Monday, June 25, 2018

Dodgy as hell

That's the only way to describe Horowhenua District Council's plan to give council assets to a private "economic development" trust:

Millions of dollars of council assets will be transferred into independent hands to help boost the Horowhenua economy.

The Horowhenua New Zealand Trust could be operating in the next month, chairman Cam Lewis said. It will own and manage property and assets given to it by the Horowhenua District Council, and promote the district as a place to do business.

The trust would benefit residents by increasing jobs in the district, but it was not yet known how profits would be spent or invested, he said.

Council staff said property to be transferred would only include "non-core properties". The council owns almost $28 million in non-core property and more than $100m in assets.

Having commercial assets owned by an arms-length organisation isn't unusual (Auckland has Auckland Council Investments Limited, Christchurch has CCHL etc). But normally its clear in such cases that profits go back to the council, that the council appoints or otherwise controls the organisation, and that it is a Council Controlled Organisation and therefore subject to LGOIMA. Here, none of that seems certain, the use of a trust structure seems designed to prevent public control and oversight, and the primary aim of the move seems to be to put public assets under the control of cronies rather than ensure they provide a benefit to the public. This deal needs a lot more scrutiny, otherwise Horowhenuans may find that their public assets have been stolen from them.