The New Zealand Chambers of Commerce is calling for whoever leads the government after November 26's election to expand the National Party's proposed sell-down of minority stakes in a handful of state owned enterprises (SOEs) to all central and local government owned businesses to help get the government's books out of the red, fund the rebuild Christchurch and provide an alternative to property investment.
Michael Barnett, head of the Auckland Chamber of Commerce and a spokesman for the New Zealand Chambers of Commerce, said the government could extend National's so-called mixed ownership model to all central and local government commercially owned and controlled organisations.
"We believe a controlled asset sell down to New Zealanders of minority shares in a range of other selected commercial assets would not only help secure the target of a (government) return to a fiscal surplus by 2015, fund the rebuild of Christchurch and enable faster delivery of critical infrastructure, but create the opportunity for New Zealanders to have some shared ownership (and direct participation) in securing our economic prospects," Barnett said.
“Allowing New Zealanders to invest in the nation’s strategic commercial assets would provide a safe alternative to continuing to invest in property,” Barnett added.
Such a move would "free up" capital for investment in key infrastructure, and give New Zealanders the opportunity to invest in productive New Zealand-owned assets and bolster their retirement funds. The core concept was of shared ownership of assets by New Zealand organisations and individuals with the government retaining at least 51% ownership, Barnett said.
The government instructed Treasury in January to conduct preparatory work to enable partial sales of Mighty River Power, Meridian Energy, Genesis Energy, and Solid Energy and to reduce the Crown’s 74.69% shareholding in Air New Zealand, with the government retaining a majority stake of at least 51% in all the companies.
National says such SOE sell-downs, through sharemarket floats, would happen over a three to five year period starting in 2012. Treasury estimates implementation of this mixed ownership model would raise between NZ$5 billion and NZ$7 billion. Prime Minister John Key says this money would be held in a specific fund for investment in infrastructure.
The issue of partial SOE sales is a key election issue, with National pledging to push ahead with the sales should it be re-elected and the Labour Party strongly opposing National's plan.
Barnett said the Chamber’s proposal gives the next government the opportunity to show it is seriously committed to a policy of promoting all New Zealand’s strategic commercial assets to playing a key role in securing our economic prospects.
"It can show this commitment by extending the shared ownership asset policy to all central and local government commercially owned and controlled organisations," said Barnett, who is a former Auckland Regional Council councilor.
“It is positive for New Zealand and New Zealanders, and because New Zealanders will have some direct ownership will help keep those managing the assets on their toes."
36 Comments
Here's part of an email from a friend who knows about such things:
"When they took over the assets, they hired a half a dozen or so 'operators' supposedly to run the stations. Their salaries were huge and they do absolutely nothing except go to team meetings everyday, or sit in front of their computers filling in work orders and looking at cars on Trade Me. Everything else is actually done by contractors. Light bulb needs changing? Get a contractor. Filters need flushing? Contractor. Leaky bearing needs oil? Contractor. Photocopier out of paper? Contractor. Transformer needs testing? Contractor. Load need changing? Contractor. Anything at all that doesn't involve admin 'work'? CONTRACTOR. This is where all that money went - for glorified office ladies. In fact you could replace the lot of them with a part-time office lady and you'd probably make the whole outfit 100% more efficient."
One problem springs to mind..the word TRUST.
With all of the fianancial shananigans and fraud perpetuated on the general public over the last few years, who is brave enough to allow let these assets to go?
I like the idea of it, but not so sure I can trust those involved to do it in the public interest, as opposed to spruiking the whole process with advisory fees, management fees, placement fees, jobs for the boys, legal loopholes left for later on and so on....
kowtow,
You mean the Hong Kong where the government owns the majority of the territory's land? The Hong Kong where the government owns and operates its water supply? The Hong Kong where the government practically runs the major electricity providers through mandatory Development Plans?
http://www.legco.gov.hk/yr08-09/english/panels/edev/papers/edev1216-enbcr2457608pt4-e.pdf
lol.
@kowtow - you are right in one respect, and recent bank bailouts by governments, thus taxpayers, has not gone well and never will.
Capitalists that stand or fall within the confines of their own resources is perfectly acceptable and the costs of creative destruction remain theirs and not mine.
I don't want under any circumstances to endure the repurchase of sold SOEs after others have had their way with them.
A word in your ear SH...51% retained govt ownership means govt control is total. If govt want to...they can reduce the div as low as they want. The dividends would impact the share value...having driven it down, the govt can then buy back the shares for less than the sale price. Note that the 'govt' could well be a Green/labour team up...destruction of shareholder values is old hat to Labour...just ask Cullen.
