Who’s being disrespectful, Lianne?

A case of the disrespectful pot calling the kettle black, perhaps?

Christchurch Mayor Lianne Dalziel has complained about Keep Our Assets Canterbury (KOA) being “disrespectful” because, for the first hour of today’s City Council meeting, we silently held up a banner and placards naming and shaming the eight Councillors (including her) who voted to sell publicly-owned assets, starting with City Care.

She complained that it was “disrespectful” to do so during the public participation session at the start of the meeting. Let’s leave aside the obvious irony of the Mayor condemning public participation during the time set aside for it.

If we had made any noise, disturbance or scene whatsoever, she (and those members of the public) may have had grounds for complaint. But, no, our protest was entirely silent and took place behind the backs of those members of the public presenting to the Councillors. They would not have even known we were there if the Mayor had not raised the subject. The fact that she did shows that she is starting to feel the heat on the issue of asset sales. And so she should, along with the other seven Councillors named and shamed on our placards – they were the targets of our protest, for which we make no apology.

Nor do we think that Christchurch people who come along to speak to a Council meeting are of such a delicate constitution that they might faint at the sight of silent protestors holding up a banner and placards speaking truth to power.

On the subject of disrespect, KOA wants it put on the record that twice recently we have written to all Councillors on the subject of asset sales and in neither case have we received so much as a formal acknowledgement from the Mayor. A case of the disrespectful pot calling the kettle black, perhaps?

But the real disrespect here is from those eight Councillors, including the Mayor, who, despite having no mandate from the 2013 election (when the subject was never mentioned), voted to sell hundreds of millions of dollars worth of publicly-owned assets, starting with City Care. That is disrespect for the electorate and disrespect for the overwhelming majority of submitters to the Long Term Plan who demanded that the Council not sell assets (of those who made a submission on asset sales, 83% were opposed to them).

KOA has no intention of letting those sellout eight Councillors off the hook on this issue.

Christchurch City Council Is Flying Blind

Just What Is The Impact Of The Changes To Council Housing

Christchurch City Council: flying blind and deliberately so
The Christchurch City Council (CCC) is the second biggest landlord in NZ (after the State). So, any changes with the city’s publicly-owned housing portfolio are a big deal.
Just such a major change is about to take effect from July, when the Council becomes a Community Housing Provider (transferring its social housing to a Trust of which the CCC is a 49% shareholder).
 And the Council is flying blind into it without having any idea as to the impact.
Keep Our Assets Canterbury (KOA) asked the Council, under the Official Information Act, for: “any analysis, working papers and reports addressing the impact, of the establishment of Otautahi Community Housing Trust, on;

a)      Council’s Social Housing Strategy and related Council polices and obligations
b)      Staff currently employed in the City Housing unit at CCC.
Council declined the request because it “would require a considerable amount of collation and research to complete”.
So, it seems glaringly obvious that the Council has done no such impact assessment.
It is utterly outrageous that Council has pursued the establishment of the Community Housing Trust without even a cursory glance at what that may mean for Council’s ongoing rights and obligations (to the community (let alone its’ own staff).
An “impact assessment” is management 101, particularly on a matter as fundamental as surrendering control of an asset as important as our publicly-owned housing and which affects so many people. Yet we are assured that it has not been done.
This is the managerial equivalent of demolishing your house without having given any thought as to where you’re going to live.
Not only is the Council flying blind into this, it is doing so deliberately.

Christchurch Council Housing Changes Not All We Were Led To Believe

Did Government Change Terms Or Was Council Wilfully Blind?

Dead Rats Aplenty 
 The Christchurch City Council (CCC) is the second biggest landlord in NZ (after the State). So, any changes
with the city’s publicly-owned housing portfolio are a big deal.

Just such a major change is about to take effect from July. And it is not as benevolent as we have been led to believe.

