Source: Taxpayers Union
Aviation package unknowns a cause for concern
18 MARCH 2020FOR IMMEDIATE RELEASE
The Taxpayers’ Union is urging the Government to rule out giving taxpayer-funded handouts to privately owned airports such as Auckland International Airport Ltd, in ways which would serve to protect shareholders rather than focusing on keeping jobs.
Taxpayers’ Union spokesperson Jordan Williams says, “RNZ is reporting that airports will be the principal recipients of this funding. In the case of Auckland International Airport, it is effectively a property company and its marginal operating costs are relatively low. That generally makes it a poor choice for taxpayer support. There is a stronger case for propping up regional airports that are mostly owned by a mixture of councils and the Crown.”
“Aviation is inherently risky. It has, what is called a high ‘asset beta’ – meaning its performance is more sensitive to changes in overall economic conditions. That is why the international airports are allowed to earn very high returns under our monopoly regulatory laws.”
“But in bad times such as now, the Government should not be insulating shareholders who took the risk. By all means step in to ensure airports keep operating, they are an essential service and employers, but don’t protect shareholders in the process. We urge the Government that to make clear that if listed companies needs to stay afloat for the public good, the Government should be implementing buy-outs, not bail-outs.”
“We’ve spoken to officials in Minister Robertson and Minister Twyford’s offices who confirmed that the eligibility requirements of the initial aviation package has not yet been decided. The Government still has the opportunity spend responsibly in this area.”