The lead article in Watchdog 162 (April 2023, "Here We Go Again. Assets Sales Back On The Agenda", Murray Horton) specifically related to the current situation with Christchurch City Council, whereby the Council voted in late 2022 to consider a business case for partial asset sales. However, this situation did not come out of thin air and can't be considered in isolation.

We need to establish the background to asset sales, secret or otherwise. We need to go back decades. This is the slightly edited talk that I gave at the Christchurch WEA in May 2023. The full 40-minute talk is available as a podcast on Plains FM. I gave the talk in my capacity as Convenor of Keep Our Assets Canterbury (KOA).

It All Started In The 80s

Like so many other bad things in NZ society today, this all started with the 1984-90 Labour government, i.e., Rogernomics, that regime of corporatisation, privatisation, asset sales and user pays. Who said this? "I am not sure we were right to use the argument that we should privatise to quit debt. We knew it was a poor argument but we probably felt it was the easiest to use politically". Answer - none other than Sir Roger Douglas, in a book praising the sale of State forests.

We can all think of public assets that were sold in this period. I'll give just one big example - Telecom. I've always been involved in campaigns against asset sales. With Telecom it was SPOT: Society for Publicly Owned Telecommunications (you have to be of a certain age to get the joke about Telecom and Spot, the dog used in its ads in those days).

Asset sales continued throughout the 90s, under National. Once again, I'll mention just one big example - the Railways. And another one, because it's very timely right now - in 1998 the Government sold all its stake in Auckland Airport, which was floated on the share market. In 2023 the Auckland Council has voted to sell 7% of its airport shares (the Mayor wanted to sell its full block of 18%). In that decade, the 90s, asset sales moved on from flogging off central government assets to local government ones.

CAFCA was instrumental in setting up the Campaign for People's Sovereignty, a coalition which fought the manifestations of foreign control at local government level for several years, in the 90s. We campaigned against the corporatisation of the former Southpower, Christchurch's publicly owned power company (which had replaced the Municipal Electricity Department - MED). Southpower was sold, a victim of National's electricity "reforms" of the 90s.

It was sold to TransAlta, a Canadian transnational corporation, which was gone within a few years. Christchurch no longer has a Council-owned electricity retailer - but it does still have a Council-owned lines company, Orion. The 90s also saw the sale of locally-owned Trust Bank to Westpac and the City Council giving its rubbish collection contract to French transnational, Onyx (a contract that is now held by another transnational corporation, Waste Management).

Labour was back in power from 1999-2008. It stopped the asset sales of its 80s and 90s predecessors but did precious little to roll them back - with a couple of exceptions. It very reluctantly renationalised both the Railways and Air NZ, which had been sold overseas and both failed as privately-owned, foreign-owned businesses. It also stopped Auckland Airport from being sold overseas. It's worth remembering that one of the great achievements of that Government - the creation of Kiwibank - was the brainchild of Jim Anderton and the Alliance, not Labour.

Attempt To Sell Lyttelton Port Company

The 2000s saw the first attempt by the Christchurch City Council to sell a major asset on its own initiative (as opposed to being forced to sell Christchurch assets such as Southpower by central Government). This was the period when the Council, led by Mayor Garry Moore, gloried in the title The People's Republic of Christchurch, bestowed on it by the Business Roundtable for refusing to follow the dominant ideology, followed by other councils around the country of selling assets, privatising, and contracting out. So, it was definitely a big surprise when, in 2006, Moore's Council announced a plan to buy the block of shares in the Lyttelton Port Company (LPC) that it didn't already own and once having gained full control, to sell it to a Hong Kong-based transnational corporation.

Moore later confirmed that the Council had been looking for a suitable transnational for years. CAFCA took a lead role in setting up the Keep Our Port Public coalition and we fought the proposed sale. But what it killed the port sale dead in the water (pun intended) was a lightning raid by the Otago port company which bought up enough shares in Lyttelton to block any such sale and sat on them for years. In 2014, Christchurch City Holdings Ltd (CCHL) - the Council's holding company for its commercial trading assets - admitted defeat, bought back those shares, to achieve 100% ownership of Lyttelton Port Company and delisted it from the share market.

But this had been a serious attempt to pull off a major asset sale. This is what I wrote at the time "...the head of Christchurch City Holdings Ltd, (the unelected front man for the deal, alongside Mayor Garry), told the media that the need for public consultation had been avoided because the stake of LPC to be sold to Hutchison would be 49.9%, i.e., 0.1% less than that which would legally invoke the necessity for consultation".

"So, they had planned it out carefully, or so they thought, and considered themselves rather clever, or so they thought. Actually, by announcing to the world at large what they planned to do, they practically invited the likes of Port of Otago to act as it did, so they were the very opposite of clever. There is a word for that".

Furthermore, I wrote: "The February 2006 Council meeting which set the process in motion altered the definition of 'significance', and then proceeded to remove not only the Lyttelton Port Company but also the Red Bus Company, City Care (the Council's road works and contracting company), Council-owned civic amenities such as Jade Stadium, and Council housing (Christchurch is the country's second biggest landlord, after the State's Housing New Zealand) from its list of protected strategic assets. Obviously, the planned sale of LPC was seen as only the first in an intended domino effect of privatisations".

