Plan to sell airport shares hits turbulence

Friday, 17 May 2024

Support for selling the council’s stake in the airport is beginning to look dicey, and a poll reveals the vast majority of Wellingtonians want to keep a share of the airport.

Polling released this morning, commissioned by Unions Wellington and run by polling company Community Engagement, found that 74% of residents were opposed to selling the shares.

Unions Wellington spokesperson Sabina Rizos-Shaw said the result sent a clear message that councillors should “put an end to this unpopular and misguided proposal”.

“Public ownership is important because it gives our city a say on the future of the airport, something that is more critical than ever as we face the challenge of climate change.”

The Wellington City Council proposed the sale of its 34% stake in the airport in this year’s long-term plan, to set up an insurance fund which could help the city in the event of a natural disaster. Currently the city council is under-insured by billions and its main financial asset, the airport, would likely be worthless in the event of a major earthquake.

The telephone poll asked 1374 people: “Do you support or oppose the Wellington City Council’s plan to sell its 34% public stake in Wellington Airport?”

About half of respondents (51.4%) said they would be less likely to vote for their local councillor if they voted to sell the airport shares.

The majority of respondents were opposed to the sale of airport shares regardless of which political party they supported, with the exception of ACT (31% opposed). Labour supporters were most likely to be opposed (86%), while National supporters had the slimmest majority of opponents (63%).

Mayor Tory Whanau was an advocate for the plan, saying yesterday that as a kaitiaki (caretaker) of the city, she was not comfortable passing billions of dollars in insurance risk to the next generation.

“To spread our risk and secure our financial resilience, council staff have come up with a solution that sells our minority share in Wellington Airport and recycles the funds into a Perpetual Green Investment Fund.”

However, she acknowledged it was a “complex issue” and was committed “to following the lead of Wellingtonians” in their feedback on the long-term plan.

There appeared to be growing concern from right-wing councillors, who generally support asset sales, that the proceeds from the sale might not be ringfenced for insurance use.

Councillor Tim Brown said selling was “the only option” to address the lack of insurance cover, but he wanted certainty about how the funds might be used.

The airport had been a good investment and sale of the stake “should only occur if there is certainty that the proceeds will be locked-in for the purposes of providing insurance”, Brown said.

Diane Calvert questioned whether the funds would truly be reinvested wisely and securely, while Nicola Young suggested “this profligate council” might spend the proceeds. Both supported the principle of selling but wanted further assurance the proceeds would be safe.

Tony Randle did not believe the money would be safe from the council, saying it was likely to be used to pay down debt.

Part of the plan to establish the insurance fund involves removing the “other leg of resilience funding”, $272m of debt headroom.

Randle believed the city should maintain both, and by getting rid of the headroom in order to establish the fund, “this proposal reduces the financial resilience of Wellington”. Brown disagreed strongly with this, describing the debt headroom as “a fiction”.

The Chamber of Commerce has suggested Wellington needs to ask Parliament for a local bill to protect the proceeds with legislation, like the New Plymouth Perpetual Investment Fund.

John Apanowicz said selling the shares “has to happen” and rejected arguments from Unions Wellington that the council had any control of the airport.

“We have no control,” he said. Whanau and Wayne Eagleson were the council’s two appointments to the board, and councillors had limited influence over their actions as directors, where they were obliged to act in the company’s best interests.

Sarah Free said the minority share did “not give us any real negotiating power on the board”. That lack of influence was shown when the airport took the council to court over the Cobham Drive pedestrian crossing, she said.

Apanowicz said it was possible the plan would be watered down to a “partial sale” of the shares, where the council would maintain a smaller stake in the airport, as a more politically palatable solution. While the Labour councillors were bound by the party to oppose strategic asset sales, the Greens might be more flexible about a partial sale.

Ray Chung and Nureddin Abdurahman have been the most staunchly opposed to the sale of shares, with Chung saying it would be far too easy for future councils to spend the money and Abdurahman saying he would not support any privatisation.

In the long-term plan committee, which will vote on the major decisions about the long-term plan, Labour councillor Rebecca Matthews has the casting vote as the chairperson.

Mana whenua representatives Holden Hohaia and Liz Kelly will also vote on the proposal, but did not respond to requests for comment.

Geordie Rogers did not respond, but has previously committed to opposing the sale of the shares at a Unions Wellington forum.

Which councillors support selling the airport shares?

Support: Mayor Tory Whanau, John Apanowicz, Sarah Free

Support with caveats: Tim Brown, Diane Calvert, Nicola Young

Oppose: Nureddin Abdurahman, Ray Chung, Rebecca Matthews, Ben McNulty, Teri O’Neill, Tony Randle, Nīkau Wi Neera

Undecided: Laurie Foon, Iona Pannett

Did not respond: Geordie Rogers, Holden Hohaia and Liz Kelly