Dancing on a head of a pin on asset sales

Marty G
14 years ago
Categories: capitalism, election 2011, national, privatisation
Tags: john key, kiwibank

On Wednesday, Jim Anderton asked John Key about two times when he explicitly ruled out ever selling Kiwibank and asked him how that meshed with his promise not to sell assets in the first term, with the clear implication that they will sell them in a second term (if they get one). Yesterday, Labour followed up with half a dozen more examples stretching over two years of Key explicitly ruling out selling Kiwibank.

So, once Kiwibank was definitely off the selling table forever, now it’s only definitely off for another year or so. A major reversal of past policy and a clear signal that the Nats are planning to sell it, eventually but not now.

After banging their heads together for a while, Key spinmeisters have come up with a little semantic trick to align the two positions: Kiwibank will never be sold, unless Key changes his mind.

In other words: I will never break my promise to you, unless I decide I want to.

Now, in all fairness, Key has said he will campaign on the issue at the next election if they decide to go ahead with sales. Probably. The term ‘seeking a mandate’ is a funny one. Doubtless, National will argue they have been mandated to allow mining on some areas of Schedule 4 land, for example.

Actually, I think what we’ll see is sales that aren’t sales. There’s more than one way to skin the public assets cat.

The government could require SOEs to issue non-voting shares or bonds and pay the proceeds to the crown. Or SOEs could be forced to parcel their assets into subsidiary companies that will then be sold. The ownership of the asset would stay with the crown but the ownership of the profit stream would go to the private buyers (mums and dads like Michael and Sarah Fay). Effectively, we’re left owning an empty shell but the Nats would argue they haven’t actually sold the ownership of the company so it isn’t an asset sale.

Expect more dancing on a head of a pin on this issue. National really, really wants to sell assets – it’ll be worth a fortune to their rich mates who can’t seem to generate any success on their own without a government hand out. But the public is firmly against asset sales. It would be an election losing campaign issue. So, National will play a game of ambiguous promises and confusing financial moves to sell without appearing to sell.