web analytics
The Standard

Asset sale disaster

Written By: - Date published: 7:45 am, December 5th, 2013 - 30 comments
Categories: ACC, Privatisation - Tags:

So the government are predictably having to lower their estimates of what asset sales will raise them.

They’ve done a terribly incompetent job implementing a stupid policy.  And unfortunately that terrible job has made the stupid policy even worse.

When they promised us $10 billion for our assets back in early 2011 they were already receiving warnings that they were running Solid Energy into the ground.  But they fully expected to sell half of it for a great sum.

When they began a policy that was against 2/3 to 3/4 of the public’s wishes, as well as against all the opposition parties, leaving them to ram through major changes on a bare majority in parliament… it was somehow a shock that said opposition parties didn’t roll over and came up with alternate policy, as is indeed their job.

They then went screaming “nationalisation! nationalisation!” misrepresenting that opposition policy, and are now blaming Labour/Greens and “unsophisticated investors” (ie their mythical mum and dad voter-investors) for running scared of a threat of … nationalisation.

Their crown jewel Meridian’s problems with Rio Tinto were visible a mile off, but somehow still struck them by surprise, and they claim you surely can’t blame them…

Now I really don’t agree with selling our power companies off.  For multiple reasons – security of energy supply and selling a profit giving asset to pay off a lower rate interest than the power-companies’ dividends chief amongst them.

But if you’re going to put your ideological blinkers on and do it, at least do it right.

The Government didn’t do as badly with getting a reasonable amount of money with Mighty River Power, in the teeth of Labour/Greens new policy.  Not good, but nothing like the disaster that was Meridian.

It’s National’s fault for not anticipating Rio Tinto and especially their fault for trying to sell too much of the same too quick.

When you’ve just sold a major energy company, massively rebalancing the stockmarket and investors portfolios, the next thing they aren’t going to want is… another energy company.

So despite the interest-free loan sweetners etc they got about half the valuation of their biggest asset.  It went for a song.

Now next up is Genesis.  To sell this next year would be insane.  If investors didn’t want Meridian, they’re going to want Genesis even less.

Sell it, and they’ll get a pittance.

Currently they’re claiming they’ll raise maybe just over $4.5 billion from asset sales including Genesis.  Their borrowing (remember Labour’s surpluses?) is down from $260 million / week to $110 million / week currently.  That means they burn through our cash producing assets in less than 10 months.  This isn’t setting us up for future infrastructure, this is burning through your major assets for petty cash.

That’s before they fail to receive as much as they expect from Genesis.

How tied are they to their ideological blinkers to blind them from seeing their next failure?

I guess we’ll find out next year.

In the meantime, we need 1,000,000 no votes in the referendum to send a message to Key – so make sure you’ve voted – and your friends and family.

30 comments on “Asset sale disaster”

  1. lanthanide 1

    Meridian and MRP at record low prices yesterday. 92.5c for Meridian and $1.99 for MRP. Analysis is that their prices drop when Labour looks more like it will win the next election.

    Act’s destruction is judged bad for National by the market…

  2. phil 2

    Good time for the Government to buy them back, eh?
    Just posted my Referendum Voting paper. It’s a complete waste of $ 9 million. It could have gone on the next Americas Cup campaign! It is clear now, that dimocracy is way too expensive, unaffordable and not working. If it’s not working, change it.

    • One Anonymous Knucklehead 2.1

      Buy? Nope. Receivers of stolen property don’t get their money back.

      Now, I’m not saying this situation is entirely analogous with receiving, but there is a further consideration: what better way to Tory-proof New Zealand strategic assets than by punitive reacquisition policy?

      The SOE model has failed. Neo-liberalism has failed, but until it hurts them in their wallets, the National Party’s owners will not resile from these policies.

      • Judge Holden 2.1.1

        No, what happened was that the Nats bilked everyone, including the Mum and Dad investors it conned into buying over-priced shares. That they said the companies were worth even more than the inflated price they sold them for amply demonstrates English’s massive incompetence. The programme has been a disaster on every possible measure.

