Recall the Nats’ promises on the tests for proceeding with asset sales (“mixed ownership model”):
The Government’s five tests for proceeding
The Government has decided to pursue extending the mixed ownership model after being assured the following five tests can be met:
- The Government will maintain a majority shareholding stake by owning more than 51 per cent of each company.
- New Zealand investors will be at the front of the queue for shareholdings, and the Government is confident of widespread and substantial New Zealand share ownership.
- The companies involved will provide good opportunities for investors.
- The capital freed up will be used on behalf of taxpayers to fund new public assets and thereby reducing the pressure on the Government to borrow.
- The Government is satisfied that industry-specific regulations will adequately protect New Zealand consumers.
Surprise surprise, they’re now trying to break the first bullet point promise:
Loophole allows sale of over 49pc
A loophole in the law covering partially privatised state assets will allow much more than 49 per cent of the value of the companies to be privatised, providing the extra shares do not carry voting rights.
The Government has pledged to retain 51 per cent of the four energy companies it has put on the block, starting with Mighty River Power later this year.
But a “minor policy decision” by ministers, revealed in a Cabinet paper released last week, shows that the 51 per cent limit, as well as the 10 per cent cap on individual shareholdings, will apply only to voting shares.
The Cabinet has agreed “the 10 per cent and 51 per cent restrictions should be calculated on the basis of voting rights rather than the total percentage of all securities held (including those with non-voting rights)”.
The wording in the Mixed Ownership Model Bill, which has had its first reading in Parliament, would ensure control of the companies remains with the Government.
But it would not prevent the companies – with shareholding ministers’ approval – issuing or selling non-voting shares, diluting the taxpayers’ slice of the dividends and profits the companies generate.
It isn’t a “loophole”, it’s simple a lie. The distinction between voting and non-voting shares is just a smokescreen. National clearly promised to retain 51% of the income from these public assets. Here’s a Treasury document quoting Bill English on mixed ownership:
“Government will maintain 51% of companies, retaining control and getting dividends”
And here’s a Nat press release:
Under mixed ownership, the Government is foregoing up to 49 per cent of the future income from the companies involved.
I’m sure there are many other sources – all the promises were about retaining 51% of ownership and income. So add this latest move to the long list of Nat broken promises, withheld information, and sheer incompetence over asset sales.
Winston Peters sets out further concerns about this latest development, and Labour are planning a new campaign for a Citizens Initiated Referendum on asset sales. Hey Peter Dunne – are you going to vote for this latest lie?