web analytics

The Government must be crazy

Written By: - Date published: 7:15 am, March 1st, 2013 - 22 comments
Categories: assets, national, Privatisation - Tags:

Apparently National are considering 3 asset sales this year.  Mighty River in May / June, and perhaps 2 in November, as there are only 2 windows you can really make a sale in (due to rules around accounting numbers etc).

Can they really be serious about having 2 major sales at the same time?  How much spare “mum and dad” capital do they think is out there?  How do they expect to get a good price?

Selling all 3 electricity companies over the course of 6-12 months is going to mean that this sector is completely saturated.  The NZSX will be completely lopsided and unbalanced towards the utility sector.  All free capital for productive NZ companies will have been soaked up, meaning a lack of cash for our exporters and manufacturers to expand.

By the time they flog the last power co, shares in Mighty River (and those Contact ones remaining in NZ hands) will be heading to foreign hands at a rate of knots.

It’s a stupid idea to sell these assets for so many reasons, from lost revenue to lost sovereignty, higher power prices to higher current account deficit and taxes…

But if National are determined to do it, they could at least try and be a bit competent about the sales process.

22 comments on “The Government must be crazy”

  1. Draco T Bastard 1

    Can they really be serious about having 2 major sales at the same time?

    When their only goal is to sell them off as fast as possible for as little as possible? Yes.

    • framu 1.1

      and the other goal to reduce the purchase price

    • prism 1.2

      Didn’t Richard Prebble say he would be prepared to give the railways away? Government two-legs bad, private ownership four-legs good!

  2. fatty 2

    There are plenty of mum and dad’s in China and USA. I’m sure they’re ready to take our candy from us babies

  3. Colonial Viper 3

    it’s like National is schizophrenically trying to lose the 2014 election when they could go all out and return for a third term. Weird behaviour driven by factional backers.

    • Tiresias 3.1

      Well, no. Given that the average voter has the political memory span of a goldfish the Nats will be able to use some of the $billions raised in the asset sales in 2013 to bedazzle them in 2014 with a couple of shiny news schools, a 5-star prison and half-a-cent off the basic rate of tax, and they’ll all go “Oooooh.”

      • Addison 3.1.1

        Of course,didn’t you realize that was the plan. A bit like working for families and free student loans.

      • Peter 3.1.2

        Agreed. If the average voter was really concerned about what is going on politically the Nats would be long gone already.

  4. odysseus 4

    So Ben, is Labour promising to renationalise the companies or regulate the market ? I think you are probably in favour of the latter but is that Labour policy ? And if it is, when is it to be trumpeted from the rooftops?

  5. johnm 5

    They’re up themselves arrogant antidemocratic crooks in other words rubbish! They know 80% of kiwis want those assets to stay in kiwi control. They’re aided and abbetted by the well orf smug sector of divided New Zealand who don’t give a flying f*ck for their poorer compatriots.

  6. Addison 6

    I thought reducing the value of these companies was a cunning Left plan to stop the sales. If not why all the threats to denationalize.

    • McFlock 6.1

      Nah. Renationalisation is the cunning plan of the “Left”. Heck, some reckon that it should be renationalisation without compensation, so lowering the sale value is pointless – but it’s only fair to give folk a heads up.

      What is perplexing is why devaluing would be part of a cunning plan of the tories. Gosh, it’s almost like they want them and their mates to be able to buy up as much of New Zealand’s essential infrastructure as possible.

      A conflict of class interest, if you will.

  7. There’s something that concerns me and that is how these power companies that are
    going to be ‘hocked off’ suddenly are making millions of dollars of profit,in a time
    when demand for power has gone down,
    Someone with more business knowledge than me might be able to shed some light
    on why.
    If the figures are being ‘made healthy’ to attract buyers of shares,surely there is
    something dodgy going on here.
    I am totally against selling off our tax-payer assets,in any shape manner or form.

    • tc 7.1

      Profit numbers are artificial at best in the power sector as it has a captive monopoly market, been dodgy since it devolved from NZED.

      Prices are controlled by themselves, they decide what to invest/spend on and they provision as they please with Audit being a tick box rather than a rigorous examination of ‘fair and accurate’.

      My guess is the hard word’s gone out to give up as much dividend as you can as the gov’t revenue base has been deliberately shrunk so it serves a dual purpose in making them look attractive.

