There is a large difference in writing a report about whether the Ports operations should be leased out (therefore privatising them) and selling the Portsβ¦.. as Smith suggested was the long term goalβ¦. even though there is no evidence available that it was too be sold. Smith used part of his report in a blog and used that as his βevidenceβ for the sale of the port.This seems like a very weak dig.
Why can't someone use their own report to defend their position? Unless of course the report is complete bogus, then sure hit away.
It looks like there was a proposal to explore privatisation of port operations.
The Post
www.thepost.co.nz
Politics π³οΈ NZ Politics
- Thread starter wizard of Tauranga
- Start date
NZWarriors.com
- Thread starter
- #8,502
MΔori party channeling Trump and playing politics by division:
βOranga Tamariki should in fact be renamed Matenga Tamariki (killing children).β
Government is on a βmission to exterminate MΔoriβ.
That sort of hate speech is only going to promoting hate and division from their followers.
Iβve found if you donβt get your kids involved with Oranga Tamariki and take personal responsibility for them you donβt need to blame anyoneβ¦
βOranga Tamariki should in fact be renamed Matenga Tamariki (killing children).β
Government is on a βmission to exterminate MΔoriβ.
That sort of hate speech is only going to promoting hate and division from their followers.
Iβve found if you donβt get your kids involved with Oranga Tamariki and take personal responsibility for them you donβt need to blame anyoneβ¦
So once again we're getting fucked over by these corrupt politicians in our current government (Act and National is who I'm referring to) - the people on here trumpeting the water change, it isn't the win you think it is
THIS IS FROM BERNARD HICKEY
Ratings agency Standard & Poorβs is pushing back hard at suggestions from Local Government Minister Simeon Brown and Mayor Wayne Brown that carving Watercare out of Auckland Council can be done easily and cheaply without clear guarantees on the new Watercare bonds from the Government or Auckland Council.
Industry sources have told me Watercare would get a BBB+ or A- credit rating at best under the proposed structure, even with a βnod and a winkβ from the Crown that it would rescue Aucklandβs water network if push came to shove. This means the Government and Council are loading up an extra 50 to 100 basis points in borrowing costs onto the nationβs key infrastructure provider in the economyβs growth engine.
Over many billions of dollars of borrowing, the costs would mount up to tens of millions of dollars a year and the unnecessarily low credit rating would also restrict Watercareβs ultimate scale of the borrowing because fund managers donβt have much room for BBB bonds. They will happily fund billions of AA bonds that the Council could issue, let alone the AA+ bonds the Government could sell.
To add to the financial pain, those costs are essentially unnecessary insurance premia to pay for the short-term and very political figleafs of keeping high credit ratings for the Council and Government themselves for now, and politicians being able to disavow responsibility for high water charges increases in future.
In my view, thatβs an expensive and unnecessary βnod and a winkβ that delays and restricts the amount of house-building needed to cope with previous fast population growth, let alone likely growth. The Government and Council would be achieve a lot more in a shorter period and with much less cost by simply borrowing off their own balance sheets. At worst, Auckland might lose a notch on its credit rating and increase its borrowing costs by 5-10 basis points, which would add about $2 million a year in interest costs.
Messrs Brown and Brown are choosing political figleafs now in exchange for loading up tens of millions in extra interest costs on Auckland ratepayers, while also delaying and downsizing the amount of house-building possible in future decades. It is the exact opposite of the Governmentβs stated aims of controlling inflation in basic living costs and βGoing For Growthβ on housebuilding.
(Paying subscribers can see more detail and analysis below the paywall fold and in the podcast above. Weβll open it up for public reading, listening and sharing if we get over 100 likes)
The deeper failure is that these extra costs will have been paid unnecessarily, especially from a taxpayersβ point of view. Thatβs because in reality, the Government would be forced bail out Watercare anyway. As it stands, the key ratings agency Standard & Poorβs is already pushing back at the vagueness of the Governmentβs position behind Watercare, saying that without a proper assurance the new carved-off Watercare would have a much lower credit rating than the Councilβs AA rating and the Crownβs AA+ rating.
Sources close to the process have confirmed Watercare might get a BBB+ rating or A- rating at the very best, even with a βnod and a winkβ from the Government. That would impose an extra borrowing cost over and above regular Government AA+ bonds or Auckland Council AA bonds of at least 50 to 100 basis points.
