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What a shambles

Written By: - Date published: 8:01 am, September 4th, 2012 - 37 comments
Categories: privatisation - Tags:

I think Mike’s hit it on the head. National’s asset sales policy is dead, it just doesn’t know it yet. Key’s punted for touch, pushed the hard calls out by six months (at a cost of another $10 million to us, thank you very much). But what’s really going to have changed when we get to March 2013? Key’s ruled out giving iwi what they want. So, any sales will be blocked by court injunctions.

You would have thought that Key would have bit the bullet and set aside shares for iwi now, rather than delaying that inevitability for six months so that there can be just five weeks of talks with iwi. That they didn’t suggests a weakening commitment to the asset sales by the government – although certain ministers obviously haven’t reached the point of deciding to throw in the towel entirely.

For the Left, for all of us who have fought these sales, the delay is great news. The issue rolls on but no actual sale takes place. The best of both worlds. Labour and the Greens’ call for the referendum to be held before the first sale now has even more power. They will have the petition completed soon and there will be no reason why the referendum can’t be held before March 2013. If National refuses to allow a referendum before any sales, then that gives another stick to whack them with and puts them even further off side with the public. The Nats aren’t fools. They know this.

Which adds further colour to the decision to delay. If they had pushed ahead now, they would have been able to make the referendum look pointless – as it is they have dramatically added to the potency of the referendum. Maybe, just maybe, Key is even looking to the referendum as an out for this stupid and crisis-laden policy.

How much longer will Key be content to bleed over a policy that makes no sense and has no positive impacts on the economy, a policy that is actually just about giving some rich people a few more gold-plated shares? About six months, I reckon.

37 comments on “What a shambles”

  1. Carol 1

    Key Inc, is still aiming to divide (Maori, and Maori vs Pakeha) by using the water issue as a reason for delay, rather than the poor market conditions.

    There’s some method in their shambles.

    • mike e 1.1

      they knew before the announcment thats why Brownosely has changed the way RONS are funded.
      That was an argument the greens put up for funding the shortfall in the CHCH rebuild as well.
      A temperory tax of 1,2 and five percent on the welloff for ten years instead of borrowing.

  2. DJL 2

    For the first time I went over to the other side and red a couple of posts and several comments. I have to agree with Carol, its like a big bees nest has been wacked with a stick, they seem pretty angry and are using some language to blame it all on Maori.

    • Lanthanide 2.1

      Yeah, I went over to kiwiblog last night as well – lots of cries of “racist” over there.

  3. Dv 3

    Gaynor saying to float all the energy companies next year, not smart.

    I might have bought the shares at one stage BUT there is just too much uncertainty about the market.

    World economic scene, Water rights, energy demand, rio tinto wanting to pull out etc

    (as a matter of interest when Manapouri was built, they want to raise the lake 100 feet?. Public protest stopped that!!!)

    Add to that Contact has only returned 4% on average per year since the float.

  4. Poission 4

    The problematic issue with the asset sales,is that it is ideologically driven (as are most nat policy),and make little economic sense.

    The foremost problem is that a second wave of contraction is appearing globally especially in China and the EU.This depreciates the future value of the assets,and places the sale program beyond the Minsky moment.


    Secondly the policy programs such as employment regulation,and poorly thought out restructuring of public service institutions (read pogroms) have a destabilizing influence on the economy a positive feedback that allows unemployment to become persistent.

    This was one of the fundamental problems identified in one of the keynote papers at Jackson Hole

    eg Reinhart and Reinhart

    Economic contraction and slow recovery might also feed back on the prospects for aggregate supply. A sustained stretch of below-trend investment and depreciation of human capital prompted by elevated and lengthy spells of unemployment could hit the level and growth rate of potential output. The unemployment rate stays high because it has been high, exhibiting hysteresis as described by Blanchard and Summers (1986).

    The forcing mechanism for a reduction in aggregate supply might be policy itself. In adverse economic circumstances, political leaders sometimes grasp for quick fixes that impair, not improve, the situation. Included in the list of unfortunate interventions are restrictions on trade (both domestically and internationally), work rules and pay practices, and the flow of credit. The output effects of crises might be persistent because we make them so, in the manner posited for the Great Depression by Cole and Ohanian (2002).

    The reinforcing or positive feedback creates uncertainty in purchasing,investment,employment opportunity etc.

