Auckland mayor Wayne Brown speaks at his inauguration last month. Photo / Supplied
OPINION:
What would Auckland mayor Wayne Brown say to a windfall income of a billion dollars?
That’s the amount council sources say the Dubai-based company DP World could be prepared to pay, to secure a lease to run the operations of the port. The period of such a lease is not known, but this is a substantial proposal.
As the Herald has reported, the council faces an operating deficit of $270 million in its budget for the 2023/24 financial year, which runs from July to June.
Brown said yesterday that he wants to fix that deficit through “a combination of head office savings, operational efficiencies, relentless scrutiny of the expenditure and commercial performance of CCOs and the port, and limited rates rises”.
He specifically ruled out selling port land. But curiously, he did not rule out or even mention the possibility of leasing the port operation. That contrasts sharply with his statement of October 27, which carried the headline, “Mayor says no to long-term port operator lease.”
Is he shifting his position on this?
Brown’s statement yesterday also contrasts with one put out by the council’s chief executive, Jim Stabback, just a quarter hour after the mayor’s. Stabback said “asset ownership” and “increasing non-rates revenue” were also on the table.
As they should be. The council might well decide it won’t increase the fees for car parking or swimming pools, but shouldn’t such decisions be made in public debate around the table?
It’s the same for the port. If there really is a billion dollars waiting to be picked up, we need to hear what councillors have to say about it.
The DP World proposal is unsolicited, but it isn’t new and it isn’t without merit.
A lease on the operation would not have to lock anything into the Waitematā site. The company is said to be “agnostic” about that and would want a deal that allowed it to operate from different sites.
Time for some lateral thinking? Different sources have told me DP World may want to move the bulk goods operations – like coal and cement – to another port, perhaps Tauranga, allowing the vehicle imports to shift eastwards on the existing site. That would free up Bledisloe Wharf and the finger wharves for the “Wynyard-style” development Brown favours.
Worth remembering: The port makes considerably more money from vehicle imports than it does from the container operation.
DP World, which runs several future-focused ports around the world, is also likely to favour an increased rail operation, taking container trucks and car carriers off the road.
Despite Brown’s earlier bombast about no long-term lease, this proposal seems to tick a lot of his boxes. No surprise he didn’t rule out an operational lease in his statement yesterday.
As one councillor told me, “Providing a revenue injection to the coffers of a billion or more can’t be sneezed at when you’re on the ropes financially.”
Brown’s been adjusting to reality on other fronts, too. In a statement last week, he declared the transport crisis in Auckland is “caused largely by Wellington politicians and bureaucrats”. That is, it’s not primarily the fault of Auckland Transport, which he railed against repeatedly during the election campaign.
He also said there is “clear evidence staff are concentrating on running Watercare efficiently and effectively and delivering improving service” and was “pleasantly surprised” at the work being done by the events and economic development CCO Tātaki Auckland Unlimited.
The agency has “responded positively and strongly to the change that is afoot in Auckland”, he said. As for the port company, it is “clearly focused on operating the port more efficiently and safely”.
I suppose it’s good the bluster is fading. But honestly, it does look like Brown, pre-election, didn’t bother to learn much about the organisations he ranted against so often.
Not that it’s stopped him from blaming his predecessor for the council’s budget deficit.
“The $270 million budget hole is a legacy of former mayor Phil Goff papering over the fiscal cracks and passing the buck to the new governing body, and not being prepared to confront poor performance by Council Controlled Organisations (CCOs) and Ports of Auckland Ltd (POAL) over six years,” he said yesterday.
This is only partly true. The outgoing council’s annual budget for 2022/23 contains a funding hole of $90-$150 million. But that same council was also responsible enough to carve $900 million out of its spending during Covid.
The fiscal hole has not grown through six years of neglect, but in the last few months because of inflation. The interest rate on debt is up by tens of millions, wages are up and the cost of everything council buys and maintains is up.
Nor is it true that the previous council failed to confront “poor performance” by the CCOs. It rewrote their instructions, abolished one of them, amalgamated two others, replaced many board members and pretty much cleaned out the old board of Ports of Auckland.
The new mayor is fond of his proclamations, but they don’t always stack up and he’s reluctant to be cross-examined about them. Didn’t he promise honesty and transparency?
Moving on. The seven new councillors made their maiden speeches in a special meeting of the governing body last week. Three of them talked about constructive engagement.
Julie Fairey from Albert-Eden-Puketāpapa said, “I look forward to sharing the mahi with you over the next three years as we make positive change together.”
“When I talked to you, Mr Mayor,” said Lotu Fuli from Manukau, “I used the word equity perhaps a hundred times in our conversation. Don’t be surprised to keep hearing it.”
She said she wanted to “work together to build a vibrant, sustaining and beautiful Tāmaki Makaurau”.
Kerri Leoni from Whau sang her mihi and talked about her hopes for a new swimming pool and a community hub in Avondale: “A youth hub for our rangatahi, to help with social and life skills, helping to break the cycles of poverty.”
Andy Baker from Franklin, which stretches from coast to coast around the far south and east of the city, took a slightly different tack. Most people he knew were “still confused to be part of Auckland”.
His solution: “Maybe we need to tell the story better. We need to empower and entrust our staff and our communities ... Perhaps we need to remember that the wisdom of our communities will always exceed the knowledge of the experts.”
The other three weren’t interested in this kind of talk. Mike Lee from Waitematā, Ken Turner from Waitākere and Maurice Williamson from Howick were angry. The council, in their view, is full of nonsense and they’re the men, along with the mayor, who are going to put a stop to it.
Lee complained about a “$10 billion goldmine for contractors”, which is a reference to the 10-year cost of running buses, road maintenance and other such contracts.
It’s absurd. There’s a good argument the council should be spending more on the buses, to boost driver wages and extend the services, and many people would like more spent on road maintenance as well.
Brown called Lee’s speech “a sobering address”.
Turner complained about speed humps and the council’s new programme for food scraps, which will reduce waste and emissions. He couldn’t see the value in it.
Williamson complained about CCOs “spending time on problems that don’t exist”. His example? Speed humps around a local school.
“The lunatics are running the asylum,” he added for good measure.
Perhaps Brown could have a word with them both. He’s said many times he wants councillors to focus on the big problems. Speed humps are not one of them.
What should we call this onslaught of the grumpy guys? Jurassic World?
“I can walk into a forest,” said Williamson, “and be the oldest living thing there.” He said it, not me.
No announcements yet on the shape of Brown’s new council. But he’s brought in a consultant: Public law specialist Max Hardy, a partner at the law firm MC. Some things are already clear.
Brown wants the governing body to take over the functions of the finance committee. That would cut out the Independent Māori Statutory Board, despite its having a statutory right to take part in decisions on natural and physical resources. That could produce a High Court challenge.
Williamson will probably be given a small committee and a sharp razor and be invited to get to work on council spending, especially in head office.
North Shore councillor and Labour member Richard Hills is tipped to head up a new planning committee that includes his old duties in environment and climate change.
There’s likely to be a new transport and infrastructure committee, perhaps chaired by Albany councillor John Watson.
And what about Auckland Transport itself?
Bus magnate Andrew Ritchie looks set to take the chair and will be joined on the board by councillors Lee and Baker, for an urban/rural mix. Other names on the table for that board: Former Labour Party president Mike Williams and – wait for it – former Transport Minister Phil Twyford.
Brown, to his credit, is not being completely partisan in his appointments.
The two countries have negotiated a ceasefire after weeks of tensions.