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Robert F's avatar

Generally I agree with clearer thinking around what assets are reasonable for councils to hold, and I'm particularly frustrated with the nonsensical 'family silver' and 'rainy day fund' arguments.

However, I intuitively feel you're underselling the 'strategic' case, even if the term 'strategic' isn't quite right. Major city airports are reliant on the rents from unique permissions and zoning to be able to operate. Their value is completely intertwined with what regulation allows them to do. They tend to be monopolistic and able to generate reliable profits from demand for land adjacent to the airport (retail, transport services, parking), but also severely constrain the use and enjoyment of land around them due to noise (a negative externality).

The 'strategic' value isn't clear in the short term (The airport’s existence does not rely on the council’s shareholding). But let's say for example an airport wants to expand (eg in Wellington), I feel like councils would be reflexively anti-development due to the negative externalities. With financial skin in the game for councils, they might be more inclined to consider the benefits as well as the costs, and the public more willing to accept the changes.

To be clear, that's not the way things 'should' work (as you note: "Desirable environmental and planning outcomes can presumably be achieved through the council’s regulatory powers ... Desirable economic, commercial and aviation outcomes are the responsibility of central government" ). But in practice I wonder if local sharing of the benefits of airports helps overcome the barriers to providing them with the significant concessions they need to operate.

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