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“Mum and Dad investors”

Written By: - Date published: 2:41 pm, May 28th, 2011 - 23 comments
Categories: economy, privatisation - Tags: , ,

Reprinted from No Right Turn:

“Mum and dad investors”

When the government has been pushing privatization, it has relentlessly pushed the idea that the buyers of these state assets will be “mum and dad investors”. The implication: the buyers will be ordinary kiwis (though why anyone would want to buy something they already own is beyond me).

Now it turns out that that’s not the case. Bill English has been touring Singapore and Hong Kong pimping our assets to the Chinese, who are of course very interested in getting their hands on profitable state-owned monopolies. So much for the idea of “mum and dad” investors…

23 comments on ““Mum and Dad investors” ”

  1. logie97 1

    I think, as “mums and dads” we should demand our share certificates now. Will have to make a line in the sand and say one share per voter as registered come November. If we divy the shares up now it will cost the greedy brokers a prohibitive fortune to gather them all in. We can then nominate which government department we wish our dividend to go to – Health, Education, Rail, et cetera. Sounds better all the time – the airforce might have to run a cake stall or two to get extra money.

    Wait a minute. We do this already. We have a General Election every three years and expect the elected members to distribute their revenue as above. Do not recall ever giving them licence to hive off assets. Just that a few think they have the right to.

    • If we divy the shares up now it will cost the greedy brokers a prohibitive fortune to gather them all in

      No it won’t. Rewind a decade and look what happened to the shares in retail power suppliers. Usually nominally owned by local coucils via trusts, they were divided up and shares (usually worth aound $1,500) were given to each resident (totally ignoring renters, people who’d contributed for years but moved out of the area, the estates of those who’d contributed but died etc. But that’s another story).

      The brokers just rented a vacant shop front (plentiful in those days too, under a National government) and offered “mum and dad” slightly over the odds (in the Waikato, where I led a protest against it via my radio show it was about $1650, from memory).

      They had queues stretching down the street as people cashed in, then went up the road to buy a new TV (or pay their power bill). When they’d got enough to force a buyout of the rump of remaining investors they closed up shop. Took a matter of weeks, from recollection.

      • logie97 1.1.1

        Thanks Rex. I recall the issue was a little different. (And I did suggest all registered voters at election time be the shareholders.)
        This government clearly does not consider the dividend it receives from the assets as significant and can run its ministries without it.
        The certificate holder can therefore nominate which public service he/she wants the dividend assigned to. Make the certificates non-tradeable. Share certificates expire at each election, and a new body of shareholders is established with the new Electoral roll.

        I think the above is called democracy – a group of politicians are asked to look after the treasury benches.

  2. Why can the government not see their ASSET POOR agenda when the average Labour voter can?

    • Treetop 2.1

      How not why.

      I need to access the edit feature.

    • Draco T Bastard 2.2

      They can see it. It doesn’t bother them as they’ll be some of the few who’ll benefit from selling state assets.

    • Peter 2.3

      Why, because they are interested in individual ownership not collective ownership. Short term greed rules every time.

      • Treetop 2.3.1

        DTB and Peter: Selling off energy shares to benefit individuals short term has to be one of the most inefficient strategies to climb out of the shit. Government gets over $800 million return each year from Air NZ and energy SOEs.

        NZ does not need anyone from overseas, (through owning shares) to make energy run more efficiently. Instead of selling off energy shares, pay for some overseas energy consultants to make energy run more efficiently. Duh to everything the government says about any benefit to selling off energy shares.

  3. Draco T Bastard 3

    The Asian Government all have large surpluses of worthless US$ and they’re trying to unload them on some unsuspecting shmucks and buy up large amounts state assets (preferably natural monopolies) so that they can get parasitical returns on them.

    FIFY Blinglish

  4. HC 4

    Sooo many of the New Zealanders still left in this country appear to have resigned to whatever governments present to them. Seems like they have chosen to switch parts of their brains off. Too many only think about “what’s in it for me”. Of course the government is rolling out a huge propaganda to make it look like they only want to sell shares to mums and dads. Few of the mums and dads will be able to afford such shares.

    Hence Bill English is making enormous efforts to prostitute NZ further and offer shares to Chinese and other Asian investors.

    But has most of the media raised this and published this matter of fact?

    No, the predominantly private media is busy publishing headlines about crime, out of context quotes of a protestor who talked about flour bombing Eden Park, sports and what dress Kate Middleton was wearing.

    It seems that not even earth quakes wake people up to come to senses anymore.

    Sad state of affairs here.

  5. Con 5

    Chinese people are mums and dads, too, you know.

