Tory Whanau’s mayoralty damaged by toxic Wellington airport shares sale – A Capital Letter

Wellington City Council is voting on whether to sell its 34% share in Wellington Airport which Wellington Mayor Tory Whanau (inset) supports. Photo / NZ Herald composite image

THREE KEY FACTS

• Wellington City Council is voting on whether to overturn a decision to sell its airport shares.
• Up to $600 million may need to be cut from the council’s 10-year budget without the sale.
• The issue will be considered at a full council meeting at 1.30pm on Thursday.

Senior journalist Georgina Campbell’s A Capital Letter column takes a deeper look at issues in Wellington, where she is based. Georgina has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.

OPINION

Tory Whanau’s mayoralty has been damaged by the controversial airport shares sale, irrespective of whether she can find a majority to withstand opposition to it at a crucial vote tomorrow.

For a mayor who campaigned on her relationship management skills and ability to bring people together, the whole saga has been toxic – and that was before her “train wreck” interview on Q+A.

The council has already voted to sell its 34% share in Wellington Airport, which is worth about $280 million.

It was lauded as a win for Whanau, who supported the sale.

As recently as 2021, council officials floated the sale, citing concerns the council’s investment portfolio lacked diversification and was relatively illiquid. It went down like a cup of cold sick with the council of the day and was quickly taken off the table.

There are plenty of reasons to sell the shares, including that it’s a minority shareholding and the council doesn’t exactly have spare cash lying around to be a good shareholder. The council also doesn’t have a diverse investment portfolio and it’s facing a $2.6 billion under-insurance problem.

However, asset sales are inherently controversial and the strength of opposition on the political left should not be underestimated.

It was therefore somewhat surprising that Whanau, an independent but Green-endorsed mayor, supported the idea and found the numbers for it.

Some of the strongest opposition to selling has come from Labour Party councillors.

The council’s usual voting blocs were cast aside to form an unlikely alliance in favour of selling the shares.

However, some councillors have changed their mind since that vote at the end of May.

Wellington Mayor Tory Whanau wants to sell the council's airport shares and put the proceeds into a perpetual investment fund. Photo / Mark Mitchell

Councillors opposed to the sale tried to hold a second vote on the issue as part of Long-Term Plan deliberations but Whanau left them no opportunity – adding fuel to the fire.

As a result, three left-leaning councillors publicly withdrew their unconditional support for the mayor’s policies.

A Notice of Motion (NoM), signed by a majority of nine councillors, has now been filed in the latest bid to stop the sale.

This will be voted on tomorrow at a meeting where Whanau has the casting vote if the council is split down the middle.

The whole thing is a mess that has divided the council and cost Whanau crucial support.

Incredibly, Whanau managed to make the situation worse when interviewed by Q+A host Jack Tame last month.

The resulting headlines focused on her backtracking on a claim she sold her car to pay the bills because of financial pressures.

But she was also forced to correct herself on the issue of the airport shares.

Whanau initially told Q+A she did not expect to have enough support to sell the shares, which would mean the Long-Term Plan would not be progressed.

But she changed tack later in the interview, saying she had misunderstood the line of questioning, and maintained the council would still sell the shares.

It appears Whanau initially thought Tame was asking about whether the NoM to stop the sale would pass. It made for excruciating viewing with Tame and Whanau talking past each other until she realised her mistake.

The Wellington City Council's 34% shareholding in Wellington Airport is worth about $280 million. Photo / Mark Mitchell

Whanau later blamed her poor performance on exhaustion and characterised Tame’s interview as “tough”.

Tame asked basic questions.

All he wanted to know was whether she had the support to sell the shares. That’s the question residents will have on their minds, not the complicated web of council processes that the NoM is caught up in.

The council would need to amend its Long-Term Plan if the airport sale does not proceed.

It’s not unusual for councils to make amendments to their Long-Term Plans. However, it’s not a great look to amend something that has only just been voted on.

It could also result in up to $600m of capital expenditure needing to be cut, which would dramatically change what’s funded in the 10-year budget.

It’s understood Local Government Minister Simeon Brown is keeping an eye on the situation.

It’s difficult to see how Whanau comes out of this looking good.

If the sale goes through, Whanau has burnt serious political capital on an issue she did not campaign on, along with a reliable working majority for the rest of her term.

If it does not go through, hundreds of millions of dollars could need to be cut from what is meant to be a progressive mayor’s budget.