Chamber of Commerce “Directive”

The Canterbury Employers Chamber of Commerce has produced a document and required Mayoral candidates to respond to it. It’s called a “directive”.

Here it is: https://cecc.org.nz/CECC_Public/About/Local_Government Directive.aspx

Before I analyse the document on the Mayoral election, I want to consider what the title implies…

I immediately responded to the title. Why did they call it a “directive”?  I looked up the meaning of the word and here is what it is:

noun: an official or authoritative instruction.

synonyms:

instruction, direction, command, order, charge, injunction, enjoinment, prescription, demand;

If the Chamber wants to be treated seriously it should have used more inclusive language. The heading is demanding and aggressive. We all live in this City together. This isn’t a line manager making a demand of their workers. It’s about a section of the business community, seeking support by candidates standing for Local Body elections.

So, let’s review the Chamber’s submission:

1. An Independent Review of Council’s Asset Base:

 This section I found quite annoying. I thought this side of the local debate had been fought and won. The submission is straight out of the sort of tripe we used to receive from the Business Roundtable as they tried to get us to hand over our family silver to their members. Did the Chamber dig up some old neo-lib economist, and hang them over their computer and say “type here”? Read this sort of nonsense:

While there is significant investment income from revenue-generating assets, the justification for continued local authority ownership of assets is weak and we believe that ownership could expose ratepayers to the risk of low returns.

My retort is, prove this statement Chamber executive. I hope you didn’t pay your advisor/s too much to write this rubbish.

Another gem:

Given that private sector companies generally outperform state-owned companies, logically, the private sector should be prepared to offer a premium on the current valuation of many local authority assets; hence ratepayers would most likely receive a windfall gain from asset sales. While local government can obtain debt funding at lower rates than some private sector companies, this does not justify local government involvement in the provision of private good infrastructure.

My retort is, have you read this article Chamber? https://www.stuff.co.nz/the-press/news/106954263/council-assets-might-not-have-been-sold–but-they-have-been-mortgaged.

This article is exceptional. It possibly hasn’t been read by your writer as it challenges, and brilliantly answers, their dogma. This says that the Council companies have been performing exceptionally well for years, and that their balance sheets have been borrowed against, to help us out of the unpredictable hole created by our earthquakes.

A Mayoral candidate for the elections on RNZ recently pointed out that some of the CCHL companies have made a loss in the last year. Maybe he should talk to the founders of Xero. They have made a loss from the start and they have market capitalisation of billions. Enable is exactly the same. It is building up customers, and expected to be producing tens of millions of dividends each year from around 2025. So, the company is losing money as it builds up its customer base right now, but watch this space. With the other companies recommend that that candidate sharpens up his understanding of tax efficiency planning. His accountant may be able to assist him.

The message for the Chamber is that there would be no windfall in any asset sale. If any of the assets are sold, all that would happen is that debt would be repaid and the dividend yield would decline.

An area I would agree with in the Chamber “directive”:

The public-private partnership model is well-suited to meeting infrastructure needs – private partners can cover a project’s upfront costs while recovering them over time from those who use the outcome. Consideration should be given to greater private sector participation in infrastructure development, operation and service provision.

The Chamber should think more about this than getting side-tracked about selling CCC assets. There is genuine potential for this sort of thinking.

 Here are other topics which are covered by the submission in addition to what is covered above. Many of them are quite useful observations, including comments like this one:

There is concern among members of the local business community about a disconnect between the high-level aspirational vision messaging from Councillors and senior Council staff and the operational experience at the frontline. Where some business initiatives have been met with agreement and support at the top ‘tier one’ level of the Council, too often this doesn’t filter through to the tier two and three staff who seem to be overly risk adverse and process-focused, without the freedom to show initiative and be solutions solutions-focused.

This comment is a good message for the newly elected Council, and the new CEO and the team she will surround herself with.

Here are the other topics.

• Increasing Rate Base and Raising Capital
• An Enabler for Business
• Prioritisation for Central City Businesses
• A Stronger Voice for Business
• Support for Central City Activation and Promotion
• Key City Assets Fit-for-Purpose
• Climate Change and Risk Management
• Greater Collaboration

As Mayor I often found that the Chamber reflected the commitment of the Board to collaborate. Other times, under different leadership, it could become quite antagonistic. This tension was quite healthy. The Chamber does perform an important role reflecting the views of some of the business community in this City.

I miss the Manufacturers Association. I always enjoyed my relationship with this group of business owners. For some reason they gave me more useful feedback on which to build local policy. Members of the Manufacturers Association seemed more interested in having an active relationship. Some of them became Councillors, and very close friends.

I received this email from John Burn, who was at one stage in his life a Citizens Association City Councillor, and he wrote:

I have my doubts about the Chamber of Commerce, and its desire for council asset sales to be more vigorously pursued.   Who are the Chamber members who ask us to respect their opinion?    Could their names, when printed, have the name of their own business placed in brackets after each?   

I have known a number of successful businessmen, and they all seem to show a concentration upon their own business, an attitude surely to be expected.   But should we listen to a member of the Chamber, whose qualification might be the ownership of a KFC outlet, or a small suburban workshop which makes widgets for a larger company, or a low-level executive of a world-wide corporation?   

The Chamber of course wants business in this city to be bustling and profitable, and on its own I guess most of us would agree, but do we all want other aspects of Christchurch life to be diminished to this aim?   Should a huge multi-million-dollar stadium be paid for by ratepayers so that some indirect boost to hotels and restaurants might be achieved when crowds come for one evening?

I think John speaks for many of us with these words. The Chamber should work on building relationships rather than chanting old, out of date, right wing nonsense.