• Full Story

Asset sales could hurt the Government

Print

Asset sales could hurt the Government

3News NZ

The assets sales bill will be passed next week (Photo: James Fyfe)

The assets sales bill will be passed next week (Photo: James Fyfe)

Ministers will be relieved to see the back of the assets sales bill when it's passed into law on a 61-60 vote next week.

The Mixed Ownership Model Bill - the title deliberately avoids the word assets - allows the sale of 49 percent of shares in four state-owned energy companies and it's a highly unpopular policy.

Opinion polls show more than 70 percent of voters don't want asset sales and opposition parties know they're on to a good thing.

That's why they've been making so much noise this week and they had ministers on the back foot in the debating chamber for the best part of three days.

Prime Minister John Key, the eternal optimist, says the public will warm to partial privatisation when they get the chance to invest in the companies.

Labour says they're more concerned about paying their power bills than buying the companies that produce it, which could be a more realistic appreciation of what is going to happen.

Asset sales have never been popular.

During the late 1980s a Labour government went on a selling spree and 15 assets raised $10 billion.

National MPs figured reminding its raucous opponents about that might shut them up and they pointed at Labour members who were part of that government, like Trevor Mallard and Annette King.

It didn't work.

"Yes, we sold them," Mallard admitted.

"And at the next election I lost my seat and Annette lost her seat. Labour was out of office for the next nine years."

The Government's plans are mild in comparison to Labour's binge and it will continue to hold a 51 percent majority interest in the companies.

But there are still significant risks.

Ministers say they're sure between 80 per cent and 90 per cent of the shares will be bought by New Zealanders, many of them "mum and dad" investors.

The share floats are expected to raise about $6 billion, and Labour doubts there are many mums and dads around with the cash to grab a noticeable slice of that.

That's one of the opposition's scary scenarios - the shares will end up in the hands of foreign multi-nationals who will control most of New Zealand's electricity generation despite the government's majority shareholding.

Scary scenario number two is that these rapacious shareholders will demand huge profits which can only be gained one way - higher power prices.

Ministers say that can't happen in a competitive market, but if they're wrong the Government is going to be in serious trouble.

Power prices are a huge issue, constantly monitored by prowling lobby groups, and the people most affected are fixed income pensioners.

Nearly all of them vote, and if they turn on National in 2014 they can change the government.

Labour describes asset sales as "a weeping sore" and intends keeping it that way through to the next election.

The campaign for a citizens-initiated referendum is part of its plan to make sure voters don't forget what is going on.

The Greens, Labour and their allies have already collected 90,000 signatures, just under a third of the 300,000 they need for a referendum, in less than two months.

They have to present the petition within 12 months of starting to collect signatures, and after that a referendum must be held within 12 months of presentation.

The timing is largely in their hands, and a referendum in election year would be a handy way of keeping asset sales up there in lights.

The result won't be binding on the Government and by then all four power companies will be well on the way to partial privatisation.

But an overwhelming vote against the policy would be a strong reminder that the Government has done something most people don't like.

NZN

Post a Comment

Before commenting, please take the time to read our moderation guide


(Won't be published)



Comments

24/06/2012 10:49:39 a.m.

James wrote:

@ MIKE B, What would they not? who are you to say this? Did a school kid not just discover the fastest way to test for cancer ever with no funding versus grown adults with years of university schooling and countless funding? What would you know MIKE? Ego vs intellectual ability Mike. Mayby its you who dosen't understand beacause you think to highly of yourself.

23/06/2012 3:20:58 p.m.

Seannachie wrote:

Get real part privatisation of power companies will result in increased power prices to attract and retain private sector shareholding and less investment in power generation. Infact the only Mums and dads ripping us off will be John Keys and his rich mates.

22/06/2012 5:37:15 p.m.

David wrote:

Considering National are now officially stealing candy from a baby with their latest tax reforms aimed at kids.... I think they have a right to have a say Mike B. All tax payers do.. and as you can be a tax payer from around 12... why not get the children involved... they contribute to the tax take too. Its an issue that affects all Kiwis Mike B.... including our children as its the asset stream that will be lost that they have to find a way to make up for.

22/06/2012 3:19:49 p.m.

Mike B wrote:

The parents of those kids should be ashamed of themselves. What do kids know about asset sales? But we need the numbers when we protest!

22/06/2012 2:36:23 p.m.

jasica campbell wrote:

Short term loan required of $1000-00 so we can buy a share in the asset sale.and will repay it back on the never never plan at 20cents a week.

22/06/2012 2:21:16 p.m.

Chelva Khanthan wrote:

Asset sales do not help to revitalise the economy in real terms. It only helps those with money who can afford to purchase these shares. Majority of us will not get a single cent out of this bill. We can now the see the true colours of our elected members of parliament. Each and every member of the parliament who had been elected to represent voters view are now blindly supporting the bill despite strong opposition against the passing of the bill. As voters we are now learning the lessons the hard way and paying the price for electing them to parliament. Isn't clear that politicians are there to enrich themselves and to help their rich friends to profit by the asset sales? So voters, next time around before voting,do not be carried away by the charming words and looks of our politicians.Instead vote the person who will listen to us and who will truly represent and act on behalf of us. God bless New Zealand. Kia Ora. Chelva Khanthan