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National 0, Christchurch 1

Written By: - Date published: 1:49 pm, September 21st, 2016 - 97 comments
Categories: christchurch earthquake, Economy, Gerry Brownlee, john key, Politics, polls, Privatisation - Tags: , ,

A stunning victory for the people of Canterbury was announced last night by Mayor Lianne Dalziel. At a candidates debate in Christchurch she promised that there would be no sell off of the Christchurch council’s assets.

The Christchurch council has built up a substantial portfolio of businesses and other profitable entities. This has allowed them to keep rates down, build up community facilities and keep the council focussed on doing good for the citizens of the people’s republic.

National’s Gerry Brownlee, and the dominant right round the council table, had been insisting that the council’s share of the earthquake bill must come from asset sales. The right have a majority on the current council and Dalziel and the other progressives have managed to stall the process long enough for the profits provided by the assets to cover the quake cost.

All it took to tear down the threat of asset sales were two quick sentences:

“The value of our assets has increased substantially since the time I’ve been in office. This means we can obtain cash from these companies without selling shares. It’s that simple.

“And I can say not one single share in one single company needs to be sold to balance the books.”

In other words, the assets have shown themselves to be more valuable in the medium and long term than any financial solace that a sugar hit of privatisation would have provided. Y’know, kinda like the left has been saying for years.

Don’t you wish our leaders in the Beehive weren’t so short sighted? We’d still be earning be getting 100% of the profits from our power companies if the idealogical blinkers weren’t strapped so tight to John Key’s head.

Let’s hope Dalziels announcement spells the end of asset sales in New Zealand. They make no economic sense at all.

Ps. Spare a thought for John Minto. His campaign for the mayoralty just got derailed spectacularly. Standing under the banner of Keep Our Assets, he must be kicking himself that he didn’t put up for council instead. There’s a lot of good will toward him and he might have made a difference as a councillor, but clearly, he’s not going to be mayor now.

 

 

 

97 comments on “National 0, Christchurch 1 ”

  1. Dialey 1

    She said there is no need to sell, she did not categorically say there would not be any sell off

    • Patrick 1.1

      Absolutely correct Dailey. She refused to categorically rule out future asset sales this morning on Morning Report, saying that currently there is no need but couldn’t commit to the future as “things change”. If I recall correctly she also seemed to infer that as the value of the assets grew, smaller portions of them could yield higher returns if sales were needed.

    • One Anonymous Bloke 1.2

      Looks smart to me: when the facts change I change my mind; what do you do?

      That’s not to say I could ever see myself supporting an asset sale, just that ‘never’ is a long time in politics.

  2. save nz 2

    +100 “In other words, the assets have shown themselves to be more valuable in the medium and long term than any financial solace that a sugar hit of privatisation would have provided. Y’know, kinda like the left has been saying for years.

    Don’t you wish our leaders in the Beehive weren’t so short sighted? We’d still be earning be getting 100% of the profits from our power companies if the idealogical blinkers weren’t strapped so tight to John Key’s head.

    Let’s hope Dalziels announcement spells the end of asset sales in New Zealand. They make no economic sense at all.”

    • b waghorn 2.1

      ”We’d still be earning be getting 100% of the profits from our power companies if the idealogical blinkers weren’t strapped so tight to John Key’s head.”

      The problem is a lot of nationals supporters are getting those profits ,so they quite like asset sales ,

      • Esoteric Pineapples 2.1.1

        Not to mention the $300 million tax payers won’t be getting from Air New Zealand this year.

  3. Chooky 3

    Double Talk ?

    Dalziel keeps options open. Dalziel has NOT ruled out sale of Christchurch Assets. Minto maintains there is an unhealthy relationship between the Council and the Nact government

    ‘Christchurch mayoralty rivals Dalziel and Minto debate issues’

    http://www.radionz.co.nz/national/programmes/morningreport/audio/201816950/christchurch-mayoralty-rivals-dalziel-and-minto-debate-issues

    Christchurch residents/voters who want to keep their assets and who dont rates rises and debt for unwanted white elephants …and most important don’t want to be dictated to by jonkey nactional will be voting Minto ! ….and NOT Dalziel.

    • Lanthanide 3.1

      Yip.