Flogging Off The Power Generators

Returning to the national scene (or more correctly, the National scene). The Key/English government was in power from 2008-17. It can't be accused of secret asset sales. During the 2011 election campaign, Key announced the partial privatisation of several public assets if National was re-elected. National was re-elected in 2011 and claimed a mandate for the partial privatisation of State-owned power generators, Meridian, Mighty River Power and Genesis. A national campaign (in which CAFCA was involved) forced a citizens'-initiated referendum in 2012, which overwhelmingly rejected the partial privatisation. Key ignored that and went ahead. Here's what I wrote about this in 2014:

"...One thing needs to be made clear - privatisation of public assets is wrong, regardless of whether the new owners are transnational corporations, local Big Business (pakeha or Māori) or 'mum and dad' (ditto). No matter how much Key and English and co tart it up, the central, glaringly obvious fact is that 'mum and dad' already own these State-Owned Enterprises, and all other public assets, because that's what public ownership is. It means ownership by the public".

"It's not very difficult to work out; you don't need a Master of Business Administration degree from Harvard. The Government has been brazenly stealing public assets - all sugar coated as 'partial privatisation' or 'the mixed ownership model', because it is only stealing 49% of them - and laughing in our faces by urging us to buy back a little bit of this stolen property in the form of shares. Forget about Nigerian scams; this is the much worse New Zealand scam".

"We have paid for them by our taxes, why should we be expected to pay for them again by buying a few shares in them and diluting our ownership to the status of a minority shareholder? What happens if one of these privatised companies goes bust? The obvious fact is that, in the share market, there are always highs and lows, winners and losers. So, in the event that one of them goes bust, mum and dad will go to the back of the queue as unsecured creditors, just as happened with the shonky finance companies that toppled like dominos. And mum and dad will be left with nothing, exactly as they were by the finance companies. Isn't that a great bargain!"

"Key makes the facile claim that restricting private ownership to 49% provides some sort of protection. Crap! Ever since 1973 the Overseas Investment Act has defined a foreign-owned or controlled company as one with more than 24.9% foreign shareholding. It doesn't matter whether that percentage is held by one or many foreign owners; if it totals anything higher than 24.9%, it is recognised as a foreign company".

"In other words, Key is talking about accepting a level of private, inevitably foreign, ownership which is double the legal definition of a foreign company. Even in the unlikely event that these SOEs do end up in continued New Zealand ownership or, in the unlikeliest event that they do end up being owned by 'mums and dads', that doesn't make it right. It would still be the privatisation of what is rightfully public; the expropriation of the common wealth for private profit".

"There are no sound economic reasons for selling these State-owned electricity generators and any other SOEs that may be also being eyed up for sale. As in the past, the reason cited for selling assets is to help to pay off public debt. But the Government can borrow money at cheaper rates than the private sector, so why is that a worry? It's the equivalent of selling your house to pay off the mortgage. You've cleared your debt, but you've no longer got your prime asset. More importantly, you no longer own the roof over your head".

"You have to downsize to being a tenant - everyone knows who calls the shots in the landlord/tenant relationship. I've been both a tenant and a homeowner, and I know which one I prefer. That's the path Key and co is setting us onto - becoming tenants in our own home. That is ironic because, it's only two to three years ago, that Key himself said that he didn't want to see New Zealanders become tenants in our own country. Well, he's doing everything possible to bring that about".

There were other high profile and totally disastrous privatisations under Key - look no further than British transnational Serco at Auckland's Mount Eden Prison. Serco made such a pig's arse of running the place that the story provided an endless stream of fodder for the mainstream media (rivalled only by the coverage given to Australian company Talent2 and its woeful "administration" of teachers' pay via Novopay). In both cases - Serco and Novopay - a Government ideologically committed to privatisation had to reluctantly face facts and relieve them of their contracts, returning the victims of their "service" to the public sector. The most egregious was the mass sell off of State houses.

Disaster Capitalism

And so, we reach the starting point of my talk, having provided the context. I wrote this in 2017: "The opposition to those power company privatisations gave birth to the Keep Our Assets Canterbury (KOA) campaign, which still continues today in Christchurch, because of the pressure placed on the City Council by the Government to sell off its extensive portfolio of publicly-owned assets in order to pay for "its share" of the cost of the quake rebuild".

"This is called disaster capitalism or shock doctrine. KOA, of which I am the Convenor, has waged a years-long battle to keep Christchurch's public assets in public ownership. That campaign has been more successful than what we might have hoped and certainly more successful than what plenty of people expected".

For all his other faults, Mayor Bob Parker (2007-13) was consistent on one issue - there would be no asset sales. And there weren't, during his two terms. In the build up to the 2013 local body election, all The People's Choice candidates and Councillors were happy to sign up to KOA's don't sell assets pledge. But things changed, for the worse, under Lianne Dalziel's three terms as Mayor (2013-22). Suddenly asset sales were back on the agenda. The real reason, as always, was ideological - private ownership good, public ownership bad.