        • jcuknz 2.1.1.1

          Originally I considered it a donation to help the government with some possible return.
          But when it came to the crunch I had other uses for the money.

  3. appleboy 3

    Heard English saying the most stupid thing yesterday. He said Labour ‘couldn’t have it both ways’, by saying National should not have sold the assets , and then complaining about what price when sold.

    Duh. We don’t agree with the sale AND we think you got a lousy price when you did sell them.

    These two ideas are entirely compatible!

    Media and Labour need to call the lying dick out.

    What a tosser, I guess that was a soundbite for the greedy/unthinking out there.

    • Disraeli Gladstone 3.1

      I think there’s probably a more subtle point than what English were trying to make. Which is that if the government sold too highly, then Mum and Dad investors couldn’t buy into it and it would all go to speculators. Which is why they had to sell lower.

      But Mr Clark here is absolutely bang on with: “and especially their fault for trying to sell too much of the same too quick.

      When you’ve just sold a major energy company, massively rebalancing the stockmarket and investors portfolios, the next thing they aren’t going to want is… another energy company.”

      That was the stupidity of the whole policy.

      • Naturesong 3.1.1

        Treasury did warn them.
        $2B per year is what they estimated the market could absorb iirc.

  4. Ad 4

    +100 Mr Clark

  5. Tat Loo (CV) 5

    Institutional investors got our best assets for cheap? Sounds to me like success for Keys mates. No fail there.

  6. Tracey 6

    I agree with tat loo. Especially on mrp which spiked up day one. Alot of keys former colleagues bought big and sold quick and pocketted the profit. Selling many power companies back to back contradicts so much of what mr key learned as a trader to maximise price for seller.

  7. jcuknz 7

    But for the sabotage on the part of Labour/Greens …….That is what I will remember about the event.
    I suppose I should be greatful to them in view of the current share price for putting this DAD off getting some.

    • One Anonymous Knucklehead 7.1

      Diddums, the nasty opposition parties came up with some policies that don’t suit you. It’s the risk you take, and after all, there are far worse things in life than losing a little bit of your money, Daddy.

    • framu 7.2

      oh bullshit

      asset sales are unpopular and its a political issue first and foremost – if you thought it was ONLY a financial deal – your an idiot

      if you were thinking about buying shares in the asset sales – and you DIDNT recognise that its a highly polarising political issue and you DIDNT ask your self what might happen when the govt changed – your an idiot

      if your going to claim that the only thing that affected the share price and overall result was the opposition announcing their policy intention BEFORE the shares went on sale – your an idiot

      The nats are in govt – not the opposition – i didnt realise that the opposition had so much power over the govt – those nats must have been quaking in their boots when that nasty labour party put a gun to their head and said “sell”

    • ropata 7.3

      yes it is all Labour’s fault that National was *forced* to piss away half the country’s finest assets :rollseyes:

  8. Will@Welly 8

    Key was working as a money man when the privatisation process began, so he knows how much money the speculators can make. Bill English was working in Treasury at the same time, he knows what sort of money that they too can make. Key knew he only gets one chance to sell these assets, keeping his buddies happy. He’s not interested in New Zealand, only what he can get out of it.

  9. Richard Christie 9

    Quite right, it isn’t nationisation, it is restoration or reclamation.
    The Labour/Green paries should stop being terrified of the term nationalisation, call it what it truly is and proudly adopt the policy.

  10. Matthew 10

    Taxpayers should be delighted at the foresight of Key and English to sell 49% of these Assets while they still had some value.

    The taxpayer has made some very good coin on these while the supposedly rich investor has lost out.

    It’s the best scheme to fix inequality anyone has ever come up with!

    • Lanthanide 10.1

      No, because the crown is losing the dividend stream that is the golden goose from these companies.