      They’re attractive because they’re a monopoly and will always be profitable no matter what supply/demand is doing, that’s why they will be flogged regardless of any obstacle, it’s all part of the hollowman agenda.

      • Thanks for your explanation tc, There really needs to be tougher rules around taxpayer
        assets so that they aren’t pillaged and robbed by successive incomming governments,too
        late now though, they will be all gone in the blink of an eye soon.

    • Draco T Bastard 7.2

      This may help explain.

    • Simple 7.3

      VivaciousViper

      lets work through the issues:

      1. Power demand hasn’t gone down, we all need to live and work, so baseload consumption is predictably stable, where you have variability is weather (hydro in the SI), production output by large users (Tiwai Point, Glenbrook type plant). See stats http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/electricity – none show a reduction.

      2. Selling anything like a house or a car, presentation matters, how you looked after it with a car, did you maintain it affects resale. As with a house, how the town is perceived, local school etc all have an impact, so if you apply this logic to selling a SOE, you would think about in the post GFC environment, that a ‘stable asset’, with predicable returns, from diversified sources is going to do well, when compared to other assets choices.

      As an example your KiwiSaver fund manager needs to make choices right now (so that you can have a better retirement) do they invest in Sky TV with the risk of technology change, demand change (demographics), content risk etc, which could produce a higher but more volitile return, or do they have a more predicable investment return, with less volitility.

      3. It is hard to make things look healthy, suddenly. You want a trend, causality with investment, so financials over the last 5 years averaged are going to be given more weight than ‘window dressing’ and a coat of paint.

      Hope this helps, happy to reference these items if that helps.

  8. Rogue Trooper 8

    ssssshh! a tip from The Daily Planet;
    is it true that Shipley is on the board of Chinas’ state-owned bank China Construction, specializing in energy-sector development, or, is it false that Treasury / Goldman Sachs are running the ruler over Kiwibank for an alternate cash-injection… (Bruce)

  9. Ed 9

    The court said that there could be compensation to pay for excluding Maori from water management. Surely any government would look to provide that compensation from the electricity generation industry itself rather than finding cash elsewhere. One possibility could be increased charges for use of water for generation, imposed on all generators. Another issue is that any government will surely look to the electricity generation industry for ensuring that there is the ability to meet future demand for electricity. If any one or more company appeared to be not willing to share in such an aim it could be necessary to impose levies from which to fund such industry expansion. In either case that would effectively represent regulatory risk for any share float of an electricity generation company.

    Have any potential regulatory risks been identified in the prospectus for Mighty River? If we don,t know perhaps someone should help the government by pointing out the risks …

