Privatisation a dirty word?

Written By: - Date published: 10:19 am, July 4th, 2011 - 48 comments
Categories: privatisation - Tags:

No Confidence

Written by The Jackal at 4:51 PM

Steven Joyce was asked some hard questions today by Labour Minister of Communications and Information Technology David Cunliffe concerning Nationals Privatisation plans for New Zealand’s SOEs. Once again the speaker of the house Lockwood Smith came to National’s rescue. Lockwood argued that Joyce didn’t have to answer a question because the Minister disagreed with the word “Privatisation.” What utter Bullshit!

National started to use the word first when they floated the idea, so it’s a valid word to use to describe what National intends to undertake. David Cunliffe did not load a question by using the word “Privatisation.” Saying so is ridiculous and Lockwood’s argument turns Parliament into a farce.

Since when are facts characterizations? Steven Joyce is simply dismissing facts out of hand because he has no answers. When the facts are presented, there is clearly no argument for asset sales. Our partially privatised SOEs charge more; often need to be bailed out by the taxpayer and account for billions of dollars of lost revenue each year. The amount of shares retained by New Zealand investors is minimal making such an argument mute.

8% of New Zealanders purchased shares in Contact Energy when it was partially privatised. Today, only 2.5% of Contact Energy shares are retained by Kiwi’s… so where does that leave National’s “Mum and Dad investors” proposition, especially considering National has no mechanism to ensure New Zealander’s purchase or retain shares? It’s a lie, plain and simple.

National is spending $6 million before the next general election on getting our assets ready to be sold. They’re effectively gambling with our money, taking the will of the public for granted and not undertaking proper procedures to gain a mandate. Many polls have recently shown that two thirds of Kiwi’s don’t want to sell our SOEs. So who exactly is National listening to?

It’s a travesty that National undertook the $6 million outlay of taxpayer money before seeking a mandate from the public. That’s like stealing money from your wallet to sell your family car… Then you’ll have to hire the car back again at a marked up price, unless you kick the thief out of the house. It’s not the way a proper functioning Government should be conducting itself.

It will cost taxpayers around 2 to 5% of the profit value to sell our SOEs, which works out to be $136 to $340 million. Joyce knows what the potential costs will be from partially privatising our SOEs… He’s playing stupid and is treated as such by David Cunliffe.

As usual National is happy to reside in rhetoric and a twisted sense of reality, which is not appreciated or helpful to the process. Lockwood Smith should ensure that questions are answered appropriately, instead of being lost in Nationals obfuscation.

Because of a lack of impartiality, dismissing the facts and protecting National’s agenda, I have no confidence in Lockwood Smith as the Speaker of the House. He is not undertaking his duties properly and should therefore resign.

48 comments on “Privatisation a dirty word?”

  1. randal 1

    there is a certain style of political organisation that came to power in germany in the 1930’s where they shouted down all opposition, would not define terms and criminalised words that they were afraid of. these policies were the ground rock of the national socialist party who were called nazi’s for short.

  2. randal 2

    and this national party may be a little more easy on the eye but in intetions they are just the same. there desire to steal the states assets for private gain is criminal but in this unicameral state there is no opposition nor chance of opposing their depredations.

  3. g says 3

    did the esteemed speaker give guidance of how the pillaging of state owned assets was to be referred to as?

  4. queenstfarmer 4

    What’s the actual problem here? Privatisation != selling minority stakes. Smith has been the best speaker in ages for holding the Govt to account.

    • Colonial Viper 4.1

      Privatisation != selling minority stakes.

      Symantics. Selling off public equity is selling off public equity.

      • queenstfarmer 4.1.1

        Yes, semantics: “The branch of linguistics and logic concerned with meaning”. And yes, selling off public equity is selling off public equity. But selling a minority stake still aint priviatisation, although it may be casually referred to as such.

        • Draco T Bastard 4.1.1.1

          But selling a minority stake still aint priviatisation

          Yes it is, no matter how much you try to say it ain’t. Selling the shares of a public asset into private ownership is privatisation. With our laws there to protect the minor shareholders against majority shareholder actions that means that the control of those assets would devolve to the private, minority owners.

          And that is privatisation.