Or the govt could direct the board to issue new shares onto the market having pumped the divs higher to pork the values...keeping 51% of course....then drive the values lower again and repeat ....all quite legal.
The divs will not climb above the govt bond rates unless there is a rort going on as above.
Who doesn't understand what is going to happen when our assets are sold off? First is that we will no longer own the assets we paid for. Next is that the profits these assets generate will almost certainly disappear offshore. That will be because the new owners are foreigners or because the new local owners will stash their profits offshore to evade taxes. Also the profits from the sales will vanish too. Either swallowed by the increasing debt being racked up by the current govt, or because it winds up stashed away for a tax free life in the Caymans. And then of course is the best part which is that the price of everything the sold assets sell will go up immediately. Hands up all of you who have an income that is increasing past the cost of living. Now hands up all of you who has an income that is even keeping pace with the cost of living. Now stick your hands up if you think you will be better off if our assets are sold.
The people with their hands up are John Key, Bill English, Gerry Brownlee and a gaggle of their close business friends and associates.
What shall one do when unable any more to afford all the things one pays for? What shall a family do when unable any more to afford all the things the family usually bought? What shall a society do when unable to pay for all the things it usually paid for?
- The first thing one / a family / a society should do is to cut down on expenses. Stop buying / paying for things that could be done away with! This by itself may be sufficient for the ends to meet. (Do we really need such a bloated army of “public servants” and their consultants, advisers, etc? Do we really benefit from all the nonsensical public money funded “programs”? Do we really have to support, year into year, those who do not want to work? The list could go on…)
- If cutting the expenses down to only what is absolutely necessary is still not enough, then one (or a family, or a society) looks what assets could be sold to get the necessary additional funds and, equally importantly, how to use the obtained funds to prolong their benefits as far as possible.
- If things are so bad that neither of the two measures above help, borrowing remains the only (but a desperate) option. Hopefully, such borrowing is accompanied by a plan as to how to stop and repay it as soon as possible (and the key factor in this is productivity).
Mate where do you go when your power bill is the most expensive item? Are we to go back to candles just because greedy buggers who now own what used to be ours and was paid for by us are charging us whatever they feel like because they can? It's not like John Key will step up and say "I insisted on selling the power companies to people who have promised me top jobs when I quit politics but now I'm going to prevent them from charging what they want" is it?
The price of electricity is already scandalously high but it's going to go a lot higher once the power cos have been flogged off. That's a fact that history and experience guarantees! So it's not much use saying we'll have to cut back to afford these things if the choice is kero lamps and eating or electric lights and bugger all else.
Good one steven....raise taxes...unintended consequences from that will be.......
1. Reduced incentive to earn a profit.
2. Capital flight off shore to avoid the govt theft.
3. Increased unemployment leading to increased govt expenditure at the same time as tax return on profits declines....doh
4. Greater borrowing to fund the growing fiscal hole...leading to a worsening debt management crisis for the stupid govt...leading to higher taxes...leading to.....
No steven....it's not the opposition pollies that are critical...it's an educated public and quality media. The threat that makes a govt avoid the usual power rorts, is a loss of office.....that threat ought to come in the media where public attitude SHOULD clearly expose any govt stupidity and inept management.
Unfortunately for NZ we have a thick public and a useless media. Now you would expect that the media would play a productive role in improving the thinking of the public but sadly the profit motive rules and they concentrate on selling advertising and pulp news wrapped up in garbage sound bites.
Whether this new web media avoids the crap trap remains to be seen.
That's naive. How many times have we heard that one of the parties "is toast", only for it to be in government an election or three later?
At the height of Labour's popularity a few years ago, the National Party may as well have not existed, yet here we are now.
However, the issue of Asset sales stirs a lot of passion, which is unsurprising since it's such an important one.
No, statistics, we are not talking 45% v 50%, but 30% v 55%...and yes Labour might as well not exist, except an oppossition is always needed.....sure the SOE sales are proving a huge fly.....but the polling trends show Labour no where.....30 to 35%. Ppls wallets stir even more passion...just look at DB's tax bribe attempt in 2005 and national's successful one in 2008.
Does labour low position change how i'll vote? no....do they deserve show a low rating, no.....
regards
Will Labour win the next election? Based upon published poll results, probably not. But then there have been major inconsistencies between many of the polls, with those conducted by known Nat sympathisers (NZ Herald, TVNZ, etc) giving National the highest ratings and Labour the lowest.