Recent Comments

Recent Posts

  • Rates rebate on the cards for retirement village residents
    People living retirement villages could be entitled to a rates rebate after a Labour Member’s Bill was today pulled from the ballot, Labour’s Senior Citizens spokesperson Ruth Dyson says. “Most residents in retirement villages cannot currently claim a rebate because… ...
    33 mins ago
  • Rates rebate on the cards for retirement village residents
    People living retirement villages could be entitled to a rates rebate after a Labour Member’s Bill was today pulled from the ballot, Labour’s Senior Citizens spokesperson Ruth Dyson says. “Most residents in retirement villages cannot currently claim a rebate because… ...
    33 mins ago
  • Government’s weak trusts inquiry lambasted
    The weak and absurd scope of the Government’s inquiry into foreign trusts has been lambasted by Transparency International, Opposition Leader Andrew Little says. “In a scathing statement released today, the anti-corruption watchdog warns that the John Sherwan-led inquiry into foreign… ...
    2 hours ago
  • Government’s weak trusts inquiry lambasted
    The weak and absurd scope of the Government’s inquiry into foreign trusts has been lambasted by Transparency International, Opposition Leader Andrew Little says. “In a scathing statement released today, the anti-corruption watchdog warns that the John Sherwan-led inquiry into foreign… ...
    2 hours ago
  • Healthy Homes Bill passes first reading
    Some of New Zealand’s most vulnerable children and families are on their way towards safer living conditions with the passing of the first reading of the Healthy Homes Guarantee Bill in Parliament last night, Leader of the Opposition Andrew Little… ...
    4 hours ago
  • Healthy Homes Bill passes first reading
    Some of New Zealand’s most vulnerable children and families are on their way towards safer living conditions with the passing of the first reading of the Healthy Homes Guarantee Bill in Parliament last night, Leader of the Opposition Andrew Little… ...
    4 hours ago
  • Wellington Town Belt Bill becomes law
    The Wellington Town Belt will grow by 120 hectares after the passing today of the Wellington Town Belt Bill, Labour MP for Wellington Central Grant Robertson says. “The Town Belt is loved by Wellingtonians as a green and open space… ...
    18 hours ago
  • Wellington Town Belt Bill becomes law
    The Wellington Town Belt will grow by 120 hectares after the passing today of the Wellington Town Belt Bill, Labour MP for Wellington Central Grant Robertson says. “The Town Belt is loved by Wellingtonians as a green and open space… ...
    18 hours ago
  • 26 weeks paid parental leave the best Mother’s Day present
    If National truly values motherhood, they would drop their threat to scupper 26 weeks paid parental leave, says Labour MP Sue Moroney. “As New Zealand prepares to celebrate Mother’s Day on Sunday, John Key should remove his threat to… ...
    19 hours ago
  • 26 weeks paid parental leave the best Mother’s Day present
    If National truly values motherhood, they would drop their threat to scupper 26 weeks paid parental leave, says Labour MP Sue Moroney. “As New Zealand prepares to celebrate Mother’s Day on Sunday, John Key should remove his threat to… ...
    19 hours ago
  • Peering through the Huntly coal smokescreen
    Energy Minister Simon Bridges revealed in Parliament this week he has no idea what majority state-owned power companies are up to, when he wrongly claimed that Genesis Energy would not burn coal at Huntly unless there was a shortage of… ...
    GreensBy Gareth Hughes
    20 hours ago
  • Peering through the Huntly coal smokescreen
    Energy Minister Simon Bridges revealed in Parliament this week he has no idea what majority state-owned power companies are up to, when he wrongly claimed that Genesis Energy would not burn coal at Huntly unless there was a shortage of… ...
    GreensBy Gareth Hughes
    20 hours ago
  • Burger King dumps caged eggs!
    I’m not a fan of fast food companies, but a few days ago I was thrilled to see fast food multinational Burger King announcing that they are going to dump caged eggs in New Zealand. They join other food companies,… ...
    GreensBy Mojo Mathers
    23 hours ago
  • Burger King dumps caged eggs!
    I’m not a fan of fast food companies, but a few days ago I was thrilled to see fast food multinational Burger King announcing that they are going to dump caged eggs in New Zealand. They join other food companies,… ...
    GreensBy Mojo Mathers
    23 hours ago
  • Smoke and Mirrors on Pharmac funding
    Today’s announcement by John Key and Jonathan Coleman on Pharmac funding is a classic piece of financial jiggery-pokery, says Labour’s Health spokesperson Annette King.  “While I welcome any boost to the Pharmac budget this does not go far enough. ...
    1 day ago
  • Firearms Inquiry calling for submissions.
    Parliament’s Law and Order select committee (of which I am a member) has today called for public submissions to its firearms inquiry. This conversation should have been live since last year, when the Police Association started talking about their concerns… ...
    GreensBy David Clendon
    1 day ago
  • Firearms Inquiry calling for submissions.
    Parliament’s Law and Order select committee (of which I am a member) has today called for public submissions to its firearms inquiry. This conversation should have been live since last year, when the Police Association started talking about their concerns… ...
