Archives for posts with tag: Asset sales

You have until midday today to make a submission to the Council on the Long Term Plan. You may want to make a submission to tell them how you feel about say asset sales, or the arts budget, or cycle ways, or councillor’s facial hair. All you have to do is go here and fill in as much or as little as you want.

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Tomorrow night at 5:30pm, the team who brought you Once In A Lifetime are hosting their first “Talking Heads” evening. It will feature Councillor Raf Manji in conversation with myself about the council’s asset sales plan. I’ll be asking him some questions, and if you’d like your question asked, then fire me an email (James dot Dann at Gmail dot Com). It’s free to come along, and we might head out after for a beer and to continue the conversation. 

TALKING HEADS #1: ASSET SALES

Cr Raf Manji in conversation with James Dann. 

5:30pm at the EPIC centre, corner Manchester and Tuam St

Free to come along

Email any questions to me before hand 

The debate around the council selling assets has largely been framed as the Mayor, Cr Manji and Cr Buck, against a rag-tag bunch of ideologues – aka the Labour-aligned, People’s Choice councillors. Though these 6 councillors publicly stated that they were against asset sales during their election campaign, and are now sticking to their promise, they have been criticised by the Mayor, Gerry Brownlee and the National Party, the Press, talkback hacks etc. But little if no attention has been given to the other 5 councillors who are supporting this plan. So what have they been up to?

Front page of the Press this morning we find Cr David East (Burwood Pegasus). Prior to being on council, he kept himself busy by running the local RSA into the ground:

When businessman Garry House, who is now executive-secretary of the club, was asked to help out the RSA in May 2012, he found: “GST had not been paid for four years. The club eventually had to pay the Inland Revenue Department a $25,000 penalty. Annual returns had not been filed for 2010 or 2011. Rates and power bills were long overdue.”

Clearly these are the appropriate pre-requisites for someone who is chairman of the council’s regulations and consents committee and a director of several council companies.

Cr Jamie Gough was most recently in the headlines for slagging off minorities and people with disabilities. He is a councillor, but is barely, if ever, in the news for actually doing councillor things. You might remember the time he got stupid drunk had a bad curry and forgot to pay for his taxi. Or the time he ranted about bogans for using public spaces. You won’t remember the time he made an impassioned speech about why he believes we should sell council assets – because he’s never made his reasons clear.

A search of the Press website for Cr Ali Jones will bring up a number of stories about her pre-council role as an advocate for people fighting Southern Response, as well as many from when she was a talkback host before that. Her most notable act as a councillor was voting against fixing a community pool. She still finds time to run her PR company though.

The Man Who Could Have Been Mayor, Cr Paul Lonsdale, has also been pretty quiet. He’s keen on carparks in the CBD, and is in favour of the Levis Skatepark. Finally, Cr Tim Scandrett, who’s most notable act since he’s been at Hereford St (and remember, we’re now more than half way through this term) is being heading up a subcommittee to look at council-run events.

These guys may all have their own reasons for voting for the sale of assets – the point is, we don’t know what they are. This isn’t just the Mayor, Cr Manji and Cr Buck voting to partially privatise or strategically refocus or whatever other Crosby-Textor spin they’re putting on this now. They are 3 votes – and they need 8. So if you live in one of these wards, and want to know why your councillor is voting to sell off assets, why don’t you ask them? People can disagree with the People’s Choice councillors position on an issue, but at least you know where they stand. For many of our quieter councillors, we sadly can’t say the same.

