Subsidy unwarranted

The council states in writing that its decision to provide a financial subsidy (some would say gift) to Air Chathams Ltd was based on two consultancy reports it commissioned between April and July this year. These two reports — a brief “consumer survey” by Colmar Brunton Ltd and an “economic analysis” by TDB Advisory Ltd — cost ratepayers in excess of $66,000. That seems an extraordinary amount to spend on researching an expenditure that we were initially told would be “only $50,000”.

Of even more concern, however, is that neither of these reports, which have only been released publicly by the council after an Official Information Act request, actually supported the subsidy decision. The consumer research study did not address viability issues and the TDB study specifically declined to comment on the economic value to Ka¯ piti of providing an airline subsidy. Notably, TDB also found that an airline service from Ka¯ piti would provide no measurable net benefit to the local business community. This finding is exactly the opposite from what we have since been told by the mayor (and the local Chamber of Commerce) was a major reason for the subsidy.

Of course, we all hope that the Air Chathams service will prove successful and safe. But it’s clear that a ratepayer subsidy was completely unwarranted. Ka¯ piti’s local government finances are heading towards a crisis. Ratepayers can simply not afford for the council to continue making poor, falsely-based decisions like this.

DAVID WEBBER FORMER CHAIRMAN KAPITI ECONOMIC DEVELOPMENT LEADERSHIP GROUP