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Bolger: privatisation has failed

Written By: - Date published: 9:03 am, October 14th, 2010 - 100 comments
Categories: privatisation - Tags:

20 years too late, Spud has announced that the neoliberal privatisation agenda has been a failure. He says we sold the wrong things, sold them the wrong way, got too little money, and created private monopolies. Of course, what we should have done is hold on to our assets, rather than turning them into cash cows for foreign owners.

Bolger is cutting in his assessment of the architect of the neoliberal revolution:

“some of our privatisations were done for a song. Sir Roger Douglas was worse than hopeless at privatising, to be honest.”

While he defended his government’s sale of the railways, he admits that it’s an asset now worth having:

He said that while NZ Post was on the wrong side of history, KiwiRail, despite its well-reported need for new investment, would prove to be on the right side as energy prices inevitably rose.

I guess you’ve got to give the guy some credit for getting it right now – his comments certainly undermine the current National Government’s nascent privatisation agenda. But wouldn’t it have been nice if he had been right back when he was Prime Minister, rather than when he’s a powerless old man?

100 comments on “Bolger: privatisation has failed”

  1. Craig Glen Eden 1

    Big ups to Jim I reckon he may be getting on but at least he can see the wood for the trees and has been man enough to say what he thinks, unlike the clown we have for a Prime Minister now.
    Im not sure that I would feel the same about Douglas however but dosen’t look like he will ever see the wood for the trees .

  2. M 2

    ‘I guess you’ve got to give the guy some credit for getting it right now – his comments certainly undermine the current National Government’s nascent privatisation agenda. But wouldn’t it have been nice if he had been right back when he was Prime Minister, rather than when he’s a powerless old man?’

    Sounds to me like a bloke feeling his own mortality and is scared of judgment day as well as the legacy he his has left his eight or nine kids – good one Jim.

    I think that Bolger is just an older sadder version of Key – Bolger and now Key love/d being PM and the supposed great statesman although to be fair Bolger did have a trace more colour to him.

  3. ianmac 3

    A breath of fresh air well spotted Eddie. It seems likely that NAct will announce plans to privatise before the next election. They promised that the electors would be told beforehand. It will be interesting as schools, rail?, health, police, roading come into the frame. (Is education being fattened up via National Standards?)
    And good of Jim to speak up.

    • MrSmith 3.1

      I think national will be playing the odds before the election nothing more nothing less, don’t expect any policy till the last minute like last time, and then it will only be one page vague nonsense.

  4. Bored 4

    Bolger was really never a neo lib from an economic viewpoint, I have often thought that the Shipley coup was a result of Jim not allowing Ruth Bitchardson full on control to pursue the Douglas agenda. He is in fact probably an economic pragmatist, not ideologically aligned to anything other than conservative principles. One might say his idea of a “decent society” might clsh with Richardsons idea of “decency”. You cant fault his observation, if it had worked he would have said so, it has not and he has said so. He has honesty, and he has a track record as a good Chairman of Board for Kiwibank etc.

    Jeez I dont like praisng a rightist…always a first.

    • Draco T Bastard 4.1

      Some of them are decent people, most of them aren’t, but some are. Bolger seems to be of the decent type.

  5. Colonial Viper 5

    Jim Bolger is showing himself as a man of conscience. Good on him.

    • Ari 5.1

      Less a man of conscience and more a pragmatist, but yeah, we always knew Jim was dangerous because he was wrong, not because he was unreasonable.

  6. Sean 6

    Glad to see he realized his mistake. Though Bolger should have noticed this mistake while it was happening. Lange also let it go too long.

    • Colonial Viper 6.1

      The Chicago School boys just seemed so certain of the way to make NZ an economic paradise, and they had all these ‘international experts’ to call upon who backed their views. Basically we were all hoodwinked by their tall theories.

      • Bored 6.1.1

        To repeat it, the definition of expertise is to know more and more about less and less until you know everything about nothing. Draw your own conclusions.

      • KJT 6.1.2

        Some were hoodwinked. Some of us thought it was stupid to sell assets at the time.

        Sure many Government departments were and some still are badly run. So are many private companies. The Peter Principle at work.
        It is the quality of the people in them that makes the difference.