Local Government Minister Simeon Brown and Auckland Mayor Wayne Brown trumpeted their deal on Sunday to carve Watercareβs assets out of Auckland Council as a win-win-win for ratepayers, taxpayers and the growth aspirations for Aotearoaβs biggest city and its economic (and housing) growth engine.
They said it would break the shackles on Aucklandβs borrowing limits, dramatically reduce this yearβs water charges increase and mean the Council and taxpayers would not have to guarantee Watercareβs bonds. It was also seen as a template for other councils to do the same thing. Whatβs not to like?
The trouble is that combination of lower water charges inflation, more borrowing and no formal guarantees of ratepayer or taxpayer bailouts is an impossible trinity without some sort of implicit reassurance or comfort for ratings agencies and bond investors given by the Goverment that means there is effectively a guarantee anyway.
The real problem is this βnod and a winkβ from minister of the day is not being clarified and wonβt be clear until legislation is written later in the year.
The Browns said in their announcement on Sunday that: βInternational credit ratings agency S&P Global Ratings has determined the model would mean Watercareβs borrowing is considered separate from Auckland Council for credit rating purposes.β
Simeon Brown went further in a news conference (bolding mine):
Sources close to Auckland Council suggested on Sunday that the lack of a formal guarantee could be replaced by type of βnod and winkβ, described thus: βCentral Government would be under no legal obligation to rescue the entity, but would be able to do so if it chose.β
What might S&P think of not having a guarantee?
I asked and they wrote back with the following (bolding mine):
So was this the only choice for Auckland Council, Watercare and the Government?
Thereβs been a lot of chatter about how there was no way for Auckland Council or Watercare to borrow more because the Council was up against its debt ceiling of 280% of revenues. Iβm told thatβs not true because Watercare could have borrowed more through the Local Government Funding Agency (LGFA), but only if Auckland Council agreed to a one-notch credit rating downgrade.
S&P made clear that such a downgrade would only increase the Councilβs costs by 5-10 basis points or less than $2 million per year. In previous years council officials have warned a downgrade for Auckland Council would force a sovereign downgrade, but S&P and others have rejected that.
In eseence, Brown and Brown are choosing an option that avoids rating downgrades that might prove politically embarrassing or increase mortgage borrowing costs nationally (but only marginally). They are also able to distance themselves from decisions made by Watercare and other water providers to increase and/or impose water charges.
THIS IS FROM BERNARD HICKEY
Ratings agency Standard & Poorβs is pushing back hard at suggestions from Local Government Minister Simeon Brown and Mayor Wayne Brown that carving Watercare out of Auckland Council can be done easily and cheaply without clear guarantees on the new Watercare bonds from the Government or Auckland Council.
Industry sources have told me Watercare would get a BBB+ or A- credit rating at best under the proposed structure, even with a βnod and a winkβ from the Crown that it would rescue Aucklandβs water network if push came to shove. This means the Government and Council are loading up an extra 50 to 100 basis points in borrowing costs onto the nationβs key infrastructure provider in the economyβs growth engine.
Over many billions of dollars of borrowing, the costs would mount up to tens of millions of dollars a year and the unnecessarily low credit rating would also restrict Watercareβs ultimate scale of the borrowing because fund managers donβt have much room for BBB bonds. They will happily fund billions of AA bonds that the Council could issue, let alone the AA+ bonds the Government could sell.
To add to the financial pain, those costs are essentially unnecessary insurance premia to pay for the short-term and very political figleafs of keeping high credit ratings for the Council and Government themselves for now, and politicians being able to disavow responsibility for high water charges increases in future.
In my view, thatβs an expensive and unnecessary βnod and a winkβ that delays and restricts the amount of house-building needed to cope with previous fast population growth, let alone likely growth. The Government and Council would be achieve a lot more in a shorter period and with much less cost by simply borrowing off their own balance sheets. At worst, Auckland might lose a notch on its credit rating and increase its borrowing costs by 5-10 basis points, which would add about $2 million a year in interest costs.
Messrs Brown and Brown are choosing political figleafs now in exchange for loading up tens of millions in extra interest costs on Auckland ratepayers, while also delaying and downsizing the amount of house-building possible in future decades. It is the exact opposite of the Governmentβs stated aims of controlling inflation in basic living costs and βGoing For Growthβ on housebuilding.
