Statement from David Thornton

Ratepayers will ultimately carry losses on Beckham fiasco

The Auckland Regional Council should not be promoting or sponsoring commercial events if they involve possible losses or costs to ratepayers.

It is typical bureaucratic spin for the ARC to claim that the $1.8 million loss on the David Beckham show will be ‘ring-fenced as a trading loss’.

The truth is that the ARC is the owner of the Mt Smart Stadium ‘Business Unit’ and any losses of that unit must be covered by the owner – and the owner gets its money from the ratepayers of the Auckland region.

The ARC’s claim that it will ‘review expenditure at Mt Smart’ and is ‘exploring all opportunities for saving’ are empty words.

The fact is the almost $2 million dollar loss must be revealed in the council’s next annual report – and that will need to be balanced by cuts in services elsewhere in the accounts.

The loss occurred in the current financial year – and rates have been, or are being, paid for this year.

This almost $2million loss will therefore be covered by diverting some rates income in the current year – which will mean that the services for which those rates were levied will not now receive that funding.

The decision to guarantee the losses from this event was ultimately approved by the regional politicians – many of whom were basking in the glory of bringing the great David Beckham to Auckland.

Meanwhile ratepayers are asking why the ARC, or indeed any city council, should be putting ratepayers funds – either directly or indirectly – into commercial events which often bring financial benefits to a few, while relying on ratepayers to ultimately underwrite any loss.

Aucklanders will hope that if, as a result of the Royal Commission on Auckland Governance, we become a SuperCity, powers for the SuperCity council to become involved in this type of disastrous financial gambling will not be permitted.

ENDS

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