      This morning on RNZ, Dalziel clarified her position:
      Strategic assets would not be sold without public consultation first.

      That means:
      1. Strategic assets may still be sold
      2. Non-strategic assets may be sold without public consultation

      She said that City Care is a non-strategic asset. The council tried to sell them off but didn’t get any offers they liked. So they might try and sell it off again, this time with a cheaper asking price.

      Also, Minto said that rather than this derailing his chances, it’s a policy win on the campaign trail. When you get your opposition to adopt your policy, it is pretty hard to say you’ve lost something.

  4. BM 4

    We’d still be earning be getting 100% of the profits from our power companies/

    That’s not profit, it’s tax.

    • One Anonymous Bloke 4.1

      Don’t be such a bloody ingrate: it’s revenue; Christchurch can use it to increase services or lower rates or a combination of both.

      Are you packing a sad because it wasn’t your idea or what?

      • Groundhog 4.1.1

        “We’d still be earning be getting 100% of the profits from our power companies if the idealogical blinkers weren’t strapped so tight to John Key’s head.”

        NZ is earning more in dividends with 51% ownership than we did with 100% ownership. And power prices are now increasing by less than the rate of inflation.

        • te reo putake 4.1.1.1

          Your claimed increase in profitability has nothing to do with the dilution of the ownership. And wouldn’t we be better off with 100% of an improved dividend, anyway?

          • Groundhog 4.1.1.1.1

            “Your claimed increase in profitability has nothing to do with the dilution of the ownership.”
            Evidence?

            “And wouldn’t we be better off with 100% of an improved dividend, anyway?”
            The improved dividend coincided with the ownership mix change. Are you suggesting this was a coincidence?

            • te reo putake 4.1.1.1.1.1

              Yes, it is a coincidence. Shareholders do not manage companies, managers do.

              If you think there is some divine link between selling off the assets and and improved performance, feel free to mount an argument. Please also provide links that show the current leadership of the companies believe that to also be the case.

              Something like ‘CEO Bill Bloggs said the improved rainfall and the rise in generating capacity, domestic consumption and spot prices can be directly linked to us selling shares to a variety of mom and pop investors in Arkansas, Beijing and the leafier parts of Kent, UK.’

              • Groundhog

                “Shareholders do not manage companies, managers do.”

                That’s not the full story, by any means. Shareholders set certain priorities, they have an element of control over Directors, and by extension just WHO the management is, and the imperatives to which they work.

                “If you think there is some divine link between selling off the assets and and improved performance, feel free to mount an argument.”

                I don’t think that, and I didn’t argue it. But I’m not the one trying to defy gravity with my argument. The shareholding mix changed, profits increased. Unless you can provide another reason, the connection seems to be the most likely explanation.

                • You’re not really all that up with how businesses run, are you? In short, a simple change of passive shareholding will not instantly or inevitably lead to increased profits. A full takeover and a change of direction might do that, but this is not what happened here. There hasn’t even been a change in the boards of the companies as far as I know, so it’s just business as usual.

                  In summary, you’ve conflated two unrelated matters. And, the simple maths remains; if we had 100% ownership of the companies, we would make more money than if we had 50% ownership.

                  • Groundhog

                    “You’re not really all that up with how businesses run, are you? ”
                    I run an international business.

                    “In short, a simple change of passive shareholding will not instantly or inevitably lead to increased profits.”
                    Instantly? No. But change happens, and can happen fast.

                    “In summary, you’ve conflated two unrelated matters. ”
                    That is your assertion; it is nothing more.

                    “if we had 100% ownership of the companies, we would make more money than if we had 50% ownership.”
                    That is an assertion based on a false premise. If the enterprise makes more money with our 50% than it did with or 100%, then you would be wrong. Wouldn’t you?

                    • te reo putake

                      You’re still struggling, but good on you for blagging the job. Let’s hope that nobody ever asks you which is bigger, 50 or 100. If you can avoid that dead giveaway, I reckon you’re set.

                    • Groundhog

                      “Let’s hope that nobody ever asks you which is bigger, 50 or 100.”

                      I smell evasion. The dividend being received on the 50 is higher than on the 100. You’re clinging to coincidence in the face of no evidence to support that.

