Partial asset sales and caring for NZ’s economy

It was made very clear in polls before the November 2011 election that more than 70% of respondents wanted our publicly-owned state assets retained in NZ ownership, not 49% sold off to the highest bidder.

The incoming National government chose to ignore this expression of New Zealanders’ views, and has been taking steps to change legislation to allow the sales to go ahead. The call for a citizens’ initiated referendum on the asset sales has been dismissed on the grounds that the 2011 Election was the poll, as if all who voted wanted every last promise of the National Party implemented, without the right to examine it further.

Several important drawbacks have surfaced since the election.

We were told that the money raised was to retire some of our public debt, or maybe to fund anything else we needed – a very elastic windfall, it seems. Now we are told that the amount likely to be raised will not be 7 billion, and, indeed, was only ‘a guess’ by the Minister of Finance! ‘Counting your chickens’ comes to mind.

Do we seriously trust our country’s reputation and autonomy to people who seem hell bent on selling our assets – and land – to anyone with a deep wallet?

Another fish hook is the Maori Party’s insistence on a clause in the sale process that will safeguard Te Tiriti rights, a factor which may well reduce the value for prospective foreign buyers, even if they are not constrained by it. Selling only to New Zealanders will not necessarily keep the shares in this country, either, because there can be no regulation forbidding the on-sale of shares to anyone else. Nor can there be safeguards to prevent a large shareholder selling off part of the holding, e.g. a dam. Nor is the government insisting on the buyers making a commitment to sustainable development – a serious omission in the case of Solid Energy, which wants to expand the mining of coal and lignite, adding to already high CO2 emissions for our fragile world.

It has been rightly said that even partial asset sales would be selling the goose that lays the golden egg, given the substantial dividends paid to the government by these energy companies, averaging 14.5% over the last 5 years. (From a recent Treasury report). A certain sum may be paid to the present government, but the next government would have nothing – no dividends, no capital assets.

Another sure result of selling energy companies would be a rise in electricity prices to the consumer. Shareholders require profits – at our expense – and the poverty gap widens.

Where is the fiscal sense in any of this? After giving tax breaks to the wealthy, we find that the tax take is much lower than expected. Is this what happens when a share trader runs the country, and the Finance Minister makes assertions based on guesswork? Is the government concerned only with the economy over next three years? Is this responsible governance?  Tricia Kane


  • Tricia Kane is a retired librarian and a grandmother
  • Image: Werewolf
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