(Paying subscribers can see more detail and analysis below the paywall fold and in the podcast above. Weβll open it up for public reading, listening and sharing if we get over 100 likes)
Brown figleaves to cost Aucklanders tens of millions
The much-trumpeted deal to carve Watercare out of Auckland Council and soften this yearβs water charges hike from 25.8% to 7.2% risks costing Aucklanders tens of millions of dollars a year extra in interest costs over the longer run, all to allow the Government and Council to say publicly they arenβt guaranteeing the debt and allow politicians to disavow responsibility for new and/or higher water charges.The deeper failure is that these extra costs will have been paid unnecessarily, especially from a taxpayersβ point of view. Thatβs because in reality, the Government would be forced bail out Watercare anyway. As it stands, the key ratings agency Standard & Poorβs is already pushing back at the vagueness of the Governmentβs position behind Watercare, saying that without a proper assurance the new carved-off Watercare would have a much lower credit rating than the Councilβs AA rating and the Crownβs AA+ rating.
Sources close to the process have confirmed Watercare might get a BBB+ rating or A- rating at the very best, even with a βnod and a winkβ from the Government. That would impose an extra borrowing cost over and above regular Government AA+ bonds or Auckland Council AA bonds of at least 50 to 100 basis points.
Local Government Minister Simeon Brown and Auckland Mayor Wayne Brown trumpeted their deal on Sunday to carve Watercareβs assets out of Auckland Council as a win-win-win for ratepayers, taxpayers and the growth aspirations for Aotearoaβs biggest city and its economic (and housing) growth engine.
They said it would break the shackles on Aucklandβs borrowing limits, dramatically reduce this yearβs water charges increase and mean the Council and taxpayers would not have to guarantee Watercareβs bonds. It was also seen as a template for other councils to do the same thing. Whatβs not to like?
The trouble is that combination of lower water charges inflation, more borrowing and no formal guarantees of ratepayer or taxpayer bailouts is an impossible trinity without some sort of implicit reassurance or comfort for ratings agencies and bond investors given by the Goverment that means there is effectively a guarantee anyway.
The real problem is this βnod and a winkβ from minister of the day is not being clarified and wonβt be clear until legislation is written later in the year.
Strategic ambiguities abound
I asked Simeon Brownβs office, Wayne Brownβs office and Standard & Poorβs for clarity on what form the guarantee or assurance would take.The Browns said in their announcement on Sunday that: βInternational credit ratings agency S&P Global Ratings has determined the model would mean Watercareβs borrowing is considered separate from Auckland Council for credit rating purposes.β
Simeon Brown went further in a news conference (bolding mine):
Really?
Sources close to Auckland Council suggested on Sunday that the lack of a formal guarantee could be replaced by type of βnod and winkβ, described thus: βCentral Government would be under no legal obligation to rescue the entity, but would be able to do so if it chose.β
What might S&P think of not having a guarantee?
I asked and they wrote back with the following (bolding mine):
So how much lower would the rating be? Sources familiar with the details of local government credit ratings said a BBB rating was likely with no assurance of Crown support, with a possible one or two extra notches to BBB+ or A- with a βnod and a wink.β
So was this the only choice for Auckland Council, Watercare and the Government?
Thereβs been a lot of chatter about how there was no way for Auckland Council or Watercare to borrow more because the Council was up against its debt ceiling of 280% of revenues. Iβm told thatβs not true because Watercare could have borrowed more through the Local Government Funding Agency (LGFA), but only if Auckland Council agreed to a one-notch credit rating downgrade.
S&P made clear that such a downgrade would only increase the Councilβs costs by 5-10 basis points or less than $2 million per year. In previous years council officials have warned a downgrade for Auckland Council would force a sovereign downgrade, but S&P and others have rejected that.
In eseence, Brown and Brown are choosing an option that avoids rating downgrades that might prove politically embarrassing or increase mortgage borrowing costs nationally (but only marginally). They are also able to distance themselves from decisions made by Watercare and other water providers to increase and/or impose water charges.
NZWarriors.com
Lol. Can you link the blog post?
This is def a win for those opposed to privatisation.
That's it? Lol.
NZWarriors.com
Less than six weeks ago, Hickey wrote an article saying how Central government imposed debt ceilings were stopping local bodies doing infrastructural workβ¦.. now that the government is changing the rules about local body debt, he doesnβt like it. A bit of consistency would be nice. Either extending local body debt is a good thing or a bad thing.
The debt rules being used to strangle NZ
LGFA debt limits are strangling big councils, but that's what officials & voters want; Luxon to use more urgency in new 97-day plan; Warehouse wants food price controls; MSD resumes tenancy reviews
thekaka.substack.com
You asked where Clint had stated where privatization of the council operations would lead to the sale of assets and Iβve provided it.