      The Greens have already done the maths that shows the government is $1b worse off by 2017, even after the proceeds of the sale is taken into account.

      Better luck next spin.

  11. Draco T Bastard 11

    How tied are they to their ideological blinkers to blind them from seeing their next failure?

    But it won’t be a failure to them. They would have sold it to the “worthy” so that those worthy can have a parasitical income on the backs of the impoverished and they’ll see that as a success.

    This National government are acting exactly as the old aristocracy and the let them eat cake attitude to the poor.

  12. Roy 12

    Have you perused the comments on that Stuff article? So much whining from idiot Nat supporters that it is all the fault of Labour and the Greens for ‘sabotaging’ the process. The stupidity of those people makes my head hurt.

    • infused 12.1

      Good to see so many people can see through Labours bullshit.

      • Paul 12.1.1

        Zzzzzz

      • framu 12.1.2

        asset sales are unpopular and its a political issue first and foremost – if you thought it was ONLY a financial deal – your an idiot

        if you were thinking about buying shares in the asset sales – and you DIDNT recognise that its a highly polarising political issue and you DIDNT ask your self what might happen when the govt changed – your an idiot

        if your going to claim that the only thing that affected the share price and overall result was the opposition announcing their policy intention BEFORE the shares went on sale – your an idiot

        The nats are in govt – not the opposition – i didnt realise that the opposition had so much power over the govt – those nats must have been quaking in their boots when that nasty labour party put a gun to their head and said “sell”

        so whats this bullshit you complain off? – all i see is a bunch of whiners to stupid to notice that investing in a politically driven sale will have political results

  13. jcuknz 13

    Paul and Rodel say it briefly and well :)

