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Monday, April 30, 2012

Peter's poll

Peter Dunne is running a poll on asset sales. Presently, over 90% of respondents are opposed to the sales. I hope Mr Dunne, who professes to listen to the people, listens hard to the responses he's called for. Here are some of them, lifted from the Peter's poll. Apologies for grabbinbg the comments of others, but they are reasoned and reasonable people, judging by their words.

  • Dear Peter Dunne, I was in the UK during the years that the Conservative government under Mrs Thatcher privatised most of the UK's publicly-owned assets. This is now widely seen as a misguided policy, and many of the difficulties faced by the present UK government and economy stem from these times, as many economists are pointing out. Looking at the international scene, we do not see the growing superpower nations with policies of allowing the private sector take ownership of key strategic, state-owned assets - there is a clear reason for this. The National government has yet to be convincing that this policy is anything other than ideologically driven. I have heard that opening these organisations up to external capital will allow them to grow and develop, but this too is specious, as the SOEs can already (quite legitimately) engage in Joint Ventures, thereby increasing the capital available. Even the 49% argument is specious....things change, and who is to say what the next National government will do. We are in the privileged position in this country of strategic advantage long-term, as the world scrabbles to find potable water and food to feed the ever-expanding population, and hence our land, food production and underlying infrastructure resources are critical to maintaining this longer-term advantage (I accept we are currently seen as a low-wage economy, but just wait till the crises start to hit!). You seem to be a man of integrity, a decision to stand up to this government requires vision as well, and I sincerely hope you consider the wider implications of the situation, and thank you for taking the time to read this note.
    Posted by andy cunningham 10.51AM, 30 Apr 2012
  • Dear Peter Dunne, you say you are the voice of the people in our parliament. You say it is vital for politicians to listen to the people. To retain any credibility on the matter of asset sales, United Future must listen to the electorate and withdraw any support for the sale of our state owned assets. To do so will take courage and will win enormous respect from the people whom you purport to represent. To do so will also show regard for our future generations - today's youth, today's infants and tomorrow's as yet unborn future New Zealanders. It is our duty as adult citizens to retain these assets on their behalf. Short term gain, short term debt write-downs, may help well-off New Zealanders who have money to invest now - but will not help our future citizens in the long term. The people of New Zealand have spoken on this issue. We are engaged and articulate, We understand the issues. We will not be fobbed off. And, Mr Dunne, we are watching you. Do not disappoint us.
    Yours sincerely
    Rosemary Penwarden
    Posted by Rosemary Penwarden 10.23AM, 30 Apr 2012
  • PLease have the courage to vote against asset sales as proposed by National. It's clear that the vast majority of ordinary New Zealanders are opposed to the proposal for many good reasons as appear in other comments.
    Posted by Paul Hill 10.59PM, 29 Apr 2012
  • Mr Dunne, you seem to be a man of principle and someone who wants their contribution as a politician to have a lasting positive effect on our country and people. It is quite possible that with our current balance of power, your vote may be the one that makes all the difference.
    I can think of no other issue since the banning of nuclear powered ships that presents such a clear example of New Zealanders imploring their representatives to listen and take a principled stand for the good of the country. I'm sure John Key will be angry if you stand up to him and say no, but voters will respect you for it.
    This could be your most powerful opportunity to leave a legacy people remember and assets our grandchildren can enjoy.
    Posted by Mark Prebble 5.52PM, 29 Apr 2012
  • The issue the Government needs to address is that has insufficient tax revenue, disposing of revenue generating assets just compounds the problem, reinstating 40 percent tax rate over $200,000 yearly income would make more economic sense, oh and if the wealth have an issue with it, they can go to Aussi and pay 47 cents in dollar.
    Posted by Tony van der Lem 5.47PM, 29 Apr 2012
  • J. Smith's comment says it all. Selling these crown jewels would be a crime and flogging them off for less than half their true value, as this government presumably intends (based on previous asset sales) would be doubly criminal.
    Posted by David Hodges 5.25PM, 29 Apr 2012
  • “Mixed ownership model” is destined to fail
    The Key government plans to sell 49% of four state owned energy companies – Mighty River Power, Meridian, Genesis, and Solid Energy, and a further 23% of Air New Zealand. It is claimed that $5–7 billion can be “freed up” to reduce debt.
