It’s been a long time since elected representatives and voters have been lectured about TINA – the dogmatic claim that There Is No Alternative to a controversial economic move.
TINA was the signature argument of Margaret Thatcher and her free market economic reforms. The lady was not for turning.
It was also embraced by the followers of Rogernomics and Ruthanomics at the national economic level here in the 1980s and 1990s. The country had to deregulate, compete, open, restructure, privatise, sell, close, cut, bring in user pays and take our medicine.
No other option. No question. No time. No second-guessing.
Roger Douglas, finance minister for the Fourth Labour Government and Ruth Richardson for the Bolger National Government elected in a landslide in 1990, pushed TINA hard, forced the issue, and their acolytes and proxies discredited political, academic and community critics as fossils and defenders of outdated, centrally controlled economic failure.
Their neo-liberal solutions were transcendent and others’ answers (including those of NewLabour’s Jim Anderton and NZ First’s Winston Peters) were temporarily marginalised.
Which is not to say everything went the way of the new right; they on occasion backed away from their ideological posturing but sometimes only after sketching an extreme in the hope of still achieving something desired but more modest in its ambition.
TINA and new right certainty started to fray in the late 1990s, were confronted and replaced by Helen Clark and Michael Cullen, and then the centrist and pragmatic John Key and Bill English, and appeared to have been consigned to history.
New and more flexible policy thinking emerged and ideas cast aside by the driving force of new right TINA were rehabilitated. They weren’t always right but they didn’t seem to claim omniscience and righteousness in the same manner.
Now TINA has made a comeback, in Auckland in 2023.
It is the unspoken catchcry of Mayor Wayne Brown in setting out his budget for the 2023/24 financial year to fill a fiscal hole that is now set at $325 million.
Brown has been unapologetic in his quest to sell the Auckland Council’s $2.2 billion shareholding in Auckland Airport.
It is the cornerstone of a budget he has written (and amended in other respects after public consultation).
If he can sell that shareholding, use the $2.2b to pay down debt and save a net $60m off interest costs in year one, he takes a step to filling his fiscal hole.
And he believes he will show voters he has followed through on campaign promises to ‘stop the waste’ at the council.
Brown has made it clear the airport sale is the one thing that must stay in his budget.
He initially went hard on cutting community and arts funding, possibly to see how hard he could go before the electorate squealed too loud, and then relented. He has adjusted his preferred rates increase upwards, even allowed the dreaded council borrowing to rise.
But on the issue of selling the airport shares: There is no alternative. Got to happen. The quicker the better.
Councillors opposed to it are “not particularly financially literate” – an ad hominem criticism that Roger and Ruth refrained from deploying, publicly at least, with their own sceptical parliamentary colleagues.
The 76-year-old engineer and former electricity and health board chairman is not for turning.
Time, however, might have passed TINA by. Two decades of blended economic approaches, MMP-driven economic compromise, the GFC, a pandemic and global economic crisis seem to have fortified some of his colleagues around the council table to push back. To challenge. To seek out (say it out loud) … alternatives.
They’ve queried his calculations. Selling all the airport shares won’t improve the council’s finances by the $100m in interest payment savings a year that Brown cites. He hasn’t routinely deducted from that number the airport company’s annual dividend payment to the council – for the coming year estimated at $38m, taking the gain in that year to around $60m.
They’ve challenged the wisdom of fixing a short-term cash problem by selling off an asset that is set to provide even more dividend income each year.
They’ve wondered aloud about holding onto the 18 percent shareholding, and making up the $60m net gap in Brown’s budgeting by borrowing more or borrowing some of it and putting rates up (each 1 percent increase would deliver $20m income to the council). They’ve suggested a part sale of the shares (say 8 percent, delivering around $1 billion in cash to pay down debt and cut interest bills).
Somewhere in the behind-the-scenes negotiations, Brown has agreed to set aside some of the proceeds of a share sale (up to $200m, his latest budget document says) to be used for some very specific, pork-barrel-sounding projects in the suburbs of Manurewa and Avondale.
But his numbers on that seem unclear. He promises both to use the full $2.2 billion sale proceeds to eliminate debt AND to ringfence the $200m of it for the Manurewa and Avondale projects.
That’s a rather large $200m difference, one way or the other.
The interrogation of the numbers, the inconvenient questioning, and alternative thinking, has, on the eve of the Thursday vote, left the mix of budget measures up in the air.
Brown might believe he’s been persuasive in his advocacy for the big airport asset sale, but he’s not been convincing.
He could yet win out. If he does, officers and advisers have already prepared the council a confidential briefing paper on how the sale will proceed and are pushing for urgency.
But his old-style TINA approach, refusing to consider alternatives to the airport share sale, dissing the thinking of peers, might have misread the room. And Brown might just run out of runway.