The decision to become a Community Housing Provider (i.e. transfer the City Council’s social housing to a Trust of which CCC is a 49% shareholder) was sold to the public as a method to increase income and assist tenants in attracting higher subsidies  
“Under this new structure, the Council would lease its social housing to the new entity. For each social housing tenant who qualifies for the IRRS, the new company would receive from the Government the difference between the actual market rent and the rent paid by the tenant. 
This would be substantial revenue and would be enough to enable us to continue, rebuild and repair our social housing without any charge on rates. It also provides a great base to keep building on the provision of housing for those in need. And at the moment that's a lot.”  
Deputy Mayor Vicki Buck, May 30, 2014
The actuality is somewhat different: only new tenants will attract the IRRS (Income Related Rent Subsidy) and only if they have been referred by the Ministry of Social Development to the new trust. 
“The Government confirmed to Council that only new tenants referred to the proposed Community Housing Provider by the Ministry of Social Development will be eligible for an Income Related Rent Subsidy (IRRS).” 
Christchurch Housing Accord Monitoring Report, December 2014
In political terms, such a major unpalatable change is called “swallowing a dead rat”.

But this particular dead rat was sold to the people of Christchurch (the owners of this extensive public housing portfolio, built up over generations) as if the Government subsidy would apply to all Council tenants, not just new ones.

As it stands, this is going to bring in a lot less by way of Government subsidies than what the public (and media) have been led to believe.
Hows that for  win-win deal 

And, in the process, the City Council is losing 51% ownership of its own housing.

How’s that for a “win win” deal!

So, did the Government – ideologically committed to privatisation, including of State housing – change the terms of the deal or was the Council wilfully blind?

Probably a combination of both. But the Council can’t pretend it didn’t know. 

That same December 2014 Christchurch Housing Accord Monitoring Report says, under “Priority Actions”:
“Council to consider how best to proceed with establishing the CHP given current Council tenants will not be eligible for IRRS” 

So the Council, willingly or otherwise, has swallowed a dead rat. And the people of Christchurch have been sold a pig in a poke.

This does not augur well for any other pending privatisations, such as City Care.

Time to Act

Annual Plan and Long Term Plan

Submissions Due to Close

A quick reminder that submissions on The Annual Plan and LTP close Tuesday May 10th.

If you wish to make submission you’ll find all the relevant documents here http://bit.ly/1TLFi23

There is an opportunity to have a face-to-face with Councillors this at 1pm this afternoon. Details here http://bit.ly/1Tq87hz

Christchurch City Council Needs To

Scale Back Asset Sales To Zero

Keep Our Assets Canterbury (KOA) congratulates the Christchurch City Council for starting to come to its senses and “scale back” its proposed asset sales from $750 million to $600m.

We are pleased that the Council is directing Christchurch City Holdings Ltd to look at ways other than asset sales of raising capital.

But we say to the Council: Don’t stop now that you’re on a roll, scale back asset sales to zero.

You don’t have a mandate to sell our assets; the subject never came up in the 2013 local body election campaign.

More importantly, it is quite unnecessary to do so. The Council allowed itself to be stampeded by a pro-privatisation Government and its local political and business mouthpieces into a panic driven by debt hysteria and ideology.

The Mayor said today that “selling assets had always been a last resort”. She is rewriting history – as far as she and her Council allies were concerned, in 2014 and 15, asset sales were the first resort.

They are backtracking now because of the major public opposition to asset sales.

Just at the weekend it was announced that one of the city’s major assets, Christchurch International Airport Ltd, will be paying increased dividends to its two owners – the City Council and the Government.

And also at the weekend Christchurch media analysed in detail how, in late 2015, the Government withheld $111 million it had promised Christchurch for the rebuild (now we know where the money came from for the Government’s 2015 “surprise surplus” of a few hundred million dollars).

So, right there are two ways of raising more capital – get higher dividends from the profitable assets which the city already owns. And the Council must demand that the Government honour its promises to the Christchurch rebuild.

KOA finds it more than coincidental that the Mayor has announced that “no money would be needed from the capital release programme in the 2016/17 financial year”. Of course not, because that includes the October 2016 local body election period and the Mayor and her allies on the Council know that asset sales will be a major issue in that campaign.

Once the election is safely over, “the Council proposed to take $400m out of CCHL during the 2017/18 and 2018/19 financial years”.  Don’t think that we don’t see through such transparent politicking, which aims to temporarily take the issue off the table during the election campaign.

And we’re still left with the Council selling City Care right now.

KOA says it is madness for a city undergoing the biggest rebuild in the country’s history to flog off its works and infrastructure department.