Recent Comments

Recent Posts

  • Labour mourns Dame Dorothy Fraser
    Labour Leader Andrew Little said the party is today mourning the loss of the youngest person to join the Labour Party, Dame Dorothy Fraser, who went on to be a stalwart of the Dunedin community and tireless worker for others.… ...
    17 hours ago
  • The ultimate scapegoat: PM blames fruit fly for new tax
    The Prime Minister has found the ultimate scapegoat for breaking his promise not to introduce a new tax – the Queensland fruit fly, Labour’s Biosecurity spokesperson Damien O’Connor says. “John Key’s first policy upon taking office and assigning himself the… ...
    20 hours ago
  • How many victims missing out on protection?
    Hundreds of domestic abuse victims could be missing out on getting protection orders because they are unable to get legal aid, Labour’s Justice spokesperson Jacinda Ardern says.“In the last two years some 351 people who applied for legal aid for… ...
    3 days ago
  • Government kicks hardworking whanau
    A major incentive to help young Kiwis and people on low incomes to start saving has been kicked out from under them with the National-led Government ramming through short-sighted legislation under Urgency today, Labour’s Maori Development Spokesperson Nanaia Mahuta says.… ...
    3 days ago
  • Speculator tax political stunt gone wrong
    Bill English’s admission he doesn’t know whether National’s new speculator tax will have any effect shows last weekend’s announcement by the Prime Minister was a desperate political stunt, says Labour’s Housing spokesperson Phil Twyford. “This Government is so desperate to… ...
    3 days ago
  • The value of parenting
    This week, as part of the Budget, the government introduced a bill to address child poverty. This bill will require parents receiving income support to look for part-time work once their youngest child is three years of age rather than… ...
    GreensBy Jan Logie MP
    3 days ago
  • Another new tax, another broken promise
    National has unveiled yet another new tax in this budget – a rural broadband levy that will almost certainly result in an immediate price hike for internet and telephone connections across New Zealand, Labour’s ICT spokesperson Clare Curran said “The… ...
    4 days ago
  • Anniversary of Sri Lankan Tamil Massacre
    This is not going to be a happy story but if the Green Party of Aotearoa doesn’t want to know who else will? May 18th marks the anniversary of what is known as the ‘Mullivaikal massacre’ of Tamils in 2009 at… ...
    GreensBy Catherine Delahunty MP
    4 days ago
  • Labour MPs join youth to take part in 40 hour famine
    A team of Labour MPs took part in the 2015 World Vision 40 hour famine and we were told by World Vision and the young people, that it was the first time MPs had joined them and how appreciative they… ...
    4 days ago
  • Rodeo: ‘Family entertainment’ or animal abuse?
    Recently  TVNZ ran a story with confronting footage showing rodeo animals being punched, repeatedly shocked with electronic prods and having their tails violently twisted over their backs. It was clear that significant force was being used behind the scenes to make… ...
    GreensBy Mojo Mathers MP
    4 days ago
  • Budget puts the squeeze on police
    The Government has cut funding to the New Zealand police force in the latest Budget, says Labour’s Police spokesperson Kelvin Davis. “The reduction is a whopping $15.3 million that could put front line officers at risk. ...
    4 days ago
  • Crucial social services take another hit
    The Government looks set to slash half a million dollars of funding for critical social services, including Women’s Refuge and Barnados, says Labour’s Social Development spokesperson Carmel Sepuloni “Taking $500,000 from organisations aimed at improving the lives of vulnerable families… ...
    4 days ago
  • Saying it Loud on Climate in Christchurch
    The Government’s Christchurch consultation meeting on New Zealand’s emission targets was inspiring – not for what was in the Ministry for the Environment’s (MFE’s) defeatist video about the obstacles to changing to a low carbon future, but for what the… ...
    GreensBy Eugenie Sage MP
    4 days ago
  • Budget silent on small business
    The Government has completely ignored one of the most important sectors of the economy – small and medium-sized enterprises – in Budget 2015, Labour’s Small Business spokesperson Jacinda Ardern says. "A stunning 41 per cent of jobs were created by… ...
    4 days ago
  • Thank you John, it’s been bloody marvellous
    The departure of John Campbell is a blow to current affairs investigative journalism, Labour’s Broadcasting Spokesperson Clare Curran says. “Campbell Live stood out in its field. Its axing comes as local broadcasting in New Zealand remains in a state of… ...
    4 days ago
  • KiwiSaver cut shows no long-term plan
    National’s cutting of the KiwiSaver kickstart is incredibly short-term thinking, typical of a Budget that is woefully short on ideas to generate wealth and opportunity, Labour’s Finance spokesperson Grant Robertson says. “New Zealand’s savings rate is far too low. KiwiSaver… ...
    4 days ago
  • National hits the panic button for its 7th Budget