          • queenstfarmer 4.1.1.1.1

            This is comedy gold. So your argument now is that the minority floats themselves don’t amount to privatisation, but the eventual “devolving” of assets to private, minority owners (by some magical process entirely unknown to the law) is the privatisation.

            Hey, on your logic, the Govt should sell 90% stakes, because the assets would magically “devolve” back to the minority!

            • Draco T Bastard 4.1.1.1.1.1

              What the law requires is that majority shareholders not to purposefully do anything to cause minority shareholders to lose value either in profits or share value. A government entity could be asked by the government as the owner to take a loss that they didn’t have to to help out the community. With private owners involved, even at a minority non-controlling level, that can’t happen.

              • queenstfarmer

                Sorry DTB, you are just way off base here. The law doesn’t impose any duties on shareholders. Obligations are on the company itself, and on directors. The main obligation is to act in the best interests of the Company (which you will find in all but rare cases involving insolvency equates with the majority shareholder views). Shareholders can’t be “levied” or asked to “take a loss” (unless shares aren’t paid up, which isn’t the case here).

                • Lanthanide

                  You’re right, queen, in terms of the law.

                  The point Draco is making was borne out a few years ago when engineers/mechanics working on Air New Zealand planes in Chirsthchurch asked the government to intervene when Air NZ was in the process of moving the jobs offshore.

                  The (Labour) government declined to intervene, citing commercial interests of the minority shareholders preventing them from interfering in business decisions by Air NZ.

                  • Colonial Viper

                    That’s not a Labour Govt that people in the 1960’s and 1970’s would have recognised.

                  • queenstfarmer

                    The point DTB was making about assets somehow “devolving” to minority shareholders.

                    Re the Air NZ example, if it is as described, then first of all it was beyond belief (even allowing for Govt incompetence) that a 75%+ majority shareholder could get bossed around, without actually wanting the outcome.

                    The other point which I have made before is that it is open to the Govt to put in a constitution that expressly allows certain “national interest” decisions to be taken. Of course these can be achieved anyway, but this makes it express.

                    • Jum

                      Queenstfarmer,

                      I have watched this government in parliament; there is nothing honourable or honest or intelligent about their behaviour.

    • Draco T Bastard 4.2

      Selling off shares to the private sector is privatisation especially when NZ law forbids the majority shareholder from doing anything that would detract from the minority shareholders profits.

  5. It will come as a surprise to those intending to buy shares in the SOEs that their shares will not be privately held.

  6. randal 6

    queenstreetfrmr. smith might be the best speaker for ages if you think that squashing debate and sanctioning government theft is the sine qua non of being a good speaker.

  7. Tangled up in blue 7

    They’re effectively gambling with our money, taking the will of the public for granted and not undertaking proper procedures to gain a mandate. Many polls have recently shown that two thirds of Kiwi’s don’t want to sell our SOEs. So who exactly is National listening to?

    Because we don’t have a direct representative democracy; if National get re-elected this year then that is all the mandate they need.

  8. Draco T Bastard 8

    I like this graph from Jackal’s Blog. Reminds me of the meeting that was held at one of the large telcos I worked for. Being enthusiastic about the business the upper management decided to show, in graph form, where all the money was coming from and going to. In the build up to displaying the graph they mentioned how important the VIP (Big Business) customers were to the profit of the business. Then they put up the graph. Those VIP customers? Yeah, they were losing the company money. The profits were all coming from the residential side.

    This looks to me like the same thing is happening in electricity.

    As for Lockwood, yeah, total partisanship and bias. Obviously didn’t like National to be shown up by the facts.

    • Jim Nald 8.1

      In that dolt’s previous political incarnation, his comments about Asians and Pasifika reflected badly on him to reveal his own small mind and his credibility going down the toilet.

  9. johnm 9

    Makes you despair about the criminal Politicians and the smug tax cut people who vote them in. Neither really care about NZ, for them we are just taxpayers (as little as possible) and consumers. This group have no vision no optimism. They believe in the virtue of selfishness: the common good is an alien concept to them.

    Lockwood Smith is a crook. Why? The whole World knows what Privatisation is (The robbery from the people for the benefit of Private interests) aided and abetted by criminal governments who identify with those same private interests and not with all the people of that country. It is a deliberate attempt to dumb down the debate in the Nation’s Parliament-Fascist and unbelievably arrogant.