    • Carol 4.1

      Yes. There was a report on Al Jazeera News this morning on the economic slow down in China, and the end of the mining boom in Aussie as the global economy continues to tank:

      23 Aug 2012

      Australia’s resources minister has said that the country’s resources boom, one of the biggest drivers of its economic growth, is “over”.

      His comments come after BHP Billiton posted a 35% dip in profits and delayed plans to expand its Olympic Dam mine.

      There are concerns that a slowing global economy may hurt demand for coal, metal ores and other commodities.

      A slowdown in its mining sector, one of the biggest employers, is likely to dent Australia’s economic growth.

      “You’ve got to understand, the resources boom is over,” Martin Ferguson told ABC radio on Thursday.

    • fnjckg 4.2

      its moments like these, you need minskys

    • Bored 4.3

      So true it is ideological: there is however another thing behind this, and that is international capital as represented by the IMF and the banks who loan to our government and major corporates. The ideology they promote is reflected by NACT, it is lip service to the dogma at the temple of the money changers.

      These money men (and remember where Key came from) pull the levers behind the throne, they want our assets on the block for sale and will withhold money to our government unless Key plays ball. They don’t care if it is a fire sale, so much the better for them. Second stage economic contractions wont save us from the money men, it suits their cause.

      Consequently when you see Nact running a Maori issue, think smokescreen. Or bennie bashing, think smokescreen. If you see Labour becoming non committed to buying back or other strategies be sure they have been nobbled by the money men too. The asset sales WILL go ahead, referendum or not.

      • Dr Terry 4.3.1

        On the TV News tonight (5 Sept) Key said that the asset sales are not a matter of national concern.
        Maori hui dismissed with a lie about being in Japan (when in fact he will be back one day before, we were told).

  5. Simon says 5

    But I want my gold-plated shares.

  6. Carol 6

    Hone’s press release on the delay is here:


    “Government’s decision to delay the sale of state assets until at least March 2013 is a back-down of massive proportions and a victory for all New Zealanders, many of whom have been working furiously to get together the numbers needed to force a referendum to stop asset sales”

    “Even investment brokers are advising against this deal because of the lack of clarity around water ownership rights and that plays into the hands of the majority of New Zealanders who can see that the only people who will benefit from the sale will be overseas investors profiting from electricity price rises paid for by Kiwis”

    “I’ve also worked very closely with the New Zealand Maori Council on this issue since before they announced they were pursuing this claim and this is a real victory for them too, particularly given the buffeting they took from the Prime Minister and from some rather smug iwi leaders whose only idea of Maori rights is how quickly they can get themselves on the right side of the Prime Minister”

    “Certainly iwi have a role in this” said Harawira. “The challenge is for iwi leaders to ask the Prime Minister to allow Maori the time and space to discuss the full implications of the Tribunals recommendation that Maori have rights – ‘the closest equivalent of which, in the English sense, is ownership’.”

    “There needs to be a full and open consideration of the rights and responsibilities that Maori have to water and the importance of water to the nation as a whole” said Harawira “and that can’t be done in 5 weeks, nor should it only include the PM and half a dozen selected individuals meeting behind closed doors”

    • BernyD 6.1

      Go Hone Harawira !

      • fnjckg 6.1.1

        Hone is appearing more statesman-like, measured and cautious in his discourse
        and receiving some fine MSM coverage
        bet there is an even bigger hole in the budget forecasts (weather) now JOHN!

        • Sunny

          Has anyone noticed that any time Hone is shown on MSM we get treated to a shot of his Mum as well? About as subtle as most MSM opinion shaping….

          • tc

            They’d put Jake the muss from ‘once were warriors’ up if they thought they could get away with it.

        • TheContrarian

          “Hone is appearing more statesman-like, measured and cautious in his discourse”


          “foolish dickhead”

          “The guy is such an idiot,”

          “I’m not going to stand by and watch a blonde, blue-eyed redneck kick around poor people who, out of desperation, bond together because they see nothing in the blonde, blue-eyed society to give them a sense of hope for their own or their children’s futures.” 

          “It’s not going to be deep-blonde white-boy Todd that’s going to be affected”

          “He wouldn’t know a gang if it kicked him in the nuts.” 

          Statesman like! 

    • Bored 6.2

      Hones words some rather smug iwi leaders whose only idea of Maori rights is how quickly they can get themselves on the right side of the Prime Minister indicate not all is well within the Maori Party. Good words from Hone after this in his understanding that water is important to the nation as a whole, and that Maori have consequent responsibilities.

