Sunday, 11 March, 2012

Q&A, Paul Holmes interview with Len Brown, Major of Auckland

Points of Interest:
Brown says ports dispute is not over: “I’m happy to sit with both parties in agreement in a mediator process if they are prepared to continue to meet and deal…”

He says that he was “laying down the law” when Council asked for 12% return from the Ports of Auckland, even though POAL chair calls the figure “aspirational.”

12% return figure is “an estimate” based on “assessments… done within the Council” and POAL has said it can achieve that within five years.

No port in Australasia is getting close to 12% return, but Brown confident it can be reached.

Doing his best to help within statutory limitations, but says “I won’t run the port out of my office.”

Mayor claims union “could have settled on the first offer”

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be watched on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Q+A, 9-10am Sundays on TV ONE.

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Q + A
PAUL HOLMES INTERVIEWS LEN BROWN
PAUL How much responsibility for these redundancies at the Ports of Auckland lies with the mayor and the council? Ports of Auckland is owned by the council via its investment company, Auckland Council Investments Ltd, and the council’s told the port to double its dividend from 6% to 12% over the next five years. The Maritime Union says the mayor should step in as mediator. You heard Gary Parsloe say that. Labour, Mana and the Greens have also called on the mayor to take a stand. Len Brown, the mayor of Auckland, is with us this morning. Good morning.
LEN BROWN – Auckland Mayor
Morning, Paul.

PAUL Is it your fault 300 men have been made redundant?

LEN No, but I certainly can’t be accused of not making a stand. Over the last eight months, I’ve been working within the framework that I can. I won’t run the port out of my office, but I have been dealing with both parties during the course of this discussion.

PAUL Well, can I say the perception is you’ve been doing nothing?

LEN Well, you know, as I say, there are some things that I can do and I will not run the port out of my office. I will say to you, though, for the last eight months, I have been giving direction, giving my view in terms of where they should be, and I wanted to see the resolution out of a collective. They have not got there. I’m not happy with that outcome. What I am here to say is that—

PAUL I heard you say to me— Did you say—? Could the union have settled earlier, do you believe?

LEN Of course.

PAUL Yeah.

LEN Absolutely. They could’ve settled on the first offer.

PAUL Yes.

LEN And that’s past in history. What is now possible is my view is I am happy to continue to be in the position of providing mediation if both parties agree.

PAUL Well, it hasn’t worked so far, has it?

LEN No, but—

PAUL Why hasn’t it?

LEN But that offer—

PAUL Why hasn’t it?

LEN Because—

PAUL Why hasn’t mediation worked?

LEN Every time they sat down, their view to me– both parties’ view is we’re really close. In fact, Gary was saying to me, ‘On Thursday we think that we are going to deal with this and finish it.’ So every step of the way, the indication had been was that they were going to resolve.

PAUL Whose side are you on?

LEN I’m on Auckland’s side.

PAUL Yes, but—

LEN And by that, I mean that we are the 1.5 million Aucklanders, we own the shares, and as a consequence of that, I’m looking after their interests. I want that port to be successful. I certainly want a greater return on our investment—

PAUL Let’s talk about that shortly, but I wondered about your position because you have said and I quote you, ‘We deserve a port that’s competitive, a decent return for ratepayers and a settlement that is sustainable.’ That sounds like the port’s position, Mr Mayor.

LEN No, it sounds like our position – our position, the council’s position and the position of any Aucklanders. Look, my commitment during the campaign was not selling the ports; we will hold the port shares. Secondly, we wanted the ports to be more commercial and present a much better return for ratepayers.

PAUL And that return, of course, the figure that you’ve come up with is you want an increase from 6.3% I think it is at the moment.

LEN Yeah.

PAUL After tax.

LEN 12% over five years in terms of return on investment.

PAUL Where did you get the 12% from? Pluck it out of the air?

LEN No—

PAUL There’s not a port in Australasia, Mr Brown, making 12%.

LEN So our view was, though, that the port was not performing as well as it was. Now, you’ve heard Mr Pearson say it’s an aspirational target. What we’re saying to the port is this is our view. We believe as a consequence of the assessments that we’ve done within the council—

PAUL Well, how firm are you on this? Have you laid down the law on the 12%?

LEN We have given it to them in our statement of corporate intent. Right at the start of the year, I went down to the port, met all the workers and the employees and the company directors down there and said, ‘Right, this is what we’re expecting from the port.’ And we had an hour’s Q & A—

PAUL This is what we’re expecting. Is this—? I mean, were you laying the law about the return you want in five years – 12%?

LEN We were laying down the law in terms of what we expected from the port in terms of its return and in terms of its performance generally.

PAUL Where did you get the 12%?

LEN So, the 12% was an estimate, a view that certainly I’ve been working on for right through the last sort of 18 months, two years. It was view that was discussed our own table with the officers, with our own council—

PAUL So it’s a guess? It’s a good guess?

LEN No, it’s an estimate.

PAUL (laughs)

LEN This is what we think we should be aiming to achieve. And so we went back to the company and said, ‘Okay, this where we think you should be. What is your advice back to us?’ Their advice was, ‘Give us five years and we believe that we can receive that.’

PAUL Well, excuse me, look at this. Okay, 12%, that’s your estimate – guesstimate. Tauranga returns 6.8%, Lyttelton 8.6%, Sydney 6.7%, Melbourne 3.1%, Auckland 6% -- 6.3% after tax.

LEN So not just about return either—

PAUL Where’s the 12% being made anywhere?

LEN It’s about competitiveness against other ports. So we are losing share against Tauranga. We are competing flat out against Brisbane, in particular, and Sydney. It was our desire that we wanted the port to be much much stronger in terms of its—

PAUL Do you endorse what Mr Pearson was saying about he cannot believe the waste of resource at the Ports of Auckland?

LEN Look, there’s a whole lots of things that we cannot believe about the performance of the Ports of Auckland, so it just was not about—

PAUL Can I just say to you again—?

LEN a stronger return on investment.

PAUL Can I just say to you again there is a perception that you’ve abnegated leadership, that you’ve been a do-nothing mayor? For God’s sake, you are the mayor of Auckland, Ports of Auckland is owned by the people of Auckland, you are the boss. Harry Truman – you might remember the story – had a little thing on his desk that said ‘the buck stops here’. Why don’t it stop with you?

LEN The buck does stop here, but I’m also the mayor of the city. I’m not the prime minister. I don’t have sovereign power, so I’m operating within a statutory framework, and I’m doing the very best that I can within that statutory framework.

PAUL And very quick, Mr Mayor, is it all over bar the shouting?

LEN No. What I’ve said to you today is that my offer today is that I’m happy to sit with both parties in agreement in a mediator process if they are prepared to continue to meet and deal with the—

PAUL He says it’s all over bar the shouting – Mr Pearson.

LEN Mr Pearson is the chair of the board; this is my offer right here in front of you.

PAUL Mr Len Brown, mayor of Auckland, thank you very much for your time.

LEN A pleasure speaking to you today.