    “Don’t you see that the whole aim of Newspeak is to narrow the range of thought?”
    George Orwell
    1984

    Lockwood’s Newspeak is the removal of “Privatisation” from discussion simply disgusting!

  10. deemac 10

    George Orwell should be living at this hour!

  11. Jan 11

    Privatisation – with apologies to Oscar Wilde. The unspeakable advocated by by the undesirable,
    I’m amused by the acceptable spin term however – Mixed Ownership Model abbreviates to MOM.

    • seeker 11.1

      Likewise Jan.
      Is this the beginning of the MOM state? How many assets are to be Mommed?
      ACC has been prepared by NickS as well as ECan water; welfare has been prepped by PaulaR courtesy of PaulaB.,prisons likewise by Judith; education is being prepped via Nat.Stans and PPPs; DoC via Whats her name; oil, mines and coal via Gerry; PharMac (traded version) via TimG; roads and internet by “cute’ joyce; heaven knows whats going on with health, and all this portfolio ‘momming’ overseen and, I think, commissioned, by John and Bill under initial advisement from business round, ashcroft and his crafty con.group and archmommer of Auckland, Hyde and his at one time in group- Shipley, Boag, Brash, not to mention the Wongs.And don’t forget SimonP. who has gone to help the Moms, I bet.
      That is the end of tonights story NZ, sweet dreams, Mom is going to turn out the light.

  12. idlegus 12

    mediaworks radio is falling into line, they refer to privatisation as ‘partial asset sales’ which is a more loaded biased political term imo.

    • queenstfarmer 12.1

      It’s telling that you find an accurate description (partial asset sales) to be more loaded and biased than an incorrect description (privatisation).

      • Puddleglum 12.1.1

        queenstfarmer, if I ‘partially sell’ an asset does the ‘part’ I’ve sold still belong to me or has it gone into (other) private hands – i.e., been ‘privatised’? (Hint: presumably I no longer get a return on the bit I sold.)

        • queenstfarmer 12.1.1.1

          Haven’t you answered your own question? It becomes “partially privatised”. Hence the perfectly accurate phrase that idlegus seems to find objectionable: partial asset sale.

          As for the asset itself, it is not privatised until majority control is gone. Look at the definition: “privatize : transitive verb : to make private; especially : to change (as a business or industry) from public to private control or ownership.”

          • Colonial Viper 12.1.1.1.1

            ffs

            Key and English are over in Nov regardless.

          • felix 12.1.1.1.2

            “Haven’t you answered your own question? It becomes “partially privatised”. “

            Err, Puddlegum asked you about the part sold. Surely you’re not saying that the part sold is only partially privatised?

            Surely the part sold is totally privatised, no?

            If you could please clear this up by indicating that you understand the question Puddlegum asked we can save a lot of time talking past one another.

            • queenstfarmer 12.1.1.1.2.1

              Of course a part sold privately is privatised (what would you call it?). The rest is held by the Govt, and remains non-privatised.

              Therefore, part of the whole asset is privatised, which means (as I repeat for the third time) the asset is “partially privatised”, following a “partial asset sale” – which is the perfectly accurate, precise term that the OP apparently objects to.

              • felix

                which is the perfectly accurate, precise term that the OP apparently objects to.

                Really? Missed that, where did you see it? (The objection to the term “partial privatisation”)

                I thought Lockie wanted everyone to say “mixed ownership model” instead.

                • queenstfarmer

                  Really? Missed that, where did you see it? (The objection to the term “partial privatisation”)

                  You misquote me. What I said was “following a “partial asset sale” – which is the perfectly accurate, precise term that the OP apparently objects to

                  Then see post #12.

                  • felix

                    Ah I see. So you’re not really arguing that selling bits of assets isn’t privatisation then.

                    Just running the lines, muddying the waters, distracting from the point and generally wasting time.

                    Hope you’re on a good wicket for selling out your country and kin.

          • Pascal's bookie 12.1.1.1.3

            Trick for young players, ‘especially’ doesn’t mean ‘exclusively’. You can look at the definition if you like; or consider this example.

            ‘Illiterate’ can be defined as: not well educated in the reading or the writing; especially, being unable to read or write.

            That doesn’t mean that if you can read and write, you aren’t illiterate. That’s just a special case; a particular one.

