The asset sales have been an unmitigated failure. They’ve raised less money than expected, they’ve cost more than twice as much as National said they would, no ‘mums and dads’ have shown up to buy the shares, and the public is waiting for its referendum. Now, it turns out that Treasury warned Key not to flood the market but Key plans to keep on flooding it.
It’s pretty much common sense from the Treasury (which is something of a revelation in itself). They told National: ‘look, if you’re going to sell 3 big electricity companies into a sharemarket that is already heavy on electricity companies, for God’s sake don’t do them all at once, the market can only swallow so much at a time; rush it, and you’ll get less Kiwi ownership and less money for the Crown’. Specifically, Treasury said don’t sell more than $1.5 billion every 12 months and spread it over 3 to 5 years.
Well, Key and co went ahead and sold two companies that were meant to be worth nearly $5 billion in just six months. The result: $1.3 billion less than thought and a fraction of the expected ‘mum and dad’ investors.
Of course, Key’s made a Prime Ministership out of ignoring all common sense and repeatedly failing in the pursuit of ideology, so he’s ignoring the lessons of Mighty River and Meridian, and threatening to sell Air NZ and Genesis in the next six months.
As Kiwi citizens, and the owners of these companies, we’ve got to send a strong message to Key and National in the referendum. A strong ‘no’ vote will tell them that, if the asset sales continue, National will get slaughtered in the election. That won’t matter to Key, he knows he’s odds on to lose and he’ll be on the next flight to Hawaii when it happens so he doesn’t care how big he loses, but it could force more level heads in National to rope him in.