News Release

Secret Plans to Amalgamate Rotorua’s Council Controlled Organizations

Rotorua District Residents and Ratepayers, 15 December 2015

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On Wednesday 9 December, officials proposed in secret to the Rotorua District Council that Destination Rotorua (DR), Grow Rotorua Ltd (GRL) and parts of Events and Venues Rotorua (EVR) should be amalgamated into one Council Controlled Organisation (CCO).

Why the secrecy? These CCOs and the Council all exist at public expense. They are meant to be publicly accountable for their governance, management structures and returns to the Council. Given the significance of the proposed restructuring, it should be put out for public consultation.

Why the proposed amalgamation? The rationale in the proposal is little more that evidence-free opinion about changing markets. There is no systematic evaluation of the nature, services or performance of any of the entities that might justify an amalgamation. The latest GRL Annual Report, for example, shows that it is mainly a provider of corporate welfare.

So why would DR be given such a favourable relationship with GRL and EVR when, according to the RDC’s website, Tourism creates only 11% of the District’s GDP compared to Forestry’s 18% and Agribusiness’ 4.7%? Is it to boost the number of low-paid jobs in the District’s perennially low-growth economy?

Most importantly, who will be consulted over this significant public policy issue? The GRL’s ‘takers’ will be consulted, with various degrees of conflicts of interests; the Chamber of Commerce, Rotorua X, the Te Arawa Board and commercial entities (FOMA?), Waiariki Institute of Technology, Public Sector Executives Forum, BOPRC, and Scion. Curiously, the big ‘givers’ not listed for consultation include Red Stag, Lockwoods, Lumber Cube, Mighty River Power, Patchell Engineering and Rotorua Freight Ltd.

And certainly not the Rotorua District residents and ratepayers who will be expected to provide the capital for any new structure and operational grants. This is outrageous. No wonder the secrecy.

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