Manukau City council borrows to fund share gamble

The Manukau City Council has increased it shareholding in Auckland International Airpot following a closed door council meeting that passed the resolution by just 1 vote.

The council has increased it holdings of 116 million shares by another 5 million.

The scary part for rate payers is that in order to fund this purchase the council raised a load of approximately $10 million. A loan!!! yes, a loan to fund share pruchases.

Manukau City Councillor Jami-Lee Ross is the voice of reason it seems at the council. He opposed the purchase and makes some damning arguments against the purchase.


“Manukau City’s holding in the airport was only originally gifted to the city many years ago. However, playing the share market now is outside of the scope of the Council’s role.

“The Council has also chosen a high-risk buying method by borrowing money for this spending spree. The share market is a volatile place and common sense would tell us that investing with borrowed money is not a wise thing to do.

“With interest and loan repayments this purchase translates into reduced share dividends by around $500,000 each year. This essentially means the half million dollar shortfall will have to be raised via rates which I doubt Manukau City residents will ever see any benefits from.”

“Council’s own policies state that a decision of this magnitude is of high significance and only to be made after extensive consultation. Instead the Council has made a huge decision behind ratepayers’ backs with absolutely no public discussion.”


 


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