1 August 2014
The Christchurch and Auckland councils should embrace the highly successful asset recycling approach employed in Australia to alleviate community concerns over needed asset sell-downs, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.
Asset recycling partial or full sell-down of capital in existing assets to fund identified new assets for the community has been used successfully in Australia to deliver much needed investment in the face of initial public concern.
For example, the sale of Newcastle Port was eventually embraced in New South Wales after it was made clear that proceeds would be directed into infrastructure and the rejuvenation of Newcastle city.
The public were thus able to consider in a tangible way whether they wanted a revitalised central city and new and better infrastructure or maintain ownership in the port.
This approach is a smart alternative for ratepayers in Christchurch and Auckland and was highlighted by Cameron Partners in their report on options for managing Christchurchs financial challenges, released today.
By recycling capital tied up in existing assets Christchurch will improve its capacity to invest in a productive, innovative and world-class city.
The Auckland Council could accelerate investment in much needed transport infrastructure by doing the same.
What local communities demand is transparency. They need clear understanding of what assets will be sold, where and how the money will be reinvested, and what the social and economic payback will be. What the national community demands is that locals contribute fairly towards projects which call upon national resources but which also have significant local benefits.
Asset recycling gives the community this choice. If Australia is anything to go by, politicians will be pleasantly surprised at the level of community support for asset recycling, provided the benefits exceed the costs, Selwood says.