Posted on 3-10-2002

Government Buys Banks Out Of Trouble
by Alan Marston

The New Zealand Prime Minister Helen Clark will announce today that the
Government plans to buy Auckland City's stock of 1600 pensioner houses,
which are valued at $75 million. The deal provides relief to the self-made
Mayor of Auckland, John Banks, whose first year in the job has seen his
`privatisation, build more roads policies divide the city into angry
opposing sides.

It will be the second time the Labour-led Government has come to the
financial aid of Auckland. Last December it paid Tranz Rail $81 million for
the city's rail corridors. This time the Government is acting as if it can
be cornered by Mr Banks and his allies' ideological moves to sell off
housing and the shares in Auckland Airport - sell to whom one could well ask.

Helen Clark, who lunched with Mr Banks in Auckland last Friday, will
announce details of the deal on a visit to a council pensioner village in
Otahuhu at 11am. The village is in the electorate of Housing Minister Mark
Gosche, who will attend. Also present will be Mr Banks and councillor Bruce
Hucker, the City Vision leader who has negotiated with the Government since
the council decided that housing was not a core function.

The sale of pensioner housing was a key plank of the cost-cutting report
prepared by former Finance Minister Sir William Birch shortly after Mr
Banks and the Auckland Citizens & Ratepayers Now ticket won power last
October. Mr Banks and his allies pledged that existing tenants would have a
home for life, then raised their rents in net terms between 5 per cent and
12.7 per cent. The Banks regime is playing it anything but straight, and
the PM seems to want to smooth out the swerves rather than confront them.