web analytics

Asset sale disaster

Written By: - Date published: 7:45 am, December 5th, 2013 - 30 comments
Categories: ACC, Privatisation - Tags:

So the government are predictably having to lower their estimates of what asset sales will raise them.

They’ve done a terribly incompetent job implementing a stupid policy.  And unfortunately that terrible job has made the stupid policy even worse.

When they promised us $10 billion for our assets back in early 2011 they were already receiving warnings that they were running Solid Energy into the ground.  But they fully expected to sell half of it for a great sum.

When they began a policy that was against 2/3 to 3/4 of the public’s wishes, as well as against all the opposition parties, leaving them to ram through major changes on a bare majority in parliament… it was somehow a shock that said opposition parties didn’t roll over and came up with alternate policy, as is indeed their job.

They then went screaming “nationalisation! nationalisation!” misrepresenting that opposition policy, and are now blaming Labour/Greens and “unsophisticated investors” (ie their mythical mum and dad voter-investors) for running scared of a threat of … nationalisation.

Their crown jewel Meridian’s problems with Rio Tinto were visible a mile off, but somehow still struck them by surprise, and they claim you surely can’t blame them…

Now I really don’t agree with selling our power companies off.  For multiple reasons – security of energy supply and selling a profit giving asset to pay off a lower rate interest than the power-companies’ dividends chief amongst them.

But if you’re going to put your ideological blinkers on and do it, at least do it right.

The Government didn’t do as badly with getting a reasonable amount of money with Mighty River Power, in the teeth of Labour/Greens new policy.  Not good, but nothing like the disaster that was Meridian.

It’s National’s fault for not anticipating Rio Tinto and especially their fault for trying to sell too much of the same too quick.

When you’ve just sold a major energy company, massively rebalancing the stockmarket and investors portfolios, the next thing they aren’t going to want is… another energy company.

So despite the interest-free loan sweetners etc they got about half the valuation of their biggest asset.  It went for a song.

Now next up is Genesis.  To sell this next year would be insane.  If investors didn’t want Meridian, they’re going to want Genesis even less.

Sell it, and they’ll get a pittance.

Currently they’re claiming they’ll raise maybe just over $4.5 billion from asset sales including Genesis.  Their borrowing (remember Labour’s surpluses?) is down from $260 million / week to $110 million / week currently.  That means they burn through our cash producing assets in less than 10 months.  This isn’t setting us up for future infrastructure, this is burning through your major assets for petty cash.

That’s before they fail to receive as much as they expect from Genesis.

How tied are they to their ideological blinkers to blind them from seeing their next failure?

I guess we’ll find out next year.

In the meantime, we need 1,000,000 no votes in the referendum to send a message to Key – so make sure you’ve voted – and your friends and family.

30 comments on “Asset sale disaster ”

  1. lanthanide 1

    Meridian and MRP at record low prices yesterday. 92.5c for Meridian and $1.99 for MRP. Analysis is that their prices drop when Labour looks more like it will win the next election.

    Act’s destruction is judged bad for National by the market…

  2. phil 2

    Good time for the Government to buy them back, eh?
    Just posted my Referendum Voting paper. It’s a complete waste of $ 9 million. It could have gone on the next Americas Cup campaign! It is clear now, that dimocracy is way too expensive, unaffordable and not working. If it’s not working, change it.

    • One Anonymous Knucklehead 2.1

      Buy? Nope. Receivers of stolen property don’t get their money back.

      Now, I’m not saying this situation is entirely analogous with receiving, but there is a further consideration: what better way to Tory-proof New Zealand strategic assets than by punitive reacquisition policy?

      The SOE model has failed. Neo-liberalism has failed, but until it hurts them in their wallets, the National Party’s owners will not resile from these policies.

      • Judge Holden 2.1.1

        No, what happened was that the Nats bilked everyone, including the Mum and Dad investors it conned into buying over-priced shares. That they said the companies were worth even more than the inflated price they sold them for amply demonstrates English’s massive incompetence. The programme has been a disaster on every possible measure.

        • jcuknz 2.1.1.1

          Originally I considered it a donation to help the government with some possible return.
          But when it came to the crunch I had other uses for the money.

  3. appleboy 3

    Heard English saying the most stupid thing yesterday. He said Labour ‘couldn’t have it both ways’, by saying National should not have sold the assets , and then complaining about what price when sold.

    Duh. We don’t agree with the sale AND we think you got a lousy price when you did sell them.

    These two ideas are entirely compatible!

    Media and Labour need to call the lying dick out.

    What a tosser, I guess that was a soundbite for the greedy/unthinking out there.

    • Disraeli Gladstone 3.1

      I think there’s probably a more subtle point than what English were trying to make. Which is that if the government sold too highly, then Mum and Dad investors couldn’t buy into it and it would all go to speculators. Which is why they had to sell lower.

      But Mr Clark here is absolutely bang on with: “and especially their fault for trying to sell too much of the same too quick.