    National has hit the panic button for its 7th Budget in a desperate attempt to look like they’re taking action to reduce our shameful child poverty rates, but they are giving with one hand and taking with the other, Opposition… ...
    5 days ago
  • Panic and back-flips can’t hide twin deficits
    National’s token measures to fight fires they have left burning for seven long years can’t hide a Budget that is long on broken promises, short on vision and fails to reach surplus, says Labour’s Finance spokesperson Grant Robertson. “After being… ...
    5 days ago
  • Auckland land measure seven years too late
    National are so desperate to look like they are doing something about the Auckland housing crisis they have dusted off Labour’s 2008 inventory of government land available for housing and re-announced it, says Labour’s housing spokesperson Phil Twyford. “Despite National… ...
    5 days ago
  • Access to gender reassignment surgery essential
    I was frankly disgusted to hear the Minister for Health say that funding gender reassignment surgeries is a “nutty idea”. A recent study found that in New Zealand 1% of young people identified themselves as transgender, and 3% were unsure… ...
    GreensBy Jan Logie MP
    6 days ago
  • Global milk prices now lowest in 6 years
    The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices… ...
    6 days ago
  • Big risks as CYF checks stopped
    Revelations that Child, Youth and Family is no longer assisting home-based early childhood educators by vetting potential employees should set alarm bells ringing, Labour Children’s spokesperson Jacinda Ardern says. “Doing away with an extra mechanism for checking potential new employees… ...
    7 days ago
  • Housing crisis about real people not numbers
    The Government’s continued failure to tackle the housing crisis is seeing thousands of vulnerable Kiwis being kept off social housing waiting lists, while others, who are on the list, are being forced to live in cars and garages, says Labour’s… ...
    7 days ago
  • Housing crisis about real people not numbers
    The Government’s continued failure to tackle the housing crisis is seeing thousands of vulnerable Kiwis being kept off social housing waiting lists, while others, who are on the list, are being forced to live in cars and garages, says Labour’s… ...
    7 days ago
  • State of origin
    Kiwis are increasingly concerned about the food they give their families. New Zealand consumers have the right to know where their food has come from, particularly when it involves animals, and should be able to expect our Government to label… ...
    GreensBy Steffan Browning MP
    7 days ago
  • Relationships Aotearoa
    It is disturbing that Relationships Aotearoa, a voluntary organisation set up in 1949 to help couples struggling with their relationships following the upheavals of World War II, may be forced to close, says Acting Spokesperson for the Voluntary and Community… ...
    7 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    7 days ago
  • An economy that is just working for some is an economy that is not working
    The National Party presents itself as a great manager of the economy, but if the economy is only working for some we really need to question that assertion. Alongside the perpetually elusive surplus, the levels of risk in our economy are… ...
    GreensBy Jan Logie MP
    7 days ago
  • House prices to a crack $1 million in 17 months
    The average Auckland home is on track to cost $1 million in 17 months’ time if nothing substantial is done to rein in soaring price rises, Labour’s Housing spokesperson Phil Twyford says. “Auckland’s house prices have skyrocketed 63 per cent… ...
    1 week ago
  • Vital support services can’t be left in lurch
    The National Government has big questions to answer about how a provider of services to thousands of vulnerable New Zealanders is set to fold, Labour’s Finance spokesperson Grant Robertson says. Relationships Aotearoa which provides support and counselling to families, individuals… ...
    1 week ago
  • Treasury and IRD on a capital gains tax
    Both the Treasury and IRD have been advising the National Government on the benefits of a capital gains tax. Documents released to the Green Party under an Official Information Act request show that John Key has been selective with the… ...
    GreensBy Russel Norman MP
    1 week ago
  • Charity legislation needs review
    It is unacceptable that the big corporate based charities claim  millions in annual income tax exemptions, while small community based and operated non-profit organisations  struggle to gain official charity status, Labour’s acting spokesperson for the Voluntary and Community Sector Louisa… ...
    1 week ago
  • John’s panic-Key response to housing crisis
    John Key needs to tell New Zealanders what caused his sudden change of heart that led to the Government’s scrambled and last-minute housing measures, Opposition Leader Andrew Little says. “The Prime Minister’s sudden rush of blood to his head followed… ...
    1 week ago
  • Keep our Assets Christchurch Campaign: An update
    I recently presented my submission to keep Christchurch Council assets at the Christchurch City Council’s public hearings on its 10 year plan on 13 May. The hearings are live-streamed and recorded so you can watch them on www.ccc.govt.nz. The Council’s… ...
