What Happened to the Airport Shares? Auckland Council.
This explains the details of the new Auckland Future Fund versus retaining Auckland Airport shares.
It became glaringly obvious that the Auckland Council had not financially prepared for the devastating and costly effects of the natural disasters of Cyclone Gabrielle or the Auckland floods in early 2023.
Led by Mayor Wayne Brown, Auckland now has a solution in advance of the next natural disaster, called the Auckland Future Fund. It is a diversified asset portfolio of $1.3 billion that earns compounding interest thus is continuously growing in size.
Its primary purpose is to be available as an emergency civil defence fund. The fund is managed externally to the Council by professional firms to maximise the financial rate of returns.
To protect this large fund from being raided in the future, for purposes other than what it is intended for, a Trust with independent qualified directors has been established to administer the money – giving it an extremely high level of protection against any raids.
The Auckland Council has also gone one step further, asking the Government to pass legislation offering even more protection of these funds for their primary purpose to assist Auckland to recover quickly if another disaster occurs. The Prime Minister is supporting this legislation getting passed.
Auckland discovered it didn’t have the liquidity or cash at hand to get the necessary repairs and recovery needed for families underway fast enough.
Months of negotiating with central Government slowed the start of essential work.
Where did this $1.3 billion come from to start this fund?
The money came from selling Auckland Council’s 11 percent stake holding in the Auckland Airport. 
Why sell these shares to create a civil defence fund?
Two very important reasons. Firstly, the airport shares make a typical financial return of 1.4 percent per annum for ratepayers. The managed fund will make a typical financial return of 7 percent per annum for ratepayers.
You don’t have to be good at maths to see one of those numbers is far greater than the other.
Secondly, the money in the fund is protected to give Aucklanders true resilience against natural disasters. Whereas the airport shares were slowly but surely being sold off by consecutive councils to plug their overspending and debt problems.
The Auckland Future Fund money is being used proactively to create ratepayer wealth, rather than ratepayer money being used reactively and dwindled away through the sale of shares to cover up budget holes and council debt.
Here are some of the bigger issues that were part of public consultation, debates and final decision making:
1. The Auckland Council is losing control of the airport. The Auckland Council did not have control over the airport. You need at least a 52 percent shareholding to have control and 20 percent to get a director appointed. The council only had 11 percent of the shares. This shareholding was only in place to get a financial return for ratepayers, not for control of the airport.
2. The council is selling the family silver. Isn’t silver meant to go up in value? Airport dividends were 1.4 percent per annum. The Auckland Future Fund’s cash contribution is expected to be $400 million more than the projected dividends from airport shares over the next 10 years. This equates to a $40 million dollar saving in rates each year, the equivalent of avoiding an additional 4 percent rates increase each year.
If the airport shares are the family silver, then the council is selling them to buy gold.
3. Auckland needs the cashflow from the airport shares. Ratepayers are only getting a 1.4 percent dividend return from the shares. The council could get better returns from a savings bank account. 
4. The fund will just be raided in the future. The Mayor has put in place ample and multiple protections to prevent it from being raided. Compared to the ease by which the council continuously keeps raiding and selling airport shares, the Auckland Future Fund is significantly more secure.
5. We can’t trust the council to manage the fund well. The council won’t be managing the fund. Experts who do that for a living will be managing the fund. It’s the equivalent of putting your money into a retirement fund – somebody else manages it for you.