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Friday, May 6, 2011

No reassurance given on asset sales

No reassurance given on asset sales

Last updated 05:00 07/05/2011
Suggestions Christchurch ratepayer-owned companies could be sold to help pay for the city's $20 billion-plus rebuild have ignited fierce political debate.

The Labour Party says special powers granted to the new Canterbury Earthquake Recovery Authority (Cera) allow it to direct the Christchurch City Council (CCC) to sell all or part of its holdings in companies.

In Parliament this week, Labour Waimakariri MP Clayton Cosgrove sought a guarantee from Earthquake Recovery Minister Gerry Brownlee that neither he nor Cera would force Canterbury's local authorities to sell assets. Brownlee said he would not get pushed into a corner on the issue. The council was an elected body that made its own decisions.

Brownlee has previously told The Press he would oppose council asset sales, but admitted the legislation left it open to Cera to suggest that.

Cosgrove said he had not got the guarantee he wanted, and the costs of the rebuild should not be unfairly borne by Canterbury householders.

"Cantabrians didn't create these earthquakes. This is a national issue, in the same way that people all around New Zealand contributed to the cost of rebuilding after the Hawke's Bay [1931 earthquake] disaster. We're all in this together."

The council's holdings include Orion New Zealand, Christchurch International Airport Ltd, the Lyttelton Port Co, Red Bus and City Care. Dividends from the six trading companies the council either owns or has majority shareholdings in have kept the city's rates at least 15 per cent lower than they would otherwise have been in recent years.

Labour's fears were compounded by the Government's rejection of a proposed amendment to the Canterbury Earthquake Recovery Act, passed by Parliament on April 12. The amendment would have prohibited the sale of those strategic assets.

New ACT leader Don Brash is an enthusiast for selling the assets. "If you were a householder whose house had been substantially destroyed or wiped out in the quakes and you had a bunch of [company] shares, logically you would sell those shares to help out, wouldn't you?"

Wigram MP Jim Anderton said that was just the response he expected from Brash – "the only New Zealander I know who once said it was a bad thing to own your own home".

The hundreds of millions of dollars in dividends from council companies had kept rates down, Anderton said.

"With other councils, Auckland and Wellington, who sold assets when they were doing the big ideological thing, I haven't seen that their rates have come down."

United Future leader Peter Dunne said selling council assets was not his preference.

"I certainly do not want the earthquake response to be used as an excuse for doing so on a carte blanche basis. However, it may well be that on a case-by-case basis, a justification could be made ... and it would be prudent for Cera and the Christchurch City Council to leave open that possibility.

"One option could be partial sale through local share floats, with shares issued as `earthquake recovery stock', but again that would have to be on a case-by-case basis."

Christchurch-based Green Party MP list Dr Kennedy Graham said the party remained opposed to selling off state or council-owned assets "for any reason".

"I note that my Labour colleagues, who are casting aspersions on Mr Brownlee, actually voted for the bill that granted him the powers they now decry ... We all call upon the minister never to override the council and sell off its assets. But he has given an undertaking that he will not. That is good enough for me."

- The Press

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