Key backs the underdog

Written By: - Date published: 1:39 pm, March 4th, 2008 - 24 comments
Categories: assets, john key, national - Tags: , ,

The latest Newsroom story [subscription only] about the Government’s move to protect Auckland International Airport from sale to the Canadian Pension Fund reports Labour is taking National to task on the issue of their support.

Prime Minister Helen Clark is challenging National to state its position on strategic assets sales after the Government stepped in to effectively place Auckland International Airport beyond the reach of foreign control.

Interestingly John Key’s first response is to speak out on behalf of his former master – the market.

The Government should have made its intentions clear much sooner and the move did not inspire much confidence in the capital markets

A little bird told me that in a recent meeting with business leaders National’s deputy leader Bill English was challenged on what made National different to Labour. His answer was simple:

Industrial relations and privatisation.

I’d say Labour has just made it a little harder for them to move on the second part of that agenda. Poor old capital markets.

Update: National has responded by calling the decision “political opportunism” and then trying really hard to sit on the fence. It seems John Key is willing to tell us whatever we want to hear. Well, most of the time. Just don’t ask him to speak against the market.

24 comments on “Key backs the underdog”

  1. John Key is right, the Government has no right to interfere with the markets and he is also right this is going to have a negative effect.

    I just feel so sorry for the tens of thousands of New Zealanders who lost hundreds of thousands of dollars today.

    IrishBill says: you mean the small handful of people who stood to gain at the expense of New Zealand control of our main airport.

  2. James Kearney 2

    Tens of thousands of New Zealanders lost hundreds of thousands of dollars? You might want to rework your sums Brett. Or you could stop bowing down and worshiping capital markets as a force above democratic control.

  3. BeShakey 3

    In what sense does the government have no right? Legally they have the right. Constitutionally they have the right. They have a public mandate (from Election 2005). They have significant popular support for the move.

    The only way someone could possibly think they don’t have the right is by subscribing to some extreme right wing market ideology that says it is morally wrong to interfere in the market. Such a view is both wrong, and rejected by the vast majority of voters.

  4. the sprout 4

    “Government has no right to interfere with the markets”

    you poor boy. a Government’s job is to make sure markets serve citizens, not the other way around.

  5. Steve Pierson 5

    Brett. It’s a paper loss you’re talking about. Hey, since 10am this morning those tens of thousands of kiwis have seen their shares increase in value 10%! Wow,’I just feel so happy for the tens of thousands of New Zealanders who made hundreds of thousands of dollars in the last few hours’

  6. Steve Pierson 6

    Government interference makes markets possible.

  7. the sprout 7

    “John Key is right, the Government has no right to interfere with the markets”

    “the small handful of people who stood to gain at the expense of New Zealand control of our main airport”

    “In what sense does the government have no right? Legally they have the right. Constitutionally they have the right. They have a public mandate”

    “a Government’s job is to make sure markets serve citizens, not the other way around”

    “Government interference makes markets possible”

    Somehow this just doesn’t sound like the Herald 😉

  8. James Kearney 9

    Classic aye. Bruce Sheppard isn’t much better:

    http://www.stuff.co.nz/blogs/stirringthepot/2008/03/04/another-asset-theft/

    Why are the two blogs Stuff links to on its front page written by right wing loons?

  9. Yeah, I left this comment on Hickey’s blog:

    Oh whine, whine, whine. New Zealand is the second best country in the world to do business in according to the World Bank and you complaining fools have just had a 3% corporate tax cut and still you whinge like little babies. Here’s a newsflash you retards: your freemarket interests are not the be-all and end-all. If you don’t like it piss off to Singapore (the only country that rates higher for ease of doing business) or better yet Somalia (I hear they’ve got very small government there). We’re sick of you.

    I expect they’ll delete it but the self importance of big money and its cheerleaders drives me nuts!

  10. the sprout 11

    hear hear robinsod

  11. out of bed 12

    Finally a true Labour Government inititive
    Lets have some lefty legislation around employment contracts whilst we are in this mood
    Take it to the Nats, expose them for what they really are

  12. Oh dear. You guys miss the point, just like Telecom and Air new Zealand Auckland Airports shareholders have just seen an enormous amount wiped from their value by a history teacher.
    Private property rights are sacrificed yet again for cullens unique brand of socialism.
    The telecom theft is the best example, imagine the govt wats to build a road through half your house. Under fair circumstances you would expect to be compensated for this loss of possesion.
    Under labour and with regard to Telecom, labour have taken half your house and made you pay for the road that now lives where your kitchen used to be.

    Just as well though because I would hate it if those damned Canadians with their bacon and flip topped heads took our beloved airport to montreal.
    And Rob, calling somebody’s private property “free market interests” does not lessen the impact on loss of value in the share price for those people “Kiwis or otherwise” caused by the history teacher.

  13. DS 14

    “Under labour and with regard to Telecom, labour have taken half your house and made you pay for the road that now lives where your kitchen used to be.”

    Oh my heart absolutely bleeds for that poor downtrodden Telecom. Allowed to get away with blue murder for a good decade and a half, then warned repeatedly to clean up their act but ignored the warnings. What a damn shame karma’s come back to bite their vile little corporate backsides.

