Urgent RMA reform, reining in Govt spending high on Mark Cairns’ Christmas wishlist

Mark Cairns is chairman of Freightways and a director of Auckland Airport.

Matching costs to revenue in a slowing economy will be one of the biggest business challenges of 2024 for NZX50-listed company director Mark Cairns.

Chairman of Freightways, a director of Auckland Airport and former chief executive of listed Port of Tauranga, Cairns recently retired as a director on the Meridian board after 11 years. He’s expecting another challenging year ahead for business.

What are your hopes for the new Government?

Better engagement with business and urgently getting government expenditure under control. An early impressive example is the decisive and immediate halting of any further feasibility and preliminary design work on the Lake Onslow pumped hydro scheme.

MBIE originally estimated this project to cost around $4 billion, with Phase 1 investigations ballooning this estimate to $15.7b. It will be interesting to see how much money has been spent on consultants to date before pulling the pin.

The most critical area I am hopeful will see some urgent reform is the Resource Management Act.

The most salient example of how the legislation is failing the country is the five-year consenting process to building a relatively simple single berth extension at Port of Tauranga.

How can the country expect GDP growth if we can’t get our exports to overseas markets?

Most of New Zealand’s dairy and kiwifruit exports are shipped or transhipped through Port of Tauranga.

On a more micro level, I love driving and the new 80km/h speed restriction on SH5 between Taupō and Napier absolutely does my head in.

I am looking forward to driving this at 100km/h (safely) again sometime soon.

How would you describe 2023 for your business?

It was a challenging year at Freightways, with the Express Package businesses largely being a pretty accurate barometer of the economy.

Our larger acquisition in Australia, Allied Express, has continued to do well and Australia hasn’t seemed to slow down as much as New Zealand at this stage.

At Auckland Airport, passenger numbers are recovering close to pre-Covid levels and we are flat out on all fronts with the huge construction programme getting the airport into the 21st century.

What will be your biggest business challenges in 2024?

Matching costs to revenues associated with the slowing economy. And restoring margins after significant wage cost increases over the last few years.

What was the most interesting news story of 2023?

The possibility that the Covid-19 pandemic could be officially over.

What’s the worst mistake you have made in business?

Not trusting my gut and leaving poor performers in the job for too long. Pip Greenwood, a director whom I respect, mentioned a good phrase that resonated with me the other day: “Hire slowly and fire quickly”.

What would you rate as your greatest success?

It might seem trite, but I can’t answer this question without saying our biggest success has been producing and growing two beautiful daughters into successful, intelligent and independent young women.

My greatest success in business, however, remains my time at Port of Tauranga.

I am “fish and chip paper” (yesterday’s news, as I resigned more than two years ago) but remain fiercely proud of my 16-year tenure as chief executive, leading and developing the port into New Zealand’s largest and most productive port, with EY acknowledging the company as one the 10 most efficient ports globally.

The eightfold increase in market capitalisation was also better than a poke in the eye for shareholders, in particular the Bay of Plenty Regional Council, which used these dividends for the Regional Infrastructure Development Fund.

On that note, I am a great cheerleader for the Mixed Ownership Model (MOM) and consider this a great success in the energy sector, raising more than $5b of capital to invest in other infrastructure.

In every case, the Crown’s 50 per cent shareholdings are now worth more than their 100 per cent shareholding as state-owned enterprises, and producing higher dividends with a much greater acuity of focus on capital discipline.

I consider there remain several opportunities for further MOM processes in SOEs such as NZ Post, Transpower and Pamu (Landcorp).

Where and how are you holidaying this summer?

We have our wider family spending Christmas at our house and then we plan to head away on the boat with no fixed itinerary and spend some time cruising around Great Barrier and Waiheke for a few weeks in January.

What would you recommend as a good book to read over summer?

I have taken up golf again after an 18-year hiatus following back surgery.

Recently I have been lucky enough to get to know Mal Tongue, one of New Zealand’s best-ever golf coaches, who has coached some of our most successful players including Mark Brown, Michael Campbell, Marcus Wheelhouse and Stephen Scahill.

I managed to locate a secondhand copy of his biography The Mal Tongue Story – New Zealand’s Top Golf Coach written by Russell Gray and published 18 years ago.

I have had a quick skim and it looks to have lots of great stories about our famous NZ golfers and am looking forward to reading it properly on the boat over summer.