    What really betrays these asset sales as an ideologically-based policy is the maths. Financial analyst Brent Sheather has calculated that the assets are earning a higher income than the cost of borrowing.
    Currently, the cost of borrowing is 4% for ten years, so the cost of $6 billion would be $240 million. The forecast dividends of the four SOE energy companies average $449 million over the next five years, 49% of which is $220 million. Add $20 million for selling 23% of Air New Zealand and the lost dividends average $240 million a year.
    Now, add the sales related costs estimated at 3% or $180 million, plus the expected improved performance from substantial recent capital investment, and there is no way for New Zealand taxpayers to come out ahead.
    As the Green’s co-leader Russel Norman has said:
    “We have seen this before. Like our energy SOEs, Telecom had invested significant amounts of capital in building a modern telecommunications network in the years before privatisation. In the years following Telecom’s privatisation, dividend streams for its new private owners doubled, then tripled within six years. History now seems to be repeating itself with our energy SOEs. National has allowed the taxpayer to build up the asset, only to then on-sell it to the benefit of others.”
    The initial public offerings (IPOs) will be snapped up and passed on to larger offshore players, who with only a combined holding of 25% will enjoy foreign-owned status under the Overseas Investment Act (2005),[20] with ample influence at 49% to sway policy. So expect higher power prices.
    Over the longer term, asset inflation will provide a mega windfall for shareholders.
    In 1999, the NZ Herald reported that: ‘Over the past 12 years 40 state-owned commercial assets have been sold, realising $19.1 billion. As at August 31, 1999 these assets had an estimated value of $35.7 billion, $16.6 billion above their original sale price. … The privatisation programme has been a huge windfall for overseas investors. Just over 79 per cent, or $13.1 billion, of the increase in value has gone to offshore interests.’
    Posted by J.Smith 2.25PM, 29 Apr 2012
  • Dear Peter Dunne,
    You have asked the question: Do you support John Keys proposal for the partial privatization of State Owned Enterprises?
    In response: More than do not support this proposal, vehemently oppose it and at the same time wonder at the socioeconomic sanity of those that do support these proposals of Keys whereby Key gets to achieve the long awaited pay-day to the Big big Corporations who have been jostling decades for a piece of us.
    There are somethings to be aware of as you decide what you are going to do about Keys plans and about your own political future.
    You call your political party United Future but we need United Now because the Future could be too late for us.
    Did you name United Future because you felt that in some way this represents the reason you are in politics?
    You see now here it gets strange. At the moment you are giving political support to a minority mandated government and at a time when this government is acting like the whole damn country is behind its plans to sell our future to the highest bidder. The sociopolitical spinoff of our present governments arrogance is mass political awakening. Ev
    Posted by Robby Torckler 10.23AM, 29 Apr 2012
  • The state assets being proposed for sale are essential intrastructure, supply renewable energy and have been created over the last 80 years. No government has the right to sell these especially when there is a clear majority opposed to that sale. The assest are currently owned equally by all New Zealanders. If they are sold then the wealthy and overseas investors will have gained and the average New Zealander will have lost - increasing inequality which is an undisputed bad outcome. The Government should meet its revenue shortfall by reversing the unaffordable tax cuts. The sale is also bad business because future revenue is reduced and selling assets to reduce debt does not improve the Balance Sheet. It is ideologically driven and basically foolish because selling high returning assets to pay off lower cost debt is just dumb. United Future should grow a backbone and oppose it instead of always having a dollar each way.
    Posted by Rob Fergusson 8.26AM, 15 Dec 2011
  • I don't disagree outright that selling state assets is a bad thing but if they are making money that taxpayers then don't have to pay in tax why sell them so long as they are run in a way that doesn't give them an unfair advantage in the market? and furthermore being a small country many services tend to be dominated by single large providers such that small providers even if they can provide goods and services of a quality and price to beat the major players the market is generally to small for investing in the production capacity and distribution to make sense
    Posted by Grant Buchan 10.54PM, 8 Oct 2011


Anonymous said...

"thank you for taking the time to read this note."
My God Andy, if that's a note, we are going to have to set a few hours aside to read your letter when you write it.

robertguyton said...

Peter'll find time - he loves to be noticed.

Thomas W said...

Hi Robert, thanks for recording these comments! All true, asset sales will make both the Government & NZ citizens poorer.

Asset Sales: a strategy for poverty.