Is anyone else surprised that National devoted their launch to talking about asset sales, a policy that the Sunday Star Times tell us this morning only 14% of the population support? And to top that off, they tried to dress up a previously announced money-go-round as some kind of new fund. We have been saying asset sales is the defining issue of the election, good to see National making sure it is.
Asset sales suck!
!
It truly is the height of irony that a PM who owns so many assets himself is trying to convince us that owning assets is a bad thing.
Arguably it might have been better if Clark and Cullen had had another term, then we’d be really screwed.
It might take that for people to wake up.
Keep our assets and create more.
More government owened assets equals more jobs.
Apparently assets are only ok in the hands of private individuals according to Donkey
I agree with Ed, the State should create and own as many assets as it can and we could have full employment and the State could look after us and make sure we live our lives in the correct way in happiness forever.
Meanwhile, in the real world, I’m surprised that you’re surprised that National is addressing the proposed mixed-ownership model*. To me it was quite a straight-forward thing to do.
For some of you, the following might but “TLDR”. The summarised version is “Because it’s smart politics, duh”.
Labour is talking about it lots (it’s their main campaign plank). National can respond by either ignoring it or addressing it. Both have risks and rewards. Ignoring it can be effective if it’s perceived as being a minor issue and easily put aside (like gay marriage). Ignoring it is usually preferable as it means time and energy does not need to be spent rebutting it, and it means you’re more likely to be able to “control the message”.
It can be risky if it is a major issue. Labour has done well in making this an election issue – they’ve put the majority of their election advertising into it. So it’s hard to just ignore. So you address it. You have to.
But then you have to choose how you address it. You need to change the narrative, take any perceived sting out of the issue. So, you take the perceived negatives of the issue and turn them into positives. You say you’ll sell bits of power stations (remember they’re bad for the environment, make our power prices high etc) and use the proceeds to buy schools and hospitals (and remember they’re good things, healthy and educated strong people lead to a healthy and educated strong economy etc).
Then you have a situation where you can announce $6-7 billion in spending on really good things that make people happy, and force the opposition to rubbish it. Then look what happens.
Opposition is forced to say taking money from power companies and spending it on schools and hospitals is bad. If they start talking about dividends and money, you can criticise them for prioritising company profits over kids and sick people. If they say the billions of spending should be taking place anyway, then you can challenge them to stop up and incorporate it into their policy. If they say they will, you have to make them explain where the money’s going to come from, and see if they’ll go harder on raising taxes.
Mixed-ownership models** have a potential to go from people asking “Why are you doing this?” to asking “Why aren’t you all doing this”?. that’s why you devote some time talking about it, because the potential benefits far outweigh the risks.
And what happens if Joe Voter sat there and thought about it for a minute and thought yes, it would be good for the State to keep control of those assets, give investors (including Kiwisaver) somewhere within NZ to invest, while building a heap more schools and hospitals and not increasing taxes? If that happens, and you actually manage to not only keep Labour’s main (and perhaps only) point of opposition at bay, but to knock it down completely, then they have nothing left. That’s an opportunity too good to pass on.
*I’ve learnt from Clare Curran that half the job is taking control of the message, so this is me doing my little bit.
**Fast learner.
Actually, you’ll find that pretty much all economists agree – they really do think that having everything owned by a few rich people is better for the economy and don’t seem to realise that if everything is owned by a few then the many have nothing and become slaves by default. Most economists these days are so wrapped up in their delusional monetary theory that they wouldn’t know an economy if they tripped over one.
Except that it isn’t. Most of us remember what happened last time assets were sold. We’re worse off due to having to either bail out the business (BNZ, AirNZ) or having to stump up for the services to be upgraded because the private business didn’t (Telecom).
Sure, you’re going to say that we’ll keep control but NZ law doesn’t allow that – the majority shareholder cannot do anything with the business that would be detrimental to the minor shareholders and the minor shareholders are going to want to maximise profits. If the government tries to do anything with a mixed ownership SOE that would benefit the country but would minimise profits then the minor shareholders would take them to court and win. By selling off even a small amount, we lose control.
JamesMeager, when asset sales (Partial private/public partnership) was proposed the PM and MOF said the proceeds were to pay down debt and stop our huge weekly borrowing? If not what did you understand it was for?
The irony about the “real world” mantra is it is usually based on things economists say. Most economists live far far from
the real world. The rarefied air of high level banking and finance is no more real world than that being breathed by factory workers, and many economists are simply academics in private employ
My two cents, not much I know. They hock off part of the assets for profit and get some moola. But long term they would have had more moola out of the assets from the revenue stream had they not hocked off their shares!
you vote Spud, you breathe and you are part of our society, your 2 cents has as much value as the next person. Spend it baby!
