A su­percity will mean lower rates – yeah right

Auckland City Harbour News - - Opinion - By Tony Hol­man

So much of the su­percity is about money. For some it’s about how much will they make from get­ting hold of the re­gion’s as­sets. For oth­ers, how much will they save in rates.

But af­ter 1989 and the amal­ga­ma­tion of Auck­land’s 29 coun­cils did we get lower rates? Has any­one seen a low­er­ing of rates from any of the cities cre­ated?

Some ar­gue it will hap­pen this time be­cause Lo­cal Gov­ern­ment Min­is­ter Rod­ney Hide and the Em­ploy­ers and Man­u­fac­tur­ers’ As­so­ci­a­tion say it will, but the leg­is­la­tion pro­poses coun­cil-owned as­sets – par­tic­u­larly Water­care, Ports of Auck­land and air­port shares – be taken out of pub­lic con­trol and placed in sep­a­rate le­gal en­ti­ties called coun­cil-con­trolled or­gan­i­sa­tions.

Those come with the nor­mal com­pany trap­pings – well-paid direc­tors and a profit mo­tive.

Many com­men­ta­tors be­lieve this move is the first step to­wards sell­ing the re­gion’s as­sets to pri­vate en­ter­prise, which can then gouge money from the as­set base and the pub­lic.

When that hap­pens there will not only be an in­crease in the costs of the goods sup­plied but the sav­ings – such as wa­ter at cost, the cur­rent sys­tem for many coun­cil sup­pli­ers – will dis­ap­pear. Prof­its from the ports, which go to im­proved pub­lic trans­port, will go into pri­vate hands.

That will mean that ei­ther the im­prove­ments stop or rates will go up to fund them.

More se­ri­ous is the plan that all wa­ter as­sets be rolled into one body for pri­vati­sa­tion.

This most vi­tal of ser­vices, life­sav­ing wa­ter, should al­ways be held in pub­lic own­er­ship.

If over­seas ex­am­ples of wa­ter own­er­ship are any­thing to go by, we can look for­ward to higher prices, less ef­fi­ciency and as­set de­pre­ci­a­tion, rather like the elec­tric­ity “re­forms”.

Al­low­ing pri­vate con­trol would, in my view, be eco­nomic treach­ery. But I’m sure that’s not how Sir Roger Dou­glas and Mr Hide will char­ac­terise it.

Part of the smoke­screen for this will be ar­gu­ments that pri­vati­sa­tion will pro­vide greater ef­fi­cien­cies, an­other that to make Auck­land a su­percity we must sell off as­sets owned by you and me to pay for the changes needed.

Some­one has to pay for this su­per­sized bu­reau­cracy with in­flated salaries and the on­go­ing in­ef­fi­cien­cies the or­gan­i­sa­tion will have to deal with un­der the bur­den of ill­con­structed leg­is­la­tion.

Get ready to pay more for many of your cur­rent ser­vices, more for pub­lic trans­port, and higher rates. You will have to be­cause you will be liv­ing in a su­per-duped re­gion.

Tony Hol­man has been in­volved in lo­cal gov­ern­ment for 21 years, has been Water­care Ser­vices chair­man of direc­tors and a man­ager in a num­ber of statu­tory bodies.

Tony Hol­man

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