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.
@ Simon and Softstarter – sorry but I was Just thinking of my name appearing alongside a list possible family names of some real Mums and Dad investors. … don’t you just love the term – it’s so cutesy and inclusive and makes you feel you and your savings have got to be so secure.
Mr and Mrs -
Aldgate, Whitechapel, Hawkins, Hotchin, Hart, Watson, Fay, Brierley, Gibbs, Richwhite, Judge, Smith, Hill, Hubbard, Myers, Bond, Richardson, Thompson, Alan, Lilley, Border, Chappell, Bright, Kupe, Equiti, Corp, Wine, Box,
Perhaps this is all part of John Keys plan to become “inevitably part of Australia”… if they own half our Strataegic assets, half the population live there already, not much left to annex.
Sing it with me ….Advance Australia Fair…
Slippery Key delivers policies that start a slippery slope of privatization. Keep it simple and stick to the real issue of economic sovereignty. Key is a margin trader who does not care which way the trades go. His mate Mark Weldon needs favors returned and those who got the big tax cuts can buy the rest of us out of our shares in the SOEs. We own them now as shareholders. This is treachery and stupidity to pay for the tax cuts the country could not afford. Let’s march in the streets and see if Key can keep his word on anything
Our banking assets are gone, Kiwibank while great is a drop in the ocean, once the power companies and the water companies go, food production is bought up by foreign corporates (Watties was history years ago) there will be no country left to be loyal to.
Every individual for themselves.
A Right Wing heaven.
@Monty
‘In case you had not noticed the country is in significant debt and it is getting worse’
Last I remember NZ’s Government debt was at 30% of GDP which is low compared to the rest of the OECD. Most of our debt is private debt which is over 100% of GDP. So increasing government revenue isn’t a major concern for solving this issue.
‘$300m per week is being borrowed to fund the massive spending obligations that Cullen placed upon the public purse’
Yes, Bill English also constantly blamed Labour for all of New Zealand’s economic problems. But National has been in government for over 2 years now and the longer the right play this card the more ridiculous they are going to look.
‘There are also fundamental questions such as why does the Government need to own 100% of the power / utility companies. What is herantly wrong with the public being able to purchase shares in a public utility company.’
You always speak as if you are a right winger and I’m suprised that you don’t even have a basic understanding of the sharemarket. If the Government sells shares in SOEs then the shareholders are going to demand dividends. How are the SOEs going to pay these dividends. The only way they can, they are going to raise prices. This could be somewhat justified if the government was going to reinvest the capital gained from selling the shares back into the SOE to increase future profits, but to my knowledge John Key said it would be used to pay for other services + paying back debt.
‘I think John Key did address these issues very weill on TV last night and I think the counter-arguement that Labour are putting forward is weak and desperate.’
The insults/emotive language you and others always add to your comments against Labour do nothing to assist your argument in any way and they never have and never will. It suggests bias and that your entire argument may not be based on logic, and that what you are saying should be taken less seriously.
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt There you go, were right down the list at 25% of GDP for public debt, placed 97th out of 131. The US is at 58% and Japan is at 198%.
The Shock Doctrine is alive and well in Key’s world – the “debt crisis” requires radical change – yeah right
Point was, that ‘mums and dads’ contribute a little each week from their wages, backed by the employer, and do not buy up shares as a replacement for their retirement funds, as I’m sure you well know.
They buy them (or CAN buy them) as part of their retirement funds though. Now Kiwisaver fund managers have slightly more choice for investments, but still with a majority govt holding.
Any suggestion that ‘mums and dads’ stop investing in kiwisaver and buy genesis shares instead to pay for retirement is a crock.
Not what i’m suggesting, and I don’t think many would – direct share trading by individuals is a risky business, as anyone with a modicum of financial literacy knows (bit like some finance company investments). That’s certainly one suggestion that should be scoffed at.
Again, nice attempt at spin, but easily swatted through mid wicket for four.
I’m not spinning if it’s what I believe (at this stage)! Hopefully I just delivered a flipper that hit you low on the back pad!