Thanks Tracey
Cyber hug 
@JamesMeager: October 30, 2011 at 10:15 pm
“Mixed-ownership models** have a potential to go from people asking “Why are you doing this?” to asking “Why aren’t you all doing this”?. that’s why you devote some time talking about it, because the potential benefits far outweigh the risks.”
Except that those of us who have dealt with them, especially in the US, mixed-ownership models are extremely complicated – there’s a lot that goes wrong – and this is because the opportunity for mix-ownership arises in areas of the economy that are . . . . well . . . complex.
The downside is huge.
For example, ask yourself ‘who is going to handle the sell off?’
Treasury? . . . after the way they cocked up South Canterbury Finance?
Private consultants? yeah, right – f*** me once, shame on you – but f*** me twice . . .
There’s a lot that go wrong here, James – it’s Chinatown.
:after the way they cocked up South Canterbury Finance?’ But did they? Didn’t they advise Bill English NOT to renew the guarantee?
Owning revenue generating assets is only ever worth while if the revenue gained is far greater than the interest you are paying on debt. This is not the case for NZ.
To me having full ownership of companies like Meridian in this day and age is the same as having 10s of thousands of dollars saved in the bank when you are mortgaged up to the hilt and could potentially struggle to meet your repayments. Economists like Gareth Morgan calls these kinds of people Turkeys.
It is precisely because of this kind of mismanagement of funds by governments and individuals alike in the last decade that we have been faced by a global economic crisis. Too many people failed to have the foresight to recognise that any boom is followed by a bust. This is a natural cycle yet by 2008 there was not a cent left in the taxpayer’s purse.
If you want to do well as an individual you always keep your debt under 30% of your income. And when you have achieved this THEN you save save save, NOT spend spend spend.
The same goes for the government. This allows room to move when the sky falls – e.g recession, natural disasters etc.
Partial asset sale is by far the best proposition on the table for reducing debt NOW and getting our books back in order.
Rebecca are you really suggesting that an annual return of around 15% is worse than a debt interest rate of 6%?
Bear in mind the PM has moved the goalposts (again) and the asset sales are not being applied to pay down debt so your last statement is partially disingenuous?
Labour has 16 days to focus on the main fear/issue, asset sales. This has really always been your only chance, to make it a choice between selling assets and not selling them and a vote for national = sell (as they have pitched) and don’t sell = Labour.
I suspect the dishonesty of key strategy has been part of this, but perhaps it’s too subtle.
I’d be pulling all my current advertisng, and reprinting, re releaseing, repainting.
1 message.
Vote Labour to keep our valuable assets
Then leave it to the electorate.
I have a question, genuine, not sarcastic.
National is seeking a mandate for asset sales at this election.
If it polls less than 50% will it consider it didn’t get that mandate?
If it, together with ACT polls less than 50% will that necessarily mean they won’t have the seats to get it through on their own?
Is 50% a genuine mandate?
Steven Joyce of Hollow Men fame seems tobe the real force behind National. His integrity was more than questionable a few years ago, has he changed (cue tui ad)… I’m beginning to see similarities with Karl Rove
For those who say that the top earners pay too much tax, what if paying it wasn’t “hurting” them?
“The report’s 2004 data – the latest available – reveals the richest 10 per cent collectively possess $128 billion in wealth, with median individual wealth of $255,000. In contrast, the poorest 10 per cent collectively possess $17.2b, with median individual wealth of $3200. While the richest 1 per cent held 16.4 per cent of the country’s net wealth, the poorest 50 per cent owned just 5.2 per cent. “
What amounts to a “mandate” to sell the assets?
Do these results (with another part of the article stating that 75% of NZers dont want asset sales) mean people won’t put aside party preference or ideology and vote against something as important as asset sales?
” Full results were: 47.4 per cent of respondents were strongly against asset sales, 28.5 per cent were more or less against, 14.6 per cent were neutral, 8.1 per cent were more or less in favour and 1.4 per cent were strongly in favour.
Meanwhile 3.8 per cent were strongly in favour of raising the age of superannuation, 13.8 per cent were more or less in favour, 20.2 were neutral, 26.6 per cent were more or less against and 35.6 per cent were strongly against.
The Massey survey was sent to 2000 people selected at random from electoral rolls. About 43 per cent of participants had so far filled out and returned the 50-page questionnaire. “
Sigh, so it’s not true, people do want to talk about the secret tape and not asset sales?