Pressure builds for asset sales

The Government has signalled councils should follow its lead and consider selling shares in publicly owned assets to help fund other projects and control rate rises.

Local Government Minister David Carter said yesterday that councils who moved to sell assets, including shares in ports and airports, to maintain their funding levels or pay for other infrastructure projects would get his support.

Speaking on current affairs programme Q and A he said the decision was for councils to make.

‘‘If they had shares in an airport or shares in a port company, they may well decide they could sell down some of those shares to help them provide the infrastructure which their community is demanding of them.’’

He said Christchurch had a strong balance sheet and it needed to think carefully about ‘‘rationalising’’ some of those assets.

Labour local government spokesman Clayton Cosgrove said those comments proved beyond doubt the Government’s intention to see Canterbury’s assets sold off.

‘‘The minister’s rationale, that councils should sell down infrastructure to survive, is ludicrous.

‘‘These are revenuegenerating assets which

‘ It is still the responsibility of the council to engage with its community and find outwhat services that community wants. David Carter minister

have sizeable returns for the whole community,’’ Cosgrove said.

‘‘Selling these off to fulfil National’s agenda is foolish.’’

He said Christchurch’s assets had helped keep local rates in check.

Earthquake Recovery Minister Gerry Brownlee asked for a list of ratepayerowned strategic assets in January, but he said there was never any pressure on Christchurch city to sell its assets.

The list had been requested so the Government could understand some of the balance-sheet issues the city faced in order to see what capacity it had to fund its share of the rebuild.

The list included the Town Hall, AMI Stadium, council equity in power network Orion and Christ- church International Airport.

Carter yesterday said he would go ahead with the local government law changes proposed by former minister Nick Smith before he was forced to resign.

That would include a change to the purposes clause under which local governments operated, and the power for central government to intervene if rates increases significantly outstripped inflation.

But he denied it was a power grab, or that councils would be stopped from funding some projects, such as the Ellerslie Flower Show in Christchurch, because they were outside councils’ core business, which he described as ‘‘rates and rubbish and water, etc’’.

‘‘It is still the responsibility of the council to engage with its community and find out what services that community wants,’’ Carter said.

‘‘We want some flashing lights there as councils debate rate increases.’’

If a council was proposing to put up its rates by 2 per cent, 3 per cent or 4 per cent above inflation, the Government wanted to know why and have the ability to intervene.

He wanted to set some financial tests and thresholds to force councils to justify their rate increases and taking on extra debt.