Damien Grant: It's time to stop port rort

The Ports of Auckland. Photo / Dean Purcell

Opinion

If you want evidence that privately owned firms are better run than those held captive by the state, you need look no further than the Ports of Auckland.

Last month, its CEO, Tony Gibson, wrote an embarrassing article in which he admitted that his primary competitor, the Port of Tauranga, was more efficient, more profitable and that despite paying unskilled dock workers $91,000 a year, he was unable to make them do more than 26 hours of work.

Can you imagine the CEO of Westpac writing in the New Zealand Herald that his staff were less productive than those of BNZ, that they were paid too much and he could not get some of them to put in 40 hours?

Gibson needs to look no further than the example set by Alan Joyce, the CEO of Qantas. When his unions threw a wobbly, he grounded the fleet. Joyce showed courage, stared down the union, took some short-term heat but saved his airline.

I do have a lot of respect for union leader Garry Parsloe, who clearly has the measure of Gibson. His job is to advance the cause of his members and he is doing that. He deserves no criticism for being so good. Workers are entitled to withdraw their labour, this right has been long established.

The Ports of Auckland is owned by Auckland Council, where councillors voted 12 to nine to back the port's management, with left-wing troglodytes such as Sandra Coney and eight others voting to support the union.

I'm not meaning to be disrespectful (okay, maybe I am) but working on the docks is not skilled employment. Knowing how to remove an appendix is skilled. Moving a container is something someone with basic literacy and functioning limbs can learn over the course of a few weeks.

They are earning $91,000 a year because Parsloe knows a council-owned company does not need to make money and that management will back down from a fight.

Gibson should sack the entire workforce and start again. At $91,000, there will be no shortage of applicants, even if he has to fly them in.

He will not because his political masters will not let him.

Down in Tauranga, the local council floated 45 per cent of its port's shares to the public. The business is therefore run along standard commercial lines. Its CEO is winning clients such as Maersk and exploiting the underlying competitive advantage it has over the hapless Jafas.

Government ownership places constraints on a business that produce the sort of nonsense we are seeing at the wharves.

Unions sense weakness and seek advantage, commercial discipline is lost and there is no consequence for failure, no risk of insolvency and no reward for profit.

The state-owned enterprise model is an improvement, but there is no discipline like the discipline of the market.

Happy New Year.