By Political Editor Duncan Garner
The Government needs 200,000 Kiwis to buy shares to make the first of the asset sales successful.
The bait of free extra shares will be needed to entice New Zealand buyers in. But opponents are calling that arrangement a scam to help the rich get richer.
The protests against asset sales have been loud and clear and the shouting hasn't stopped. Now the Government is openly talking about giving away free shares to Kiwis who buy.
“It may choose to give Kiwis buying shares a slightly better deal than others,” Prime Minister John Key says.
But Green Party co-leader Russel Norman is sceptical.
“It is absolutely a scheme for the rich, what else could it be?"
The loyalty shares are a way the Government can achieve its goal of 85 to 90 percent New Zealand ownership.
3 News can reveal the Government will target 200,000 Kiwi investors to raise the required capital. There will be free bonus shares for keeping the shares in Kiwi hands as long as possible.
But Labour says it's rotten.
“The loyalty scheme is a scam designed to hold Kiwis in until the day after the next election when the scheme will expire,” Labour MP Clayton Cosgrove says.
When National sold Contact Energy in 1999 225,000 people bought up the shares, mainly Kiwis. But now many of them have been sold and just 78,000 Kiwi investors remain.
Twenty big institutional investors own 75 percent of the company.
But this is what the Government wants to avoid this time by offering free shares.
“We've focused on what we want to achieve,” Finance Minister Bill English says. “Widespread New Zealand ownership and this is a tool used elsewhere to achieve that successfully.”
But the Greens say it is taking from the poor to give to the rich.
“You're talking about a transfer of wealth from those 99 percent who won't buy shares to the 1 percent who can afford to buy shares.”
Opposition MPs are publicly pledging not to buy these shares themselves.
But embarrassingly they're likely to end up with them, through no fault of their own. Their superannuation funds - like Kiwisaver - are likely to buy these shares, so the MPs who have so fiercely rallied against the sales will become reluctant owners of the flogged off assets.
3 News