Gaynor on vampire neoliberalism

Written By: - Date published: 3:28 pm, August 28th, 2011 - 14 comments
Categories: capitalism, class war, privatisation - Tags:

Brian Gaynor: Decline and fall of Kiwi private enterprise

In December 1986, all of the 10 largest companies had private sector origins, and most were named after their creators.

Top 10 company founders included Ron Brierley, James Fletcher, James Wattie, Bob Jones and Frank Renouf.

Chase and Equiticorp were also dominated by individuals, Colin Reynolds and Allan Hawkins respectively.

Thirteen years later only Carter Holt Harvey and Brierley Investments remained in the top 10, and Brierley’s value is down from $5481 million to $1097 million.

At the end of 1999, three of the top 10 companies – Telecom, Contact Energy and Auckland International Airport – had public sector origins.

Telecom’s share price closed in 1999 at $9 – having reached $10 during the year – and the company had a market value of $15,775 million. This was more than 3.6 times the share market value of Carter Holt Harvey, the NZX’s second largest company.

Long-time Telecom shareholders will have been stunned by the interview with Theresa Gattung, Telecom’s chief executive from 1999 to 2007, in the Australian this week.

It appeared under the heading “Defensive strategy turns to gold for Gattung”.

Gattung boasted that she sold her Telecom shares after leaving the company in mid-2007, when its share price was around $4.50, and bought gold bullion, which has risen 140 per cent since then.

She told the Australian “I am a conservative investor. I look to property, cash and precious metals.” She went on to add, “I ran a $10 billion company for nearly eight years” – but did not mention that Telecom was a $16 billion company when she started as chief executive but had a sharemarket value of only $9 billion when she left.

The latest top 10 list, based on Wednesday’s closing prices, includes six former publicly-owned companies; Telecom, Contact Energy, Auckland International Airport, Vector, Port of Tauranga and Air New Zealand.

It could be argued that only Fletcher Building and Ryman Healthcare operate in a truly competitive environment as SkyCity owns a monopoly casino in Auckland and SkyTV has created its own monopoly because of weak competition [Gaynor forgets that Fletcher’s got its start  as the government’s state house builder with a government guarantee on its debt].

These top 10 sharemarket value figures show that New Zealand businessmen and women have lost the ability to create great companies and the domestic sharemarket is now heavily reliant on former publicly owned organisations.

The National Government’s partial privatisation proposals will be a huge boost to the NZX, but these are one-offs. After the float of Mighty River Power, Meridian Energy, Genesis Energy and Solid Energy, it is conceivable that eight or nine of the NZX’s 10 largest companies will have their origins in the public sector.

The NZX badly needs more private enterprise established companies because these usually have better international growth prospects than privatised organisations.

Unfortunately our private sector originated businesses participation in the top 10 largest company list has declined:

* In December 1986, all of the top 10 companies originated in the private sector and had a total sharemarket value of $20,712 million.

* Thirteen years later seven of the 10 companies started in the private sector and had a market value of $13,044 million.

* Today, only four of the top 10 have a private sector background and their sharemarket capitalisation is just $10,866 million.

14 comments on “Gaynor on vampire neoliberalism”

  1. ghostwhowalksnz 1

    Where does the business “Govt Bailout Corp’ stand in the list.

    Add up all the money poured down the drain in the finance sector to bail out investors surely it would be in the top 10.

    $2.5 billion ? Maybe even in the top 5

  2. KJT 2

    Since Rogernomics investment in actual NZ business has decreased to 1/3 of what it was.

    Notice that the only ones left out of the ten are asset strippers and property speculators.

    That is because savvy business people know that low wage countries cannot afford their products.

    The business people that are left are so poor at making good businesses work that they now want to grab ours again.

    • Peter 2.1

      Exactly, Weldons NZX has been an abysmal failure. He is biding his time before next years asset sales appearing as a nice guy fundraiser before he makes a stack of extra money as one of many Asset Sales Middlemen.

  3. Afewknowthetruth 3

    What is there left to say? Betrayal? Treason?

    In the 80s we were mugged by economic hit men (and women) and much of the nation’s treasure was stolen. Irreparable damage has been done to society and to the environment since then.

    What is particularly disgusting is that the criminals who orchestrated it all got away with their crimes because the system is totally corrupt. In fact the system is so corrupt that many of the criminals involved in the looting were honoured for their crimes.

  4. tc 4

    This just outlines even more the stupidity of putting even more public assets into a weak and poorly run NZX where they will get sucked up by overseas and corporate interests. Weldon’s a compliant lightweight who sits back and let’s the cowboys do as they please, so he’s assured a job.