        Telecom has managed to lose most of their market share despite starting as a monopoly.

  7. Sanctuary 7

    First Bernard Hickey saw the burning bush, now revelation has come to Bolger. Perhaps we should stake out (pun intended) Voldamort Birch and ask him if he has changed his mind and come to light of the sunlit uplands of economic common sense?

    We’ve had public transport come from nowhere as an issue to sweep aside National parties mayoral candidates in both our main cities, a real poke in the eye for Stephen “holiday highway” Joyce.

    The GFC will prove to be to neo-liberal market capitalism what the fall of the Berlin wall was to Soviet-style communism – the defining earthquake moment of the total discrediting of an ideology in the minds of the western public.

    The GFC set off a cascade of re-thinking the neo-liberal status quo amongst Western economic writers and thinkers. The tide is flowing out – and getting stronger and stronger – on right wing ideology. Neo-liberalism is dead, and the political parties that advocate it are dead men walking.

    • Draco T Bastard 7.1

      Neo-liberalism is dead, and the political parties that advocate it are dead men walking.

      Now if our left-leaning parties would just enunciate that forcefully and clearly we’d probably do a hell of a lot better in getting rid of the corpses.

  8. tsmithfield 8

    This suggests to me that “privatisation” is not the problem. The problem is that politicians seem to have little in the way of business ability and get thoroughly rogered by those who do. In a similar way, nationalisation hasn’t worked very well either for the same reasons. For example look at how Toll played Cullen et al in selling them a dog of a railway system.

    • felix 8.1

      And how did that happen ts? Toll built a shoddy railway and sold it to the govt, did they?

      Don’t be ridiculous. Your example highlights precisely the problem with privatisation.

      • tsmithfield 8.1.1

        Nah, what it shows is that governments are hopeless at getting favourable prices whether buying or selling. If the price is right any deal can be good.

        • felix 8.1.1.1

          Sounds like you’re saying it shouldn’t have been sold under the circumstances.

          However you’re dead wrong about the price. Douglas and Prebble negotiated a very good price for the railways – unfortunately they weren’t negotiating in our interest.

    • Colonial Viper 8.2

      What polly would turn down the chance of sitting on a big company Board of Directors, or to act as a $750/hr ‘consultant’ to industry after they get voted out of office.

      So being very friendly with business and banking interests makes sense to them. Problem is that the politicians are supposed to be working for *us*, the many and not the few.

    • insider 8.3

      Just shows that we are all really clever at investing and selling with the benefit of 20 years hindsight, and able to come to the brilliant conclusion that sometimes we got a good price and other times we didn’t. The man is a financial genius.

      • Colonial Viper 8.3.1

        Missed the point insider, we shouldn’t be selling at all.

        • insider 8.3.1.1

          That might be your point but it wasn’t Bolger’s.What if we had been offered $100b for Telecom in 1990? Would it have been worth selling then?

          • Bright Red 8.3.1.1.1

            silly question. obviously if someone is prepared to offer you a stupidly high price for something, that’s a good deal but it’s not going to happen.

            any real price will be based on commercial expectations of the profitability of the asset. If someone is buying it must be at a price they think will make them money, so why wouldn’t we keep it and make the money ourselves?

            We should only sell if we need the cash to pay down debt or buy something else… or if some idiot offers $100 billion, which obviously is never going to happen.

            • insider 8.3.1.1.1.1

              It’s not a silly question becuase the comment was we shouldn’t be “selling at all”. You;ve shown that it is not a philosophic view but one based on the perception of whether you are getting a fair price.

              We got more for Telecom in 1990 – and that’s in 1990 dollars – than its current market cap. Sounds a reasnoable deal in retrospect.

              • Nick C

                Hey insider, Im not against privitisation but I dont think that is a good argument for it. The answer I would give its “Yes we would sell at the overpriced offer, but then we would offer to renationalise the asset at a fair price”

                The same arguement applies in reverse if you oppose nationalising assets: The question becomes “If you oppose nationalisation, then would you be against the government buying telecom if it were offered all shares in telecom for $1?”. The answer to that is “No, but then I would immediatly privitise it at market value”.

                • insider

                  THanks for the contra Nick – I hadn’t considered it that way. To clarify I am happy with assets owned by governments, particularly monopoly ones. I am also happy for them to be sold when govt ownership is irrelevant and the price is right

                  • Locus

                    Telecom has gone down the ranking of telcos somewhat since it was privatised and yet it’s still worth that much? I think that its current market capitalisation figure reflects that telecommunications has become way more important to the world now than it was back then. Pretty bad judgement to sell off not only critical infrastructure, but also a business in an increasingly valuable sector. You could say the same about public transport as well with the way that oil prices and oil supply are heading. By the way, in the past 20 years has the average wage gone up by the same factor?

          • Draco T Bastard 8.3.1.1.2

            Would need to do the sums but, at a guess, I’d say $100b for Telecom in 1990 was still a bad deal. It would have cost more than that, over the years, to build it.

            Things aren’t worth what people will pay for it, but how much it actually costs.

            • Nick C 8.3.1.1.2.1

              I assume you are arguing labour theory of value? Modern economic concensus is that that is incorrect

              http://en.wikipedia.org/wiki/Paradox_of_value#Marginalism

              • BLiP

                Modern economic concensus

                Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!

              • Draco T Bastard

                Actually, I was just thinking of the costs of the hard physical stuff like food for the workers, homes for them as well, the copper, the steel and lead etc etc.

                You know, reality…

                Oh, wait, you’re a RWNJ who disbelieves in reality.

                • Nick C

                  Wow Draco, I wish I was as intelligent as you, just able to label everyone a ‘rwnj’ and be right every single time.

                  What you’re saying makes no sense; If I spend 1million dollars making a house doesnt make it worth 1million dollars. If you think it does, I have a bridge to sell you.

                  And blip you’re just so intelligent too, it must be awesome just knowing that a whole profession of millions of academics are all idiots and you see the truth and know everything that they dont.

                  • Draco T Bastard

                    Actually, it does. If it wasn’t worth a million dollars then you wouldn’t have spent that much.

                    • Draco T Bastard

                      I’ll clarify that a bit.

                      How much is something worth? The answer is: How much does it cost to replace?

                      As far as something that is infrastructure, such as a telecommunications network, the best way to determine what it’s going to cost to replace it is to ask how much it cost to put it in place in the first place. You may want to use some depreciation on some parts of it but, because it’s being continuously updated (unless it’s privately owned as Telecom have proved), you probably won’t get much of a reduction.

                      We were definitely not paid enough to replace the telecommunications network and administration when Telecom was sold. The same is true of everything else that the 4th Labour and National governments sold.

                  • cripes

                    Watch out he’ll set his spotty mates on ya !!

                  • BLiP

                    And blip you’re just so intelligent too, it must be awesome just knowing that a whole profession of millions of academics are all idiots and you see the truth and know everything that they dont.

                    Like Greenspan and his monetarist mates?

                    • Draco T Bastard

                      @JMH

                      Modern economics is a load of bollocks. This should be obvious due to its constant failing over the last 300 years.

                      The guy who spent $500k on the bar? Irrational.

                  • Vicky32

                    Economists are academics only by courtesy! 😀
                    Deb

                    • Jeremy Harris

                      @DTB, you couldn’t be more wrong, as usual…

                      A friend of mine recently brought a bar for $250,000 that had just had $500,000 of renovations done…

                      The intrinsic value of a company is it’s profitability divided by the lowest rate of return a purchaser is willing to accept…

                      Most companies book value is just that – the value on the book, i.e. the money the company has spent on assets minus it’s debt, these assets are usually very industry specific and have little (compared to acquisition cost) resaleable value, especially when distressed, in liquidation, etc…

                      Book value and total capital are good tools to assertain the true value of a company because their changes over time give an indication of not only rate of return on equity but how it has changed over time… Obviously you want a high and increasing rate of return, these factors determine the companies value not what is spent on the business as my opening example demonstrates, the previous owner increased the equity in the company while decreasing the rate of return, the value of his business stayed essentially the same after he had spent $500,000…

                    • Jeremy Harris

                      @DTB, it’s failings like the largest increase in wealth, living standards, life expectancy, health, freedom and education in the history of man..?

                      That failure..?

                      According to your earlier posts his bar should be worth $500,000 more than it was before he started his renovations…

                      I’ve used the above method to calculate the value of an investment 100s of times, it works… Although I accidentially used the word intrinsic before value, it should have just read value…

                    • Jeremy Harris

                      Book value and total capital are good tools to assertain the true value of a company because their changes over time give an indication of not only rate of return on equity but how it has changed over time…

                      Sorry that should have read:

                      Book value and total capital are good tools to assertain the true value of a company because their changes, measured against profitability and it’s changes, give an indication of not only rate of return on equity but how it has changed over time…

                      Captcha: sums, hilarious…

                    • Colonial Viper

                      Jeremy.

                      The real value of a small business often has very little to do with capital value/book value and their associated accounting conventions. Its based on something completely different: how much money can the business make looking forwards. You didn’t mention that at all, except from trying to use historical trends to forecast future potential. Big mistake in business.

                      the previous owner increased the equity in the company while decreasing the rate of return, the value of his business stayed essentially the same after he had spent $500,000…

                      You ignored the possibility that he may have needed to upgrade and refresh the bar simply to stay in the game e.g. if nearby competitors had just refurbished themselves.

                      @DTB, it’s failings like the largest increase in wealth, living standards, life expectancy, health, freedom and education in the history of man..?

                      I think you drunk the kool-aid, trying to conflate everything with modern economics.

                      For starters, your so-called ‘increase in wealth’ = ‘increase in interest bearing debt’

                      Note that approximately 20% of adult NZ’ers have negative or little net worth. How’s that for wealth?

                      Your argument goes down hill from there.

                      @DTB, you couldn’t be more wrong, as usual…

                      Like I said, I think you drunk Milton Friedman’s kool-aid.

                    • Draco T Bastard

                      According to your earlier posts his bar should be worth $500,000 more than it was before he started his renovations…

                      No, according to my other posts he shouldn’t have spent the $500k and that he did so on the assumptions of wrong information. i.e. he acted irrationally. This is not true of the telecommunications network or the railways. We (society as a whole) really actually did need them and still do. Under those circumstances it’s better for the community to pay for them and keep them. Replacement costs are the way to measure value for infrastructure – not profits because they invariably don’t return profits. You’ll note that the telecommunications network wasn’t put in place by private firms and, despite deregulation, they’re still not rushing to do so. What they did do was petition the government for unbundling of Telecom’s local loop. The simple reality is that the only way that a private firm can make a profit from infrastructure is if the government pays for it (hence the $1,5b promise for FttH by NACT). (Actually, considering the fact that almost nothing has happened in the “capitalist” era without government subsidies perhaps I should be saying that a private firm can’t make a profit on anything unless the government pays for it.)

                      That failure..?

                      It has brought some benefits but it keeps falling over (The Great Depression, the GFC etc), has brought the world to the brink of ecological collapse (Climate Change) and has half the world population living in dire poverty. That failure. An economic paradigm that can’t predict anything (the measure of a theory is it’s ability to predict) and goes around dismissing reality.

                    • Jeremy Harris

                      @CV, I thought that was so obvious I didn’t even need to mention it on this blog… Maybe you missed the part where I said:

                      Book value and total capital are good tools to assertain the true value of a company because their changes, measured against profitability and it’s changes, give an indication of not only rate of return on equity but how it has changed over time…

                      They are tools allowing you to see which companies use equity the most effectively and use retained earnings to increase earnings per share the fastest…

                      except from trying to use historical trends to forecast future potential. Big mistake in business.

                      This is an absurb statement, it’s very true when picking an investment fund but not when picking an individual business to invest in… A company’s past profiability measured against equity and a company’s current profitability measured against equity and it’s change allows you to see whether a company has a durable competetive advantage and increasing rates of return and whether management is using reatined earnings well… I always go back 10 years… If a company has a durable competetive advantage you can use this method to project investment returns relatively accurately…

                      I’ve pointed out to you numerous times that the average American living standard has increased sevenfold in the last century… The average beneficiary in NZ has a standard of living the upper class would have had in the UK 300 years ago…

    • Bored 8.4

      TS….ho hum…You ascribe some degree of superiority to business nous over political nous and ability….and it seems to me the same people are involved. Your argument is in laymans terms a load of bollocks, just another tendentious excuse to throw strawmen at what is really an argument about politically sanctioned larceny. As the Romans would say “Caput tuum in ano est”.

  9. “For example look at how Toll played Cullen et al in selling them a dog of a railway system.”
    Or how the Bolger Government was gamed (and asset stripped) by Fay Richwhite when selling NZ Rail in 1993.

  10. NZ Groover 10

    I used to work for the old Post Office many years ago before it was sold and became Telecom. Back then the Post Office used to charge a business $1.03 to call Wellington (and that was in yesterday’s dollars!!!). Telecom charge the same business about $0.10 nowadays. I could also tell you some absolute horror stories about the waste and inefficiency back then. Privatisation wasn’t good for us as workers but was hugely beneficial in reducing costs to communicate.

    • Colonial Viper 10.1

      Waste and inefficiency can be eliminated without having to sell organisations off. Just takes backbone and good management skills.

      • RWNJ 10.1.1

        Backbone was something that neither Govt had. Under govt ownership 99 days to get a phone connected, We still had manual exchange’s for gods sake. best move ever was to sell it .

        • BLiP 10.1.1.1

          Any and all improvements to telecommunications in the last 20 years have been due to technology – not management. If anything, management has hindered the full potential offered by technology. The idea that private ownership is somehow better than public ownership fails to recognise the obvious.

    • mcflock 10.2

      cry me a freaking river – Prebs tried to bring up all that sort of crap in his toilet-paper book.

      Cellphones also cost a huge amount of money to use in the 1980s. It’s amazing what technology can achieve.

    • Draco T Bastard 10.3

      Really? So did I – as a Telecom Tech. That change you mention would have come about anyway due to changes in technology.

      Back before the middle of the 1990s the exchanges were analogue – they were huge, metal machines that cost massive amounts. Cables were sheathed in lead and steel while the wires in them were wrapped in paper. So, yeah, toll calls were expensive – because every bloody thing was expensive. As technology changed it became less expensive. Instead of an exchange taking up an entire building steel it took up a single room. Cables became sheathed in plastic and so did the wires in them. Instead of manually twisting wires together we got tools that could crimp them in a tenth of the time. With the drop in the price of cables it became economic to put in enough cable pairs for two lines in every home rather than party lines. This, in line with remote control digital technology, allowed phone lines to be left connected rather than having to send someone around disconnect them (and then to reconnect them later). Which, of course, meant that phone lines could be connected immediately rather than when someone was available.

      All the advantages that people point out and say happened only because of the sale would have happened anyway due to technology. All the sale did was make it so that, instead of the profit going back into the network, it went overseas putting a developmental break onto our telecommunications. If we’d kept it we’d already have FttH to most of the country and not have to have the government (us) subsidising private companies to do it now.

      As I’ve always said, the restructuring needed to happen as there really were inefficiencies, the fire sale didn’t.

      • NZ Groover 10.3.1

        Draco, I was both an exchange technician and lineman. The old technology you’re talking about (Step by Step exch’s and lead cabling) was a sunk cost that had been paid back many times over The new technology (NEC exch’s and grease filled cable) reduced the costs to operate and maintain the network but these weren’t being passed onto consumers. Competition, not so much technology, was the real enabler for the massive cost reductions we’ve seen. This also drove restructuring at Telecom as they needed to become more efficient to compete effectively.

        • Draco T Bastard 10.3.1.1

          but these weren’t being passed onto consumers.

          Yes they were – in upgraded exchanges and increased network capacity.

          What competition?

  11. felix 11

    “some of our privatisations were done for a song. Sir Roger Douglas was worse than hopeless at privatising, to be honest.”

    Bullshit. This presumes that Douglas and Prebble were attempting to act in our collective interest.

    Make no mistake, our assets were sold “for a song” by design. That bunch of crooks were bloody good at privatising and it went down exactly as they intended.

  12. insider 12

    Eddie

    Where does Bolger say privatisation is a failure?

    Where does Bolger say privatisation created private monopolies?

    Sounds more like you’re saying these things.

    • Colonial Viper 12.1

      What amounts to theft of public assets – us being paid cents in the dollar of what they actually cost to create – by the private sector is a failure for the common good.

  13. Nick K 13

    Shame on Helen Clark for approving the sale of Telecom as deputy PM at the time.

    • felix 13.1

      Yes. For shame.

    • Colonial Viper 13.2

      Forget the ‘shame’ Nick K, its time to grow up and kick the right wingers out of office.

      • grumpy 13.2.1

        so, was Helen Clark a “right winger”?

        • felix 13.2.1.1

          She was part of a mostly right-wing government in the 80s.

          She led a mostly centrist govt from 1999 – 2008.

          Are you finding it hard to keep up, grumpy?

          • Draco T Bastard 13.2.1.1.1

            The RWNJs always find it hard to keep up. Things change but they try to stay the same and so don’t recognise that that change has happened.

  14. smhead 14

    Haven’t seen Phil Goff renounce the privatisation agenda of the 1980s. Wasn’t he a senior minister then?

    • felix 14.1

      I’d like to see him renounce it too.

      Much more than that I’d like to see Bill English, John Key, Gerry Brownlee and Vogon Commander Joyce renounce it, seeing as they’re the ones who are intent on re-instating it.

      Goff isn’t.

      But that’s just silly old me, stuck in present-day reality again.

  15. Pascal's bookie 15

    May I congratulate the resident righties on their steadfast ability to ignore the political reality of privatisation.

    Just keep talkin’ online righties! I’m sure you know best. Whatever you say guys! Honestly, Key’s poll ratings prove that you are not out of touch! It’s the lefties who are arrogant and always telling people what’s what and whatnot. Preach it brothers.

    • insider 15.1

      Don’t dispute the opinions and political issues, but I’d note that far fewer kiwis do not bank with KB than want to retain it, which is more telling.

      • Anthony C 15.1.1

        I think one way of charting the success of KiwiBank is by how scared it has the other banks, and how they have reacted through their marketing. I’ve been polled about 5 times in the last year or two on banking, and all of it has focused on perceptions of “kiwiness”. Look at BNZ’s new campaign, they’re all trying to ride the bandwagon, and I bet ASB’s new campaign minus Goldstein will be something similar, they all want to be KiwiBank.

      • felix 15.1.2

        “…far fewer kiwis do not bank with KB than want to retain it, which is more telling”

        I’m going to assume you meant to say “far fewer kiwis bank with”, but yes, very telling. I think it tells us two things:

        a) kiwis understand that one of the reasons we have our own bank is that it serves to regulate the practices of the foreign-owned banks via competition, and

        b) kiwis don’t only consider their own “rational self-interest” but also that of other people.

        i.e. perhaps the rest of us aren’t as short-sighted and/or selfish as you.

        • insider 15.1.2.1

          Correct assumption. Sorry for the error.

          re (a), I agree Kiwis think that, not sure they understand that based on hard evidence.

          Where is the evidence it has had a significant competitive impact in terms of the cost of bank services? I can see it has branches and customers, but are lending margins lower and is that due to the KB effect? I haven’t found any.

          as for (b), Sorry, is it short-sighted and/or selfish to express an opinion about a subject or is it only short-sighted and/or selfish if it potentially is different from yours?

          • felix 15.1.2.1.1

            I don’t have any evidence. Maybe kiwis are deluded? Maybe they just feel safer having a kiwi-owned bank around? I don’t know, you could be right.

            Good to see you challenging the basic assumptions of market theory though.

            And sorry, I shouldn’t have made that last point so personal. I meant that it implies selfishness and short sightedness to assume that someone would only support something that had an immediate positive effect on them as an individual.

            • insider 15.1.2.1.1.1

              Thanks for the response felix.

              Frankly I think it is an emotional response to KB, played up by marketing. I don’t believe it has changed the market much at all.

              I found some data from the RB showing some lending margins had actually grown, which goes against what you’d expect for a competitive market http://www.rbnz.govt.nz/monpol/3683652.pdf – open to debate as to why – GFC may be the stronger driver and it only goes back a few years and any KB effect may have already impacted.

              I wasn’t thinking about it personally- I pay no fees and haven’t since well before KB existed. Plenty of banks offered that if you had a mortgage.I was more thinking, has it provided a national benefit in terms of driving the cost of banking down in a way unique to NZ?

          • Draco T Bastard 15.1.2.1.2

            Just before KB launched my ASB on-call account charged 25c per EFT-POS and electronic transactions. When KB launched I opened an account with them because their on-call accounts didn’t charge for EFT-POS or electronic transactions.

            A couple of months later and ASB on-call accounts stopped charging for EFT-POS and electronic transactions.

            Gee, I wonder what changed….

      • Pascal's bookie 15.1.3

        Why do you think it is ‘more telling?’ What on earth does that mean?

        The question is , ‘Should we privatise stuff’, and the answer is ‘no, sez 80 perecent’.

        Who they bank with is completely beside the point.

      • Vicky32 15.1.4

        I’d bank with KB if I had a job, but if I switched now, WINZ might well mess up, cos it’s what they do!
        Deb

  16. Anthony C 16

    Not too surprised, Bolger always came across as a conservative anyway, and the neolibs such as Richardon/Douglas (and their entourages) infected both major parties around this time. At least Labour has kind of got rid of most of theirs…

  17. prism 17

    Hindsight it’s a wonderful thing. And Bolger is not powerless. He is speaking up from a position of involvement in business and good things for NZ. So his opinion counts amongst many people. As for knowing the right thing to do at the time, he got caught up in the zeitgeist and that’s all too easy apparently. I heard a radio interview of someone confessing how quickly their opinions had been turned right round, By wartime propaganda and in a matter of a week I think.

  18. Treetop 18

    Owning Kiwirail is crucial to Celia Wade – Brown and Len Brown sorting out transport in Wellington and Auckland. The government has said that there will be no new money for roads.

    When Toll owned the rail all they did was run it down, cut services, reduce long distance travel passenger and frieght, (at one stage the Wellington to Auckland passenger service was jeopadised) and cream off the profit.

    Do I think that Celia Wade – Brown and Len Brown have vision for rail, I most certainly do. What would be the outcome if NZ did not own Kiwirail? Does anyone know if NZ still owned the railway tracks when Toll ran the show?

    • Treetop – Toll never owned the rail per se – the Government has owned the rail network since 2004 as a seperate CROC – Ontrack. The state would own the network and Toll would purchase the rolling stock, operations and locomotives from Tranzrail.

      It is really ironic that the right demonise Kiwirail as Cullen’s rail set, because among all of the Labour cabinet, he was one of the those most opposed to the buy back – I know this because YL asked him in 2006 at the Labour Party conference.

      He favoured ownership of the tracks only, and the gradual phasing out of the subsidy given to Toll Holdings. The problem was that after a while, Toll was reneging on the deal, demanding greater subsidies or it would cancel prominent services like the Overlander. Labour was not keen on a permanent subsidy, and eventually decided that it would be simply cheaper, and rail would be more likely to survive as a form of transportation if it was totally state-owned – the split model had not worked.

      However, the state operator does not, as far as I am aware hold a contractual monopoly on track use rights, and as such, other companies can provide rail services if they can overcome some of the entry to market barriers – and pay Ontrack usage fees.

  19. Rharn 19

    All those with a ‘smidgon’ of intellect saw the failure while Prebble
    and Doulas were flogging off our assets. It’s the reason I left the Labour Party.

    It’s a mystery to me why it has taken Bolger and others so long what many saw in an instant. Still its good some commentators are speaking up. Better late than never. I hope they don’t become silent in the lead up to the election.

    • Treetop 19.1

      Rharn, Prebble and Douglas are also too slow to see the demise of their baby ACT. Will they try and sell Hide to Epsom?

  20. Maggie 20

    Bolger is rapidly becoming NZ’s version of Malcolm Fraser. Glad to see he’s finally seen the light, maybe he’ll get to heaven after all.

  21. I spoke with Jim at the Al Gore presentation in Auckland http://oilcrash.com/articles/algore01.htm I was nearly struck dumb when I mentioned peak oil, he agreed … and went on to say that palm oil was pointless. And how bad the devastation in Asia was … I know of 15,000 Orangutans that would concur.

  22. Jeremy Harris 22

    It seems to me Bolger is saying privatisation was done wrong – not that it shouldn’t have been done…

    More sense than usual out of Spud…

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