Wellington Mayor Tory Whanau says she is feeling the cost of living crisis. Video / Mark Mitchell
Finance Minister Nicola Willis has been urged to use political capital amid the Wellington Airport share debate.
Wellington City Council faces a crucial vote on airport shares worth $280 million.
Willis supports the Wellington Airport share sale to ease the council’s financial burden.
The Finance Minister has been urged to use her “political capital” to get Wellington City Council on a better financial footing – as councillors debate selling shares in the airport.
It comes after Nicola Willis – along with Prime Minister Christopher Luxon and Local Government Minister Simeon Brown– met with Wellington Mayor Tory Whanau on May 8 this year.
Official Information Act document shows much of the focus of the meeting was on the insurance liability of the council.
Treasury officials advised that Wellington Airport’s value will deteriorate after a natural disaster – spelling issues for the shareholding council as it looks to rebuild the city.
Speaking to Newstalk ZB last week, Willis expressed her personal support for the sale of the airport shares.
“I have spoken with the mayor and councillors about the potential sale of Wellington Airport shares, and I have shared my personal view that I can see how that would make sense for the Wellington City Council.”
But she said that was a matter for elected representatives who sit around the council table, and she has been clear she “wouldn’t enter the public debate” on this issue.
Despite this, she said she has shared her personal view “candidly with the mayor and with others”.
The Post reports that, as it stands, the council is split eight for and eight against. That would give Whanau the casting vote and she has said she was in favour of the sale.
But on TVNZ’s Q&A this weekend, Whanau somewhat muddied the waters when she said she did not think the council would approve the share sale.
She went on to say without the share sell-off, passing the council’s long-term plan would be “unviable”.
But she changed tack later in the interview, saying she had misunderstood the line of questioning.
“I think we will continue selling the shares and will continue having a solid Long-Term Plan,” she said.
Wellington Mayor Tory Whanau in Newstalk ZB’s Wellington studio. Photo / Mark Mitchell
The capital raised from the sale would help finance a “Perpetual Investment Fund” to help Wellington recover from a natural disaster.
Last year, a KPMG review identified that the council has a significant insurance risk associated with underinsurance in the context of a major event.
According to the Treasury advice, councils – including Wellington’s – “represent a large contingent liability on the Crown’s balance sheet”.
“It [WCC] has around $725m of insurance protection for assets with a replacement value of around $17 billion. Maximum probable loss is somewhere between $5b and $17b,” according to advice from Treasury officials, released under the Official Information Act.
That advice specifically cites the risk created by the council’s Wellington Airport shares.
“Wellington Airport’s value, for example, will deteriorate after a natural disaster – the same point at which WCC may wish to draw down on its balance sheet.”
It goes on to say it is for WCC’s judgement whether there are clear benefits accessible only through ownership of Wellington Airport to justify retaining such an asset.
Wellington International Airport. Photo / Mark Mitchell
In the “proposed talking points” section of the document, officials said: “You [Willis] may wish to use your political capital to support an initiative that reduces the risks to the Crown balance sheet.”
Speaking to Newstalk ZB, Willis said in this instance, she did not take Treasury’s advice in using her “political capital”.
She did, however, say the Treasury’s advice shows Wellington Council has some very real, basic challenges it needs to meet.
“That’s why it needs to think really carefully about which assets it owns and why, and what new projects it commits to,” she said.
“Just about every Wellingtonian I meet who owns their home has been shocked by their recent rates bill – it’s really hurting a lot of Wellingtonians.
“They don’t want to see their city more indebted with higher rates into the future, they want to see the council spending money much more wisely than they have been.”
