Speaking to Newstalk ZB's Mike Hosking this morning, Mayor Wayne Brown reiterated his push for Auckland Transport to have a change in approach. Video / Newstalk ZB
OPINION:
When I voted for Wayne Brown I had no illusions about his economics. His ports study for New Zealand First a few years ago, sensibly shelved by Labour, showed no concept of efficiency as found by competitors in free markets. Efficiency was what he decided it was.
He isa bull in the china shop of public policy, which is exactly what I think is needed to rearrange the porcelain dolls of unelected power within the Auckland Council and its uncontrolled subsidiaries. But when he turns on a priceless national asset, Auckland’s port, the bull needs to be restrained.
This week it was reported he has written to the port company’s chair telling her he wants Bledisloe Wharf no longer used for car deliveries. “There is no one who voted for me who should have been unaware of my view that car importation and container services should cease at the current site,” he said.
That’s true. I knew he hated unloaded cars being parked on the waterfront awaiting collection. They are a bit unsightly, though not easily visible from downtown streets, unlike the monstrously ugly ships that bring them here.
But as a voter I also noted his declared solution went no further than to charge the port company a hefty rate for its site. It’s perfectly legitimate and economically desirable for a public body to make a business take account of the value of land it uses.
However, it is not legitimate – and economically undesirable – for a city’s mayor to start specifying where particular cargoes can go. New Zealand has a highly efficient, resilient economy today precisely because governments no longer interfere in decisions at that level.
It is hard to think of anything more vital to a national economy than its principal ports. If freight does not enter or leave the country by the most efficient routes possible, the cost of imports and exports is higher than it need be and national wealth is diminished.
Brown not only wants to decide where goods may go, he wants to decide how it is carried. He wants everything transported to and from ports by rail. Much of it already is railed from inland port depots but not all, because rail is not efficient for all.
Our new mayor may be successful in business, he no doubt thinks he could manage a port very well - and possibly he could. But all successful business people who go into politics need to recognise the influences on their decisions change.
Wayne Brown says cars should not be unloaded at Auckland's Bledisloe Wharf. Photo / NZME
They are no longer facing the discipline of profitability, they can make decisions with public money they would not dare make if they were investing their own or answerable to shareholders. They know they should exercise the same care but it is very hard to do so when the pressure is not there.
That is why they are advised to put economic assets like ports at a distance from their influence, answerable to them as nominal shareholders. But this works best when the asset managers are also answerable to real shareholders, as the Port of Tauranga is and Ports of Auckland used to be.
Assets don’t need to be fully floated to become responsive to the disciplines of the sharemarket. And they don’t need to be wholly in public ownership for the public to benefit from their earnings. In fact, the public benefit is likely to be larger if the company is partially listed.
The Port of Tauranga, 54 per cent owned by the Bay of Plenty Regional Council, pays handsome dividends to its council and minority shareholders, which include me. Ports of Auckland could not pay anyone a dividend in recent years.
The company has gone steadily downhill since the former Auckland Regional Council bought out its private shareholders. It became more vulnerable to unions, making it harder to rationalise its operations. It made big, bad investments in technology it could not operate and had to ditch. It has lost its primacy to Tauranga.
Full ownership has not worked for the public interest either. As sole owner, the Auckland Council has felt obliged to protect the port’s commercial interests, compromising the council’s ability to stand against wharf extensions and those grossly outsized cranes.
Mixed-ownership works best for vital economic assets. That was the model National put to the 2011 election for power companies, prompting Labour to campaign entirely on the slogan, “no asset sales”. National won.
Labour has been helpful again in the Auckland mayoral campaign with an attack ad on the Herald’s front page declaring: “Efeso Collins will not sell the port. Brown???” That’s a mandate of sorts.
The port company is not the port, just the tenant. Brown’s council should float it.
John Roughan is an editorial writer and columnist for the New Zealand Herald.
