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Asset sales: still bad

Written By: - Date published: 8:33 am, May 27th, 2012 - 16 comments
Categories: International, Privatisation, treasury - Tags:

Adding to the canon of reasons and commentators on why you don’t sell your assets (particularly to pay for your maintenance) is an excellent article on The Guardian.

It is an article exhorting the countries of the Arab Spring to resist Western countries pressure to implement neo-liberal economics in the name of ‘freedom’.

It cites sociologists from the universities of Cambridge and Harvard (the world’s top 2 universities) who:

claim to have established a “direct link” between the mass privatisation programmes followed by around half the countries of the region – enthusiastically urged upon them by western economists and western financial institutions – and the “economic failure and corruption that followed”. The more closely the countries followed western advice, and the more they privatised, the worse things became.

As those countries suffered an average 30% GDP slump and mass unemployment in the early 90s following western advice, their governments faced bankruptcy as they no longer had the income from their state assets.  State assets that were by then making a handful of oligarchs very rich and powerful at the expense of the rest of the citizens.  Corruption quickly worsened.

While coming from a world away from our position freedom-wise, it shows the fallacy of asset sales being the solution to pretty much anything.

I say our country is much more democratic, but worryingly Treasury had prepared their report on the “Mixed Ownership Model Bill” before the Select Committee had finished hearing submissions.  Apparently those citizens who took time to present their evidence on why asset sales weren’t a good idea weren’t going to affect the pre-ordained result.

Which hardly seems very democratic.

Best we get on with gathering signatures for the asset sales referendum to make sure we get our say.

16 comments on “Asset sales: still bad”

  1. bbfloyd 1

    “Which hardly seems democratic”… i generally agree with the thrust of your posts ben… and i agree with this one, but please, don’t waste time being polite about the national pseudo governments blatant abuse of democratic systems for their own ends….

    This was the failing of the labour party in the last term…. being far too polite in their criticism of what will prove to be the actions of criminals and charlatans….

    It leaves an impression of a lack of certainty… there can be no uncertainty when it comes to exposing nationals fascist tendencies, which form part of their basic political philosophy(if stealing from the poor to give to the rich can be called philosophy)….

  2. Johnm 2

    You can keep on talking and explaining ad infinitum to National why Asset Sales are crazy until you’re blue in the face but it makes no difference to their ideological Business is everything approach. They aren’t democratic and for the people only for their business mates.

    Basically a waste of breath, Apathetic self interested wealthier ,So long as I am alright, NZers voted this shower in! For them poorer kiwis are a nuisance best swept under the carpet

  3. Draco T Bastard 3

    Which hardly seems very democratic.

    We live in an elected dictatorship where the people who are supposed to work for us tell us to go get fucked instead. We need binding referendums so that shit like this can be stopped.

    • cin77 3.1

      There’s the problem with the referendum, its non-binding. The entire country could sign it and the assets would still be sold because of Keys mandate

      • tc 3.1.1

        Key has been very clear that election wins equals mandate for asset sales.

        He’s got less than 2 years to deliver on this so he can be rewarded by the business connections for the rest of his life….this is what they are driving towards, fuck the rest of nz and the long tern consequences.

      • Draco T Bastard 3.1.2

        Yes, which is why I specifically said that we need binding referendums.

        • darkhorse

          Draco we don’t need referendums we need labour politicians to say no more than “If they are sold we will buy them back”.

          It is easy simple and it would cost less than the borrowing would have done anyway.

          And labour would finally be seen as having some spine and some vision.

          Referendums are just no-hoping wastes of time – everyone knows what the majority of NZer’s want and what all need – good governance and public ownership of public infrastructure

          I am off to my first labour party branch meeting tomorrow, I intend to make it interesting.

          We need to re-energise democracy – people need to start going to political party branch meetings.

  4. Herodotus 4

    Given that there is only 2 years to go until the next election, that IMO selling only one class of assets that it will get progressively more difficult to sell power stations we will face come 2014 the fact that only 2 of the 4 companies will be able to have been sold. So it will reduce the damage caused by such a poor policy.

  5. lefty 5

    The food market won’t deliver food to those with no money.

    The housing market won’t deliver housing to the poor.

    The vote every three years democracy market won’t deliver power to the people.

    Real democracy would be much deeper and broader.

    It would be present be in the decisions made by the workers determing how things were run in our workplaces, it would be reflected in how our communities functioned in facilitating the day to day interactions with each other, in the decisions that allocated resources, in an education system designed by us all to serve us all and deliver a society that valued thinking and ethics, in our health system that was designed by us to create a healthy environment as its starting point, in a justice system that started with equitable distribution of material goods ,equal access to opportunity and the rejection of privilige, in an agricultural system where the land was owned in common and farmed to produce healthy food for feeding us all rather than pay off bank loans for land transfers, in a foreign policy based on valuing the cultures and needs of our trading partner while carrying out mutually beneficial trading, and in our relationships with each other, especially those who have been colonised and ill treated in the past.

    We won’t get there by voting in the elaborate farce we go through every three years.

    • fascist-anti-fascist. 5.1

      Don’t you think that sounds a bit like communism or some other kind of fantasy-based rubbish? You’d probably achieve more if you focussed on one or two points rather than empty rhetoric about all these changes be made at once. That just won’t happen.

      Everyone gets it – times are tough. But focus on particular examples at least. Your whole point just reads like a boring rant from a self-entitled sloganist.

  6. Dr Terry 6

    Keep this going! I am encouraged by these lines of thinking.(At last, I find that some New Zealanders still do think!)

  7. Why doesn’t labour just come and say sell them and we will buy them back at what ever they were sold for or the current market value – which ever is the lesser.

    This will cost nothing as one way or another the government is going to rack up the cost of the buy back in debt if it doesn’t sell the assets.  And debt will be cheaper for the taxpayer to service than the increase in electricity costs caused by the assets sales.

    Promising a buy back will also kill the market for these assets.  It will spike JK’s guns on this issue and make him look (more) stupid. 

    It will also show that Labour has some grit in its guts – and not before time!

    we don’t need referendums or petitions we just need some politicians in the labour party to develop sufficient stamina to state that anything national does labour will undo – simple cheap effective – and a vote winner


    • Roy 7.1

      Excellent idea!

    • fascist-anti-fascist. 7.2

      Well, to start with, your link doesn’t work.

      Secondly, Labour can’t guarantee that they will be able to force people to sell land: that is what the Crown used to do back in the days when it confiscated all that land illegally and were forced to apologize and give it back to Maori, but we would become a banana republic if we tried to run a country with stupid destructive policies like that in the 21st Century.

      Better to get out there and go Greek, like Bill English said to. Right after John Key asked a bunch of wealthy business men why they wouldn’t want to purchase his “smart people”.

      [Change your handle or all your comments will drop into moderation. – B.]

  8. fascist-anti-fascist. 8

    Europe is collapsing into debt crisis because of the kind of big government that steps in to intervene and subsidize everything, frequently using borrowed money to fund unprofitable ventures like buying and selling assets to jostle for political power.

    Democracy is in crisis because young people are convinced they can just demand money without being productive themselves. You can’t expect the government to give you a job or a free university education, without you paying more money as tax. The government of a small nation like NZ has limited capital and it is currently going to pensions and benefits in unsustainable numbers.

    A glut created by excess mortgage debt from baby boomers is behind the economic stagnation that explains why you will struggle to find a job with a sufficient salary to pay off your student debt.

    Stimulating the economy will not work the way it used to during the Clark years and that is why Labour can’t front a strong opposition without some new ideas.

    And your idea to generate this money to pay for spending is? Tax the rich? Um, yeah.

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