Editorial: Comfort and risk in Super City spending

Just what should local bodies be able to spend your money on? It is a timely question, given the upheaval facing Auckland ratepayers and the onset of the Super City. The Auckland Regional Council, soon to be no more, gambled on footballer David Beckham pulling a big crowd and lost $1.79 million. The Auckland City Council's entertainment arm, the Edge, gambled on another ageing gig, My Fair Lady, and lost $1.9 million when 32,000 of the 50,000 people needed just for the show to break even failed to show. A further Edge loss of $500,000 on two plays has added to the tarnishing of councils' reputations as impresarios.

The Edge will have its losses underwritten with an injection of ratepayers' money from the city council. The mayor, John Banks, is sanguine about the multimillion-dollar bailout, claiming citizens will only be "disappointed". He is probably right, but only because people have become so used to unoriginal ideas being poorly executed when public money is involved. Those spending public funds do so in the sure knowledge that however bad the investment there is more where that came from. Local bodies' involvement in the commercial world of entertainment will never be optimal because the disciplines of the market - that high appeal events, rightly targeted and priced will be rewarded with strong demand and also-rans at exorbitant prices will not - can be ignored.

There is comfort, and risk, in the super council. On one hand the transformation process has the chance to focus the city on essential, core activities and eliminate luxuries best left to the market. On the other, the new body's greatly enlarged income from rates might mean a few million dropped on bad bets will seem like small change and be treated accordingly.