Quake recovery won't be helped by selling local assets
Tuesday 3 May 2011, 8:21AM
By Labour Party
185 views
Canterbury ratepayer assets must not be sold to help fund the quake recovery, say Christchurch MPs Clayton Cosgrove and Brendon Burns.
The MPs fear the Government is assessing the Christchurch City Council’s $2b worth of trading assets as a contribution to the cost of rebuilding damaged city infrastructure, and that it is also looking at assets owned by the other Canterbury local authorities.
“If the Government has no intention of doing this, it would have accepted Labour’s amendment to the CERA legislation precluding the full or partial sale of assets,” Clayton Cosgrove said. “Instead, it used its numbers to defeat the amendment.
“We all know the Government already intends to sell state assets to reduce its debt, and will partly blame the cost of Christchurch recovery for this. We are now deeply concerned the Government will go further, forcing the sale of council assets. That will simply load more cost on to a struggling ratepayer base.”
Brendon Burns said selling the city council’s majority stake (89 per cent) in the Orion power network would push up power prices, while flogging off controlling stakes in Port Lyttleton (79 per cent) or Christchurch airport (75 per cent) would probably mean foreign owners seeking higher profits. “Likewise, selling down ownership of The Red Bus Company, City Care or the Enable broadband network won’t lead to lower bus fares, cheaper council services or more competitive broadband.”
Brendon Burns said these assets, worth more than $2 billion, are held on behalf of the council by its holding company, CCHL. “Over recent years CCHL has delivered more than $800m in capital and dividend payments to ratepayers. It has helped fund projects like the Art Gallery and kept rates down by an estimated 15 per cent.
“The Government might see short-term balance sheet benefits in requiring Christchurch to sell its assets, but ratepayers, businesses and consumers will pay the long-term cost.”
Clayton Cosgrove said: “It is crucial that the Government comes clean and confirms its intentions, so that Canterbury people can say what they think.”