29 Nov 2023

Councillor says Wayne Brown's plan for new fund would be based on an 'asset strip'

6:29 pm on 29 November 2023
Auckland mayor Wayne Brown visits the Mangere Emergency Centre following the Auckland floods on Friday, 27 January to see how they are supporting victims.

Mayor Wayne Brown says ratepayers have been propping up Auckland's port and airport for years. Photo: RNZ/Angus Dreaver

Auckland mayor Wayne Brown is proposing to lease council assets, such as the Port of Auckland, to fund the rising costs of running the city, and put the brakes on rates rises.

He proposed a a $3 billion to $4b fund created by leasing the port and transferring the remainder of the council's Auckland Airport shares. The Auckland Future Fund would also make provisions for climate change risks.

While critics such as councillor Mike Lee see it as a raid on the silver drawer, Brown said it would ease pressure on ratepayers.

The proposal is part of the city's 10-year budget which councillors have been debating today.

Speaking to Midday Report, deputy mayor Desley Simpson said the proposal could lead to a better financial future.

"It would potentially bring us more income, and it would give us less reliance on the likes of our rates income, because we're very conscious of that for Aucklanders," she said.

"But also, reduce our risk, and that's really important as a council, by diversifying our markets."

She said the multi-billion-dollar regional fund would give the city a better return than its two biggest assets.

However, not everyone was convinced.

Council 'not to be trusted with investment funds'

AUCKLAND, NEW ZEALAND - FEBRUARY 10:  ARC Chair, Michael Lee makes a speech at the Auckland Regional Transport Authority Launch in the Britomart Transport Centre in Auckland City, Thursday, 10 February, 2005.  (Photo by Sandra Mu/Getty Images)

Mike Lee Photo: Getty Images / Sandra Mu

Councillor Lee called the move asset stripping.

"I'm not impressed at all," he said.

"Anyone who has any knowledge of the performance of Auckland Council in recent years would realise that the council, to be frank, is not to be trusted with investment funds."

Lee said the mayor's proposal seemed contradictory to what he campaigned on.

"He campaigned as the guy who was going to fix Auckland, not as the guy who was going to asset strip Auckland," Lee said.

"If your house needed fixing, you wouldn't want this type of person coming to fix it.

"You may end up with a cowboy fix-it job on your house."

However, Brown said it was about using what the council had.

"It's not asset stripping; it's asset utilising. At the moment we are asset stripping of ratepayers because we take more money off them just to prop up the ownership of those two things [the airport and the port]."

The mayor said ratepayers had been subsidising importers for years.

"The ratepayers should not subsidise importers, the port should be subsidising ratepayers. That's what you own things for but that hasn't happened," he said.

Brown said the end goal of the fund would be more than just financial security, it would also be a way to protect council assets.

"It's financial and asset security to the extent that, should something go wrong, there's a place to go and get money to fix things from.

"This city has no resilience, either financial or physical."

During the current financial year, the council's property insurance costs rose more than 44 percent.

'It is a generational sale'

Ports of Auckland

The Port of Auckland. Photo: RNZ / Kymberlee Fernandes

The mayor insisted Port of Auckland was not for sale, but it was worth considering a temporary lease of its operation.

Councillor John Watson said that was just the first step.

"It is a generational sale," he said.

"It's the lease that's getting bought out, but Auckland loses the control of that asset for whatever length of time it is."

In a statement to RNZ, the Port of Auckland said the ownership model was up to the council governing body and they had been engaging with the mayor and councillors on the matter.

For now, a spokesperson said the port would continue to focus on operational safety and efficiency, profitability, and delivering greater returns for Auckland Council and the region.

  • Mayor Wayne Brown proposes 'Auckland Future Fund' to help stem rates hikes
  • Mayor Wayne Brown raises ire of union, councillor over port lease plan
  • Auckland Council budget: Second day of debate on airport share sale, rate hikes and funding cuts
  • Why Port of Auckland may be better for the city where it is
  • Most Aucklanders want port to remain publicly owned, new poll shows