As the Ports of Auckland standoff drags on, the Productivity Commission is recommending partial privatisation of council air and sea port assets.
New Zealand paid $5 billion a year for freight costs in 2010, its 278-page draft report released yesterday said, and with freight costs once more on the rise lowering these costs would increase New Zealand living standards.
The draft freight transport report included a raft of recommendations aimed at improving international freight services, including listing of major council-owned seaports and airports on the stock market.
This would offer "significant potential governance improvements for larger companies" with a partial-council ownership model.
According to the report, the Port of Tauranga – 55 percent council-owned, with the other 45 percent of shares floated to the public – is especially productive in comparison to its rivals.
The commission also suggested removing current exemptions for shipping companies to combat any anti-competitive behaviour in the market, sharing information to enable better decision-making, precluding councillors and council staff from being directors of airports and ports and decreasing the time it takes to complete export and import requirements.
In addition, it outlined potential ways work practices could be improved at the different ports.
Commission chair Murray Sherwin said governance arrangements for publicly-owned companies needed to be more stringent because they were spending the public’s money without the performance disciplines faced by privately-owned firms.
“Trade matters a great deal for New Zealand’s standard of living.
Freight costs are built into the prices New Zealanders pay for everyday
imported goods and the returns exporters receive for their goods.”
The final report will be released to the government on April 1.
The commission is also carrying out in-depth research into housing affordability.
Recent figures show nationwide affordability has decreased by nearly 2 percent, with Auckland surpassing Central Otago Lakes as the least affordable region.
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