            • Colonial Viper 12.1.1.1.3.1

              That doesn’t mean that if you can read and write, you aren’t illiterate. That’s just a special case; a particular one.

              Indeed, someone who doesn’t know the correct meanings of words that he can read or write could still be considered illiterate

              :mrgreen:

            • queenstfarmer 12.1.1.1.3.2

              Trick for young players, ‘especially’ doesn’t mean ‘exclusively’.

              No argument there. The first part of the definition makes my point. As you say, what follows simply adds further detail.

              Though it’s quite nice that the one, non-exclusive example is exactly on the topic of this debate, and gives a meaning entirely consistent with what MediaWorks and others have been saying, but which some on this thread apparently think is incorrect.

              • Colonial Viper

                It’s selling out our country and the energy security of our children, regardless of how you cleverly define it you cheap fuck.

                • Hanswurst

                  It is not even vaguely clever, though. The only question that needs to be asked is, “Has anything that was previously in public ownership passed into private hands?” The answer being “Yes,” there is no further argument to be had.

                  Qstf”ers thick-headed misunderstanding of privatisation to mean “When some big whole company or summink gets sold by a gummint (esp. a Labour gummint)” is on exactly the same level as those lazy and misinformed citizens who define communism as “That fascist system where nice people get shot and it reminds me of Hitler”.

  13. let’s call it what everybody around the world at the receiving end of the Banksters “largesse” calls it: Looting.

  14. Red Rosa 14

    Love it. The Nats are right into Orwellian bafflegab.

    First we have MOM. Surely not the Nanny State?

    Bad luck for any buyers of these shares. Presumably (Lockwood, we have your word on this) they are not then private property?

    Bit disturbing really.

    • Puddleglum 14.1

      Yep, putting the boundary at the ‘firm’ level (of the SOE) just so you can say you haven’t ‘privatised’ what was once under public ownership is playing with words.

      What say one of the SOEs was split and the asset value of a part of it that was then sold to private interests amounted to the proportion of shares now proposed for sale? Then, no-one would hesitate in saying the asset had been privatised.

      Also, fifty-one percent retention of shares does not mean that decision making remains in the hands of the government. Or, to put it more accurately, the nominal government control over decision making (because it would have the majority of shares) obscures the fact that the kinds of decisions that would then have to be made would have to incorporate the fact that 49% of the shares were in private hands and that, therefore, the viability of the, nominal, SOE would be dependent upon keeping that 49% happy (i.e., putting their interests first). If they weren’t kept happy they would sell down and then where would the SOE be?

      This form of privatisation is an attempt to make SOEs completely part of a market rather than to operate as a ‘strategic asset’ owned by all of us.

  15. Jan 15

    What is this special “not private status” I wonder since the intention is to trade the SOE;s on the share market. The potential public benefits (smart metering technology, options to use more power cheaply at times of plentiful supply, profits to the exchequer to purchase government services or to keep power prices manageable, approaches for guaranteeing energy security for the future as discussed on the recent Radio NZ Sunday programme http://podcast.radionz.co.nz/sun/sun-20110703-1005-john_scott-048.mp3

    [audio src="http://podcast.radionz.co.nz/sun/sun-20110703-1005-john_scott-048.mp3" /]

    are all marginalised in favour of the benefits to private share holders. The broken ‘competitive’ model has and will hamper the efficient operation of the electricity industry in in favour of guaranteed profits for a few.

    Typical of a government who see themselves solely as enablers of capital – Jam today for a few in preference to Jam today and tomorrow for all New Zealanders

    MOM n’ DAD – dangerous and duplicitous anyone

  16. felix 16

    Watching Lockwood’s character arc over the past term, it’s hard to avoid thinking he was given a very strong talking-to during the summer recess – you’ve been very fair but this is election year, don’t forget who’s team you’re on, I made you I can break you too, you want the fucking knighthood or not, cunt? – that sort of thing.

    Disappointing really.

  17. randal 17

    anyway the guts of the matter is this. the neo-cons in the government want to disrupt a natural monopoly so that they can get their hands on the spoils and even better create a market so they can bet on spot prices and make the conusmer and more importantly industry pay on the nose any time time they can put a corner on the market.
    and kiwis are so dumb they are going to fall for it.
    think enron and think how the staff at the wall street journal nearly crashed the paper trying to do the same thing.

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