Unpopular asset sales should be hurting - so why isn't it?

Mon, 07 Nov 2011 10:59a.m.

Overwhelmingly, people say they don't think our power companies need to be flicked off

By Duncan Garner

John Key's plan to sell down 49 percent of state-owned assets is unpopular. All the polls show that.

But Labour has failed to turn it into a game-changer.

I hit the streets in Newmarket last week asking voters what their major issue was this election. Overwhelmingly, it was asset sales. From young people to the middle-aged, to the elderly, they all said they didn't think our power companies, airline and state-owned coal company needed to be flicked off.

They wondered why. They said it wouldn't make the economy any better. They questioned the wisdom of it. Are they really worth $5-7 billion? Why do it? Who wins? Can Mum and Dads really afford it?

But then I asked who they're all voting for. They all said John Key. It's a complex game, isn't it?

So while voters are simply not convinced of the need to sell down our assets, they are not making the connection with Phil Goff over it.

Labour has certainly run this issue hard. Very hard. But it has failed to win the hearts and minds of voters over it. It has failed to connect. It goes to the heart of their leadership. Phil Goff has banged on and on about asset sales - till he's red in the comb and the veins are popping out of his neck. But it ends there.

It's a given that Labour voters will vote against asset sales and for Goff anyway. But he has failed to bring across swinging voters who are concerned about it. They don't find him convincing or compelling on this for some reason. Maybe they're questioning his credibility on the issue. He sat in a Labour Cabinet that sold billions of assets in a firesale. Now of course, Goff has seen the error of his ways and changed his tune. But maybe voters don't forget.

Perhaps they don't find Goff attractive enough to vote for on this single issue.

It's also a sign of how Key has successfully taken the heat out of asset sales.

Sure, he's still explaining and defending his programme over this - but while people are concerned and questioning - they're not walking away over it.

Many, many questions remain about the wisdom of hocking off our assets. Labour will continue its attack and so it should. Labour's argument on the asset sales is strong.

Problem is - would a different leader have connected better? A fresher face. One without connections to past Labour decisions. Or has John Key's affable and happy nature with voters - convinced them to look the other way?

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15 Mar 2012 07:58p.m.

Dave wrote:

Why isn't it a game changer? Because most people (voters) would rather stomach asset sales than swallow the dead rat that is the Labour Party. Says a great deal about how ineffective they are.

23 Nov 2011 11:04p.m.

FarOut wrote:

The problem we have here is that the assets John Key is selling doesn't even belong to him. Generally, that is known as THEFT. Oh, it is hurting alright, but the media have their own little world where they play their own little games, and they all win.

17 Nov 2011 04:26p.m.

Dave wrote:

Gee Duncan maybe if you and your mates in the media had not spent the last 2 and a half years slagging Phil Goff maybe more people would be out voting against asset sales. Buy the way any word how Key expects to spend the money and how much... If he manages to get re-elected of course

17 Nov 2011 11:54a.m.

Mark wrote:

I suspect the reason why people still vote for Key who abhor the asset sales is that it is clear a world-wide financial disaster is approaching, and you don't change horses in a disaster. For example, just before the September 2010 Canterbury earthquake the current mayor, Bob Parker, was w-a-y down in the polls; straight afterwards he shot up and reversed his position. There may be other reasons for it (I doubt it), but notice that since then the Christchurch City Council has been up to exactly the kind of stuff people were keen to boot Parker over, but nobody cares too much because we appreciate Bob's "being there for us". I think the same thing applies to John Key's popularity (not National's, or National policies) - he is our leader and we have to stick with him no matter what when storm clouds gather. If he'd kept employment and the books about as good as they were three years ago, ironically, I think he'd have a lower popularity. We *want* to believe in a Brighter Future, which may very well be a broken promise from last election yet to vote for any of the opposition would be to give in to pessimism. Besides, economists are split over the merits of asset sales, so it isn't technically being unrealistic to go along with a promise of prosperity based on them.

17 Nov 2011 07:39a.m.

Mike wrote:

We see much ignorance over debt.

Say you own an asset and need some money.

You can borrow against the asset and the more you borrow the higher interest you pay. The labour policy is to look towards a downgrade in credit rating and higher interest rates.

You can sell some of the asset. As a % of borrowing covered by assets, this also can lead to downgrade of credit rating, ie higher interest rates.

In the end there is not much difference between borrow and sell - not much more than some ink on some paper as both lose some control. The biggest difference is the amount of spending, Labour always spends more than National and puts us more in the toilet - always have done.

Labour is like the beneficary going out to the local loan shark, telling us that its better to borrow than sell. What happens when its time to repay the loan? If we borrow from the Chinese, will they kindly remind us they have more troops than we have people? Then its come up with fire sale of assets and or give away our assets to keep the loan sharks happy. Labour has done the firesale of assets before and sold more NZ assets than National. Who last sold NZ assets? Labour.

While selling assets not good, selling a smaller non-controlling interest is better than borrowing. Of course Labour will claim that only the non-labour voters can afford to invest in NZ assets ...

Its not that NZ want assets sold, its just that Labour is a worse alternative to NZ than some of our assets being sold.

It is possible to turn a country around. Take Singapore, they used overseas investment in their country to move it forward, and then did a lot of buying back of their national assets using the profits from that overseas investment.

14 Nov 2011 02:21p.m.

mikey wrote:

Sell for short term gain, retain for long term investment. And guess what i can't afford to but any shares if they sell of these companys, More wealth generating for the wealthy.

12 Nov 2011 06:01p.m.

Neil wrote:

National’s idea of floating 49% of our energy companies is a lot better than Labours idea of borrowing more money now. It is like Fairfax floating a portion of TradeMe to raise funds to pay debt and invest back in its business.
What they should do is have two shares A shares for mum and dad investors in New Zealand and these shares cannot be traded overseas. B Shares which can be traded overseas but to a maximum of 10%. As they have said, that no one person can own more than 10% of the 49% that is being floated.
If you read the whole policy of the share float instead of believing the Political bs that is being spouted you will actually understand it better.
It will also allow me to get a dividend instead of it all going to government when i actually do own a share. According to all the knowledgeable people in economics experts in this country we own it. Will if I owned a share why don’t they pay me a dividend.

12 Nov 2011 12:57p.m.

keith wrote:

Gary the debt national are talking about labour taking on is in the area of 3-4 billion. To refresh your memmory key said during this past three years that 2billion is niether here nor there in the grand scheme of things. Yet 4billion suddenly becomes huge. Today English did not deny that he may have to borrow more. Before making any decision please check your facts. You may not like a labour green coalition but if national act get back into power you better lock up your grandmother before they sell her.

10 Nov 2011 02:54p.m.

eddie wrote:

Phil...National have campaigned on this, it's no secret, if you don't agree don't vote National!, if National are returned with a majority to govern after 26th Nov, then that's all they need, why would a referendum be different?, nationwide voting of anyone over 18 in the country on Nov 26th will be all the party needs to go ahead, and rightfully so.

10 Nov 2011 10:38a.m.

Phil wrote:

Something as major as the proposed asset sales should be sanctioned by national referendum or at least in some form of super-majority, cross Parliament approval process If National gets in on John Key's personality or from some default voting outcome I hope they are not so arrogant as to dismiss the broad-ranging disquiet the nation is expressing over asset sales.