In the absence of any political party stating clearly that public ownership of major infrastructure is a very good idea, here’s 10 good things public ownership of infrastructure does that private ownership doesn’t.
1. Community Ownership
Nearly all our municipal utilities used to be owned by the city, region or state they served. Where they still do, they exist to provide a public service and enough return to keep improvements going. Service, not profit, is the public utility’s mission. Public servants that run them are required to serve you not wrinse you for profit.
2. Long-Term Community Goals
The emphasis from public ownership is to achieve the long-term goals of the community. They are not seeking to extract long term rent. The primary mission of providing the least-cost and most reliable service over maximizing profit ensures that these goals are always in sight.
3. Local Control
Because of local control, Dunedin and Christchurch municipal utilities determine how utility services are provided within their community. This includes the design and aesthetics of electric distribution systems, public transport, and more. Yes it can go wrong, but more often than not local control means matching local resources to local needs and offering special programs (including energy efficiency & conservation, economic development incentives) to benefit citizens.
4. Local Regulation
When Dunedin’s power poles went into decay, the public came to multiple council meetings and just roasted them until those owners got the message and acted. Queenstown Lakes Council owns 75% of Queenstown Airport, and when the public didn’t like the Statement of Intent draft, the public came to the council meeting and scorched them until they got it right. Whereas in 2015 when Vector failed to remedy days and sometimes weeks of power outages, absolutely nothing was done and there was no public accountability at all, and Auckland remains even less resilient than in 2015. A utility governed by residents of the community who are customers of the utility can regulate poor performance with democratic mechanisms.
5. Local Presence
Municipal utilities are located in the community and are readily available to customers. A customer of a privatised utility with a complaint has to take it to a international call centre, international corporate headquarters or worse to a Wellington-based regulator. The customer gets a local with local knowledge responding to a local issue. That way your problem is actually addressed not sent down an endless referral chain.
With electric, water and sewer crews located within the community, citizens benefit from a quick and effective local response to emergency situations and outages. The working crews and the citizens are the same people and they get it. There is still no mechanism in this country to require telecommunications and internet providers to respond and coordinate with a disaster rebuild. Imagine if there was.
7. The Public Interest
Infrastructure operated in the public interest is directed to benefit the residents of the city, region or state. Christchurch airport is directed to have a Carbon Zero plan. Auckland Airport will spend on precisely what it wants and does not need to demonstrate any value for money other than to its shareholders, and the majority of its shareholders are overseas with little interest in the community. With private utility ownership, there is often conflict between the interests of customers and the interests of the shareholders. This disparity of interests has given rise to a complex system of regulation of private utilities which in New Zealand is weak, opaque, and with no obvious control over rising prices which hurt everyone.
8. Keeping the Dollars in the Community
There are numerous ways that public infrastructure helps to maintain and improve a sound local economy:
• They keep rates down. When New Plymouth Airport needed rebuilding in 2016, the Council funded it out of airport fees and charges, not rates. The interior design is a true statement of partnership that a privatised airport would not have bothered with.
• Local ownership means that customers’ utility dollars stay in the community, creating jobs and supporting the local economy.
• They can hire local, and train local, for local conditions. This generates social cohesion and loyalty.
• They serve as an engine for economic development. The citizen through its politicians can pressure them to bring in a specific flight or kind of ship, just like the public pressure Auckland Transport to alter bus frequency. Local flexibility, reliability and quality service only occurs when the public owns it and the public politicians have to respond or they get fired by the public.
9. Community Values
Decisions about the operation of local infrastructure are made locally, by members of the community, at open, public meetings. At the moment the primary way locals get any input is right at the beginning during the consenting processes, and that’s it. Locally owned infrastructure is uniquely able to respond to the community’s needs, build on the community’s strengths, and reflect and advance the community’s values.
10. Integrated Growth
With negligible public ownership and no board representation, and its own empowering legislation, Auckland International Airport has no public control about how it develops. Christchurch Airport and Palmerston North Airport are carefully integrated into the growth of the city. Queenstown Airport wanted a long term lease over Wanaka Airport to help develop it, but the public hated the idea and successfully shut it down. As a result Queenstown Airport have generated a masterplan this year that seeks greater efficiency from its existing site. The integrated redevelopment of Wynyard Quarter in Auckland by public agencies has revived a previously derelict and contaminated area, whereas once Ports of Auckland is leased out the public influence over redevelopment and shifting use will vanish.
With none of those things, you have the situation that Auckland and Tauranga now finds themselves in now: near-incoherent growth and negligible public accountability.
I invite any Labour or Green councillor or Member of Parliament to comment. For Auckland’s Labour and Green councillors, this is what the City Vision manifesto said on public ownership of assets.