And it is madness for the country’s second biggest city not to own and control its own works and infrastructure department.

KOA demands that the City Council stop the City Care sale ASAP (it was announced before the Council had even settled its quake insurance claim, so they didn’t even know their actual financial position before rushing into starting to sell assets).

If the Council persists with the sale it has to be approved by a full Council vote. KOA calls on Councillors to grow a backbone and vote not to sell.

If the sale goes ahead, KOA calls on the incoming Council to get it back or take other steps to ensure that Christchurch continues to have a publicly-owned and controlled works and infrastructure department.

Expert paper #6

Implications Of TPPA For Local Government

The latest in a series of expert papers on the  implications of the  TPPA for New Zealand, funded by the NZ Law Federation, this one dealing with the agreement's impact on Local Government  has just been released.
Below we reproduce the Key Facts section. You can download the full report here and fine the preceding 5 Expert Papers here.  

The TPPA and Local Government ~> Key Facts

As democratically elected bodies, local authorities
Download the full report
must be able to influence important decisions, be held accountable by their constituencies and have flexibility to respond to local needs and circumstances, which necessarily change over time.


Local governments internationally have found they have to exercise their mandates within strict policy and regulatory boundaries set by international trade and investment treaties they had no role in negotiating, and that decision-making is removed further from elected bodies who are responsible for the wellbeing of their regions.


The binding and enforceable rules of the TPPA go further than any previous such agreement and will impose new constraints on local governments’ authority and autonomy to regulate and make decisions.


Every local authority will have to comply with complex rules across many chapters, and decisions they make that impact adversely on foreign investors will potentially be open to challenge through the investor-state dispute settlement (ISDS) mechanism.


The chapters on investment and cross-border services that apply directly to local government have the greatest potential impact, and the protections for key areas of local authority activity are limited.


Local government is not currently bound by the government procurement chapter and most rules in the state-owned enterprises chapter, but negotiations to include them are built into the Agreement. Extending these rules to local government level requires extensive in-depth study and democratic consultation, which has not occurred to date with the TPPA.


There are piecemeal and contingent exceptions and exclusions in the TPPA, which are complex and will make it very hard for local government to anticipate the legal risks when it exercises its powers.


Municipal activities that have the greatest potential to be affected are: policy making and planning decisions; bylaws and regulations governing permitted activities; technical standards, such as property development, construction, advertising, zoning and environmental quality; activities relating to finance; public procurement contracts, including public private partnerships (PPPs); utilities; and resource management rules and decisions.


Investors from TPPA countries will have the power to challenge local government decisions that damage their commercial interests, including disputed procurement or PPP contracts, planning and consent processes, or blocking price increases for utilities like water or sanitation.


Special rights for foreign investors can be enforced through the controversial ISDS process. Even where the local government believes it is legally correct the uncertainty and costs of defending a dispute can sap a government’s resolve – known as the ‘chilling effect’.

An investor from a TPPA country can also enforce an investment contract through ISDS, eventhey are not claiming a breach of the TPPA’s investment chapter.

The text has not addressed the main objections that ISDS lacks the characteristics of a credible and independent legal process and can effectively bypass domestic courts.


The recent Bilcon v Canada dispute shows the risks of ISDS where a local authority rejects a resource application from a foreign investor because of community concerns. The dissenting arbitrator called the decision a ‘significant intrusion’ into domestic jurisdiction and a ‘remarkable step backwards’ in environmental protection.


Defending disputes is very costly. In recent Canadian disputes the government has proposed to recover the costs and any compensation from the provincial authority.


The contracting out of services, greater use of PPPs, including for water, and asset sales will intensify the exposure of local government to the TPPA and heighten the risks of investor-state disputes over disputed contracts.

.Regulations, bylaws, administrative decisions, etc that give preferences to local firms, limit the quantity of services or suppliers, or impose special restrictions or performance requirements on foreign firms, cannot be tightened unless the New Zealand government has expressly reserved the right to do so. 

.Administration of local government measures affecting services from a TPPA supplier can be challenged as not being reasonable, objective or impartial. 
The TPPA erodes the flexibility that local authorities need to promote economic development in their communities, and is not a sound basis for a progressive and sustainable 21st century economy that addresses climate change, social inequalities, environmental degradation and other challenges.