On the other hand, even if the poll results are accurate, how many people do you know (of) who favour Asset sales? How many do you know (of) who don't? There aren't many outside the most fanatical of the National Party's mob of apologists and a**e-lickers who do. Most people are dead set against even partial Asset sales. Yet National seem determined to proceed.
Could that pull out the rug from under them? It seems very possible.
Labour "toast"? Only for this election, if that. But they will be back, just as National returned from the political wilderness and became the government. That happens all the time, with both major parties, and has been happening for a long time.
that it would be CassO....but even my own are voting for them in digust at the alternatives....so that's not necessarily an endorsement of policy........dear me what are we to do....?
Doom Doom Doom let's go back to the womb and prostrate ourselves in foetal submission.........
Adopt the faecal position , Count , 'cos we're in deep shit ! ...... both Labour & National are promising to spend more Chinese money , to prop up our bloated welfare state .
..... Labour have even dropped the incentive of WFF , to encourage folk to seek work , and to pay lower tax ...... by offering WFF to beneficiaries , a $ 2.8 billion + election bribe , the stable door is thrust wide open ... ..
Vote Greens ! .... for no other reason , than to send a message to both National & Labour :
Stop spending money which we have not earnt !!!
will do...! Roger that Roger......I've got clearance Clarence.....sodding duopolies making my piss come back to me in their backdraught.......I'm all wet so might as well so some seeds.
Chinese boys not so happy to see Dr.Russell with his erection frag though.....!
There are pleanty of alternatives to property as an investment. If you want to direct people away from property, target the banks, stop making ridiculous statements like that. If banks would give 95% loans on shares, or bonds, people would be dumb enough to buy them, and the price would hit the ozone layer.
Currently poor kiwis,on low income have an equal share in the soe's as the rich. Let them have something, don't try and take that away from them as well.
This is shameful ogliarchal nonsense, selling the only assets of the poor to the rich. Lets not be irresponsible like former generations, lets keep something for future generations to enjoy. They will have unnafordable petrol, a mountain of debt, climate change, depleted fisheries, and to top it off you want to take thier assets. They are already in debt for your pension, and reckless disregard for the enviroment, stop stealing from those with no vote!
That's absolutely correct. Flogging off the SOEs can only make the rich richer and the poor poorer, which doubtless is the whole point of the rich flogging off the SOEs to other rich people at the expense of the poor.
But have they really thought it through? The electorate that has nothing, has nothing to lose. The 'Occupy Wall St' type protests could morph into something far worse for the people who steal the last assets of the "underclasses".
Not sure who the target was ther skudiv....but ., yes asset sales by this administration are not so much shortsighted as intentionally devious.....showing a willful campaign to place considerable ownership in the hands of those who through their own greed have left decimation in their wake.
and you don't have to look that far back to find it wasn't just foreign interests that rained carnage upon our economy.
In fact if you want to go back and read the Tranz Rail Story it reads more like a textbook 101 on how to relieve the punters from their money at both ends and get away with it scott free ..................a knighthood thrown in boot........
Now to an FX boy that's gotta look like a turkey shoot.
Gummy wonders why it is that foreigners wish to obtain stakes in SOE's and in other key Kiwi assets , whereas the citizenry seem to be obsessed with buying residential properties .....
.... are those foriegners privy to some knowledge , to some information that we're not clued in to ?
Meebee businesses actually are better investments than houses ? ....... pbssssssst , nah !
Sell local government businesses? Could do. There aren’t many local government-owned businesses in the narrow sense of term. There are some stadia, airports, shareholdings in airports and ports, Kiwibank franchises, aquatic centres, business development entities, tourism promotion entities. Nothing startling that I am aware of. And in no case that I am aware of would any of the operating entities be desirable investment opportunities – obviously the shareholdings in major airports and ports is a different story. Most of these “businesses” are ratepayer subsidised money sinks.
It’s a different story outside of the obvious “businesses”. Most of local government money is tied up in land (parks and reserves), roads, water, sewer, stormwater and solid waste. To sell these assets off would require a total, first principles-based overhaul of the structure of local government. Having spent some years working at a senior level inside local government I believe that our Councils are an anachronism and could easily be largely dispensed with and no-one would notice. Let’s do that first and then flog the assets off.
So possibly an interesting idea from Mr Barnett but if we ever got to the point of selling those assets I am sure we would have forgotten his rationale or what the benefits were supposed to have been.
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