recommends $578 million in asset sales, a reduction of expenditure of $30.6 million over three years, the elimination of debt, reduced rates in the future, more user-pays and unquantified public-sector job losses.
The asset-sales programme includes pensioner housing, general rental housing, Auckland City's shares in Auckland International Airport, carparking buildings, and City Design, the local authority trading enterprise.
The provision of housing, the report asserts, is not a core council service. Pensioner and general rental housing units are, however, the product of a long-standing partnership with central Government, supported historically by concessional interest-rate loans at 3 per cent.
Their provision is in keeping with the Local Government Act, the purposes of local government, the customary practice of more than 50 years and the creation of a legitimate expectation among existing and future tenants, including 400 on the pensioner housing waiting lists, that the service will continue.
Housing is also a contribution to the common good. A withdrawal from ownership will do significant damage to access to affordable housing in the city.
The combination of housing sales, moves towards market rentals, the acceptance of no new tenants and the shifting of pensioners around to facilitate the sales process represents a failure of a duty of care to more vulnerable lower-income sections of the community.
Auckland City also holds 25.7 per cent of the shares in Auckland International Airport. Their market value is about $410 million. They came as a windfall in 1998 and they have increased in value by $225 million since then.
With Manukau City's 9.64 per cent holding, considerable influence can be exercised by the two councils over the direction of the company in the public interest.
Auckland Airport is a strategic asset. It is part of a broader regional transport network. It affects and is affected by other components of that integrated system involving road, rail, sea and air. The sale of the shares will reduce the ability of Auckland City to promote and protect its tourism interests and to encourage sustainable transport policies. It will also mean forgoing a long-term income stream in the form of dividend and special dividends.
There is no guarantee that privatisation will serve the public interest. New owners may have short-term gains in mind, rather than the longer-term interests of the company and the region.
Asset-stripping has been a feature of our privatised rail system. Public ownership of airport shares provides a check and a balance against that happening at our international airport.
The Birch report also recommends major expenditure cuts. Worst hit is community infrastructure. More than 50 per cent of the cuts ($15.4 million) are at the expense of local communities.
Citizens advice bureaus, mainstreet programmes, community halls, community advice and planning, rates remissions, rates rebates for wastewater charges, the mowing of council-owned verges, non-chemical weed control on our streets, libraries and community board small local improvement projects are all affected.
Closely allied to the community is the area of arts, culture and recreation. Another $2.6 million is to be cut here from programmes that contribute to the vitality of Auckland.
There are to be cuts in sponsorship of events such as the Volvo ocean race, in free events such as Music in the Park, the Celebration of Performing Arts, and Pacifica, and a 33 per cent reduction in The Edge community arts programme. The last of these helps to make the Aotea Centre more accessible to children from families on low and moderate incomes.
Environmental care also comes under fire. The cuts amount to $7 million. That handy and popular recycling activity, the inorganic rubbish collection, is to be scrapped; also the garden waste coupons enabling rates-funded free collections of garden waste to compensate people for the smaller mobile garbage bins will no longer be issued.
Hidden environmental costs are also signalled in the criticism of the Britomart project and the Auckland regional land transport strategy.
If the region fails to encourage more Aucklanders to travel less by car and more by public transport, toxic run-off into our streams and harbours will continue to increase and high air pollution levels will go on rising.
What then are the weaknesses in the Birch Report? Its assumptions are drawn from a narrow and dated economic ideology. This is evidenced by the language of inputs, outputs and outcomes rather than that of means and ends.
There are the quaint definitions of public and private goods from public choice theory, where we are hard-pushed to come up with examples of public goods other than lighthouses and street lights. These replace more robust definitions of the common good drawn from ethical traditions.
Absent also is a hard-nosed and practical common sense. The cuts in community infrastructure and in arts, culture and recreation presuppose a buoyant sponsorship market and willing private-sector operators prepared to participate without public subsidies. If these are not present, the services will no longer be provided and the events will not take place. And that will be to the detriment of us all.
Perhaps we need to return to the old Christmas Carol and hope that the hearts and minds of our new Uncle Scrooges will be touched. And that the Auckland City Council will come to its senses, and produce more balanced policies.
* Dr Bruce Hucker is the leader of the City Vision team on the Auckland City Council.
The Birch report
