“An upward transfer of wealth”: inside the fight over outsourcing in Wellington
As rates rise and infrastructure crumbles, Unions Wellington is calling for council services to be brought back in-house — arguing outsourcing has failed both workers and ratepayers. So, can the privatisation of local government be reversed in the capital?
Local councils in New Zealand are trapped in an impossible position.
Rates are soaring and insurance costs are climbing. Yet there is a clear need to spend money to address the mounting challenges facing our cities — from crumbling infrastructure to the devastating impact of extreme weather events.
Nowhere is this challenge more acute than in Wellington where a succession of controversies — from the catastrophic failure of the Moa Point wastewater plant to the cost blowout with the Town Hall restoration — have undermined trust in council delivery.
But what if the problem isn’t that councils are doing too much, but that they’ve spent decades giving away the ability to do things themselves?
That’s the argument of Unions Wellington secretary Ashok Jacob in a new interview with Public Interest.
Jacob argues that councils have gradually outsourced huge chunks of their own capacity — from cleaning and waste collection to project management and infrastructure delivery — leaving Wellington increasingly dependent on private contractors whose interests are fundamentally different from the public’s.
The result, he says, is a system where ratepayer money flows upwards into corporate profits while councils lose the expertise needed to properly oversee the work they’re paying for.
To undo this mess, Unions Wellington is calling on Wellington City Council to bring council services back in house — through its new Wellington Works campaign, which it launched earlier this month.
Among the more explosive claims in a new report from the campaign: several companies with major Wellington City Council contracts are all ultimately owned by companies registered in the same building in the Cayman Islands.
"Ratepayers are paying into the council coffers to deliver services that are supposed to benefit everybody. And currently they're paying for remodelling mansions in Remuera of shareholders of cleaning companies or for people who are hanging around in the Caribbean on private islands," Jacob says.
"It's essentially an upward transfer of wealth — the transfer of wealth from the working population of Wellington to the ownership class, not just the New Zealand ownership class, but the international ownership class."
The conversation also digs into the growing tension between elected councillors and council bureaucracies, the fallout from Wellington Water, and why battles over public ownership — from water infrastructure to Wellington Airport — are rapidly becoming central political fault lines in the capital.
Watch the full interview below.