    • Bored 4.1

      Too true, Weldon is a parasite, he has created nothing and merely wants more tickets to clip. A vampire blood sucking leach.

  5. aerobubble 5

    I listen to the crap Nat.Radio about entrepenuers, it basically said please phone
    these people with good ideas they will help you go from zero to extreme wealth.
    Scam like. But it shows how out of touch media is, many businesses before
    they become great start in garages, or sold something else badly and switched direction.
    They didn’t need special help, they needed access to the market, but the market
    has so many gatekeepers (think banks, and work down to the gutter press)
    who are looking to get on the next gravy train. The funny thing is those entrepreurs
    got where they were by going around the last set of entrepreneurs, sometimes
    even rolling right on over them, because each new era has new demands and
    new demands require paradigm shifts the last business generation are too
    old and spent to see. Ergo, the whole business industry of helpers is actually
    detrimental to growth, as it prolongs the old paradigms. Time was when the
    great thing about growing your own business into a world international
    player was doing yourself. Did Hillary need consultants in nice pristine
    Wellington Offices to help hiim climb Everest? It was worht much more
    to him doing it as much by himself. There too much spin in media, please
    turn off and tune out until they wake up to themselves.

    • Vicky32 5.1

      Did Hillary need consultants in nice pristine
      Wellington Offices to help hiim climb Everest?

      Except he’s a bad choice of example, as he didn’t do it all by himself! (I know what you meant, but it bothers me a little bit, Hillary’s legend as it has grown up since I was a child. He climbed Everest the year I was born – and we kids of the time all knew that he was part of a big expedition, had a sherpa with him even for the final stretch,  and it’s pure chance, literally, that we know Hillary as the man who, as he put it in such a juvenile manner, “Knocked the bastard off”. The leaders of the expedition actually flipped a coin and chose Hillary to take the lead up the final stretch… ) Just think, we might now know the name of someone else and not Hillary, if the coin toss had turned out differently…

      • aerobubble 5.1.1

        We all need some help. My argument is the more one does it themselves the more
        rewarding it is. Hillary is a good example of this given he needed sherpas to
        break the new ground of Everest, but now people attempt following his tracks.
        They ‘needed’ someone to be a trail blazer. We need assistence, we assist others
        after we are gone, but we also want to brag and you can’t brag as much
        if you followed the same line Hillary took up the mountain. This is why
        mountainers try new routes, etc. By their very nature entrepeurers
        are trail blazers and its contradictory for them to help other ‘trailblazers’.
        Since to be unique, and maximizing the self-reward, doing it without as
        many of the giants who came before makes them the new giants and
        not someone walking in the shoes of the giants.

        The rest of the Laidlaw pod was all crap about how they have investors
        waiting to assist. Please where’s the fun in finding their own!
        Rogernomics destroy investment in NZ, its fun to go overseas and
        seek investors who not only made their money in the hard business
        environments of CGT, and big regulators, who know the experience
        is far more rewarding.
        Soft NZ business needs to get its mantra head out of its brown colored
        collective arse. They start every sentence with we on the edge of
        the world, the market isn’t big enough, give me a hand up my
        millions won’t cover it all.

  6. Shona 6

    Fletcher Corp was created when James Fletcher , carpenter Dunedin ,was awarded the first State housing contracts. That is the basis of their wealth. A govt.contract.All the rest of Fletcher Corp grew from state seeding money. But of course History is so unfashionable and irrevalent. Have a great day people.

  7. rd 7

    In December 1986, all of the top 10 companies originated in the private sector and had a total sharemarket value of $20,712 million.

    * Thirteen years later seven of the 10 companies started in the private sector and had a market value of $13,044 million.

    * Today, only four of the top 10 have a private sector background and their sharemarket capitalisation is just $10,866 million.

    Are these numbers inflation adjusted?
    if not it is even a lot worse.

  8. mik e 8

    I’m surprised theirs no comment from the right whingers. Gaynors economic understanding is very smart basically he says we need to think long term and getaway from this quick buck mentality our business people think like.Thats the sort of thinking National promote by selling of our best performing assets.
    the power companies 17.6% return per annum
    Solid Energy 29% increase in profit
    Cost of borrowing 5.5% to 6%
    Dumb Quick buck thinking by bean brained bean counters
    Cutting R&D investment Dumb
    No doubt they’ll Troll out their Has-been bean brained bean counters too spin a story on how they have covered up this scandal.

  9. Hilary 9

    Ryman like the other private aged care providers privatises a lot of taxpayer money from national super and aged care funding. Remember when the last government tried to raise the salaries of aged care workers but the industry refused to hand the money on to the workers and kept it as profit?

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