What is the popular referendum?
We don’t believe the council did a good enough job at consulting the community before deciding to sell the airport. Of the 4077 submissions to the city council’s long term plan, only 28% supported a fully privatised Wellington Airport, despite this, it was included in the plan. Since the long term plan vote, enough new information has come to light that a majority of Councillors support stopping the sale.
The council is set to revisit the decision later this year, so we want to show them what Wellingtonians believe about this critical issue of public ownership.
Where can I vote?
Click here for more info about voting locations and how the votes will be counted: Keep The Airport Ours Popular Referendum Info
What additional information has come to light?
The Council’s CFO initially claimed that they had exhausted all alternative options before proposing the sale. A subsequent investigation by The Post, supported by Unions Wellington, showed that they hadn’t in fact investigated any other options, and this information was unlawfully kept secret from elected councillors.
Is this an official referendum?
Our campaign is not a government referendum, nor does it bind anyone to do anything. We’re simply trying to demonstrate to the council what Wellingtonians think about this issue.
How should I vote?
You should vote based on your own opinion. We want this to be as transparent and democratic as possible, so people should feel free to choose either option. However, if you want more information about why Unions Wellington opposes the sale, check out our FAQ below:
Keep The Airport Ours: FAQ
Is there any other solution to Wellington City Council’s insurance issue?
WCC’s 34% share in Wellington International Airport would be worth an absolute maximum of $500m on the market. WCC’s current insurance gap is 2.8bn, so selling the airport shares is obviously not a solution, even if the money was proposed to be immediately spent on insurance, which it isn’t.
There are plenty of other ways to cover ourselves in the event of a natural disaster. The council could arrange a Right of First Refusal with Infratil in the event that the city is damaged but the airport is not, or vice versa. This would provide them with a large amount of liquidity in the event of a natural disaster almost immediately.
Every council in New Zealand is underinsured to some degree, and the solution to this lies in local government funding reform, not stripping public assets.
Doesn’t the council have no control with a minority share in the airport company?
The council has 34% of the shares in the airport, along with two board appointees which are able to veto major transactions. Those board appointees are also privy to any investigations that the majority shareholder is undertaking into proposed operational changes.
Historically the council has kept out of the airport’s business, but they actually have more influence as a minority shareholder and with board appointees under the Companies Act than they would if it were a CCO.
Basic Controls
- with 5% ownership or more, shareholders gain the authority to call for shareholders’ meetings and demand that the company’s financial statements be audited by a qualified auditor.
- 25 percent gives shareholders the ability to possess the power to block special resolutions and major transactions.
Unfair Prejudice Remedy
- The Companies Act provides minority shareholders with a mechanism to ensure that the affairs of the company are not being conducted in a manner that is unfairly prejudicial towards a minority shareholder. 1
- This provision allows the Wellington City Council, in specific circumstances, to hold Infratil accountable and ensure that they are treated fairly.
The council hasn’t ever got involved in the airport’s business!
This has historically been true, but doesn’t have to be. Our campaign is as much aimed at the council to start taking their role in the airport’s governance seriously as it is at the public. The council must see their share in the airport as a stake in a natural monopoly and public infrastructure rather than just an appreciative asset.
Aren’t the council representatives on the board are obligated to maximise profit for their shareholders?
The Companies Act gives directors wide discretion regarding business judgment. Hence, leaving an incredibly wide ambit for what exists to be in the ‘best interest of the company’. Wellington City Council has extremely diverse interests as shareholders in a natural monopoly and public utility. Infratil even has more diverse interests as a public infrastructure provider than just making a profit.
Selling the airport will have no impact on the environment.
A private company does not have the same stake in maintaining our natural environment that the council does. Overseas evidence shows that private ownership of public infrastructure means environmental impact is overlooked moreso than for publicly owned infrastructure.2
Selling the airport will have no impact on the workers at the airport.
Our experience as trade unionists is that public entities can be held to account in terms of working conditions much more successfully than private companies. The bus drivers’ experience of privatization of their services is a good example of this. Private companies are also much more likely to cut working conditions to save money than public organisations.
Perpetual Green Fund FAQs
New Plymouth’s fund is a good example for us.
New Plymouth’s fund has been an economic success on paper, but it is managed by an overseas wealth management company (Mercer) which is explicitly not what WCC is proposing. New Plymouth’s fund invests in exclusively overseas infrastructure which does not compete with New Plymouth’s economic interests, and does not take ethical or environmental concerns into account.
A managed fund will provide us with more liquidity than the airport.
Whatever liquidity that a managed fund provides will likely be less than what the airport provides long term. Managed funds are much more susceptible to wider economic disruption (recessions etc) than the airport is.
A managed fund is a more prudent investment than the airport.
The airport has provided consistent returns through global economic downturns in a way that a managed fund cannot. The managed fund as proposed by WCC also risks competing with Wellington’s economic interests by investing in competing infrastructure elsewhere in NZ.
The fund will make money for Wellington while being socially and environmentally responsible.
As a general rule, the more a fund is managed, the less of a return it makes. Even the optimistic projections WCC has provided are less than/equal to the liquidity the airport share return annually.
Footnotes