The Silent Five councillors, with their contact details (all publicly available on the CCC website)

David East – Burwood Pegasus,

388 1104 david.east@ccc.govt.nz

Ali Jones Shirley-Papanui,

941 7066 ali.jones@ccc.govt.nz

Jamie Gough Fendalton-Waimairi,

027 231 4393 jamie.gough@ccc.govt.nz

Paul Lonsdale Hagley-Ferrymead,

941 7064 paul.lonsdale@ccc.govt.nz

Tim Scandrett Spreydon-Heathcote,

941 7069 tim.scandrett@ccc.govt.nz

I feel like I’ve woken up in the bizarro episode of Sealab 2021. Asked for comment about the financial situation at the City Council, Gerry Brownlee is happy to give his two cents, which, unsurprisingly, are that the CCC should sell more assets and spend less. Of course, Mr Brownlee doesn’t offer to help by say, putting in all the money that the Crown initially promised, or revising some of the vanity projects which he has bestowed upon the council. No, that didn’t cross his mind. Instead, we get this bizarre statement:

Brownlee said rather than putting rates up the council should be looking at its baseline, just as the Government had done when it was faced with the double whammy of the global financial crisis and the Christchurch earthquake.

“Whenever you are in a tight financial situation you have to look at your own expenditure profile and I don’t see evidence of that happening from the council.

“I think most people would be able to come up with some example of what they would see as fairly unnecessary expenditure,” the minister said.

When the government was faced with the double whammy of the financial crisis and the earthquakes … from memory, they gave $1.8 billion dollars to a failed financial company, slashed taxes, refused to introduce a special quake levy and borrowed money from overseas. Government debt, which was around $10b when National came to office in 2008, is now $100b dollars. That Brownlee would be giving financial advice to the Christchurch City Council, pretending he’s just “a regular ratepayer” is ironic enough; that he would try and site his government’s dismal economic record as some sort of example to follow is positively hilarious.

The council today voted to flog off another $200 million of ratepayer owned assets, bringing the fire sale total to $750m. On top of this, they are talking about rates increases of 33% over the next four years. Less than a year ago, this is what Cr Manji had to say about rates rises:

The Cameron report suggests rate rises could be in order – more income to allow the servicing of more debt. Despite earthquake levies being added by the previous council, Christchurch still has some of the country’s lowest rates.

But Manji says it is clear that further rate hikes are politically unacceptable. “That would be a huge flashpoint. You’ve got to remember what people have been through over the past four years. They’re stretched emotionally more than you could ever imagine.”

However, Manji agrees with Mayor Lianne Dalziel that a sale of council assets – or rather finding strategic partners to take a 25 per cent share in the holding company – makes eminent sense. This alone could knock $400m off that 2019 hump.

A week is a long time in politics. However, I struggle to see how we’ve gone from “rates rises or asset sales to raise $400m” in August 2014 to “rase rises AND even more asset sales to raise $750m” less than a year later. And yet despite the Minister promising a review of the cost sharing event by December during the election campaign, we’ve not heard anything about this, which could ease some of the burden on the council. The ratepayers of Christchurch are being played, both by the council and the government, who are selling off productive assets and running down our social housing stock, whilst refusing to back down over less-than-essential anchor projects such as stadiums, convention centres and sports centres.

The Press ran a feature at the weekend that looked at the City Council’s finances, and the man who has a lot of the responsibility, Raf Manji. Undoubtedly, this is a very complicated subject, but since the release of the Cameron Partners report it has been simplified down to “we have to sell assets.” That’s not the only conclusion that one could reach from reading the report, but it is one that suits the government, who have been trying to sell off council assets since pretty much as soon as the quakes started, almost four years ago. However, John McCrone does go and talk to someone else, Christchurch accountant Cameron Preston. Between the two of them, they do a good job of explaining how we got into this situation:

On the infrastructure repairs, the council’s position was that a total of $3.4b of public works was needed to bring Christchurch’s roads and pipes back to their pre-quake level of service. But KordaMentha notes the Government unilaterally capped its “60 per cent” contribution at $1.8b. A maximum figure was named. Once the council’s 40 per cent share was calculated off that, it effectively lopped $400m off the infrastructure budget, bringing the agreed spend back to $3b.

Some 83 road, sewer and water projects got axed from the council’s priority list to make this work.

However, now – because the money actually does need to be spent says the council – the missing millions have just reappeared to haunt the accounts as the largest part of its $800m balance sheet black hole.

