The Government's billion dollar challenge
By Richard Harman (author)
There are an extra billion dollars on the table in Wellington for Auckland transport if the city agrees to sell its port company.
The city's Mayor, Phil Goff, has confirmed that he has received a briefing from the Ports Company proposing a privatisation.
POLITIK has learned that the Government may be willing to stump up an extra one billion dollars for transport projects if the port – or other assets – were to be sold.
Given that the company is worth approximately $1.1 billion the Government appears to be proposing a dollar for dollar subsidy.
It’s clear that the proposal has implications well beyond Auckland.
Already Labour is opposing any sale, and it appears that former Labour Leader and now Mayor, Phil Goff, is equivocal about a sale.
Asked on RNZ”s "Checkpoint" last night if he was "looking to try and cash some cheques” from the sale of the port he said: “I think the port company is probably looking at that.”
“That is not my starting point.
“Probably where we do see some agreement is that they see some value in separating the port (into) an operating company and a land company.”
However, he said he wanted the Ports Company to brief the Council as a whole in a confidential workshop.
The National Government, on the other hand, is ideologically sympathetic to privatisation and reluctant to pour money into Auckland without some evidence that Auckland is also helping to pay for its own transport infrastructure.
The situation is made more urgent with the prospect of the $114-per-household transp[ort levy due to stop in the middle of next year.
A senior Government source last night told POLITIK that one billion dollars could be available and projects that might be able to be brought forward could include:
- Mills Road motorway extension.
- The Panmure- Botany busway and other roadworks
- The busway to the Airport
- A busway and other work on the North Western motorway.
However, the Government is not banking on the Council either agreeing to or being able to sell the port company.
Goff himself, in the Checkpoint interview, made much of his pledge to have the port move, probably to the Firth of Thames within the next 40 years. But that could complicate any sale.
For that reason and the political uncertainty around the Council agreeing to sell, the Government is not getting involved in the Auckland debate.
“We need to see them do a bit more; they have a range of options; this is one of them,” the source said.
“But it’s up to them.”
Labour's Transport spokesperson Phil Twyford however was not that shy about expressing his view.
“National has blocked every request Auckland Council has made for new sources of revenue to invest in desperately needed infrastructure, including road pricing and a regional fuel tax,” he said.
“And now the usual cheerleaders for privatisation are telling the Council to flog off the port company to fund the infrastructure deficit.
“The country needs the future of the upper North Island ports to be resolved on the basis of what’s good for the long term prosperity of New Zealand.
“Privatising the port now could jeopardise that process.
"Labour in Government will put in place a national freight strategy that will involve all the stakeholders in an evidence-based decision-making process on the future of the upper North Island ports – Auckland, Tauranga and Northport.”
What that means is that Labour is proposing a central ports plan which will be directed by Wellington.
National is opposed to that, and Transport Minister Simon Bridges has consistently refused to get into any “pick a port” speculation.
Ministers are not willing to have the Government fully fund Auckland’s transport infrastructure --- it would be a hard sell across the rest of New Zealand.
They are also not going to agree to Goff's preference for a regional petrol tax.
Energy Minister Judith Collins told a recent National Party conference that it would simply see the petrol companies equalise their prices across New Zealand so non-Aucklanders paid more to cushion the effect of the tax on Auckland.
That leaves Auckland with a choice of targeted rates or general rates increases or asset sales.