Business Roundtable says priorities to change after quake

Friday 11th March 2011 3 Comments

The Business Roundtable is urging Christchurch City Council to sell its shareholdings in commercial businesses in the wake of the earthquake which devastated the central city.

"Reducing its shareholding in its port, airport and electricity companies would free up cash for repairs to local infrastructure without imposing new burdens on ratepayers," the roundtable said in a statement.

Christchurch City Holdings Ltd (CHHL), the wholly owned investment arm of the council, owns 89.3% of Orion Group Ltd, 75% of Christchurch International Airport Ltd, 75.1% of Lyttelton Port Company, and 100% of Christchurch City Networks. It also owns 100% of Red Bus and City Care.

Dividends from these investments reduce rates by more than 15%, according to the CCHL website.

The roundtable is a long time advocate for a smaller role for both local and central government.

"The Government's plans to sell down its shareholding in several state-owned enterprises make even more sense in present circumstances. It does not need to be involved in commercial activities whereas basic infrastructure is a core government function," it said.

"The same argument applies to the assets of the Christchurch City Council."

The tragic events in Christchurch had implications for the government and councils in the region for years to come. Public policies could help or hinder the recovery process.

The current high level of central government spending and borrowing - the latter amounting to a massive $300 million a week - was not a good starting point for dealing with reconstruction.

The roundtable said that it made sense for monetary policy to be eased but the Government had to reprioritise spending as any household would when faced with a setback.

"Interest-free student loans and Working for Families were politically motivated, not based on sound public policy analysis.

"Such reductions should also take priority over tax increases to fund reconstruction. These would dampen economic activity at a time when the economy may again be in recession," the roundtable said.

NZPA

Comments from our readers

On 12 March 2011 at 1:52 pm Mike D said:

As the National Party is a front for the Business Round Table, no doubt all the BRT wishes will come to fruition given time. I hope the Christchurch City Council gives the BRT the finger and holds on to its assets. From the article above, it would appear the ratepayer are realising a 15% return on their assets, more they could achieve on any capital received. At the same time we all know that the costs for use of transferred assets will increase dramatically in addition to the increase in welfare payments that will be required fore those losing their jobs. This is how BRT members make such huge profits by redundancies and transfer of wages to the dole paid by taxpayers!

On 12 March 2011 at 5:29 pm Nick said:

So don't think just hand over the assets and we'll take the profits. The nerve of these opportunists!

On 14 March 2011 at 12:08 pm Jack said:

The Govt and the BRT have proven that their meddling in existing and well founded operations are useless. Look at the National's Electricity reforms--all that has done has increased prices for both the Home and Business's. It has also made business's less compeditive, with higher power prices. Look at the Town Milk Industry (DRI)--11 Town Milk companies in the SI knocked out--Now Higher Prices for Milk --now controlled by 2 Supermarket Chains-Fonterra/Anchor & Goodman Fielder-- No Benefit to the NZ Good. NZ is too small a country to have these reforms. ChCh City Council business interests have put back into the Community--Companies won't do that.