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Monday, March 14, 2011

Business Roundtable - some advice for CCC

The NZ Herald reports that the New Zealand Business Roundtable is urging the Christchurch City Council sell off its share holdings in businesses in Christchurch, and so free up money for rebuilding infrastructure. The Herald article is here.

According to the Herald, the view of the Business Roundtable is that by:
"... Reducing its shareholding in its port, airport and electricity companies (CCC) would free up cash for repairs to local infrastructure without imposing new burdens on ratepayers," the roundtable said.
As pointed out by the Herald, the investments are strategic, provide a good return to the city, and in turn help keep rates lower.

This argument has been had before and, for the city and its residents, it makes no sense. Overall the investments are sound, return money to the city, and help keep control of essential assets: Orion (electricity supply), Christchurch Airport, Lyttelton Port Company, Christchurch City Networks, the Red Bus, and City Care.

The Herald report is based upon part of an article entitled Some Public Policy Implications of the Canterbury Earthquake by Roger Kerr, executive director of the New Zealand Business Roundtable. When you read the article you will find that encouraging the City to sell off it's investments is only part of the range of changes being promoted.

The earthquake seems to have become an opportunity for a pre-existing range of issues to be revisited in a different and more urgent context. The big view being promoted is that:
"The tragic events in Christchurch will have implications for the government and councils in the region for years to come.  Public policies could help or hinder the recovery process."
From this proposition the argument pursued is that bad public policies will cause an over-long recovery, and be less useful in alleviating the hardship that Christchurch faces. The solution is seen as "Good public policies, focused above all on economic flexibility and growth, could greatly alleviate the hardship that Christchurch faces and promote a speedier recovery." I wonder what value can be put on the word 'could' in that statement?

The good public policy issues raised include: changes to student loans and working for families to remove the need for a general tax to fund rebuilding Christchurch, increased funding to private schools to allow them to take more of the displaced students, possibly applying the experience of fast-tracking under emergency legislation to the wider reforms of the Resource Management Act, fast tracking housing and, by implication, freeing up land use, and more. You can form your own opinions by reading the article on the Business Roundtable website here.

An approach that is particularly disturbing to me is the prospect of replacing democracy with market forces when devising the rebuilding strategy. To quote the article:
"A broader issue is the relative role of top-down and bottom-up strategies in rebuilding Christchurch.  Clearly the devastation is too vast for a detailed centrally planned strategy to be viable.  Central and local government need to concentrate on their vital roles and let markets work."
Where is the discussion of the bottom-up approach of the residents of Christchurch? Imperfect though it is, it resides in the electoral and representational process which provides governance at the local level - the same local government that conducts its business in a manner labeled as not being viable. And, what of market forces - to what extent in the past did the markets work to make the city a desirable, coherent and safe place in which to live, work, study, and holiday?  It will take a Royal Commission of Enquiry to answer that, in the meantime there is no evidence for pronouncing that the markets know how to deal with ordinary city growth, let alone disaster recovery.

In a free country it is lawful, right, and proper for individuals to be able to express their views at any time. Quite often timing is important: on occasions there are advantages in being quick to raise an issue, at other times it is considered appropriate to allow a situation to settle before offering a view. To use the devastation of Christchurch, especially so early in the season of recovery, is at best an insensitive device for promoting a political platform that is better reserved for other occasions. At worst it could be considered as being obscenely opportunistic.

I await with interest what response, if any, we get from John Key, Bill English and Gerry Brownlee.
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