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Home / New Zealand

<i>John Roughan:</i> Hucker's integrity intact over true price of water

John Roughan
By John Roughan,
Opinion Writer·
29 Jun, 2007 05:00 PM5 mins to read

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John Roughan
Opinion by John Roughan
Former editorial writer and columnist, NZ Herald
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KEY POINTS:

When the future President Kennedy made his name with a memorable book, Profiles in Courage, the public figures he selected were those who dared to be unpopular. Were he writing in Auckland this week I think he would put in a word for the city's deputy mayor, Bruce Hucker.

Hucker is the loneliest of figures right now, denounced by companions on the left, avoided by the right, assailed and abused by the little group that resents water bills. All because elections are looming and he is refusing to join the rest of the Auckland City Council in a phony retreat from a perfectly sensible way of paying for better drainage.

Drains might not sound important unless, like me, you are disgusted by a sign that appears on your local beach about this time every year warning of sewage contamination after a few days of rain.

The solution has been well known for as long as I can remember. Some of the pipes take both surface water and waste and after heavy rain cannot cope. The solution is simply to separate the flows, simple but out of sight and politically thankless. Nobody gets pictured in the paper cutting the ribbon on a nice new drain.

All Auckland's councils have had interminable separation programmes under way for decades, usually paid from rates if any is left after more visible expenses. Auckland City has given its project a more assured revenue stream by taking higher dividends from its water supply company, Metrowater.

This, the Herald's civic reporter Bernard Orsman has revealed, will more than double the price of tap water in Auckland over the next 10 years.

It could be called a rate increase by stealth, it could also be called sound public financing but the reason is impossible to explain in a soundbite.

It is particularly hard for a left wing politician to explain because the reason lies in the virtues of commercial asset management.

If private shareholders owned a company supplying tap water the price would include the cost of debt servicing and a competitive return on capital. Well-run companies fund themselves with a reasonable ratio of debt to equity. If they limited themselves to their own capital they would be unduly restricting the scale of their operation and reducing the value they could be getting from it.

Public assets are no different. If they are set up simply with sunk capital, no debt, no need to earn a return on the public investment and their product priced simply to cover their running costs, their value would constantly deteriorate and much of their potential value to the public would remain untapped.

That is why we get sewage in the sea. If water had been priced to reflect the full value of the asset, its clean disposal after the heaviest of rain would have been built into the system long ago.

Bruce Hucker is almost the last person I'd have expected to have seen the sense of efficient pricing. When I covered the City Council 30 years ago he was a cheerful young pastor who had made it his mission to haunt the corridors and committee rooms on behalf of the poor, the homeless and hopeless.

In those days, before the city was divided into electoral wards, almost the entire council was elected from the eastern suburbs where rates were higher and more residents were inclined to vote.

The result was a council of remarkably fine gentlemen who recognised their social responsibilities and usually gave the Rev Hucker a polite hearing.

He in turn developed a wider interest in their work, particularly town planning, which is now his academic profession.

When the city was enlarged to cover the isthmus and divided into electoral wards, left-leaning social activists and political aspirants were elected from the western suburbs. Hucker was one of the first.

It took his team until the last election to become the largest faction. He meanwhile has been on the board of Watercare, the regional bulk supplier and sewage disposer, and learned a few things about business people and sound management that his team finds hard to credit.

When the heat went on the water charging project both left and right began looking for refuge in the promise of a "review" in November, safely past the election.

This week the left devised a policy that water would be priced at the minimum level necessary to provide it "in a financially and environmentally sustainable way, but not to subsidise other activities".

That could be a description of corporate pricing. It is a set of words Hucker could endorse if he wanted to duck the issue.

For his refusal to take the spineless route he has lost the left's support and probably will be removed from the deputy mayoralty.

If so he will go with his integrity intact.

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