Goff and privatisation of Ports of Auckland

Back in 2011 when Phil Goff was leading the Labour Party: National planning fire sale of assets, Goff warns

Labour Party leader Phil Goff is accusing the National Party of preparing for a fire sale of New Zealand’s assets at a time when the international economy is uncertain.

On Monday, Mr Goff took his campaign to stop asset sales to state-owned Mighty River Power’s Southdown Power Station in Auckland.

He told a small crowd of Labour MPs, candidates and supporters that New Zealanders do not want assets such as the power plant sold.

“It belongs to you as New Zealanders and we are determined that in five days’ time it will still belong to you as New Zealanders, because we’re going to keep our assets by voting in a Labour-led government.”

Labour wasn’t voted in, and soon after Goff was replaced as leader.

Last year Goff left Parliament after he was voted in as mayor of Auckland, a city needing a lot of money to deal with it’s growth. Goff is at least not staunchly against asset sales now.

NZH: Phil Goff coy about privatisation of Ports of Auckland

High level discussions are under way over the future of Ports of Auckland as Auckland Mayor Phil Goff wrestles with how to fund the city’s ballooning infrastructure costs.

But Goff is refusing to be drawn on whether he plans to sell the council’s ownership stake, saying only he wants to address the port’s long-term future this term.

The Herald understands an IPO, or initial public offering, of the port is being discussed in merchant banking circles. Either a sale of the operating company or a part sale of the entire entity is understood to be under discussion.

Goff would only say he has had wide-ranging discussions on Auckland’s port but no specific proposal on ownership has been presented to him.

Auckland City really has to consider all options for funding it’s expansion.

Since coming to office, Goff has struggled to find new revenue sources to fill a $4b funding hole for transport in the next decade and meet the needs of a rapidly growing city.

Asked under the Official Information Act if he had been made aware by officers or other parties about an IPO sale, a response said: “The strategic issues relating to the Port has been raised with the mayor by officers on occasion as part of their normal advisory role.

“No specific proposals has been shared with the mayor,” said the response, which did not answer questions about the names of officers and parties he had discussed the issue with and what written records or verbal recollections he had.

Pressed further on the issue, Goff said in a written statement he had had wide-ranging discussions on the port “but no specific proposal on the port’s ownership has been presented to me.

“I’ve made no decisions about the port’s long-term future as yet, but intend to make progress on this matter over the course of this term,” Goff said.

So a sale of Ports of Auckland seems to at least be a possibility under Goff’s mayoralty.

It is supported by some:

Auckland Chamber of Commerce chief executive Michael Barnett said last night he was aware of discussions around the port’s future.

It would make “real commercial sense” to sell the business and retain the land, Barnett said.

Infrastructure New Zealand chief executive Stephen Selwood agreed, saying the business community was “very supportive” of the idea.

“It seems to us silly for the council to be tying up monetary assets and effectively crowding out private sector investment when the money could be better used.”

Right-wing councillor Dick Quax said he would be comfortable retaining the port land and selling the business, saying it was a palatable option that would still bring income to the council from leasing the land.

But not by others:

Councillor Mike Lee, who secured the final 20 per cent of shares in Ports of Auckland in 2005 as chairman of the former Auckland Regional Council, said he was giving Goff the benefit of the doubt.

“But if the rumours are true I think it would be an appalling betrayal and not what Aucklanders voted for,’ Lee said.

City Vision councillor Cathy Casey said there would be no ports sale “on my watch”.

Goff was vague on many things in last year’s election, including the Ports.

On the election hustings last year, Goff said he would not sell council’s 22 per cent shareholding in Auckland Airport but left open the door to sell the port business.

He said the 77 hectares of prime waterfront port land should be owned permanently by the people of Auckland and the port business should continue in council ownership, pending long-term decisions on the future of the port.

David Farrar has posted Go Goff go:

Selling some or all of the Port Company would be a great move. Ports of Tauranga has done brilliantly since being wholly Council owned.  needs investment in infrastructure and freeing up capital is a much more sensible way to finance the infrastructure than further debt.

Port Otago is still publicly owned, but Dunedin doesn’t have the expansion problems that Auckland has.

No doubt some in Auckland will campaign against ‘selling the family silver’.

Back to 2011: Parties criticise Govt plan for asset sales

Phil Goff says the Government will lose income when the Government partially privatises State-owned companies.

“Bill English says this isn’t about selling the family silver – he’s right. It’s not the family silver – it’s the most profitable of family businesses that they are selling.”

Perhaps after failing back then Goff has reassessed the merits of selling assets.

It is probably an indication  of how blurred left/right political lines have become. English and his Government are not talking about asset sales any more. They announced a plan this week  for the state to build 25,000 new houses in Auckland.

Political lines look more like this these days:

PickUpSticks

2 Comments

  1. As an investor (small) In Port of Tauranga since just after it was listed, I certainly consider it to be very successful being privatised. It pays a dividend to part-owners the rate payers of Tauranga and is able to secure capital loans at excellent rates which also helps investors who want to see the NZ economy grow. I could see this model working for Auckland as well as long as Goff’s council retain majority shares holding to give all a win win situation, particularly wih the long term capital needs for development of Port Auckland.

  2. The BIG decision that needs to be made in Auckland is whether the port should cease to function as a port and I’m sure avoiding that discussion is part of the Council’s strategy for palming it off to the private sector. Pushing freight out to either Whangarei or Tauranga would be a godsend in terms of taking pressure off Auckland’s infrastructure. Sure some businesses may need to relocate but that is an opportunity in the longer term, not a threat…