Finance Minister Bill English has ruled out the further selldowns in shares of the partly privatised state owned assets sold over the last year, including Air New Zealand, Mighty River Power and Meridian Energy.
"We have no plans after the election to sell more," English told reporters at a joint news conference with Economic Development Minister Steven Joyce. They were releasing a 91 page progress report on the Government's Business Growth Agenda of various micro-economic reforms aimed at improving the economy's economic growth potential.
"If you look at the crown's balance sheet, the assets that are there are not amenable to sell-down," he said. He pointed to various financial and structural problems with the likes of NZ Post, Solid Energy, Kiwirail and Landcorp.
He said Landcorp was restricted by negotiations over treaty settlements. Further initial public offerings (IPO) through the Government's mixed ownership model were not on the government's agenda.
"We're not going to be looking at large IPOs of state assets, and there aren't really assets that are suitable for it," he said.
Elsewhere, English said the Business Growth Agenda was a collection of microeconomic reforms. He said its aim was to lift the country's economic growth limits, which the Reserve Bank Governor Graeme Wheeler said last week was currently around 2.25-2.5%, beyond which the economy started to generate inflationary pressures that required higher interest rates.
"Over time I think we'll see those estimates lift," English said of the economy's growth limits.
He noted it had fallen over recent years, "but over the next four to five years you'd expect those to be lifting."
English and Joyce said the aim of the Business Growth Agenda was to lift wage growth from its current 13 year low.
"That's the point of them," he said.
The median increase in ordinary time salaries and wages for those who received a wage increase was 2.5% in the year to the September quarter, the lowest since the December quarter of 2000. Only 54% of wage and salary earners got a wage increase over the year to the September quarter, down from 56% a year earlier and the lowest seen in almost three years.
Joyce said workers should look at how low inflation meant real wage growth was relatively stronger.
17 Comments
Capitalists are rubbing their hands with glee.
Even the Economist gets it: The “labour share” of national income has been falling across much of the world since the 1980s (see chart). The Organisation for Economic Co-operation and Development (OECD), a club of mostly rich countries, reckons that labour captured just 62% of all income in the 2000s, down from over 66% in the early 1990s. Read more
Sadly, yes, seems we cant learn from history. Watch and weep not to far off I suspect. The only Q is which country, Spain? Greece? >50% youth un-employed. Pakistan almost broke and has a stockpile of nukes? All the nasty little flash points in front of us but its all OK its getting better.....just 6 years so far.
regards
Presumably in the year of the sale there can be a gain or loss on book value; I'm not sure how the power companies have fared in that regard.
Any year thereafter, there will be a reduction in dividends (so a negative effect) offset by arguably some lower interest costs on government borrowing. Given the government cost of funds is very low, my understanding is the dividend less interest equation will be significantly negative in the future. I don't believe the government plan an even modest surplus until 2015, so given the above, that surplus would have been greater if they had kept the assets, all else being equal.
In every country I can think of, the sovereignty and wealth of the Nation, which was once the embodiment of the power and will of the people, is being butchered and sold to the highest bidder. Everywhere, the Nation and the people within it, are under attack. Not from without by terrorists but from within. Because in every country the people who run the State have largely decided they no longer wish to serve the people but prefer instead to serve the interests of a Global Over-Class
http://www.golemxiv.co.uk/2013/11/the-new-world-order-part-1-the-destruction-of-the-nation/
steven,
I was and am vehemently opposed to the power company sales in particular. Nevertheless I accept that National campaigned on the idea, even if in my view on false pretences.
Revolution is not required. I would personally not vote for a party with Key, English, Joyce or Ryall in significant positions; regardless of the fact they now seem to be distancing themselves from any future sales as fast as they can.
Whether enough others share my views time will tell I guess.
Stephen, it isnt that I see it as "required" far from it. Its that I see ever growing in-equality and frankly the Govns didnt care. They and indeed we have brought this mischief on ourselves, so I see it as a probable consquence.
Now I dont think NZ is a powder keg, far from it, but looking at the huge un-employment in the EU and not much likelyhood of change, gotta wonder on how long before we see some rioting there. Ditto china, they have locked themselves into growth cant get out, one wonders on the result when they fail to deliver. I dont know about the US thats just kooky IMHO, might be bedlam or relatively sane...
As an aside in a way look at the Gains the Green's have made, that isnt a green gain IMHO, but a left wing gain. So a doubling of numbers more or less at the expens eof labour mostly...a pretty big lean and I dont see a long term sound path.
I go back to the instance of the Greek Parliment making sure their escape exit was free, makes me wonder.
regards
The more ideological of them proclaim that the state, whenever and wherever it tries to do good, will always and by necessity do harm.
Jeepers, I bet those remaining Chorus shareholders are wishing they had voted to put a stop to the public private partnership with the government to provide NZers UFB.
And that's not the end of it:
Chorus chief executive Mark Ratcliffe said withdrawing dividend guidance was a "regrettable but necessary step".
The company was making investments at "unprecedented levels", investing roughly three dollars in the ultrafast broadband initiative for every dollar of financing provided by the Government, he said. Read more
"We remain hopeful that as the major partner in New Zealand's largest public private partnership we can work with the government to find a timely solution to the current issues that works for all parties and provides Chorus and its investors with the certainty we need to get on with delivering this once in many generations infrastructure upgrade," he said.
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