NZIER Report Undermines Argument for Giving Public Money to Private Airport Co.

15 FEBRUARY 2016
FOR IMMEDIATE RELEASE

The Taxpayers’ Union is welcoming the New Zealand Institute of Economic Research report, released today, which concludes that the net cost to New Zealand of the proposed Wellington runway extension is greater than the net benefit. The Union’s Executive Director, Jordan Williams, says:

“This new analysis concludes that the project has a cost benefit ratio of less than 1.0. That’s economic jargon for ‘money down the drain’ - Wellingtonians would pay more than any benefit the region would receive.”

“Like most Wellington ratepayers, the Taxpayers’ Union wants the runway extension but don’t think that public money should be used to subsidise it when it’ll be the privately owned Infratil who will reap most of the landing fees and monopoly profits.”

“Wellington’s Deputy Mayor has tried to argue that a longer runway is a public asset like a road or railway. But this represents a fundamental misunderstanding of how airport pricing regulation works. For every extra dollar the company can put into the runway, they can effectively get back a guaranteed return, regardless of whether it’s existing domestic or new international visitors who ultimately pay more.”

ENDS

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