      The elephant in the room for the Maori Party seems to be that Hone now represents a real voting option for non iwi / hapu Maoris (i.e urban maori, non “titled” maori families etc). I do not know if these people feel alienated from any Treaty settlements, in their position I would. Seems from my viewpoint (and I am happy to be corrected) that settling claims with exclusive groups can only create “propertied” relationships in which the rank and file miss out to the “entitled”. This is exactly what the “right” would desire, the creation of more propertied private interests.

      • tc 6.2.1

        I’ve always thought that’s a fundamental plank of the hollow men strategy, divide and rule. The way the Maori landscape is that’s pretty easy for them to do and look ‘tough’ to the rednecks in the process cutting a shonky deal…win win in their view.

        Hone will pick up many disaffected Maori voters if he keeps calm and plays it smart with plain and consistent messaging. He’s been true to his ideals and voters know what to expect from him.

      • Murray Olsen 6.2.2

        Plenty of “iwi/hapu” Maori are taking a fresh look at Hone and Mana. More than a few pakeha are looking at them as a principled option as well. I may be overly optimistic here, but I sense the beginning of something.

        • Clashman

          I’m an upper-middle “class”, mid-aged, educated, male Pakeha from a relatively priveleged background ( and a little aprehensive about admitting that here). I voted Mana in the last election at this point am likely to vote for them in the next one too.
          Unfortunately I am the “black sheep” in the little world sphere in which I operate. There are so many with outdated entrenched positions on many things, that I fear it might take until the baby boomers are all but gone before we see any real traction for a party like Mana.

          • Carol

            And yet, Hone is a boomer….???!!!

          • Murray Olsen

            I’m probably considered a middle class baby boomer as well. I prefer to think in class terms rather than age groupings. My interests lie squarely with what I would call the working class, i.e. those who must sell their labour power to survive. In that sense, although I sell intellectual labour power and get a fairly good price for it, I’m working class.
            I really dislike the emphasis that someone like Bradbury puts on blaming baby boomers. People who have indulged in greedy behaviour and want to ruin the planet don’t do it because of the year in which they happened to be born. However, I will agree that a lot of aging dead wood needs to be kicked out of parliament, but some of the younger ones aren’t so hot either.

            • Carol

              Yes, when you look at what bomber actually says, his disdain for boomers is largely focused on aging conservative MPs and MSM journos.

              But there are also many neoliberal MPs in parliament, and some journos who are younger.

              • Clashman

                Probably its just I’m in an industry dominated by wealthy (greedy) baby boomers who seem to be anti everything. Anti-poor/bene, anti-Maori, anti-gay, anti-enviroment, anti-youth, anti-immigrant etc
                I hope I’m wrong about my previous comment but from where I’m viewing the landscape….
                No offence intended to any LWBB’s, the rightys’ can get fucked tho.

                • Bored

                  My good lady, as pakeha as myself, tells me she is going to vote for Hone. I still need to get over the “no pakeha boyfriend” bit, but he is making all the right noises.

          • Clashman

            Actually I’ll re-phrase that first sentence from – I’m a middle aged educated Pakeha from a relatively priveleged upper-middle “class” background. I despise the word class as it is used in this context, I can’t believe I used it to describe myself.

  7. BernyD 7

    They should be arguing for a “Permanent” clause that all these shares are only sold to or onto Taxpayers, they are NZ maori ragardless of their skin colour or political allegiances.
    Answer all the citizens concerns , and keeps NZ/Maori/Taxpayer ownership.
    It’ll slow the sales down, but Kiwis can keep investing in NZ.

  8. Matthew 8

    CAn anyone tell me what the ‘ten million’ that it ‘will cost’ is being spent on? It seems everytime someone farts it costs us ten million. This concept of pulling figures out of thin air is getting ridiculous, because they always estimate high, & if it comes in under, the money just vanishes anyway….
    but apart from that, good job !!

  9. felix 9

    As much as anything else this whole debacle is a true measure of all John Key’s much-touted skills as an economic expert, financial genius, and a real-world dealmaking moving and shaking businessman. Fail.

    He’s run into the Peter Principle, promoted to his level of incompetence, unable to perform the one single task he’s charged with.

    vto said it best a while back. He will fail at the peak, it’s written in his character.

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