Council staff accused of ‘scaremongering’ over airport shares

Tuesday, 28 May 2024

A dire warning issued to councillors by staff last week is under question from opponents of selling the city’s airport shares.

In a briefing last week, Wellington City Council chief financial officer Andrea Reeves told councillors if they did not go ahead with the sale of the shares it would change the financial basis of the whole long-term plan.

Council staff have proposed selling the council’s 34% shareholding in Wellington Airport, in order to establish an investment fund which could address its billion-dollar shortfall in insurance coverage.

Without the sale of the shares providing more room for debt, the council would have to cut $450m of capital spending and begin consultation with the community again, Reeves told councillors.

But Council of Trade Unions economist Craig Renney, part of the Unions Wellington campaign Keep the Airport Ours, said he would caution councillors against assuming the share sale would solve their problems.

“If half a billion dollars was the panacea for their problems, we would have done this years ago,” he said.

Addressing the council’s insurance gap “absolutely” needed to be done, but there was time to consider other options. Councillors should not feel time pressure to vote for a sale this week, he said, given that the process of selling could take years.

The possibility of a $450m budget hole if the shares were not sold was news to councillors.

Nureddin Abdurahman, who has opposed the sale of the airport shares right from the start, said staff had brought out new information that councillors hadn’t heard before, about how $450m of spending would need to be cut from the long-term plan if the shares were not sold.

“They’re saying there are not other options, you have to sell. If you don’t sell, the whole thing kind of collapses.”

It had been “full-on scaremongering”, he said, and when the council went into the public-excluded part of the briefing staff had continued on similar lines.

“I suspect the information [about the $450m] was there previously, but it just wasn’t presented in that way,” said councillor Nīkau Wi Neera.

He did not think the briefing had been scaremongering, but said the finances had been presented in “a far starker, more explicitly steering kind of way” by staff.

Ray Chung, in a press release, questioned whether the council had any evidence that its financial rating issued by Standard & Poors would drop as a result of a decision against the sale, as claimed by staff in the briefing.

“I think that statement is questionable and would hope that it’s not just scaremongering of councillors and the Wellington public,” he said.

Council spokesperson Richard MacLean defended the briefing last week as “comprehensive and timely advice” and said it was ”transparent, in public, and included advice from independent experts [at KPMG]”.

In response to questions about whether staff had been trying to scare councillors, Mayor Tory Whanau said the insurance gap was “an extremely serious and difficult decision”.

“I think it’s important that all elected members are well informed and have open eyes about the consequences of all decisions they make here at council.”

Iona Pannett said the decision about the airport shares was “the most difficult issue that’s come across my desk”.

Council staff had “a strong view” and that had been reflected in their advice at the briefing. “They are entitled to but it is a very, very difficult decision and there are other arguments which need to be taken into consideration.”

The council will vote on whether to sell the airport shares in its long-term plan meeting on Thursday.