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.
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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.
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