Its always interesting the morning after a big announcement to look at the spin and lines that get trotted out. National pay a lot of attention to this stuff, and Crosby Textor and Mr Joyce have been working hard to get their lines and their “independent” commentators out there. Let’s just look at a few examples:
“Selling assets will give Mum and Dad investors a chance to get a stake”. Well, to start with Kiwi Mums and Dads already have a stake in them, since along with the rest of us Kiwis they already own them. For a large number of Mums and Dads they are worried about paying the power bill, not owning the company.
As an aside I find the omnipresence of Mark Weldon talking about how good this will be is hilarious. Mark is the CE of the NZ Stock Exchange, I kind of expect he might like the idea. Its in the same vein as bank economists being put up as the commentators on interest rates. Just a slight vested interested there.
“This will not increase power prices” So, what exactly will the new investors in these companies be looking for? A warm feeling of social responsibility? No, presumably a profit, which won’t exactly be helped by lowering power prices. There is a discussion to be had about how we best leverage our collective ownership of these assets, and whether the dividend policy needs to change to help address power prices, but I am damn sure that wont happen by selling them off.
“We have to sell assets and further slash government expenditure because we have a huge debt problem” Where to start? Perhaps where John Key said “we don’t have a debt problem, we have a growth problem.” Of course any government needs to be a prudent manager of the economy, but the truth is that our debt is quite different from the PIGS. Their problem is soaring government debt. In New Zealand the National Party inherited zero net government debt. It has increased under National’s watch, but even still not to the point of being anything like the PIGS.
If we are in such a parlous state, perhaps its time for John Key to look in the mirror, Two Budgets with tax cuts targeted at the wealthy and no economic recovery plan. Time for National to take some responsibility.
“Which schools and hospitals would you not build if we did not do this” Utter nonsense. This is pure spin developed to meet the polling results that New Zealanders want to see better investment in education and health. Investing in schools and hospitals is a priority totally seperate from the ownership of SOEs.
But my favourite piece of spin comes directly from the PMs speech
I am convinced that Air New Zealand would not be run as well, nor provide as good a service to customers if it was owned 100% by the government
Let’s remember Air New Zealand was bailed out by the 5th Labour Government after it was driven into the ground by its private owners. A bailout incidentally opposed by National at the time. For New Zealand a functioning airline is essential, and it was highly at risk without government involvement. As it happens I think one of the reasons Air New Zealand has been innovative is that it has had the security of government ownership.
There is more, and feel free to contribute any other myths and spin in the comments.