      When you’ve just sold a major energy company, massively rebalancing the stockmarket and investors portfolios, the next thing they aren’t going to want is… another energy company.”

      That was the stupidity of the whole policy.

      • Naturesong 3.1.1

        Treasury did warn them.
        $2B per year is what they estimated the market could absorb iirc.

  4. Ad 4

    +100 Mr Clark

  5. Tat Loo (CV) 5

    Institutional investors got our best assets for cheap? Sounds to me like success for Keys mates. No fail there.

  6. Tracey 6

    I agree with tat loo. Especially on mrp which spiked up day one. Alot of keys former colleagues bought big and sold quick and pocketted the profit. Selling many power companies back to back contradicts so much of what mr key learned as a trader to maximise price for seller.

  7. jcuknz 7

    But for the sabotage on the part of Labour/Greens …….That is what I will remember about the event.
    I suppose I should be greatful to them in view of the current share price for putting this DAD off getting some.

    • One Anonymous Knucklehead 7.1

      Diddums, the nasty opposition parties came up with some policies that don’t suit you. It’s the risk you take, and after all, there are far worse things in life than losing a little bit of your money, Daddy.

    • framu 7.2

      oh bullshit

      asset sales are unpopular and its a political issue first and foremost – if you thought it was ONLY a financial deal – your an idiot

      if you were thinking about buying shares in the asset sales – and you DIDNT recognise that its a highly polarising political issue and you DIDNT ask your self what might happen when the govt changed – your an idiot

      if your going to claim that the only thing that affected the share price and overall result was the opposition announcing their policy intention BEFORE the shares went on sale – your an idiot

      The nats are in govt – not the opposition – i didnt realise that the opposition had so much power over the govt – those nats must have been quaking in their boots when that nasty labour party put a gun to their head and said “sell”

    • ropata 7.3

      yes it is all Labour’s fault that National was *forced* to piss away half the country’s finest assets :rollseyes:

  8. Will@Welly 8

    Key was working as a money man when the privatisation process began, so he knows how much money the speculators can make. Bill English was working in Treasury at the same time, he knows what sort of money that they too can make. Key knew he only gets one chance to sell these assets, keeping his buddies happy. He’s not interested in New Zealand, only what he can get out of it.

  9. Richard Christie 9

    Quite right, it isn’t nationisation, it is restoration or reclamation.
    The Labour/Green paries should stop being terrified of the term nationalisation, call it what it truly is and proudly adopt the policy.

  10. Matthew 10

    Taxpayers should be delighted at the foresight of Key and English to sell 49% of these Assets while they still had some value.

    The taxpayer has made some very good coin on these while the supposedly rich investor has lost out.

    It’s the best scheme to fix inequality anyone has ever come up with!

    • Lanthanide 10.1

      No, because the crown is losing the dividend stream that is the golden goose from these companies.

      The Greens have already done the maths that shows the government is $1b worse off by 2017, even after the proceeds of the sale is taken into account.

      Better luck next spin.

  11. Draco T Bastard 11

    How tied are they to their ideological blinkers to blind them from seeing their next failure?

    But it won’t be a failure to them. They would have sold it to the “worthy” so that those worthy can have a parasitical income on the backs of the impoverished and they’ll see that as a success.

    This National government are acting exactly as the old aristocracy and the let them eat cake attitude to the poor.

  12. Roy 12

    Have you perused the comments on that Stuff article? So much whining from idiot Nat supporters that it is all the fault of Labour and the Greens for ‘sabotaging’ the process. The stupidity of those people makes my head hurt.

    • infused 12.1

      Good to see so many people can see through Labours bullshit.

      • Paul 12.1.1

        Zzzzzz

      • framu 12.1.2

        asset sales are unpopular and its a political issue first and foremost – if you thought it was ONLY a financial deal – your an idiot

        if you were thinking about buying shares in the asset sales – and you DIDNT recognise that its a highly polarising political issue and you DIDNT ask your self what might happen when the govt changed – your an idiot

        if your going to claim that the only thing that affected the share price and overall result was the opposition announcing their policy intention BEFORE the shares went on sale – your an idiot

        The nats are in govt – not the opposition – i didnt realise that the opposition had so much power over the govt – those nats must have been quaking in their boots when that nasty labour party put a gun to their head and said “sell”

        so whats this bullshit you complain off? – all i see is a bunch of whiners to stupid to notice that investing in a politically driven sale will have political results

  13. jcuknz 13

    Paul and Rodel say it briefly and well 🙂

Recent Comments

Recent Posts

  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruapehu cycle trails gets PGF boost
    The spectacular Mountains to Sea cycle trail in Ruapehu District will receive $4.6 million in funding from the Provincial Growth Fund for two additional trails, Regional Economic Development Minister Shane Jones announced today. “This is an exciting development for the local community, and one that will provide significant economic opportunities ...
    BeehiveBy beehive.govt.nz
    3 weeks ago