    If you’re going to complain about Telecom’s loss of property rights, what about the privatisation in the first place? NZ had their property (state assets) flogged off at fire sale prices without their consent. The Telecom sale was opposed by 90% of NZers. But hey, satisfying a warped ideology and fat cat donors comes first, right?

  14. The telecom theft is the best example, imagine the govt wats to build a road through half your house. Under fair circumstances you would expect to be compensated for this loss of possesion.

    Bill, I’ve spoken with a fair few business people about Telecom and regulation, and I can assure you that virtually none of them (Roger Kerr was the exception) wanted to sacrifice their ability to compete in the real world to an abstract idea of property rights. When it comes to telecommunications, everyone’s a socialist …

  15. the sprout 16

    when it comes to any strategic infrastructure, anybody who’s sane is a socialist

  16. property rights as an abstract idea, tell me Russell were any of these business people shareholders in Telecom. Thought not.

  17. DS, I suspect your 90% comment was plucked straight from your arse which is fitting really because the rest of your comment stinks.
    The company was sold by a govt that included Clark, Cullen and Goff.
    And it is not Telecom’s loss of property rights you numpty. It is the shareholders who have had billions of dollars of value stripped by an ideologically bankrupt govt. If they want to nationalise then they should pay.

  18. Pascal's bookie 19

    Bill, While it is true of course that the shareholders have taken a paper hit, part of the price of the shares was a reflection of the Canadian bid. The bid was controversial.

    Some investors wanted to take advantage of the bid and the controversy for a quick profit. This carried a risk.

    Other people have been buying cheap AK airport shares today because fraidy cat traders who were counting on the bid to make their profit for them, (rather than the future earnings of the airport), didn’t want to hold on to their shares. That’s why the price went down, it’s a market thing. Anyone who sold their shares today did so voluntarily, Cullen didn’t make them realise a loss or anything remotely similar. They did it to themselves if they did in fact realise a loss.

    But you know all that.

    Government action is always a risk. Even on Wall Street. Name a country that has not had share prices affected by Govt action and I’ll name you a place you would’nt want to take the family on holiday.

    Incidentaly I saw today that a bunch of Wall streeters got themselves up to 60% pay increases, and $US2.3M in retention bonuses. Their company didn’t want to lose those execs in these troubled times.

    These expensive chaps had overseen a u drop in their shareholders value over the last year, based on their voodoo investments in debts that no-one can put a value on.

    I’d say that they are bigger wealth destroyers than Cullen, (though they completely outclassed by the GOP, who are the all time champion wealth eaters IMHO). And there they are being rewarded for it by those damn Wall Street bank socialists. Moral Hazard is for solo mums apparently.

  19. Pascal's bookie 20

    ” had overseen a u drop in their shareholders value over the last year”

    and other typo’s

  20. Pascal's bookie 21

    Try again, that infernal U should read “seventy five per cent”

  21. DS 22

    “DS, I suspect your 90% comment was plucked straight from your arse”

    Reference: M. Russell, Revolution: New Zealand from Fortress to Free Market, Auckland, 1996, pp.211-212.

    Own goal there, mate.

    “which is fitting really because the rest of your comment stinks.”

    How nice.

    “The company was sold by a govt that included Clark, Cullen and Goff.”

    And a government that was thrown out of office in the largest landslide in modern political history. Because, you know, NZers really don’t like it when a government shafts people in order to suck up to corporates.

    “And it is not Telecom’s loss of property rights you numpty.”

    Oh but it is. Unbundling permitted competitors to use Telecom’s copper wire infrastructure (i.e. its property). But then what do I know? I’m just a “numpty”.

    “It is the shareholders who have had billions of dollars of value stripped by an ideologically bankrupt govt.”

    You mean the same shareholders who had previously been raking in huge truckloads of dough at everyone else’s expense? How tragic.

    “If they want to nationalise then they should pay.”

    It’s not a matter of nationalisation (I’d personally love to nationalise Telecom, it’s too expensive to do so now), but rather regulating to ensure that major strategic assets are operating in the interests of New Zealand and the New Zealand economy.

  22. insider 23

    If Auckland airport is so strategic, then why are the westies talking about building a competing airport at whenuapai? Surely you can’t replace a strategic asset, does that mean alternative airports can’t be built? And what does this do to those westie plans?

  23. Draco TB 24

    Oh dear. You guys miss the point, just like Telecom and Air new Zealand Auckland Airports shareholders have just seen an enormous amount wiped from their value by a history teacher.

    No they didn’t. They can’t have been worth that much to begin with or the price wouldn’t have dropped. As Adam Smith said in his Wealth of Nations (paraphrased) ‘monopolies generate supernormal profits and because of this they get more money thrown at them which artificially inflates their value. When competition is brought in, or some other regulation which prevents such profits, their share value will drop.’

    If Auckland airport is so strategic, then why are the westies talking about building a competing airport at whenuapai?

    They’re not talking about building one but using the existing one once it drops from being a defence asset. Airports are strategic in that they’re a gateway into the country so it doesn’t matter how many you build (not that you can go around building them willy nilly as they do take up a huge amount of room).

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