                    • te reo putake

                      And 100% will always be larger than 50%. As I said, keep your head down and you’ll probably get away with it.

                    • Groundhog

                      “And 100% will always be larger than 50%.”

                      Not when it comes to the dividend income. And that really is the point.

        • Molly 4.1.1.2

          The usual mode for recently privatised companies is to increase profits to justify the practice.

          Efficiency measures almost always include: reducing proposed (and often) necessary maintenance and repairs, reducing staff levels and training, and pretty much creating a business model that will suffer from these choices in the long run. But for a while they can benefit from the previous maintenance and staffing policies and most decision makers will move on before the shtf.

          At that point, the government will be asked to step in with support of some kind to ensure the continuation of much needed public utilities.

          • Groundhog 4.1.1.2.1

            Do you have any evidence that any of those things are actually happening?

            • Matthew Whitehead 4.1.1.2.1.1

              The railway network seems like a pretty good example tbh.

              • Groundhog

                No, it isn’t. Toll didn’t make the rail network work, and frankly they were stupid to try. (Although they made a lot of money on the sale, by duping Michael Cullen).

                • …you seem to be agreeing with Molly’s point in your counterargument to that example, so I’m not even sure what you’re trying to say.

                  Yes, Toll ran down the rail network and then extorted the Labour government’s overly nice consentual buyout process. (Which is why the government should simply compensate them a fair amount for nationalising the infrastructure back into government hands where it belongs in cases like that)

                  • Groundhog

                    I’m not agreeing with Molly at all. Her view seems to be an ideological ‘one size fits all’ opposition to partial or total privatisation. My view is that there are some circumstances where mixed ownership, or even full privatisation works. And there are some circumstances where it doesn’t.

              • Molly

                Thanks Matthew.

                Was AFK, but the rail sale is a good example. Knew someone who worked there at the time, and who questioned decisions like pulling apart wagons, cobbling together all the good parts into wagons which were then sold overseas, leaving NZ Rail making do with the detritus.

                Line maintenance also fell considerably, and the decision was made to focus on freight and allow passenger services to atrophy.

                • Groundhog

                  Rail will never make money in NZ, either commercial or passenger. There simply isn’t the volume, and so there is little commercial imperative for privatisation. If we are to insist on persevering with a rail network, an SoE type structure, where the Government is the shareholder but the enterprise is run on as close to a commercial basis as possible is probably the best option. I believe that is the current model.

  5. The Chairman 5

    The timing of this announcement would suggest it was possible this was an attempt to derail Minto and appease voter concern. Yet, Dalziel denies that.

    In your link above it states Dalziel used a candidates’ debate to take asset sales firmly off the table, however, in this later debate (link below) she wouldn’t fully rule them out.

    http://www.radionz.co.nz/national/programmes/morningreport/audio/201816950/christchurch-mayoralty-rivals-dalziel-and-minto-debate-issues

    Therefore, voters should still be concerned, seems Dalziel may be attempting to pull a political fast one, giving herself an out for partial sell offs or a later change of mind.

    • Red 5.1

      Derail Minto? He is not even a mediocre chance, so there is nothing to derail The activist and far left far overstate their appeal by the echo chamber they live in

      • The Chairman 5.1.1

        The timing of this announcement would suggest that some may have had concerns about a momentum building.

        Moreover, voters are concerned about asset sales, thus this kind of political fast one will appeal (hence appease) the politically ignorant amongst them.

      • Scott 5.1.2

        But why would Minto ever think he stood a chance?

        Ch-ch Chiquita makes a good point below. Her vote for Minto is more of a protest vote so that the winner realises they don’t have as much support as they might think if she didn’t vote at all.

        That makes sense to me.

        I suspect it is much the same reason Minto stood for election at all.

  6. Ch-ch Chiquita 6

    I’m still voting Minto. He doesn’t stand a chance but the more votes Dalziel is going to loose the better notice she will take about the policies he is promoting. There are also people standing for councilors who support no assets sale and if successful they can make the difference.

    • Chooky 6.1

      +100 Ch-ch Chiquita….in order to make an evaluation of the integrity of a politician one should perhaps examine their closest associates and family members

      John Minto has impeccable credentials in this regard..he is uncompromised

    • Scott 6.2

      That’s a good attitude to have, and I suspect Minto himself shares it – he seems too intelligent to actually think he ever stood a chance of winning.

