web analytics

Even Bob Jones against asset sales

Written By: - Date published: 11:33 am, July 3rd, 2012 - 13 comments
Categories: privatisation - Tags:

Bob Jones may be a facetious old bugger but he knows a rort when he sees one. And asset sales are a rort: “Since the advent of the industrial revolution every business has sought the bliss of a monopoly. The competitive market economy denies that, except in unique situations, such as for example with our hydro electricity generating dams. So why sell them?”

“Here the Government becomes a little slippery. To reduce debt, says the Finance Minister, despite our public debt being low by world standards and interest rates never being lower. To enable future capital-raising, argues the PM, overlooking that if, as an appeasement to objectors, the Government intends retaining half ownership, it will still be up for 50 per cent of any capital-raising while receiving only half the previous dividend return.”

There, Jones knocks over three of the Government’s main arguments in two paragraphs:

– privatisation won’t increase competitiveness, it just provides monopolistic profits to private investors through higher power prices

– it doesn’t make sense to reduce the amount of cheap debt you’re borrowing by selling relatively high-return assets (returns that still aren’t high enough for a private investor’s cost of capital)

– privatisation would actually constrain the ability of these companies to raise capital because they’ll have to get 51% from the government every time.

That leaves them with ‘mums and dads’. And we already know that the Government expects 93% of us won’t buy shares. So, which mums and dads are these?

13 comments on “Even Bob Jones against asset sales ”

  1. Karl Sinclair 1

    Go Bob, just to add:

    From The Dynamics of a Mixed Economy:


    The great Viennese economist, Joseph Schumpeter, has given a
    rather different prognosis of the capitalist process on which I also
    feel obliged briefly to comment. While Fukuyama’s thesis is based
    on the proposition that the struggle of ideas propels historical events,
    Schumpeter, like Kirzner, views capitalism as driven by an
    entrepreneurial quest for profit. Unlike Kirzner, however, the forces
    of entrepreneurship for Schumpeter give rise to a process, not of
    coordinating discovery, but rather of discoordinating “creative
    destruction” (Kirzner 1973:125–31) that operates not only to fuel
    competition within the market process, but, perversely, to erode over
    time the very social fabric that supports it. Eventually, as investment
    opportunities steadily vanish, this process sets the stage for its own
    demise. Specifically, the creative-destructive process generates a
    growing hostility on the part of intellectuals against capitalists and
    capitalism and a spreading ennui among entrepreneurial innovators
    that in the long term turns activity within the capitalist process into
    mere routine. His outlook for capitalism is thus infamously gloomy:
    “Can capitalism survive? No. I do not think it can” (Schumpeter
    1950:61). The gales of creative destruction abate and history comes
    to an end for Schumpeter, not in a liberal democracy under
    capitalism, but in a workable, if uninspiring, form of socialism (ibid.:

  2. Our debt isn’t low by any standards. $112 Billion in off the book Derivatives of odious debt generated by John Key and his banking buddies. If we keep protesting that will all of a sudden be on the books. Just like in Greece, Spain and Ireland

  3. Tom Gould 3

    @ travellerev, do you mean off their books and onto ours?

  4. tsmithfield 4

    Um, James, it seems to me that Bob Jones is criticizing the government for retaining 50% ownership rather than flogging the lot off, as can be seen from the last half of the relevant paragraph.

    ….To enable future capital-raising, argues the PM, overlooking that if, as an appeasement to objectors, the Government intends retaining half ownership, it will still be up for 50 per cent of any capital-raising while receiving only half the previous dividend return.

    If you read further down in the article Jones says:

    One absolute certainty is that the people who bitterly opposed the construction of our dams are exactly the same types now opposing their sale. What puzzles me is why the Government doesn’t sell TVNZ. The rationale for owning it was to ensure quality public broadcasting. It’s hardly debatable that TVNZ’s fare is, with few exceptions, a diet of populist trash, yet inexplicably, its one attempt to create a channel providing a degree of quality broadcasting it’s now closing.

    Selling Air New Zealand makes sense. The financial performance of commercial airlines, being a modern business, is assessable. Their global history amounts to a net loss (more educational value from your newspaper). That’s not peculiar to airlines yet there are always buyers, for as the PM knows from his past employment, the investment industry is noted for its irrationality.

    So, it seems to me, Jones would be keen to sell the lot rather than piss around with 50% ownership models.

    • felix 4.1

      Is the govt arguing for selling the lot then? Or just for pissing around as usual?

    • mike e 4.2

      The stupid monetarist Would trust a (investment banker) Robber.A common criminal in suit. without the stocking Definition of an investment baker. When the FBI come to get old Shonkey I hope they have the right warrants

    • Pascal's bookie 4.3

      nah ts. You’re an idiot.

      He says they should sell some things they are not selling, not sell the things they are selling, and that the the MOM model is a pig.

      So he reckons they are wrong about everything, pretty much.

    • higherstandard 4.4

      You’ve have failed basic reading comprehension.

  5. Murray Olsen 5

    Any mention of Bob Jones just makes me wish journalists knew how to physically defend themselves.

  6. TimD 6

    Feels like a rant and an excuse for a few cheap shots at ‘greenies’ to me.

  7. tc 7

    Smart man who understands a good versus a bad decision having been through a few cycles. The Nats know this isn’t defendable from a rational perspective.

    So they’ll stick with the spin and mates in the media including their blogosphere cohorts like the persistent ones on this site and DPF etc as logically from any angle the hydro dam sales represent economic and sovereign stupidity and negligence which is par for the course under ‘everything has my price tag on it’ sideshow shonkey.

  8. Treetop 8

    Would it not be better to sell two energy SOEs completly and retain 100% of the other two?

    Note: I do not even want one share sold from any energy SOE.

    To have one foot in and one foot out, it is going to be/get messy.

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • 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
    1 week 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
    2 weeks 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
    2 weeks 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
    2 weeks 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
    2 weeks 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
    3 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
    3 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
    3 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
    3 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
    3 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
    3 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
    3 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
    3 weeks ago