    • I think the usual, unabbreviated, phrase is “Kiwi Mum and Dad investors” and that’s usually taken as referring to ‘Mums and Dads’ in New Zealand who, at the time of purchase, don’t happen to be operating on behalf of large corporations, managed funds, etc..

      • HC 5.1.1

        How many “Kiwi mum and dad investors” are there in English’s travel destiantions of Hong Kong and Singapore though???

        • Puddleglum 5.1.1.1

          A vanishingly small number, I imagine.

          It seems odd that, usually, ‘foreign investment’ is seen as some El Dorado on the right. But, when Key wants to sell off shares in state assets he apparently doesn’t want ‘foreign investment’ he wants ‘kiwi’ investment – or so the ‘mum and dad’ charade is meant to lead us to believe.

  6. Cin77 6

    Not surprised at all.

  7. The government knows that it’s in a financial shit so they are going to flog off the family silver ah La Roger and Prebble.

    This is what will happen; as a result more farm land and public assets will be owned by some Chinese tycoon who will not have any respect or scrooples with regards to environment or labour relations of this country.

    The sovereignty of New Zealand will be almost completely stripped and foreign comprodore’s will be our overlords.

    Rather than be seen to be renaging on his promise of tax cuts to the corporations (that would be the real solution) Key and English will be flogging the countries assets at basement bargains.

    What would happen to these politicians if they tried to pull that stunt 300 years ago?

    I don’t suggest we go back 300 years for a minuite.

    Key and co don’t give a stuff for the country I mean who has the condo in Hawaii?

  8. Rolling 8

    Play the Nats at their own game. There are many people on the left who could afford to pool their money to purchase these shares if they choose to.

    Creating a fund aimed at ensuring these assets remain in Kiwi hands and which uses the dividends to reinvest in communities would create alot of goodwill in the political middle.

    It wouldn’t be hard to do, if the Nats somehow win the next election then action will need to be taken. Appoint a benevolent fund manager, rally high profile and wealthy left leaning people, ensure that anyone can contribute by giving equal share to people who can only afford $5 and then publicly rally the government to give the fund first dibs on investment.

    • Campbell Larsen 8.1

      Globally the top 10% have got 90% of the worlds wealth. Locally the distribution follows similar patterns (but with foreign wealthy owners thrown into the mix as a sig % thanks to our neo lib policies)

      Don’t be naieve Rolling. The buying power of ordinary people will never be able to compete with that of local or international infrastructure companies or very wealthy individuals – that is why the sale of public assets is, to put it simply, immoral and wrong.

      There is no opportunity in the sale of our countries energy infrastructure and public assets for ordinary people, there is only loss.

      • Drakula 8.1.1

        I agree with Campbell the economies of scale with investors from China is absolutely huge, no way in the world could a group of professional investors could compete.

        Lets put it this way Rolling if someone like Bill Gates had a game of poker with you (assuming you are an average working guy) and you wanted to see his hand could you match the stakes he would raise?

        Capitalism and poker have many similarities !

  9. aotearoean 9

    Mum Merrill and Dad Lynch?

  10. Kevyn 10

    By the time these assets are sold the mum and dad investors will have been conned out of any spare cash they currently have to buy KiwiBonds in the false belief that they will be helping rebuild Christchurch. The fact is only $1.8bn of the $4.8bn raised from KiwiBond will be spent in Canterbury. The other $3bn is to fund the redemption of government securities held by EQC. Half those securities should have been redeemed before Christmas as thats when the NZDMO incorporated them into the Government’s debt programme. But it looks like Key and English are more concerned about maintining the Govts credit rating by restructuiring its long-term debt hence they have delayed repaying the $3bn of 6% Government Bonds to the EQC until the $4.8bn of 4% KiwiBonds was organised. This is real important as the interest costs are the same for both bonds and therefore the earthquake adds a mere $1.8bn to government debt but can be blamed through the lazy MSM as being the main reason for the government not being able to balance its books.

    EQC can’t meet it’s $3bn commitment on which the global reinsurers $4bn is contingent until the government honours it’s commitment to the EQC. Until then it’s the mum and dad investors operating as tardespeople in Christchurch who are paying the price for EQC being forced to keep payouts to within its cash reserves of approx $500m.

    All of the above info is hidden in plain view on Treasury’s website so why hasn’t Cunliffe been all over this in question time?

  11. Andy B 11

    I want to buy a few shares. Where and how will I be able to do so?

    (I am a father of two young children and want to invest a little for their future. I cannot yet find this information. I’ll come back to this page to check for any responses. Thanks.)

    • Campbell Larsen 11.1

      Try the Chinese Govt Website:
      english@mail.gov.cn.
      I’m sure thats what Blinglish has in mind for our essential assets….though the Chinese are not silly and prob won’t sell you any shares

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