    GreensBy David Clendon
    1 day ago
  • National playing politics with children’s lives
    John Key’s Government is playing political games with the lives of children by refusing to support a bill which will ensure every home in the country is warm and dry, Leader of the Opposition Andrew Little says. “National says that… ...
    1 day ago
  • Unemployment rise demands Budget response
    The rise in unemployment shows the Budget must contain concrete plans for job growth that deliver for all New Zealanders, not just the few at the top, says Labour’s Finance spokesperson Grant Robertson. “After eight years under National it is… ...
    1 day ago
  • School funding falls by $150 per student
    Parents are having to fork out even more for their kids’ education after the Government cut school funding per student by $150 in the past year, Labour’s Education spokesperson Chris Hipkins says. “According to the Education Ministry, its total per… ...
    1 day ago
  • School funding falls by $150 per student
    Parents are having to fork out even more for their kids’ education after the Government cut school funding per student by $150 in the past year, Labour’s Education spokesperson Chris Hipkins says. “According to the Education Ministry, its total per… ...
    1 day ago
  • Government must clamp down on dodgy PTEs
    The Government must ensure all international students coming to New Zealand are legitimate after a survey of those approved in Mumbai found only 9 per cent had genuine intentions and met English language requirements, Labour’s Education spokesperson Chris Hipkins says.… ...
    2 days ago
  • Government must clamp down on dodgy PTEs
    The Government must ensure all international students coming to New Zealand are legitimate after a survey of those approved in Mumbai found only 9 per cent had genuine intentions and met English language requirements, Labour’s Education spokesperson Chris Hipkins says.… ...
    2 days ago
  • Chance to crack down on foreign speculators
    If John Key is serious about stopping foreign speculators driving house prices out of the reach of Kiwi families, he will support Labour’s Member’s Bill to ban offshore investors from buying existing homes, Labour’s Housing spokesperson Phil Twyford says. “My… ...
    2 days ago
  • IRD had foreign trusts review on action plan
    The IRD was so ready to review foreign trusts it had the review on its action plan in November 2014, just before the Revenue Minister met with John Key’s lawyer, says the Leader of the Opposition Andrew Little. “The IRD… ...
    2 days ago
  • IRD had foreign trusts review on action plan
    The IRD was so ready to review foreign trusts it had the review on its action plan in November 2014, just before the Revenue Minister met with John Key’s lawyer, says the Leader of the Opposition Andrew Little. “The IRD… ...
    2 days ago
  • Child Youth and Family Review and Māori
    I wrote this blogpost sitting in Parliament listening to the Attorney General’s first reading speech on the Tauranga Moana Iwi Collective Redress and Ngā Hapū o Ngāti Ranganui Claims Settlement Bill. He has acknowledged the impact of colonisation that made… ...
    GreensBy Jan Logie
    2 days ago
  • Rebuilding Christchurch – a lost opportunity?
    In rebuilding Christchurch, the city has a rare chance to build in a sustainable, creative and people-centred way. We can create a city that is so much more than a simple re-construction of buildings and transport links. Christchurch could be… ...
    GreensBy Eugenie Sage
    3 days ago
  • Rebuilding Christchurch – a lost opportunity?
    In rebuilding Christchurch, the city has a rare chance to build in a sustainable, creative and people-centred way. We can create a city that is so much more than a simple re-construction of buildings and transport links. Christchurch could be… ...
    GreensBy Eugenie Sage
    3 days ago
  • Minister must ensure 111 issue is fixed
    The Police Minister must ensure the 111 fault is fixed as an urgent priority as a 40 minute wait can be the difference between life and death, says Labour’s Police spokesperson Stuart Nash. “The Police have said the fault lies… ...
    3 days ago
  • New Zealand a world leader – in unaffordable housing
    The National Government has made New Zealand a world leader – in unaffordable housing, Labour’s Housing spokesperson Phil Twyford says. “The latest International Monetary Fund report shows New Zealand had the world’s second fastest growth in house prices at the… ...
    3 days ago
  • New Zealand a world leader – in unaffordable housing
    The National Government has made New Zealand a world leader – in unaffordable housing, Labour’s Housing spokesperson Phil Twyford says. “The latest International Monetary Fund report shows New Zealand had the world’s second fastest growth in house prices at the… ...
    3 days ago
  • Hospital meals making you sick
    I don’t know about you but I felt a bit sick watching Health Minister Jonathon Coleman eat supposed Dunedin hospital food last week.  Dunedin people have tolerated a crumbling hospital, lower access to services, longer waiting times and gross food… ...
    GreensBy Metiria Turei
    3 days ago
  • Hospital meals making you sick
    I don’t know about you but I felt a bit sick watching Health Minister Jonathon Coleman eat supposed Dunedin hospital food last week.  Dunedin people have tolerated a crumbling hospital, lower access to services, longer waiting times and gross food… ...
