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Speaker: Grand Theft Auckland

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  • Sacha,

    Steve put it entertainingly elsethread:

    "Auckland, wanna score some infrastructure?"

    Ak • Since May 2008 • 15715 posts Report Reply

  • Sacha,

    Found this - presume the Act site will have details, given that it's hardly a secret and is consistent with the rest of their beliefs:

    Act wants councils to privatise their commercial activities and to supply water on a "fully commercial basis"

    Ak • Since May 2008 • 15715 posts Report Reply

  • DeepRed,

    Sacha:

    Sorry Scott I don't have the energy tonight to dig up references, but it's pretty widely talked about that one of the prizes of the merger is access to the $28b of combined assets - including the water ones, with their global market for privatisation. South Africa is another unfortunate example.

    Battle of Cochabamba, anybody?

    I suppose it makes sense if you want to run a Council like a business to free up cash now by flogging off large and marketable assets like that. The new Council may need that cash to pay for the nine figure transition costs - and to keep rates down if Mr Hide persuades the Nats to back his TABOR-style proposal.

    TABOR Special Offer returning soon!

    The southernmost capital … • Since Nov 2006 • 3897 posts Report Reply

  • ScottY,

    Sacha, I'm sure many people in ACT, the Nats and CitRats would love to see these assets carved up and sold.

    And I'd be surprised if ACT didn't want to privatise the water. Hell, they'd sell the air we breathe if they could just work out how.

    But that doesn't mean there's an active plan to flog off all of Auckland's assets. Wanting to do something and having the balls to do it are two different things. Any mayor who advocates asset sales in this environment is a dead man walking.

    I'm quite prepared to join any lynchmob that might be going the moment any such thing is advocated. But it hasn't been, to my knowledge.

    Yorke of The Atatu • Since Feb 2009 • 787 posts Report Reply

  • Christopher Dempsey,

    Numerous charitable and government organisations have lawyers and accountants on their boards. Wouldn't you want a group of people handling millions of dollars to have among them someone with these professional skills? I'm not advocating that every board member should be a lawyer or accountant.

    No reason at all then to put a few non-lawyers, non-suits, non-accountants onto the Transition Agency, is there? I'm struggling to find them there though.

    Now don't get me wrong - I'm no fan of either Hide or the CitRats. But please give us more than "because that's just the kind of thing they'd do".

    But that doesn't mean there's an active plan to flog off all of Auckland's assets. Wanting to do something and having the balls to do it are two different things.

    Here's how it works, in a very large nutshell; you give the levers of the assets to business friendly friends, say, Cits'n'Rats (or on the odd occassion, someone who is nominally left, but very 'friendly'). They don't have to do anything except sit there like little Miss Muffet with her asset-rich pie.

    Along comes a spider, say, Merril Lynch, or Price Waterhouse Coopers, or Deloittes, or Russell McVeagh, or you get the idea, who just wispers in Miss Muffets ear that the asset-pie would deliver [here follows magic incantation using words like 'return on investment', 'expenditure' 'cost benefit' 'value for shareholders' 'equity' 'customer' etc.]

    The levers are 'released', and control passes to someone else, usually a client of the spider. Note Miss Muffet didn't have an active plan.

    This is a very large nutshell, but if one strips away non-essential items and thinks in gross simple terms, this is what I believe happens. But like all fairytales, there are a few black swans ready to fly across the picture.

    Parnell / Tamaki-Auckland… • Since Sep 2008 • 635 posts Report Reply

  • Matthew Poole,

    Any mayor who advocates asset sales in this environment is a dead man walking.

    And that's stopped them before? I seem to recall Gruppen-Fuhrer Banks campaigning on frozen rates and cessation of the dividend payments from WaterCare. Increased rates in excess of inflation? Check. Continuing WaterCare dividend payments? Check.

    They only have to get into power once to be able to run amok. This new Megatropolis legislation enables that further. Rodney's agenda regarding councils losing control of water utilities is explicit, and not in any way secret. If he can get Auckland divested of WaterCare, it'll be much easier to force it on the rest of the country.

    The pit from whence crawl… • Since Mar 2007 • 3731 posts Report Reply

  • Sacha,

    They don't have to do anything except sit there like little Miss Muffet with her asset-rich pie.

    Nice. I imagine in practice it's like all those internal coups by politicians who are happy in their current role and have no plans to become leader. Who needs a plan when you have motive and opportunity - though it will require the engineering of a crisis, maybe the discovery of a budget blowout after inspecting the books..

    Ak • Since May 2008 • 15715 posts Report Reply

  • Gareth Ward,

    The move we MAY see in water provision is public asset ownership, private asset management. Where water management companies bid for contracts to run and bill services on the water pipes still owned by the council.
    It seems like a more spinnable/saleable story.

    Auckland, NZ • Since Mar 2007 • 1712 posts Report Reply

  • Sacha,

    Agree, Gareth. They'd be crazy not to start with less obviously sensitive assets like the port and airport shares, and in any case there will be political timing to consider at both local and national levels.

    it'll be much easier to force it on the rest of the country

    And this should not be seen as an "Auckland issue".

    Ak • Since May 2008 • 15715 posts Report Reply

  • Matthew Poole,

    it'll be much easier to force it on the rest of the country


    And this should not be seen as an "Auckland issue".

    I'm not sure if I read it somewhere, or thought of it myself, but as soon as I saw Act's position on WaterCare (can't recall if it was before or after Rodders got made LGM, but it was definitely before we saw the Megatropolis report) I understood that fucking over Auckland's water would be the first step on a path to forcing every council in the country to divest water utilities. It's not a big leap, and it can be done by central government with a single stroke of their legislative pen. Councils can only own assets because the law permits it, after all. They like urgency, as we've seen, and getting that kind of clause through under urgency would be a piece of cake. It might even miss scrutiny by Labour and the Greens if the rest of the legislation in question was particularly odious.

    The pit from whence crawl… • Since Mar 2007 • 3731 posts Report Reply

  • Gareth Ward,

    But but but... ahhh crap maybe you're right and they'd just do it.

    But the case for privatising monopoly delivery of an essential service just seems nonexistent. It wouldn't be cheaper than current provision (which is setup commercially so is not being subsidised), and the only argument for privatising a service like that is the private vendor would run it more efficiently through being exposed to commercial pressures and would therefore deliver it for lower cost. That won't happen in a non-competitive setup. If you then setup regulatory arms to try and counter that then you've just added the cost of bureacracy and lost your efficiency argument.

    Even if the Council or Government knew this and privatised anyway, the opposition to it would be so easy to muster?

    Auckland, NZ • Since Mar 2007 • 1712 posts Report Reply

  • Christopher Dempsey,

    But the case for privatising monopoly delivery of an essential service just seems nonexistent. It wouldn't be cheaper than current provision (which is setup commercially so is not being subsidised), and the only argument for privatising a service like that is the private vendor would run it more efficiently through being exposed to commercial pressures and would therefore deliver it for lower cost. That won't happen in a non-competitive setup. If you then setup regulatory arms to try and counter that then you've just added the cost of bureacracy and lost your efficiency argument.

    Try telling that to a Nactional government and let's see what answer you get...

    Short answer is that there is a very long, wide and immeasurable disconnect between your rational, common sense/thinking world as you describe it, and a Nactional government.

    Why precisely that gap is there, I've no idea. But it's there alright.

    Parnell / Tamaki-Auckland… • Since Sep 2008 • 635 posts Report Reply

  • Gareth Ward,

    Try telling that to a Nactional government and let's see what answer you get...

    If it ever comes to that I'd really like to actually. If they think there is a case for privatisation I'd like to ask them to explain it to me!
    But that's all supposition as it hasn't been mooted at all.

    Auckland, NZ • Since Mar 2007 • 1712 posts Report Reply

  • Steve Barnes,

    Who needs a plan when you have motive and opportunity - though it will require the engineering of a crisis,

    And that, Sir, is classic right wing behaviour, WMD anybody?.

    The wireless north ;-) • Since Dec 2006 • 4443 posts Report Reply

  • Sofie Bribiesca,

    But that's all supposition as it hasn't been mooted at all.

