Prime Minister John Key has said he is confident Genesis Energy can be floated this year despite the lacklustre performance of the floats of Meridian and Mighty River Power last year.
Key told a post-cabinet news conference senior ministers had discussed the Genesis float last week and he had received advice from Treasury overnight that it was confident it could be floated.
He said a decision was not due today, but would be made "soon." He noted Meridian and Mighty River Power had done better recently and were still expected to pay good dividends.
Elsewhere, Key said an election would be in the second half of the year and he was still considering the exact timing.
He noted that the G20 Summit due in Brisbane on November 15 and 16 was a "complicating factor" when considering the timing, given it could take weeks for any election result to be clear. Australian Prime Minister Tony Abbott has invited the New Zealand Prime Minister to attend the G20 meeting.
Key said it was unlikely he would attend in the latter stages of the election campaign, but he would not rule an election in or out either before or after the campaign.
If an election was held in November it would require either the Prime Minister to travel to Brisbane in the middle of the campaign, or for a Prime Minister to be elected and a coalition to be formed in the previous two weeks.
He said he would clearly indicate to voters which minor parties National would reach accommodations with in the weeks before the election. He suggested announcements about the possible deals for electorate seats could be announced 2 to 3 weeks before the election.
Meanwhile, he said he agreed with Finance Minister Bill English that wages were likely to increase this year as the Labour Market tightened and skill shortages developed.
He said he expected pay increases around the 2-3% mark.
He declined to say how much the Government would increase the minimum wage when it decided in April, except to say the Government had increased the minimum wage every year since 2008.
Visit to Australia
Key announced he would travel to Sydney after Waitangi Day celebrations on Thursday to meet with Australian Prime Minister Tony Abbott on Friday and Saturday. They are due to jointly attend and speak at a Trans Tasman Business Circle event in Sydney.
He said he would thank Abbott for the invitation to the G20 and discuss their Governments responses to the New Zealand and Australian Productivity Commissions' respective reports.
He said the hosting of the joint Cricket World Cup next year would be discussed, as would New Zealand's objection to the Australian Government's exclusion of various benefits and services to New Zealand citizens working in Australia.
Key said he would be joined by Finance Minister Bill English and five other ministers, Steven Joyce, Judith Collins, Tony Ryall, Amy Adams and Michael Woodhouse, for a joint meeting of Australian and New Zealand cabinet ministers.
(Updated with Australian trip details)
18 Comments
I support the SOE partial privatisations but this has got to be the dumbest politics.
National should be sitting on this until after the election and then going ahead. The last two floats have not performed well and supporters of this are not as passionate as those against it. National should be asking themselves whether this is worth losing the election over.
@peakeverything , the current 100% ownership arrangement is too cozy for politicians to use it as a piggy bank and appoint their cronies into the senior positions .
The increases we have faced under 100% state ownership have been horrendous so I support the breakup of this cozy price fixing monopoly .
Also , when it comes to funding expansion or incurring losses , it can be done with privaste capital instead of taxpayers money
Lastly , the government has no business in running businesses which it has never done competently anyway
Well it would be interesting to see now that most generation is run as a private company how a government owned company does. Don't get me wrong I did economics at uni and understand the principal of private markets, I just suspect that a lot of the benefits are bollocks. By your comments its as if you think only the government appoints their cronies, I can assure you that private eneterprise is not so different. If as you say incurring losses can be kept in private hands that's great but it seems more often than not only profits are privatised losses often seem to end up on the tax payer.
Will be interesting to see what happens when our overvalued farm land prices start to tank where the losses will end up.
It hasn't been run as a business, it's been run as a public service.
The first move as a business would be charge insurance for surety of supply,
then to look at recouping all the long line/low current costs rather than spread them out over the whole country. Can't just cut off all the low users and distance customers if you're a government for the people....but a corporate can certain ask such people to pay for their equipment & zone.
And refinance with government ownership would be a loan for capital work, and would show in the budget and be done at cost with oversight. The government would be unpopular for passing on the costs. Private corporations can say "go elsewhere then"
Yes, on multiple levels,
You just have to look at how that PV expansion is panning out in Germany. Solar panels rob the peak charging regime so its a double whammy, less kwh and a lower peak kwh charge means a lot less profit.
Also, lets assume the Green's get in,
a) they are pushing PV's and "reasonable" feedin tarrifs so its a Q of when not if.
b) They will change the regualtion system, taking profits out short term if nothing else (see a)
The P/E is crazy even in a BAU scenario.
regards
Well, yes and no.
I mean unless JK stands up and says we looked at Germany and decided to sell quick, this is speculation on your part that it is the main driver. Not unreasonable, I'll agree with you, its what I would do, but then Im not JK.
However bear in mind the Govn stepped in for chorus and is trying to stop the ADSL price drops, it could easily do the same and block significant feedin numbers and make the tarriffs un-attractive for years....well 3 at least.
If indeed it see's such medium term events then with peak oil, why isnt it selling Air NZ? if anything that is clearly urgent, I'd sell it all off tomorrow while no one thinks its going to go out of business.
I'd suggest really its a political thing, JK looking for a PPP seed fund to use in his re-election....another failed fiasco. Could also be a "here Im one of your free markteers, trust me foreign markets / lenders"
regards
The Technophiles have been raving about ink-pv and algae energy for a long time, we've had flexible panels for over 30 years now. It just never comes to town as the startup and business project costs just aren't feasible.
Until the German push to PV and the ramp up (and sudden collapse) of Chinese production of panels for those projects it was barely feasible to use existing panels.
If the government has information about some up and coming technology in the pipe that is going to obsolete the power companies.... well the word is "insider trading" :) while I'm sure the taxpayer will foot the bill for the fines, there's rather solid jail time and personal seizures that goes with that crime. Best reality TV yet.
Far more likely is that they want liquid cash, they want to "unbundle" (aka privatise) the electric system so it more resembles Australia and the US, and they're want to prop up a rather sad flat gurl known as "Nz-sexy" ...where else are the kiwislaver folks going to find local cheap dependable share packets?
In 2006 the Australian Government incentivised the installation of "distributed" household roof-top Solar PV with extremely generous subsidies
Now it has taken on a life of it's own and going gangbusters, subsidies much reduced
On the BBC last week it was announced that with over 1 million households with roof-top solar PV installations, Australia, with 22 million population, and 9 million homes, has the second most "household" installations behind Japan, but ahead of Germany and USA with 300 million population
Yes my Australian friends all jumped on.
However they're already cutting back subsidies and splitting hairs over payment vs credits, kWh unit cost (sold/consumed) and transported. ie a kWh sold back on to the grid, is still a kWh carried and thus, goes the reasoning, the cost should come off the alternate generation supplier.
I can see how other companies , like Michael Hill Jeweller , Ryman Healthcare or like XERO , can expand their business , increase profits .... and reward shareholders ultimately with increased dividends and improving share prices ....
... I struggle to see how these stodgy old electricity companies can achieve this level of success for their backers ...
Having said that , a glance at the history of stodgy old steel manufacturing in the USA shows how a newer company ( NUCOR ) can innovate and steal market share off an incumbent ( US Steel Corp ) , and grow to 4 times the market capitalisation of the former blue chippest of all blue chippers ...
... let's hope something alike that can occur within the NZ electricity market ...
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