I'm not ideologically opposed to partial privatization of state owned assets. So that makes my current opposition to the sale of Mighty River Power one based on pragmatism (we'll get a low price) and lack of trust in the National Party.
I just don't buy into their story. First, I recall them talking about how much money they could unlock to help reduce the debt. Then later, they say they will use it not to reduce debt, but "invest" in infrastructure.
Looking at the world economy, now seems hardly the time to make a killing floating shares. And what will the impact be to open up these places to foreign investment? On one hand we have National saying that it will never be more than 49%, and on the other hand...we have the classic misdirection technique of the magician. What if the percentage doesn't actually matter? What if the mere act of floating the companies changes the governance structure so that the ultra rich can skim profits in ways that we can only imagine. Unless we stop for a second and look back at how profits have been skimmed by the large investment firms responsible for the Global Financial Crisis.
Also, once the structure of the business has been changed, what's the bet that the 51% government share is up for Treaty Settlement? 26% government, 25% assorted Iwi. Now that's an asset sell-off no-one saw coming.
The National Party won the election, but it was for a myriad of reasons, and they certainly cannot claim a mandate for asset sales with a clear conscience. Selling off the assets in order to reduce debt will not happen - the money will be frittered away on other things. The bigger worry to me is that National haven't articulated great reasons for the sale, which only makes me more suspicious that their motives are not pure.
From the Congo to the Waikato, the natives remain restless.
I just don't buy into their story. First, I recall them talking about how much money they could unlock to help reduce the debt. Then later, they say they will use it not to reduce debt, but "invest" in infrastructure.
Looking at the world economy, now seems hardly the time to make a killing floating shares. And what will the impact be to open up these places to foreign investment? On one hand we have National saying that it will never be more than 49%, and on the other hand...we have the classic misdirection technique of the magician. What if the percentage doesn't actually matter? What if the mere act of floating the companies changes the governance structure so that the ultra rich can skim profits in ways that we can only imagine. Unless we stop for a second and look back at how profits have been skimmed by the large investment firms responsible for the Global Financial Crisis.
Also, once the structure of the business has been changed, what's the bet that the 51% government share is up for Treaty Settlement? 26% government, 25% assorted Iwi. Now that's an asset sell-off no-one saw coming.
The National Party won the election, but it was for a myriad of reasons, and they certainly cannot claim a mandate for asset sales with a clear conscience. Selling off the assets in order to reduce debt will not happen - the money will be frittered away on other things. The bigger worry to me is that National haven't articulated great reasons for the sale, which only makes me more suspicious that their motives are not pure.
From the Congo to the Waikato, the natives remain restless.
They seem to have spent the money several times over already - it wll pay down debt, it will help cover existing spending without additional debt and it will buy improved infrastructure. Which suggests we're right not to trust them - hell, previous experience alone would suggest not trusting them to get a good outcome.
ReplyDeleteI also don't trust them to retain 51% ownership. Apart from the potential treaty settlement ripoff you mention, there's the general principle that if you sell off part of your assets to cover excessive spending but don't curb the spending, the rest of the assets will follow. So far the govt's doing nothing to suggest that won't happen.