So $400 million went missing from the infrastructure budget from the start, and everyone knew that it was needed. The government knew it was needed, and knew that there was no room in the CCC’s budget. They knew that if the CCC were to act responsibly, they would have to find this $400 million, and that in doing so, this would create a “black hole” and a “crisis”. Then the pressure goes on the council, and the “sensible heads” like Manji to do the “reasonable thing” and sell assets. Job done. The $400 million to raise from asset sales is suspiciously similar to the $400 million that went missing from the infrastructure budget in the cost sharing agreement.

Brownlee, Parker and Joyce, put the final touches on burying the council

the government and council in happier times

But what about the other $400 million in the council’s $800 million block hole, you might ask? Well, you might like to consider some other items that were forced upon the council in the cost-sharing agreement. $253 million for a stadium (a project that will be controlled by the Crown, not the council that is paying for it). $147 million for the Metro Sports Centre – another council-funded, Crown-controlled asset. And funnily enough, that’s $400 million right there.

This isn’t a crisis; it’s a bait and switch. The government has skimped on infrastructure, and then forced the council to spend money on assets with weak or non-existent business cases. They’ve forced the council into a corner, and are now trying to tell us the only way out is asset sales. It’s not. They’ve trimmed money from the rebuild budget so that they could make their surplus, and then turn around and say they can afford to spend $300 million on a behemoth of a conference centre.

This “crisis” is a key example of just how this government are running the rebuild, and a strong signal of how they plan to continue if given another term. We can’t afford another 3 years like this. Every vote for Labour in Christchurch is a vote that says that we want an inclusive, people-focussed recovery; every vote for me in Ilam sends a signal to John Key that the rebuild isn’t working.

Like a bigoted relative at a family gathering, council asset sales are the unwanted guest that just won’t get the message. Despite wide-spread opposition in Christchurch, including strong declarations from the council and mayor, the government keeps bringing along asset sales to the party, claiming that it’s their “plus one”. John Key again mentioned it is morning, in a TV interview. Once he’s snuck his guest into the room, he then outright lies about why he’s there at all.

How the city funded the rest of the build was a “matter for Cantabrians to consider”, Key told Firstline this morning. “It is for the council to say ‘do you want the nice-to-haves’,” he said. “Then they’ll ask how are you going to pay? That could be through rates or asset sales.”

The bolded quote is simply a bald-faced lie. The council has no say at all in whether they want nice-to-haves – it is a decision that has clearly come down from the Beehive, where stadia and convention centres seem to be the only pages in their economic recovery textbook. This was made clear to me last week, when I made a submission in person at the council, on the Three Year Plan, partly in opposition to the stadium plan. Upon giving my submission, Councillor Broughton asked me if I knew that it was a decision made by the government, not the council. I did know that, and that my submission was partly in vain, but I still urged the council to oppose these developments.

What Key and Brownlee are doing is forcing us – via the council – to build these assets, in spite of opposition. Then they will turn around and say that we need to pay our share, and that the rest of New Zealand shouldn’t have to go without so you carpers and moaners can have your flash new stadium. Bloody ingrates. So why don’t we just sell some of these assets you have? If the council opposes selling them off – for some obscure reason like the economics of keeping them far outweighing the prices we’d get for them in a rushed sale, or the social utility of a city owning its infrastructure – then the government can force the council to flog them using their “emergency powers”. Emergency powers that they haven’t seen fit to use to break the insurance deadlock, or to alleviate the suffering of the people worst hit out East, but could be used fund a white elephant monument to Brownlee’s egotistical stubbornness.

This is like selling the company van so the boss can buy a flash motorbike; meanwhile, the boys at the building site have to move their stuff from job to job using a wheelbarrow. It’s economic idiocy, and political expediency, from a government that continues to mismanage the recovery whilst simultaneously relying on it to turn around the government books. Like the fantastically bearded gentlemen in the new tv commercial, it’s time to take John Key’s mate asset sales into a quiet corner of the room and say “yeah, nah”, until he finally gets the message.