    But Gareth, we are already heading down that slippery slope. I recall recently "no thanks John Banks" saying public private partnership or a BOOT for the Art Gallery, parks, swimming pools. Was that subliminal?

    here and there. • Since Nov 2007 • 5699 posts Report Reply

  • Sacha,

    Sofie, I seem to recall that idea came from their CEO and staff, not the Mayor or Councillors (some of whom publicly squashed it right away). Can't be arsed looking up the links, but it was just the Harold, methinks.

    There are no doubt perfectly good arguments for privatising public assets if you think about the world a certain way.

    Ak • Since May 2008 • 15715 posts Report Reply

  • Matthew Poole,

    There are no doubt perfectly good arguments for privatising public assets if you think about the world a certain way.

    Oh, of course. They mostly revolve around this mythical notion of a competitive market driving prices down in reflection of the long-run marginal cost

    They dissolve once one realises that in a market as small as NZ there is simply no room for true competition in utilities. Hell there's barely room for pseudo competition in cellphones, and they're the lightest-weight "utility" around. Sadly ideology trumps reality, at least in the minds of Rodders et al, so we're stuck with not only selling the cow but also paying premium prices for the milk.

    The pit from whence crawl… • Since Mar 2007 • 3731 posts Report Reply

  • Sofie Bribiesca,

    not the Mayor or Councillors

    I'll research it later but if not , I'll repeat it in 18 months:)

    here and there. • Since Nov 2007 • 5699 posts Report Reply

  • tussock,

    Surely, rather than Nat/ACT being stupid people who would accidentally enrich businessmen whom they have no connection with, one might consider their "anonymous" campaign funding.

    OK, I know it doesn't have to be an actual conspiracy, just that rich folk with an eye to looting an asset-heavy state monopoly happen to support politicians who have dedicated themselves, in the pursuit of pleasure by association, to serving stunningly rich and powerful men.

    Similar for bat-shit insane social commentators and the men who buy the add space on their stations.

    'S just, to me, the whole "bought and paid for" angle seems the least complex of the reasonable options. No one was surprised the roading lobby got a huge boost from the Nats, all while kicking public transport in the nuts, eh.

    Since Nov 2006 • 337 posts Report Reply

  • Sofie Bribiesca,

    Sacha, this was where I recalled Banks et al.

    here and there. • Since Nov 2007 • 5699 posts Report Reply

  • Sacha,

    Slightly different matter - that was setting the council budget in a way that adversely affected its poorest communities. The idea of commercialising services like libaries and art galleries was suggested by staff - from the finance team. Funny, that.

    Ak • Since May 2008 • 15715 posts Report Reply

  • Sacha,

    However:

    Doug Armstrong, the chairman of the Auckland City Council's finance committee, wasted no time in dismissing a staff proposal to place community services such as parks, libraries, swimming pools and zoos in a separate, commercially run holding company.

    Ak • Since May 2008 • 15715 posts Report Reply

  • Sofie Bribiesca,

    Ratepayers would have to be consulted before any assets were placed in a holding company. Any timeline suggests the proposal will be swamped by the royal commission's report.

    Ha Ha.
    Thanks for that Sacha. Glad to know we are safe, yeah right :)

    here and there. • Since Nov 2007 • 5699 posts Report Reply

  • Christopher Dempsey,

    Slightly different matter - that was setting the council budget in a way that adversely affected its poorest communities. The idea of commercialising services like libaries and art galleries was suggested by staff - from the finance team. Funny, that.

    How does one know that one wasn't being 'toyed' with by the Cit's'n'Rats over this issue?

    Parnell / Tamaki-Auckland… • Since Sep 2008 • 635 posts Report Reply

  • Sofie Bribiesca,

    How does one know that one wasn't being 'toyed' with by the Cit's'n'Rats over this issue?

    And we wonder why there is so much in the budget for roads? Then, Key's confidence with Standard and Poors?None of this is fluke, Mr 3 and a bit % has got Auckland (and rides the flak) while Key is still smiling, with all their mates. Never trusted the smiling Assassin then nor now. A transparent, brighter future, my arse.

    here and there. • Since Nov 2007 • 5699 posts Report Reply

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