      • Chooky 6.2.1

        is that wishful thinking?….maybe Minto does have a chance…it will depend on what Christchurch residents think of the integrity of the Mayor and this council…not all are happy

  7. Enough is Enough 7

    TRP – You are dreaming.

    Dalziel will sell assets. That much is certain.

    So long as she can come up with a reason why any particular asset is not a “strategic asset”, that asset will be sold to the highest bidder.

    Christchurch needs to know that and to vote John Minto to stop it

    • I think you’re wrong. Dalziel has little option but to front the sales asset option because the council has democratically voted for it, under extreme pressure from central government. In addition, the majority of current councillors are right leaning, so whatever her views, this iteration of the council is supportive of the sales.

      The key question is whether or not the next council is majority opposed to asset sales. Clearly, Dalziel is going to be returned as mayor, but what will be more important is getting left leaning councillors elected. It’s just a shame John Minto isn’t going to be one of them.

      • Anthony 7.1.1

        I full year agree: hence why it is essential that Christchurch people who want to retain the city’s assets need to vote, however disillusioned some may be feeling.

        Only a strong People’s Choice caucus can ensure the city retains ownership.

      • Keir Leslie 7.1.2

        This is just wrong.

        Lianne Dalziel pushed the asset sales agenda against stiff opposition from Labour backed People’s Choice councillors and the trades unions in Canterbury. Her vote was the decisive vote which made sure they would go ahead as far as they have — otherwise the motions would all have been lost 7-7.

        I’m really pleased Lianne has seen the light and realises that there is no need to sell assets, as Labour has said all along. But please don’t erase the fact she did push this asset sales agenda and Labour councillors had to lead a strong fight back to protect Christchurch’s assets.

  8. john 8

    Inconvenient truth:
    The sell down of electricity companies, now nets more to the Govt. from dividends on the 51% Govt. ownership plus taxes on the 49% private ownership, than it did on the 100% govt. ownership.

  9. Autonomouse 9

    “Dalziel and the other progressives have managed to stall the process long enough for the profits provided by the assets to cover the quake cost.” – That makes it sound like the progressives within the CCC have made a conscious effort to slow down the rebuild of Christchurch. Possibly not a bad thing in the long term if such a move has enabled Chch to have its cake and eat it too (keep Assets & rebuild), but not sure how that information would sit with those that have been waiting on progress.

  10. srylands 10

    So why does a local council need to own an airport or a port? Saying because they make money is nuts. That would raise the question of why these companies?

    Why does the central Government own Landcorp or TVNZ? It is just as crazy.

    The Crown is receiving higher dividends now from its 51% of the partially privatised power companies than it used to get from 100% ownership. Of course it should have sold the lot.

    The Cameron Partners report on CCC holdings made it clear that CCC should review the strategic need for owning these businesses. They should be sold unless ownership was the only way to achieve vital strategic objectives.

    http://www.rebuildchristchurch.co.nz/blog/2014/8/christchurch-city-council-releases-cameron-partners-report

    Where is the business by business analysis using the Cameron Partners methodology?

    • Lanthanide 10.1

      “So why does a local council need to own an airport or a port? Saying because they make money is nuts.”

      Because they’re strategic assets, duh.

      It means that some other private company who is only interested in profits, can’t buy them up and make short-term decisions that are in the best interests of themselves, regardless of how they impact the city who the assets exists to serve.

      For example, the National government selling off TranzRail was stupid, because the private owners asset stripped it, leaving the country worse off because we now have a poorly performing rail network.

      It’s the same reason people were against National’s latest great idea to sell off the power companies. Now that private interests hold a significant stake in them, they can make decisions about how the companies operate that aren’t in the best interests of New Zealand (for example, by increasing the salaries of the board members by 3x as a result of the privatisation – which all comes out of NZers pockets in the form of higher power prices).

      You really are thick if you can’t put 2 and 2 together and work out how a strategic asset differs from any old private company.

      • BM 10.1.1

        Your dumps fees are rather expensive in Christchurch.

      • Chooky 10.1.2

        +100 Lanthanide …for all your comments

        re ” “So why does a local council need to own an airport or a port? Saying because they make money is nuts.”

