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Govt ponders asset sale loyalty scheme

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Govt ponders asset sale loyalty scheme

3News NZ

Power companies will be the first on the block (file pic)

Power companies will be the first on the block (file pic)

By Peter Wilson, Political Writer

The Government could use a loyalty scheme to help keep state-owned energy company shares in New Zealand hands.

Ministers are ramming a bill through Parliament so 49 percent of the shares in four companies can be sold and Opposition parties are saying it's inevitable they will end up in foreign hands.

A loyalty scheme was used when Queensland Rail sold shares and offered one bonus share for every 15 held if they were kept by Australian buyers for more than two years.

Prime Minister John Key says he likes the idea.

"I think it makes sense for New Zealand investors to be given some encouragement to hold on to their shares," he told reporters on Thursday.

Mr Key says Finance Minister Bill English has raised it with him.

"I've encouraged the murmurings he's been making in that regard."

The prospect of the power company shares being bought up by foreign multi-nationals is one of the main arguments Opposition parties have against the sale.

They say the companies would effectively be under foreign control even though the Government is going to retain 51 percent of the shares in them.

The bill got through the second reading in Parliament on Thursday with a narrow 61-59 majority, with all opposition parties voting against it.

If the Maori Party had cast all its three votes - one of its MPs was away - the vote would have been 61-60.

The bill's committee stage will be debated next week and Labour MPs are drafting dozens of amendments to delay it as long as they can.

The Government will sell 49 per cent of the shares in Mighty River Power, Meridian Energy, Genesis Energy and Solid Energy.

The first share float is scheduled for August.

NZN

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Comments

15/06/2012 3:58:35 p.m.

Paora wrote:

For Labour to show they can flip-flop with the best, from selling off our assets 100% (Telecom, NZ Post Bank, Yellow Pages, Govt Print & Air NZ etc) as Labour did, they only have to make it an election pledge to dramatically reduce the price of Electricity for the power companies we will still own after the next election, which would in turn force the ones sold off by National to drop their prices to compete, and we will all profit once again from our own assets. The problem is that Labour have proven to be all mouth and no commitment. Even the buy back of some Air NZ shares was purely a vote catch idea because Air NZ was going bust and done much for the same reason as the Nats helped out lenders to Canterbury Finance etc.

15/06/2012 3:11:32 p.m.

Chargone wrote:

of course, such a two year delay does one thing only: it means the problematic consequences of these actions will crop up under the Next Government. which probably won't be national. at which point you can almost take it to the bank: national will blame the current government at the time for the results if it's not them, and if it is will whine about changing markets and how it wasn't predictable. if they ACTUALLY cared about this issue, they would legislate that the shares Cannot be owned by non-citizens. as in, any such shares sold to non-citizens are automatically nationalised (eliminates any such buyers. Far more effective than attempting to find a punishment for a seller that wasn't either ineffectively pathetic or cripplingly over the top depending on their situation.)

15/06/2012 1:11:00 p.m.

Martin wrote:

Instead of being in profit by 2015 we have to forget asset sales and have a longer strategic plan to return to a zero budget. Who can afford the shares, rhetorical question of course not the average kiwi who will end up even poorer with the assets requiring an increased return on their investment. Yes their must be some sacrifices including those such as the treaty settlements which are not necessary or urgently needed, and WINZ benefits for those that do not need it with a substantial alternative income. The touchy ACC department which needs a balance between a caring and understanding attitude, and those who don't have an acute condition on long term payments that can be assessed properly and have their payments reduced from 80% of their previous wages to a realistic comfortable income. WINZ have payment scales, accommodation allowances and if an item such as a washing machine breaks a new replacement is paid for.They have a cutoff limit for married people that earn too much even if well under the average wage. That would stop the budging of ACC and care for those that need it. National has been level headed about the economy and despite whinges from the opposition listened to the people about school class numbers and had the dignity to say we got it wrong. Now is the time to say it looks like we got it wrong.Yep the rentacrowd, including John Minto, will protest about treaty settlements and ACC issues and anything else those of us don't have time for because we are working too sick to protest on, but the rest of us have our pride, sort of.

15/06/2012 10:00:01 a.m.

Wiseacre wrote:

The neoliberal agenda of transferring the public wealth into the hands of the private few continues unabated. The already wealthy that benefited hugely from the unaffordable tax cuts that were gifted to the rich will use that windfall to fleece their fellow New Zealanders of our communally-owned income-generating strategic assets. Then, those of us that object to this sale and refuse to steal from our fellow citizens - and the many of us that can't afford to - will be forced to pay out extra, on top of inflated power prices, to reward those rapacious thieves that held on to their plundered shares in our stolen assets. And then, once rewarded, they will no doubt proceed to flog those shares off overseas anyway, for even greater profit. Unconscionable!

15/06/2012 9:52:46 a.m.

Scott wrote:

NO! NO! NO! NO! Anybody old enough to remember the the last round of privatizations know that there are two possible outcomes. Either the business is extremely profitable (Telecom) and the profits that would have benefitted NZ go to multinationals with little or no tax take or - the former SOE "pumped and dumped" and having to be bought back and rehabilitated. No thanks, we'll keep our assets and you can keep the Keyster.

15/06/2012 9:33:47 a.m.

Richard wrote:

I support most things National is doing - the opposition parties would have ruined this country under the current global crisis, but i must admit I DO NOT support the asset sales. they make no sense to me. Stop wasting money on non core activities instead. Cease all maori land claim payouts until we are in better shape as one example.

15/06/2012 8:42:37 a.m.

vicki wrote:

A good reason to buy a few solar panels I think, why won't the government listen to the people of NZ, it is our country and they are our employees.

15/06/2012 8:03:11 a.m.

Remove stupidity wrote:

It will be all the wrong NZders who are able to buy shares.The vulnerable as always will have no way to offset rising electricity costs pushed by greedy profit driven share holders.This leader is an ass pure and simple.There is no sensible move other than to retain state assets and insist a GVT both grows and uses them for the public good.The only loyalty there should be is to NZders resident in the country.Attention should also be paid to the ways a GVT can(can and could) run a power co. and the way a business would very defintely and specifically run them-two vastly different scenarios.