Also interesting that Clint Smith was all for increasing government debt to fund infrastructure but when National want to change the rules to allow local bodies to do that, debt for infrastructure is such a bad idea.Less than six weeks ago, Hickey wrote an article saying how Central government imposed debt ceilings were stopping local bodies doing infrastructural workβ¦.. now that the government is changing the rules about local body debt, he doesnβt like it. A bit of consistency would be nice. Either extending local body debt is a good thing or a bad thing.
The debt rules being used to strangle NZ
LGFA debt limits are strangling big councils, but that's what officials & voters want; Luxon to use more urgency in new 97-day plan; Warehouse wants food price controls; MSD resumes tenancy reviews
Itβs time for Labour to damn the debt and build a legacy
This government has the means to tackle some of NZ's most urgent problems. But first, Labour must abandon its cautious approach.
thespinoff.co.nz
NZWarriors.com
Lol, but National want to change the settings so it's much more expensive for local bodies to borrow and add clauses where it's difficult for those entities to get help if they get into financial difficulty. Hence the chat about setting up for privatisation. I thought you were the details man.Also interesting that Clint Smith was all for increasing government debt to fund infrastructure but when National want to change the rules to allow local bodies to do that, debt for infrastructure is such a bad idea.
Itβs time for Labour to damn the debt and build a legacy
This government has the means to tackle some of NZ's most urgent problems. But first, Labour must abandon its cautious approach.thespinoff.co.nz
In terms of what transaction was on the table in recent months, it was only ever an op-co prop-co lease with a concession period of 35 years.
Lol. The disappointment is making the entities off balance without either the council or govt backing, meaning they have a much worse credit rating, meaning borrowing will be much more expensive. And also leaves them ripe for privatisation.Less than six weeks ago, Hickey wrote an article saying how Central government imposed debt ceilings were stopping local bodies doing infrastructural workβ¦.. now that the government is changing the rules about local body debt, he doesnβt like it. A bit of consistency would be nice. Either extending local body debt is a good thing or a bad thing.
The debt rules being used to strangle NZ
LGFA debt limits are strangling big councils, but that's what officials & voters want; Luxon to use more urgency in new 97-day plan; Warehouse wants food price controls; MSD resumes tenancy reviews
This is a laughable dig. Geez I thought you were better than this.
NZWarriors.com
You do realise the government is allowing local bodies to borrow more money for infrastructure and that companies like Standard and Poors set the credit rating standards based on the councils and their organisations ability to pay it back, their income and expenditure and their asset base to debt ratios.
Government are allowing them to borrow moreβ¦.. if that borrowing is too much that it effects the councils or their organisations credit rating, thatβs their responsibilityβ¦. not central government.
You do realise that there is only one country in the world which decided it would try to follow Scottish Water by establishing its own versionβ¦. NZ. If the Scottish Water way of doing things was so good, why havenβt other countries adopted it? Think of this, before Scottish Water came into being, it was estimated that just over 20% of water leaked from their system, now itβs over 30%. Smaller cities and towns water infrastructure has deteriorated there while only slight improvements have happened to the major citiesβ¦. despite them receiving the bulk of the funding.
TBH, I would rather we had looked at what they are doing right in an earthquake city like Tokyo where their water leakage is less than 10% and adopted that here nationally than do things like complaining that a water leakage of over 30% was happening in Wellington. Iβd rather that central government funding was available for new water treatment plants in smaller communities like Havelock North than have a centralised bureaucracy. Iβd rather we concentrated on outcomes than ideology.
Thats a fucking trainwreck...
Government actually keeping the free lunches in schools as well as 10,000 lunches for some preschoolers, commend them for that.
NZWarriors.com
And with food kids will eat by the sounds of it.
Kids will be fussy regardless I bet.
You mention "corrupt" and then quote an entire article that doesnt mention it once, but does carry on at length about the inner workings of council and government debt and borrowings.
Give me a TLDR on Bernards article in your opinion.
NZWarriors.com
Cigarettes, mining, farming, real estate, the trucking and roading lobby, real estate, landlords, realestate, landlords, horse racing, gambling, privatisation, fossil fuels, tax cuts for the rich, running the public sector down deliberately and on and on and on.
Take your pick Frank
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Thats not a summation of the article. Elaborate accounting tricks are many things, but corrupt they are not.
Mining and farming are essential to the economy and civilisation. Fossil fuels are responsible for 5 billion people being alive. You just typed a Green Party grievance list and tacked it onto an entirely unrelated subject being Bernard Keane's article.