    GreensBy Metiria Turei
    3 days ago
  • Key needs to stop shifting and come clean
    John Key’s position on his lawyer’s offshore trusts lobbying has changed yet again with the Prime Minister admitting he told Todd McClay that Ken Whitney had approached him, says Labour’s Finance spokesperson Grant Robertson. “Yet again information has to be… ...
    3 days ago
  • Key needs to stop shifting and come clean
    John Key’s position on his lawyer’s offshore trusts lobbying has changed yet again with the Prime Minister admitting he told Todd McClay that Ken Whitney had approached him, says Labour’s Finance spokesperson Grant Robertson. “Yet again information has to be… ...
    3 days ago
  • Revolutionary art in Palmerston North
    Last night I was a judge at the May Day Cup, an annual theatrical event which celebrates International Workers Day. The event was organised by stalwart unionist Dion Martin and included a range of performers competing for the Cup. This year… ...
    GreensBy Catherine Delahunty
    4 days ago
  • Revolutionary art in Palmerston North
    Last night I was a judge at the May Day Cup, an annual theatrical event which celebrates International Workers Day. The event was organised by stalwart unionist Dion Martin and included a range of performers competing for the Cup. This year… ...
    GreensBy Catherine Delahunty
    4 days ago
  • Andrew Little visits Zaatari refugee camp
    Leader of the Opposition, Andrew Little, has visited the largest Syrian refugee camp in the world, Zaatari in Jordan, a day after seeing New Zealand troops at Camp Taji in Iraq. Mr Little spent several hours in the camp, meeting… ...
    5 days ago
  • Com Com’s Z Energy decision anti-competitive
    The Commerce Commission’s decision to allow Z Energy to buy Caltex can only undermine the competition in the fuel industry that is needed to ensure New Zealanders pay the lowest price for petrol, Labour’s Consumer Affairs spokesperson David Shearer says.… ...
    5 days ago
  • Com Com’s Z Energy decision anti-competitive
    The Commerce Commission’s decision to allow Z Energy to buy Caltex can only undermine the competition in the fuel industry that is needed to ensure New Zealanders pay the lowest price for petrol, Labour’s Consumer Affairs spokesperson David Shearer says.… ...
    5 days ago
  • OAG raps Govt over the knuckles on HNZ contracts
    The Government has been rapped over the knuckles by the Auditor General over its failure to properly manage $2.3m of contracts and conflicts of interest in relation to a merchant banker advising them on the state house sell-off, says Labour’s… ...
    6 days ago
  • OAG raps Govt over the knuckles on HNZ contracts
    The Government has been rapped over the knuckles by the Auditor General over its failure to properly manage $2.3m of contracts and conflicts of interest in relation to a merchant banker advising them on the state house sell-off, says Labour’s… ...
    6 days ago
  • Brownlee must step in as EQC spin exposed
    Gerry Brownlee needs to step in after EQC’s desperate spin in the wake of yesterday’s landmark settlement has been exposed by its own documents, says Labour’s Canterbury spokesperson Megan Woods. “Yesterday’s settlement showed that thousands of homes may not have… ...
    6 days ago
  • Brownlee must step in as EQC spin exposed
    Gerry Brownlee needs to step in after EQC’s desperate spin in the wake of yesterday’s landmark settlement has been exposed by its own documents, says Labour’s Canterbury spokesperson Megan Woods. “Yesterday’s settlement showed that thousands of homes may not have… ...
    6 days ago
  • OIO must explain Argentine pollution prosecutions
    The Overseas Investment Office (OIO)has questions to answer about how it safeguarded our sensitive land by allowing foreign investors with criminal prosecutions to purchase Onetai Station in Taranaki, says Labour’s Land Information spokesperson David Cunliffe.   “Rafael and Federico Grozovsky… ...
    6 days ago
  • Aussie banks in NZ should ban lending to offshore buyers
    ASB, Westpac and ANZ must confirm whether or not they will continue to fund the over-heated property market by lending to non-resident offshore home buyers, Labour’s Housing spokesperson Phil Twyford says. “This issue has arisen because their parent banks have… ...
    6 days ago
  • Aussie banks in NZ should ban lending to offshore buyers
    ASB, Westpac and ANZ must confirm whether or not they will continue to fund the over-heated property market by lending to non-resident offshore home buyers, Labour’s Housing spokesperson Phil Twyford says. “This issue has arisen because their parent banks have… ...
    6 days ago
  • Murray McCully needs to come clean over Tokelau ferry debacle
    Foreign Minister Murray McCully needs to come clean on why a New Zealand aid-funded vessel intended to service the Tokelau Islands is delayed, over budget and failed its sea trials, Labour’s Foreign Affairs spokesperson David Shearer says. “The new ship… ...
    6 days ago
  • Full independent inquiry needed to save New Zealand’s reputation
    Revelations that John Key's personal lawyer and trust advisor led a lobbying campaign to shut down a review of New Zealand's foreign trust regime makes the case for a full scale independent inquiry a matter of urgency, Labour's Finance spokesperson… ...
    6 days ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere