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Couldn’t organise a piss up in a brewery

Written By: - Date published: 7:18 am, November 6th, 2013 - 98 comments
Categories: capitalism, national, privatisation - Tags:

National was warned not to give the main ultrafast broadband contracts to Chorus. All it would do would restore and strengthen the monopoly that had kept prices too high ever since Telecom was privatised (and which David Cunliffe did such good work to break up).

Of course, National ignored that. And now, once again, National finds itself in a corner, about to bailout out a large corporate that is using its market power to threaten its political agenda.

Chorus is crying that it will go bankrupt if the Commerce Commission’s decision that its wholesale copper broadband prices have to drop by 23% is allowed to stand. And it’s very quick to say that will throw National’s ultrafast broadband plan in to chaos.

Effectively, what they’re saying is that they promised to build the fibre network too cheaply to fund the build from the contract itself and they need it to be cross-subsidised by being allowed to over-charge for copper.

National was warned that Chorus was doing this at the time. They were warned that Chorus was offering artificially low prices for the fibre build so it that would corner the bulk of the contracts, which would then allow Chorus to act inefficiently, maximise its profits, and lean on the Government at a later date to get more money. That’s what happens when you create private monopolies.

I don’t believe that Chorus will go bankrupt if it has to drop its copper prices. It made a $171 million profit last year.

No, what we’re seeing here is the intersection of a failed privatisation (Telecom) that created a private monopoly (Chorus) and the inept National Government which has once again backed itself into a corner dealing with a major corporation and now seems almost eager to hand over some public cash.

It’s Warner Bros. It’s the SkyCity deal. It’s South Canterbury Finance. It’s AMI. It’s Rio Tinto. It’s the cut-price the institutions forced for the asset sales. It’s Solid Energy. This Chorus mess is the same old story of National reaching into your pocket to hand money to some corporate that has the power to threaten its political agenda, at the same time as saying there’s no money for the stuff that really matters to Kiwis.

Again and again, National have screwed up their dealings with corporates, and we’ve paid the price.


98 comments on “Couldn’t organise a piss up in a brewery”

  1. Colonial Viper 1

    Typical for the NATs to reward bad corporate behaviour by handing out millions in other peoples’ money.

    • greywarbler 1.1

      National is always in a corner. It’s just that someone has lit a match and revealed it.

  2. framu 2

    amy adams was on the radio last night trying to claim that no-one knew that copper prices needed to, and were going to come down – which is 100% bullshit and im staggered at the boldness of the bullshit

    Im amazed that people are seriously trying to run the line of “but people wont buy the shiny new model” –
    how on earth is that the fault of the copper customer?
    Why should they be forced to pay more to create a false market in order to encourage more takeup of UFB?
    Why isnt the shareholders taking the hit for investment in new infrasturcture?

    This is as much about protecting the nats failed bullshit as it is about protecting chorus dividend flows – hmm who owns what aye?

    scratch a neo-liberal – find a thief

  3. BM 3

    Should just remove the copper, problem solved.

    • Colonial Viper 3.1

      And you want Chorus to reap hundreds more millions for doing that?

    • framu 3.2

      why do you hate competition? You some sort of communist or something?

      • BM 3.2.1

        Chorus is losing a ton of money on the install, there only hope of survival is if everyone goes off copper and jumps onto this new high speed cable.

        The easiest way to solve that problem is if you take one of those options off the table.

        • vto

          You Know what BM? Who the fuck cares about Chorus’s survival? If it fails to meet its obligations under the installation contract then I’m sure there will be provisions which allow the government to kick it off the install and complete it itself or use an alternative installer.

          Can someone please explain why we should care for Chorus? Why it shouldn’t be subjected to the demands of the free market private enterprise arena that its investors so warmly embrace?

          • David H

            Fuck Chorus. Let em go broke. I mean what a cheek, they fuck up their tender, and then have the bare faced cheek to come cap in hand to the Doormat they call our PM.

        • framu

          so you are a communist

          1) did or did not chorus know that copper prices were too high and would be forced down if they didnt come down?

          2) did chorus factor this into their bid?

          3) are the investors taking a hit on the development of new infrastructure that they stand to profit from?

          4) why should customers of one product subsidise a different product?

          5) if no ones buying your product shouldnt you improve your product?

          Theres no way i would be switching to UFB at the moment as the cost of the plans are through the fucking roof. When it becomes more affordable i might change, but untill then i will adapt my internet use to suit the service im happy paying for – standard broadband. Thats my choice as a consumer isnt it?

          Its chorus pricing that is the issue, and they are stifling innovation because of their idiotic behaviour

          • BM

            Yes, I’m actually Joseph Stalin, back from the dead and now spending the next millennium posting at the standard.

            You may not have noticed but I didn’t actually state that I thought ripping out the copper was what should happen.

            I was just floating the idea that this could be one way to solve the issue and save Chorus.

            • framu

              “You may not have noticed but I didn’t actually state that I thought ripping out the copper was what should happen.”

              yeah you did – twice

              1 – “Should just remove the copper, problem solved.”

              2 – ” there only hope of survival is if everyone goes off copper and jumps onto this new high speed cable.

              The easiest way to solve that problem is if you take one of those options off the table.”

              you can redefine what you meant till the cows come home – but your words are all there in black and white

              But your still avoiding every single point being put to you. Why?

              So you can focus on my little dig at your expense if you want – or you could discuss the finer details of the issue. Why are you sticking up for bad business practices by a monopoly that is trying to hold the tax payer and its customers to ransom?

            • felix

              “one way to solve the issue and save Chorus”

              Nope, you started from the position that the issue was to save Chorus.

              • Colonial Viper

                I’m confused – isn’t the role of Government to support corporations and shareholders at the cost of the citizenry? At least, that’s what I picked up from watching National.

                • Jim Nald

                  Mmm yah, great support for the board of directors’ and senior management’s excessive remuneration (thank you very much taxpayers and NZ citizens, and the National Government) and the $170 million last year to shareholders (thank you, thank you, thank you very much, National Government).

                  • Rogue Trooper

                    …”for your kind donation, thank you very much, thank you very, very, very much…” (Chore-a-thon).

          • Draco T Bastard

            4) why should customers of one product subsidise a different product?

            That’s a false argument. If we still had Telecom as a state monopoly it would be inevitable that the users of copper pay for the crossover to fibre as Telecom’s surplus from renting out the copper would pay for the installation of the fibre. The reason why this isn’t happening is because all that surplus went into dividends instead and now we have to pay out taxpayers money to get the fibre installed.

        • hoom

          “Chorus is losing a ton of money on the install”

          Surely you mean ‘investing in long term infrastructure which will reap great dividends in the future through reduced maintenance costs of a brand new, water resistant & largely non-electrical network vs ancient, decaying, corrosion prone, patched to hell legacy copper network’

          If there is really a need for a monopoly here to ensure that people are using the better network it should be a State owned & operated ‘at cost’ one like the roads.

          • Jim Nald

            LOL !

            Chorus is losing a ton of money … yeah, like they have $171m to burn !?

            Oh, $171m of profiteering at the cost to taxpayers, citizens, and Amy Adam’s noble consumers who need better affordability and access.

            (It had to be Amy Adams because the Joyce stick has gone underground to let Amy front and take the bullets ho ho ho.)

        • fender

          What a dick, how about when the engine mounts are worn out the engine has to be removed and the vehicle has to then be propelled Flintstones style, would that seem fair to you BM…

        • thatguynz

          So perhaps they should have bid realistically.. How the fuck is it our problem?

        • Draco T Bastard

          It’s neither our place nor the governments as our representatives to ensure that Chorus survives. If it collapses, well, that’s the risk of doing business within a capitalist economy.

          It is the government place to ensure that we get those services. The best way to do that is actually through a state owned monopoly which is why that’s what it was.

  4. Philgwellington Wellington 4

    It’s business as usual folks! We now clearly witness the Tories ‘government’ gifting taxpayers money to big business. It’s NOTthe case! It’s Corporate interest looking after its corporate friends, assisted by a faux ‘government’. It is not really a government at all. It only gives the appearance of one. It’s called corporatocracy.

  5. vto 5

    Well there aint much space left for more nails in the coffin of neoliberalism is there ….

    Private enterprise can do these things much better they said
    Private enterprise has efficiencies that public doesn’t they said
    It will result in lower costs they said
    Taxpayer funding is not required they said

    all of it a load of hogwash. Fine in theory but now we have seen the practice and it does not match. It has failed.

    This government will never admit it of course – that will be left to the dregs of the National Party post-defeat in 2014. Watch them jump on board and also dump this neolib religion within a short space of time after being routed next year.

    Key is riding the peak of the crashing wave to the reef below. He will be remembered as the poster boy for all that has been shown to be wrong with their neoliberal privatisation free market individual greed religion. He will shoulder the blame for it all and for the taxpayers mind-boggling bailouts of private people.

    • Draco T Bastard 5.1

      Well there aint much space left for more nails in the coffin of neoliberalism is there ….

      Private enterprise can do these things much better they said
      Private enterprise has efficiencies that public doesn’t they said
      It will result in lower costs they said
      Taxpayer funding is not required they said

      all of it a load of hogwash. Fine in theory but now we have seen the practice and it does not match. It has failed.


      The state monopoly that the arseholes in the 4th Labour government sold ran close to perfectly. The implementation of “competition” has just upped the costs while providing us with a poorer service.

  6. geoff 6

    Great post, MS.

    The answer, of course, is to have state-owned providers of many of these services. At least then, if there are fuck-ups, and the government has to do a bail out, then the money still stay in kiwi hands.

  7. vto 7

    I am staggering around this morning woozy on the realisation that John Key simply does not believe in the principles of the free market and competition and wants to go full-blown socialist.

    Excuse the language, but John Key is just a fucking empty fuck

    • Draco T Bastard 7.1

      He never did believe in the free-market, no capitalist does, but he’s not going socialist on us – he’s going fascist.

  8. Tracey 8

    It is common for large corps to low tender and cram variations and loopholes. Funny that many who say they want govt out of business make their living securing govt contracts is they know its a game they usually win. Chorus would be the exception except this govt wants to help them out contrary to market forces.

    • vto 8.1

      Yes, and that is one of the big problems with tender processes – everyone goes hard out to push their lowest possible price, while at the same time identifying all possible loopholes, missed detail, etc for later variation cost attack.

      In our business we never go down the tender road – it sets the parties up at logger-heads from the start. Much better to work up a price and contract open book styles. Everybody n the same boat. Works out cheaper, get a better product, the parties are more certain in their returns, and everybody comes to the job happy each day (and that aint no small thing…)

      This problem with Government procurement is being seen a lot in Christchurch rebuild. Government goes hollus bolus into full blown tenders and goes hard for the lowest possible tender. It is a flawed process.

      Tenders either result in greater cost to the client than an open approach or they result in the supplier going bust or backwards.

  9. tc 9

    You can put a new brand, logo and make some shiny feel good TV ad’s about how Chorus love to connect kiwi’s etc. Hell even get Jake the Muss to voice over a Gigatown campaign that funnily coincides with this latest cry for help.

    Underneath it all is the old Telecom, same network, management, ageing systems that should have been replaced decades ago and an attitude to match.

    Time to take the old clunker down to the shed, salvage what we need and discard the rest. First lets wean it off the public tit so the bellys not full to minimise the mess.

  10. Lanthanide 10

    I don’t think National were particularly culpable for what happened to AMI, so shouldn’t really be on that list.

    Yes, it got a bailout for not being able to do it’s job properly. Arguably there should have been some sort of regulation in place so that the situation couldn’t arise. But AMI’s problems reared their heads 2 years into National’s first term; it’s not really up to an incoming government REGULATE ALL THE THINGS within their first 2 years in the job.

    • Zorr 10.1

      They get a term of 3 years… so 2/3rds of the way through a term they’re still not expected to be able to deal with issues? Why not just say that until they are 5 years in they shouldn’t be held accountable for anything because everything that is causing problems now was put in to motion by the previous government… we only want the kudos for good stuff happening here!

      • Lanthanide 10.1.1

        Er, they did “deal” with the issue of AMI by bailing them out.

        But it’s hardly their fault AMI needed to be bailed out – they didn’t cause the earthquake, and as I laid out, you can’t expect an incoming government to regulate and investigate every single industry within 2 years of taking office.

        On the other hand, it is directly National’s fault that South Canterbury Finance had to be cashed out, and directly National’s fault that Solid Energy had to be bailed out. The current Chorus situation is likewise directly National’s fault.

        • Colonial Viper

          That’s a pretty fair assessment I think. Like Bernie Madoff who only got found out because of the GFC, AMI’s mismanagement was only exposed by the Christchurch earthquake.

          Had the earthquake caused only half the damage it did, AMI’s under-reinsurance may have never come to light.

  11. Tiger Mountain 11

    Eddie’s post should be printed and fixed to every MPs office door with large nails.

  12. Wayne 12

    For a party keen on nationalising things, I would have thought Labour would be estatic at the prospect of the govt buying into Chorus. It meets the conventional tests of things to nationalise – a monopoly on the copper network, regulated pricing, the potential to reduce prices to consumers.

    In fact why doesn’t Labour say buy the lot, it is certainly cheap enough on the stock exchange now.

    A bit like the fabled Powercorp.

    Or would that all take the heat off the government.

    • vto 12.1

      why does the national party say one thing and do the opposite wayne?

      hypocrisy and no credibility much?

      this is the particular issue as it goes to credibility of your entire political philosophy

      • Pascal's bookie 12.1.1

        Isn’t it hilarious?

        Just so filled with confidence that the Nats will be able to do decent job with the much more complicated PPP tenders and contracts. And I bet we don’t hear a peep about the moral hazards of bailing out someone for submitting a tender that was too low.

        • vto


          Imagine the balls-ups to come with charter schools, PPPs in transmission gulley, private roads through Fiordland National Park, privately-owned power companies which keep old people warm and alive at night….

          ffs, she’s a real nightmare

          what a balls-up of a political philosophy and trying to implement said political philosophy

        • Lanthanide

          Seems to me like PPPs and other deals set up by this government will have to be repealed by future governments, just because they’ve made such fuck ups with them. It won’t be a case of ideology or politics, just simple business practices. Private companies can renege on badly constructed contracts, there’s no reason a government can’t do the same.

          SkyCity being a good example, as well as the SouthCanterbury bailout.

    • framu 12.2

      wayne – your turning into a bit of an apologist

      1) did or did not chorus know that copper prices were too high and would be forced down if they didnt come down?

      2) did chorus factor this into their bid?

      3) are the investors taking a hit on the development of new infrastructure that they stand to profit from?

      4) why should customers of one product subsidise a different product?

      5) if no ones buying your product shouldnt you improve your product?

      Stick to your free market theory for once

      • Wayne 12.2.1

        Actually my post was intended to be ironic – but surely nationalisation must appeal to Labour?

        As for this issue, I simply don’t know enough to assess where the truth lies. I do note that Rod Oram and David Farrar are both saying that there needs to be an independent financial review of Chorus, before the govt takes any action, either to invest or change to commerce Commission determination. Seems fair enough in the circumstances

        • framu

          ok then – a simpler version

          3) who should pay for infrastructure development – the investors or the customers who arent using the new infrastucture

          4) why should customers of one product subsidise a different product?

          5) if no ones buying your product shouldnt you improve your product?

        • Colonial Viper

          Actually my post was intended to be ironic – but surely nationalisation must appeal to Labour?

          Given that nationalisation will save NZ consumers and business owners hundreds of millions in excess ultrafast broadband fees over the next decade or two, thus also encouraging take up of this important technology, it must have some appeal to National as well?

          • Draco T Bastard

            Considering that National are on the side of profit and not the country? No.

        • Saarbo

          “As for this issue, I simply don’t know enough to assess where the truth lies.”

          Yes well that doesnt stop you from commenting on any other issues, I think you know very well that this is a another major National Party fuck up. This government is hopeless and if it wasnt for $30 billion dollars from the Chch earthquake and record dairy payouts (a commodity), then NZ would be in a long term recession….National are inept at running the economy. Labour will get things back in balance (again).

          • Wayne

            On other issues (for instance TPP) I do know enough to comment on the substance of the issue.

            • Draco T Bastard

              You know as much about the TPPA as the rest of us. Everything else you have on it is ideology.

              • Wayne

                Not really correct, that this is only a matter of general interest for me.

                International trade has been a specific field of study for me professionally, so I have read a great deal on this area, taught it at Bachelors and Masters level, and of course was involved in various govt committees dealing with trade issues.

                So I do have some insight into TPP.

                • geoff

                  So what’s in the TPP, Wayne?

                • Draco T Bastard

                  International trade has been a specific field of study for me professionally, so I have read a great deal on this area, taught it at Bachelors and Masters level, and of course was involved in various govt committees dealing with trade issues.

                  That doesn’t preclude it from being ideology.

                  Fallacy of Composition

                  Thing is, economists even had to invent the actor that they then said whose attributes applies to everyone.

                  • Wayne


                    Well obviously I support free trade, as do most people on the centre right (and centre left). Empirical evidence strongly supports the value of free trade. Have a look at an interesting graph on Kiwiblog on trade with China since the FTA.

                    However, I have also worked professionally in the area, so have specific skills in the field.

                    For instance I know that Jane Kelsey has a different perspective to me, but I also recognise the depth of her knowledge, so I accept she is an expert in the field.

                    In your perspective it seems you simply discount everyone who does not share your view.

                    • Pascal's bookie

                      Would you say that ‘free trade agreements’ aren’t really free trade agreements, and why?

                    • KJT

                      “Empirical evidence strongly supports the value of free trade”.

                      On what planet?

                      How much has borrowing to buy short lived junk from China cost?

                      How much is the repatriation of profits, going to overseas corporates, cost now and in the future?

                      How much are we going to have pay for the lack of jobs and a future for our young people in NZ?

                      How much is the hollowing out of our economy, especially losing local production, costing us?

                      FTA advocates live in the Neo-liberal fantasy world that is destroying societies everywhere.

                      Even on the face of it. 7 billion extra exports to China, 8.2 billion from China and the capital flows from us to China, is not empirical evidence of advantage to New Zealanders.

                      This is why Governments are terrified of allowing their citizens to see the contents of the TPPA before it is signed.
                      They want it signed before we realise how royally we are being screwed, by a corporate Magna Carta.

                      Of course, free trade works perfectly well in transferring wealth to the overseas corporates who fund the National party.

                    • Draco T Bastard

                      Empirical evidence strongly supports the value of free trade.

                      For who? Because it certainly hasn’t helped those who are now in poverty.

                      Also, trade over international distances must actually cost more, in real terms, than producing the product where it’s going to be used. The problem is that our monetary system hides this waste caused by trade. Hell, that waste will push up GDP and so the morons who believe in free trade will be patting themselves on the back.

                      Another good example of the waste caused by the “free-market” system is the installation of the new computers in the new ASB building in Auckland. ~1000 PCs with 4 USB cables each and each cables being ~1.5m long. Most of those probably didn’t need to be any more than half a meter long but “the market” hadn’t provided the tools to make the cables on site. I figure this is probably because it’s so cheap, monetarily speaking, to get them made at the factory that nobody’s even bothered to think about making the correct tools. End result, a conservative estimate of 2km of wasted USB 3 cable.

                      In your perspective it seems you simply discount everyone who does not share your view.

                      Nope. I read what they write, listen to what they say and then pick holes in it with logic and evidence.

                      Oh, and I did note that you didn’t say anything about the entire “free-market” theory being based upon a logical fallacy.

                    • Satty

                      Just out of interest…

                      How much increase in trade with China would we have had without the FTA?

                      China is obviously interested in NZ resources, like dairy, wood etc., yet ,there are still tariffs on dairy products. (China even threatened to increase those when difficulties arose buying dairy farms here.)
                      The NZ consumer likes cheaply produced stuff from China – I call it export of inflation and environmental issues – and as far as I know NZ doesn’t protect local production in any form. Many things are not produced here at all, like TV, mobile phones etc. this would have been imported independent on FTA from China.

                      So how much did NZ profit in export – hypothetical compared to no FTA in place – and how much local business was destroyed by impossible to compete with imports, example clothing manufacturer?

                    • Colonial Viper

                      Phil Goff said that we’ve almost closed the gap on our once huge trade deficit with China because of the FTA.

                      The current account deficit that NZ persistently faces now is largely due to foreign corporates and banks siphoning billions of dollars out of this country a year, afaik.

                    • newsense

                      The problem Dr Mapp, is that it is hard to believe the National government when it says the TPP will benefit New Zealand, in that it is far from sure it will benefit all New Zealanders.

                      Generating trade may be good for the economy, but the costs are not in plain sight and the benefits do not always flow through.

                      For example we have seen a rise in prescription charges, a rise in GST and a reduction the power workers have to improve their conditions through bargaining, among other things. All these things are a redistribution in wealth in our country, but it sure doesn’t benefit all New Zealanders. This makes it hard to trust the assurances of the National government that it is in New Zealand’s best interests to sign up to the TPPA.

                      Besides the numerous flaws of process, such as being at the behest of the US Congress post-negotiation, there is a sense that those of us who might end up paying the cost of this would not see the benefits, and that the costs may in the end be too great to justify. I think I am pro-free trade, but this doesn’t seem to be a free-trade agreement in the strict sense of the agreement either, but we won’t know until we see the text or have key details made plain.

                    • KJT

                      In fact our real trade, in tangible products, has almost always been in surplus.

                      The deficit is due to profits and interest going offshore. A deficit which Waynes mates are increasing every day.

                  • Rogue Trooper

                    Modo hoc Draco 😉 +1

                • KJT

                  So. Why are Governments all around the world too scared to tell their people, what is in it? Wayne.

  13. Red Horse 14

    This Chorus thing is a disaster. National have shown they cant manage the economy. Nationals ideas are extreme, outdated and they are hurting families.

    The Greens have decided the best way to get high speed Internet to all families is to have a government owned Internet provider.

    Partnering with Labour, we will launch KIWINET during our first term of office.

    This will provide families with good, fast, cheap Internet.

    We will also include filtering to protect families from things they don’t want to be seeing.

    Vote Green, a vote for families.

    • shorts 14.1

      as much as I care for families – have one myself…. but you know there’s a shit load of potential voters whom don’t live in what would be consider a Family type situation… something for your one liner writers to consider – file alongside only ever considering the children (adults count too)

      Vote Green, a vote for ALL New Zealanders


    • Lanthanide 14.2

      Oh god, KiwiNet!

      When will it end? KiwiFood, a new supermarket? KiwiShop, a rival for The Warehouse?

      Naming aside, as for a government owned ISP, I don’t really see a need for it. There is actually a lot of competition in the market already (thanks to Cunliffe) and prices and speeds, as well as bandwidth allowances, are actually pretty good.

      Now the ‘family filtering’ thing would be welcome for those who wanted to sign up for it, but there’s no need for a government ISP to offer that service, it could just be regulated.

  14. Tracey 15


    are you joining the current mischieviousness of deliberately calling setting up a govt run enterprise as nationalization?

    • Wayne 15.1


      Well, surely buying into an existing company is nationalisation, even if only a mild form. For instance Labour activists want the govt to buy back MRP and Meridian – actually some do not want to buy back, they just want to seize the private shareholdings, presumably including Kiwisaver investments!

      But I guess you mean KiwiAssure, which I frankly am indifferent to. Seems to be solving a nonexistent problem. Which is not to say that people don’t have some difficulties with insurance in Christchurch, but that is inevitable in such a large disaster. In fact people seem to have more grievance with the state owned EQC, than with the private insurers. And lets remember that AMI went bust and was bailed out by taxpayers (or more accurately the homeowner policy holders were bailed out).

      • felix 15.1.1

        “Well, surely buying into an existing company is nationalisation, even if only a mild form.”

        That’s pretty funny considering the lengths to which your govt and propagandists went to insist that it’s not privatisation unless you sell the whole farm.

        • Wayne

          I think it was called a partial privitisation, well actually a Mixed Ownership Model, presumably for Mom and Dad Investors!

          • Lanthanide

            So it’s Partial Nationalisation then, duh.

            • Colonial Viper

              Just awesome.

              • Lanthanide

                Seems there’s a clear attack line for the opposition there.

                “This government was tripping over itself to implement partial privatisation of our energy companies, and now they’re wanting to go for partial nationalisation of the telecommunications industry. This government clearly doesn’t know whether they’re coming or going, buying or selling.”

      • One Anonymous Knucklehead 15.1.2

        Seize back, as a punitive measure, to send a message to the greedy. They can buy the National Party, it’s for sale, but don’t expect New Zealand to put up with it.

  15. MrSmith 16

    And you forgot about the banks Eddie, English let a golden opportunity to nationalize our banks slip away.

    If this was the corporate world these companies would go under or be snapped up for a bargain and I see no reason why the government shouldn’t be the buyer, but this goes against Nationals ideology and Key, Joyce, National are beholding to there corporate donors so can’t do what they know is the right thing, what’s wrong with the Government picking up the odd bargain instead of always buying back defunct ones.

  16. SpaceMonkey 17

    FWIW… a quick check: Chorus Limited wholly owns Chorus NZ Ltd while in turn being over 55% owned by the Government in the form of NZ Central Securities (RBNZ) (39.69%) and Crown Fibre Holdings (15.86%). Crown Fibre Holdings’ share allocation is 50/50 between the Minister of Finance and the Minister of State Owned Enterprises.

    The remainder of the ownership is the usual suspects: JP Morgan, National Nominees (that’s NAB), Forsyth Barr, Citicorp, HSBC, etc at around 3% and downwards.

    • tc 17.1

      Where does the actual network ownership lie, in the NZ vehicle or the ultimate limited holding entity.

      So the crown has a 55% exposure on what Chorus is getting up to on top of paying for them to do it via CFH funding the build as I read this…..awesome.

  17. Tracey 18

    [lprent: please link to where you take quotes from – eg http://en.wikipedia.org/wiki/Nationalization and also identify the quote as being a quote. It would also help to have pasted it in as a readable format. I did the first two for you, and if people want a readable viersion, wikipedia is (now) only a click away. ]

    Nationalization (British/Commonwealth spellingnationalisation) is the process of taking a private industry or private assets into public ownership by a national government or state.[1] Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such asmunicipalities, being transferred to the public sectorto be operated and owned by the state. The opposite of nationalization is usually privatization or de-nationalization, but may also be municipalization. Industries that are usually subject to nationalization include transport, communications, energy, banking and natural resources.A renationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power.A renationalization process may also be calledreverse privatization. Nationalization has been used to refer to either direct state-ownership and management of an enterprise or to a government acquiring a large controlling share of a nominally private, publicly listed corporation.[citation needed]Nationalization was one of the major means advocated by reformist socialists for transitioning from capitalism to socialism. Socialist ideologies that favor nationalization are typically called state socialism. In this context, the goals of nationalization were to dispossess large capitalistsand redirect the profits of industry to the public purse, as a precursor to the long-term goals of establishing worker-management and reorganizing production toward use.[2]Nationalized industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention toexternalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs — for example, rural postal and transport services. As an instance, theUnited States Postal Service is guaranteed its nationalised status by the Constitution. The government has recognized these social obligations and, in some cases, provides subsidies for such non-commercial operations.Since the nationalised industries are state owned, the government is responsible for meeting any debtsincurred by these industries. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. However, if they are profitable, the profit is often used as a means to finance other state services, such as social programs and government research — which can help lower the tax burden.Nationalization may occur with or without compensation to the former owners. Nationalization is distinguished from property redistribution in that the government retains control of nationalizedproperty. Some nationalizations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.[3

  18. Tim 19

    Just saying ….. many arguments above seem to be based around the concept of a ‘company’ or corporation operating on commercial lines. Why?! – only because we’ve become accustomed to the neo-lib doctrine of commodifying all and everything!
    It’s a natural monopoly – just like a water or gas or electricity or roading GRIDs. Any such monopoly IMHO should be PUBLICLY owned – or at the very least controlled. In the 21stC, access to the copper or fibre infrastructure is becoming a right – not something that should be left to commercial imperatives.
    The right constantly try to characterise ‘gubbamint’ ownership as necessarily meaning inefficiency, bureaucracy and anything else they can throw at it. They do so on the basis of it being something that necessarily has to have commercial imperatives as the driving force – rather than it being a social need or public good.
    Personally, I couldn’t give a flying fuck if Chorus’ shares reached 1c a share! Actually I kind of hope they do! I really only care if Chorus (or any other natural monopoly) has sufficient income to maintain it’s presence and re-invest in its infrastructure. And I don’t care if that means there is only 1 share – owned by central gubbamint; or 11 – owned by 11 regional councils; or slightly higher – owned by regional and city councils; or 4 plus mill (which would be a more complicated proposition having to take account of births and deaths) – owned by each and every citizen.
    Why have ANY shares? Why not just have it as an entity that functions in the interest of its NZ public – owned and controlled by them through their elected representatives (with various guidelines and protections in place of course – for those tempted towards the Main Chance – and with appropriate sanctions if ever they were to try it )

    We’re talking about the “grid” here – NOT businesses, individual humans, SME’s or larger corporates wanting to provide various services (such as exchange switching) or Josephine Blogger wanting to have access to that PUBLICLY owned backbone – they should be able to access it on equal terms.

    Christ! Have we all bought into this neo-lib agenda or what! WHAT!

    • Draco T Bastard 19.1


      Well said. We are talking about a monopoly here and one that provides a critical service that everyone needs. Quite simply, we cannot allow the private sector to own and control it. Doing so takes us back to feudalism and the abuses that occurred under that.

    • tc 19.2

      +1 and the way Chorus and the Nats have gone about this shows why it should never been privatised in the first place.

      Chorus are discovering how poor their network has become as they have to now roll back through it with Fibre. They’ve had decades of record profits but funny it never went into the network did it but dividends and more highly paid managers than you can poke a fibre duct at.

    • Colonial Viper 19.3

      Good point Tim. Shows what a thorough job the neolibs have done of warping the language and the discussion.

  19. Andrew Wallace 20

    Excellent article.Will someone please tell me why it cannot be splashed across every newspaper front page in the country? Is it simply because of the right-wing strangehold on 95% of the nation’s media?

    • Rogue Trooper 20.1

      Keep referring to The Standard if you are interested in what is really going on around the place.

  20. tricledrown 21

    Geeze Wayne are you sure you were teaching are you sure you are centre right are you sure you no more about free trade.
    Your explanation has lead no where .
    Maybe that’s why the Tppa is going nowhere.
    Free trade with the US is about Corporations screwing our Democracy over.

  21. tricledrown 22

    After years of monopoly then duopoly under National .Labour broke the monopoly then Steven Joyce handed the contract to chorus to monopolize again.
    Steven Joyce Nationals chief slush funder.
    It started with his ex employers pay off for dirty electioneering on Media Works.(Djs on media work radio stations running Helen Clark down).
    National just keep digging a bigger home for themselves.
    Bill English is pulling out of clutha southland electorate.
    After Tiwae closes there will be no where for him to hide.

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