The stated reason, as always, was debt. Specifically, the Christchurch City Council's financial obligations under the post-quakes rebuild Cost Sharing Agreement with the National government. A report was commissioned from investment bankers Cameron Partners, which said that there was a $900 million shortfall in Council finances (the figure later ballooned to more than $1 billion). This is called disaster capitalism or, more colourfully, shock doctrine. It was used to get away with all sorts of things in post-quake Christchurch e.g., schools' restructuring.

Trying To Sell Citycare

In 2015 the Council announced it would sell $750 million of assets - later reduced to $600m, because of significant public opposition It announced that Citycare would be the first asset to be sold. KOA campaigned very hard against this, including running John Minto for Mayor (he got tens of thousands of votes, nearly 15% of the total vote). Just months out from the 2016 local body election the Council announced that Citycare wouldn't be sold, after all. Not because of any opposition but because they couldn't get the price that they wanted for it. They said they'd had a buyer lined up but it was not prepared to pay the asking price. Who that prospective buyer was has been secret ever since.

But I can tell you. In 2022, I found out - literally in the course of a casual conversation with an anonymous stranger on a suburban street. It was Veolia, the huge French water services transnational corporation that already has its talons sunk deep into NZ. It would be the likes of them who would snap up Christchurch's publicly-owned assets. My informant, who was in a position to know, said that Veolia only wanted to buy Citycare Water and the Council wanted to sell the whole thing, so the sale broke down.

And the purported huge shortfall in Council finances? Well, it just vanished into thin air. Its' purpose had been to scare Christchurch ratepayers into being stampeded into accepting asset sales. That hadn't worked, so the scam was withdrawn. Money was found by the other means that had been available to the Council e.g., by borrowing (which local bodies can do at cheaper rates and better terms than you and I can) or by dividends from those very trading entities that they wanted to sell.

In the years since Citycare was taken off the block, KOA has kept on campaigning, and with some successes - Citycare was restored to the Council's list of strategic assets, which means it can't be sold without public consultation. The Council's fibre broadband company Enable was also restored to that list - it had been quietly removed from it.

But there were some losses too - Red Bus was withdrawn from that list and has been sold overseas. Meaning that that Council has no direct ownership of any public transport asset. And the National government forced the Council - NZ's second-biggest landlord, after the Crown - to quit direct ownership of its public rental housing portfolio and hand it over to a community housing trust.

In 2019 KOA again ran John Minto for Mayor. In 2016 he had been the only major candidate to run against Mayor Dalziel (the business community did not put up a candidate) and John got nearly 15% of the vote. In 2019 the business community did put up a candidate - who campaigned for asset sales, to pay for the bloody white elephant stadium. In this three-way split, John got nearly 10% of the vote.

Which - finally - brings us to today's situation. KOA did not run a candidate for Mayor in the October 2022 local body elections. The subject of asset sales was never raised by any Councillor, or the Mayor, during that election campaign. None of them has a mandate on this. And yet, in December 2022, the City Council announced that a confidential report had been commissioned in 2021 by the previous Council and that this report, by a private company, recommended that the Council investigate partially selling our assets (the report never uses the word "sell". It talks about "recycling").

Where did this come from? It turns out that the previous Dalziel-led Council laid the groundwork, KOA wrote to the Council and got this answer:

1. Council requested CCHL undertake the report as part of the Letter of Expectations to CCHL in December 2021. This was in a public meeting (meaning, a City Council meeting open to the public).
2. Council took over the lead of the procurement of the report in July 2022 after CCHL had advised that it could not make the deadlines. Northington Partners were appointed in August 2022 following a market process.
3. The cost was $275,000.

Once again, a report by investment bankers has recommended the Council "partially" sell assets because of a purported debt. This debt is still quake rebuild-related but self-inflicted, namely the hundreds of millions of dollars (including hundreds of millions that is over the budget) that this "frugal" Council decided to spend on the white elephant stadium.

The arguments against asset sales are the same now as a decade ago - once they're gone, they're gone. Talk of turning the "family silver" into "gold" is true, insofar as someone else will own our assets and be reaping the gold. They're valuable and profitable - why would you sell them, for short term, one-off gain? A very good article on the subject is in Newsroom (6/3/23, David Williams).

Need To Return To Public Service Model

As we have in the past, KOA will fight this latest attempt to steal public assets for the benefit of private profits. But, in the longer run, what is required is an ideological shift from the stale and failed nostrums of the neoliberal 1980s, in which so much of NZ political thinking is still stuck and which continues to wreak havoc across so many sectors of society.

Away from the business, commercial, corporate, competitive, market forces, private-is-best model and into the tried-and-true public service model. To use the example of Citycare, it should be changed from an empire-building corporate contractor bidding for work all over the country to what it should always have been - a Christchurch City Council works department. There is no shortage of things for it to do, it is a core Council task. As for the stadium: it will be a public asset but in the "nice to have" category. Park it up until the Council can afford it.