    GreensBy Eugenie Sage MP
    1 week ago
  • John Key finally admits there’s a housing crisis
    John Key’s weak measures to rein in the astronomical profits property speculators are making are an admission – finally – that there is a housing crisis, Labour Leader Andrew Little says. “But yet again National is tinkering with the housing… ...
    1 week ago
  • Government stifles voices in CYFs review
    The Government’s exclusion of the Māori Women’s Welfare League in a panel on the future of CYFs is a cynical ploy to stifle views, says Labour’s Māori Development Spokesperson Nanaia Mahuta. “It's unbelievable that a significant review on the future… ...
    2 weeks ago
  • Speech to the Otago Chamber of Commerce
    Thank you very much for the opportunity to be here today. It’s a pleasure as always to be back in the town that raised me. Growing up in St Kilda meant that there was one thing that was a big… ...
    2 weeks ago
  • Key can’t just be Prime Minister for Parnell
    John Key must show New Zealanders in next week’s Budget that he is more than the Prime Minister for Parnell, and is also the Prime Minister for Pine Hill, Putararu and Palmerston North, Labour’s Finance spokesperson Grant Robertson says. In… ...
    2 weeks ago
  • Stop the conversions
    This week, some Waikato locals took me and intrepid photographer Amanda Rogers on a tour of some  lakes and waterways in their region, and up to the massive dairy conversions in the upper catchment of the Waikato River. It… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • More regional jobs go in Corrections reshape
    News that 194 Corrections staff are to lose their jobs will have ramifications not only for them and their families but for the wider community, Labour’s Corrections spokesperson Kelvin Davis says. Prison units at Waikeria, Tongariro and Rimutaka face closure… ...
    2 weeks ago
  • Government’s climate meetings off to a bumpy start
    On Wednesday, I attended a hui and an evening meeting that the Government had organised in Nelson as part of its climate change consultation tour, to support the Nelson community telling the Government to take meaningful action on climate change.… ...
    GreensBy Steffan Browning MP
    2 weeks ago
  • Taxpayers the only ones left feeling blue
    Ministry of Social Development bosses could have saved themselves thousands of dollars in consultants’ fees by providing staff with rose-tinted spectacles, Labour’s State Services spokesperson Kris Faafoi says. A report out today reveals the Ministry is spending over half a… ...
    2 weeks ago
  • Why are the regions still facing restrictions?
    Labour's Housing spokesperson Phil Twyford is questioning why the regions should continue to be saddled with LVR lending restrictions announced by the Reserve Bank today. “Labour has been calling for the regions to be exempted from LVRs for the best… ...
    2 weeks ago
  • The high costs of weak environmental regulation
    Te Waihora/Lake Ellesmere is described on the Department of Conservation website as “Canterbury’s largest and New Zealand’s fifth largest [lake], and an internationally important wildlife area.” But the lake is also polluted by nutrients leaching from farms in the catchment.… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Submissions to Wellington City Council on their Gambling Venues Policy
    Every three years Councils across the country are required to check that their gambling venue policies are still fit for purpose and they can choose to consult on their policy if they are thinking of making changes. Councils don’t have… ...
    GreensBy Denise Roche MP
    2 weeks ago
  • Reserve Bank action shows Govt out of touch and out of ideas
    The Reserve Bank’s unprecedented measures today show it understands the serious risks of the overheating housing market – in complete contrast to John Key’s refusal to acknowledge the crisis, Labour’s Finance spokesperson Grant Robertson says. “The Bank is right to… ...
    2 weeks ago
  • Send us your snaps: 25 Years of the Green Party
    This year we've hit a milestone. We're turning 25.To help celebrate a quarter of a century, please send us your photos from the last 25 years of the Green Party Aotearoa New Zealand! Note: Photos must be jpg, gif or… ...
    2 weeks ago
  • 25 Years of the Green Party
    This year the Green Party sends 25. To help us celebrate a quarter of a century please send us you photos of 25 years of the Green Party!Photos must be jpg,gif or png and smaller than 2MB. If you are… ...
    2 weeks ago
  • Bay growth plan too little too late
    Today’s Bay of Plenty growth study from MBIE is another example of Government spin - lots of talk but little action, says Labour’s Regional Development spokesperson David Cunliffe.  “This is a region that desperately needs to develop the downstream processing… ...
    2 weeks ago
  • Government bows to ACC pressure
     The Government has finally buckled to pressure from Labour and the New Zealand public in making a half billion dollar cut to ACC levies, but the full benefits are two years away,” says Opposition Leader Andrew Little.  “$500 million over… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere