Written By: Guest post - Date published: 8:43 pm, August 20th, 2013 - 19 comments
Categories: capitalism, infrastructure, Privatisation, water - Tags: handouts to the rich, meridian, not yours to sell, privatisation
Hey John, how much public money are you going to pay the wealthy to “buy” our assets? (And how just desperate are you…?)
The announcement yesterday that JK and his buddy Bill have come up with a scheme to give interest-free “bridging loans” to the small number of already wealthy NZers who dabble in the share-market to entice them to buy little slices of Meridian Energy (a company they and the rest of us already own) is the kind of farcical extreme that belongs in a parody show like The Thick of It, or The Daily Show.
A quick recap:
1) You, I and all other NZers own Meridian (just as we all owned Mighty River Power before they flogged off 49% of it).
2) The $30 million subsidy flung at Rio Tinto to keep them operating in the south for the next few years was always about propping up Meridian so it could be flogged off.
3) The predicted return on the asset sale was always shonky, but when we add in the cost of these sweetheart loans (up to 40% of the share value, no interest for 18 months and returns paid every year on the full value of the shares – including those that haven’t been paid for) it’s hard to see this as anything but a loss. A lost asset, a financial loss, and a loss of credibility for the government.
4) It’s ridiculous (but typical) that this sly wee deal hasn’t been costed (or rather, that the costing isn’t being released to us – the people who are paying for it both through the loss of a major part of our state asset and through the direct financial cost of the loans scheme).
5) In the absence of any other assessment, the Greens have announced an estimate – $40 million. Maybe they’re right, maybe they’re wrong. Hard to know when the boys aren’t talking. If they’re right, we’re now talking $70 million up front to help convince a minority of wealthy NZers to buy something currently owned by all NZers.
6) And why do they need convincing? Well, how are those Mighty River shares going, mate? Don’t worry – probably just a market fluctuation. After all, the market knows best.
And all this on the same day as the Reserve Bank announces restrictions on home lending that will make home ownership a phantom dream for the many whose tax money is being used to subsidise this gift to the few.
Perhaps The Civilian has crossed over to The Dark Side and has taken employment as a policy advisor for the National Party…
– red blooded