The Argument for Council Selling Non-Core Assets

Here is an article in The New Zealand Herald dated 14 th November 2015 by Fran O Sullivan that puts forward the argument for Council selling non-core assets.

“Auckland Council’s top executives have shown realism by commissioning two leading consultants to come up up with recommendations to sell assets, in order to raise funds to underwrite the city’s growth.”

“With Auckland facing significant growth pressure from immigration, and ratepayers increasingly opposed to rate hikes, the option to monetise the council’s balance sheet rather than resorting to more debt funding ought to be attractive.

• Auckland for sale, but rates won’t drop
• Project Auckland: Five big years

Behind the scenes, the Government has made it clear that an asset-rich Auckland can’t expect the taxpayer to fund a disproportionate amount of the city’s infrastructure spending.

But it will take political will from Auckland City’s councillors to get the proposals over the line.

The reports out yesterday from investment bankers Cameron Partners and advisory firm EY have recommended either the full or partial sale of a swag of council-owned assets. These include Ports of Auckland, Auckland International Airport and Watercare — as well as a swathe of other assets ranging from golf courses to public reserves.

The recommendations were hardly surprising, given their authorship.

Rob Cameron is known somewhat facetiously as “Mr Mom” by elements of the investment banking community.

Cameron was the Government’s “go-to guy” in his role as chairman of the Capital Markets Taskforce.

The “mixed ownership model”, known colloquially as “Mom”, which the taskforce recommended involved the Crown selling down its shareholding in prime state-owned enterprises to 51 per cent.”

Go here to read the whole article 


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