The good, the bad and the ugly – NBR's plays of the week

Airport investment to bring benefits

Auckland International Airport’s decision to spend nearly $28 million to take a 24.99% stake in Queenstown Airport is good news for both the airports and Queenstown itself.

And Queenstown Airport, following approval from Queenstown Lakes District Council, may exercise an option for Auckland Airport to increase this stake from 30% to 35% before June 30 next year.

The strategic alliance announced yesterday is projected to help Queenstown Airport, which is already the fastest growing airport in the country, to increase its already impressive growth projections.

In the next five years Queenstown Airport had predicted increasing its annual passenger movements by 260,000 (currently 811,000) but now with the strategic alliance iit expects to add an extra 176,000 to that projection.

Those extra visitors would be worth more than $150 million annually to the Queenstown economy, yesterday’s statement said.

Queenstown Airport chairman Mark Taylor said the share capital would allow the airport to fund growth of its operating capacity and would also allow it to pay regular dividends to the community through the Queenstown Lakes District Council shareholding.

Model for other council-owned companies

While it’s silly in the first place for councils to be risking ratepayer funds in business ventures, if they do own stakes in companies they had better make some money from them to justify it.

This strategic alliance is a good example of why poorly performing council-owned companies like Ports of Auckland need a metaphorical “kick up the backside” through an injection of private capital.

Ports of Tauranga, which is publicly listed, should be allowed the chance to invest in Ports of Auckland the same way Auckland Airport has invested in Queenstown Airport.

If there’s any good to come out of the supercity boondoggle it could be that capital-strapped council-owned assets get the private funding boost they need.

Sadly, it is just as likely a left-wing mayor and council will be elected on an anti-privatisation platform, meaning vital infrastructure companies will be kept in public hands and will continue to let our cities down.

Nanny state in a blue dress

They may not care what kind of showerhead or light bulbs we use but it’s becoming clear that the only thing National has changed about the nanny state is what earns the finger wag.

News this week suggests that getting on the turps late at night, buying sharp objects or making a profit on fresh produce could all leave you in line for a good spanking before long.

Simon Power (or Simon Power-Lust as libertarian blogger Not PC unflatteringly calls him) has announced he is looking into instituting a national closing time, begging the obvious question of whether he’s planning to institute a national bedtime as well.

Apparently he took a drive around the seedy metropolis of Auckland late at night and found, to his horror, people drinking! Clearly this had to stop.

There’s a slight problem though – apart from being frighteningly close to the actions of a police state, this proposed course of action would likely make drinking-related harm in this country even worse than it already is.

Recent high profile cases including the Auckland teenager who died after consuming a lethal dose of vodka show that, if anything, people are safest drinking inside a pub or a club and it’s out on the streets and in homes that the carnage happens.

So what does the government do? It forces more people to drink alcohol in these unsafe environments.

If it’s possible to sue politicians for stupid laws that endanger people’s lives someone should get cracking right away.

Tut-tutting won’t solve problems

In a similar vein Mr Power also announced this week that the government would be looking into the phantom menace of knife crime and what can be done about it.

No mention was made of baseball bat crime, fist crime or even steel-capped boot crime, the point being that if people want to commit violence there are limitless ways to go about it as just about anything can be fashioned into a weapon.

However, it looks likely that some form of restriction on knife sales to young people will be made.

It’s not clear what the government hopes to achieve with this plan (it rarely is); after all, most households generally have a sharp knife or two sitting around somewhere.

But it’s a classic case of the government wanting to be seen “doing something” regardless of whether it will make any effect on the problem in question and whether it is compatible with basic human rights and civil liberties.

Maybe the government should instead ask why New Zealand is producing so many young people who want to stab each other.

Supermarkets defend super mark-ups

It’s not yet clear how the government will react to the Green Party’s whining about horrible supermarkets ripping off growers but with Mr Super-Power as Commerce Minister more populist nonsense is likely.

Already a sort of supermarket “code of conduct” has been suggested, with commandments including “Thou shalt not slap big mark-ups on tomatoes and oranges!”

The obvious answer to the supermarkets’ massive buying power would be for the growers, who say they often have to sell produce below cost, to band together and increase their bargaining clout.

Unfortunately this would probably be classified as “collusion” under New Zealand’s competition laws, which need to be repealed immediately.

Fat chance of that happening, though: it would reduce the ability of the government to interfere in private voluntary transactions it doesn’t approve of, like buying booze and knives

Finance industry figurehead charged

The news that Investment Savings and Insurance Association (ISI) chief executive Vance Arkinstall is facing criminal and civil proceedings has caught the industry organisation on the hop.

The Securities Commission announced on Wednesday that it has laid criminal charges and issued civil proceedings against the directors of collapsed Dominion Finance and North South Finance, including Mr Arkinstall.

A day later Grant Graham and Brendon Gibson of KordaMentha were appointed as receivers for North South Finance, which had been operating under a moratorium.

The commission alleges that Dominion Finance Group's offer documents and advertisements misled investors by misrepresenting the investment risks.

North South Finance's offer documents and advertisements are alleged to have misled investors about related party transactions, liquidity and the company's overall financial position.

The criminal charges have a maximum penalty of five years in jail or up to $300,000 of fines.

Not a good look

The charges are not likely to enhance the reputation of the financial industry body, which is currently mulling over what to do about the situation.

It’s always tricky when people get charged because even if Mr Arkinstall isn’t found guilty of anything some of the mud from the allegations will still stick to him and the organisation he represents, in people's minds at least.

And that’s a problem for the ISI because the reputation of the finance industry in New Zealand isn’t wonderful as it is.

However, Mr Arkinstall’s involvement in Dominion Finance Group, which went into receivership in September 2008 owing $176.9 million to 5900 investors, wasn’t much of a secret before the charges were laid.

With many of the finance companies collapsed and with directors being targeted left, right and centre by regulators eager for some prize scalps, it’s hard to find anyone important in the industry that still looks squeaky clean.

Whatever decision the ISI makes about Mr Arkinstall the finance industry will need a lot more than a PR makeover to make New Zealanders trust it again.