Can council control QAC? Yes … if it wants to.
The parameters within which QAC operates, for what purposes, are defined each year by its Statement of Intent. Councillors are meant to either agree to the SOI each year, or direct QAC how to change it “as soon as practicable”.
Under the Local Government Act, Councillors can use the SOI to direct QAC on its objectives (both financial and non-financial), the nature and scope of activities, and performance targets, among other things. Through this, Council has total control over QAC’s strategic direction.
QAC is 75.01% owned by QLDC, which makes it a council-controlled trading organisation and this means its primary purpose by law is to achieve the strategic objectives of Council, its controlling shareholder.
But so far councillors have not defined these its strategic objectives, so they are not included in the SOI. How then can QAC’s performance be assessed? In fact, how is QAC meant to know what our councillors want it to achieve?
The stated objective of QLDC’s other shareholder (Auckland International Airport Ltd) is to maximise return for shareholders. But profit is not – at least, legally – the driving force of QAC. What the law does require of QAC, within the strategic parameters set by QLDC as its majority shareholder is to:
- “conduct its affairs in accordance with sound business practice” [s.59(1)(d) of LGA] and
- “be operated or managed as a commercial undertaking.” [s.4(3) of AAA 1966].
In other words, QAC must manage its business commercially to meet council’s strategic objectives. Profit-making is not a required strategic goal.
The previous council twice rejected Queenstown Airport Corporation’s SOI. But on December 12, 2019, at an extraordinary council meeting, the new council agreed to QAC’s second “final” version – subject to a joint agreement that QAC would not act on their expansion plans without specific QLDC go-ahead.
Mayor Boult says council will be “guided” by community feedback into economic and social impact assessments being prepared by consultant MartinJenkins, who also did council’s conference centre and growth reports.
However, councillors have had no input to the Terms of Reference for these airport impact assessments. These TORs determine what information the reports will seek, from whom and for what purpose. So neither councillors nor our community know what information the consultant is seeking or the objectives, parameters, analytical methodology, consultation methods or who will be consulted.
Should we trust an opaque process that neither councillors nor community have had input to – less than six weeks before the draft QAC statement of intent it’s meant to inform is to be presented for council agreement?
Let’s help Council out …
What might some of council’s strategic objectives for QAC be? Some suggestions:
- Queenstown Airport’s air noise boundaries will not be expanded.
- Growth will be strategically managed within existing noise boundaries, to sustainably maximise returns to Queenstown Lakes’ tourism-based economy and ensure the well-being of the community.
- QAC operations will be consistent with QLDC’s Climate Emergency Declaration.
- Airports will be operated in a way to retain social licence for tourism and the local community’s social and amenity values.
- QAC will be driven by the community, environmental, economic and social well-being, interests and aspirations of the communities it serves, not by the demands of airlines.
- ZQN will be a destination airport, not a regional hub, to maximise our economy’s gains and minimise negative impacts on our community.
- QAC will develop metrics to measure performance against the above strategic objectives and report on them to Council annually.