        Because they’re strategic assets, duh….”

        Precisely!….Do we want these sold off to the Chinese government with access to Antarctic waters?….fishing?….economic?…military strategic?
        …also the airport with access to NZ land and assets?

        … Do we want them sold off to jonkey Nacts mates?…blind trusts?

        ….I am sure they would just love them and I am sure they could afford them!

        We would lose our sovereignty however

        This jonkey Nact government and mates in and out of the Christchurch City Council is putting the SQUEEZE on Christchurch so that it offers its ASSETS up for SALE!

        …to the detriment of Christchurch citizens and all New Zealanders

        VOTE MINTO!

    • Barfly 10.2

      Ideology much?

    • Henry Filth 10.3

      Why the Cameron Partners methodology in particular?

  11. Barfly 11

    “Why are the right so wedded to asset sales when they make no financial sense?”

    IDEOLOGY

    • Chooky 11.1

      +100 Barfly…IDEOLOGY of their own personal bank balances and not the public good of Christchurch, Canterbury and New Zealand citizens

      …these are robbers of publically owned assets ….robbers of the white collar variety

  12. Draco T Bastard 12

    In other words, the assets have shown themselves to be more valuable in the medium and long term than any financial solace that a sugar hit of privatisation would have provided.

    The whole point of state asset sales is to shift the peoples wealth into the hands of the rich. It has no other purpose.

    Don’t you wish our leaders in the Beehive weren’t so short sighted?

    They’re not short sighted. They exactly what they’re doing – they’re making the rich bigger bludgers.

    • srylands 12.2

      Well congrats on that. Because laughably in the case of the powercos labour and the Greens made the rich richer. Their ridiculous power policy..I can’t even remember its name now… It suppressed the offering prices only for the share price to roar back when Cunrliffe bombed. So a transfer of wealth from people to the share buyers. So cheers for that. I literally think about it every time my MRP dividend lands.

      It is way past time you got over the state run business model. When the government eventually puts the rest of the powercos up for sale what are you going to do? Double down on last time and transfer another billion to the new shareholders? I hope that in National’s 5th term in 2021 that the world will have moved on enough to complete the process.

      • Draco T Bastard 12.2.1

        So cheers for that. I literally think about it every time my MRP dividend lands.

        Yes, bludgers do think that them ripping everyone else off is a reason to celebrate.

        It’s all this bludging by the capitalists that your celebrating that’s causing the worlds economy to fail and take the environment and society with it.

      • vto 12.2.2

        The world is changing srylands, get with the times old fulla

      • One Anonymous Bloke 12.2.3

        It is way past time you got over the state run business model.

        I agree: they are far better off being run as public services. The SOE model has not delivered on the sophisticated lies its shills promised.

      • framu 12.2.4

        “It suppressed the offering prices only for the share price to roar back when Cunrliffe bombed.”

        utter bullshit – your ignoring all the other factors such as bill flooding the market against advice

      • Well we could always have them stop charging and just let that stimulate the economy directly, of course, it would mean higher or new taxes to make up the necessary revenue. 😉

  13. Henry Filth 13

    Didn’t Bruce Jesson write a rather good book about this sort of thing? Something that both sides could learn from?

  14. Brian Smith 14

    The ‘private enterprise does it better than public’ debate is over now- the extortion of the NZ public through privatisation, and the massive transfer of wealth (theft) from public to private hands, created mass unemployment, severely reduced public wealth and as a result, public welfare. This has had a lasting negative effect on NZ society, as some of us knew it.
    This is not about political leaders being short-sighted. Privatisation is about greed and the transfer of public wealth, built up over many generations for the public good, into the greedy hands of the few in which political leaders are totally complicit. Those who support privatisation are the greedy few who gain from the process, while the vast majority of the population (and their future generations) suffer. Here’s to your ‘brighter future’……..yeah, right!

    • Richard Rawshark 14.1

      Bastards!!! Get the pitch forks ma, wheez goin to a hangin.

    • Smilin 14.2

      So true everything squeezing thru the Nat portal to private enterprise to avoid the democratic vote and sovereignty issues over the right of public ownership of publicly funded assets
      Change laws by stealth go back to Keys first term and look at what the now CEO of Westpac did

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