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Should the Left keep opposing asset sales?

Written By: - Date published: 7:08 am, March 12th, 2013 - 80 comments
Categories: blogs, Privatisation - Tags: , ,

Barring a miraculous outbreak of common sense the sale of at least some state owned assets is going ahead. Should the parties of the Left continue to oppose the process? Lew At Kiwipolitico (loudly cheered on by Bryce Edwards) doesn’t think so. I think Lew is wrong. Here’s why:

If it wasn’t already over on the night of 26 November 2011, the argument about the popular legitimacy of the government’s plan to partially privatise selected state-owned enterprises was finally put to bed when the pre-registration website for the Mighty River Power float fell over shortly after it went live. Whether this was a result of intentional underprovisioning to generate buzz or genuine organic demand doesn’t matter: within 24 hours100,000 people had pre-registered interest in buying shares. That’s about one-third of the signatures opponents of the scheme took seven months to collect to force a citizens initiated referendum. …

Lew is comparing Apples (online registration for what people hope will be free money) with Oranges (signatures painfully collected by hand by volunteers standing in shopping malls). Of course online registration works quicker – isn’t that obvious? As far as I know the asset sales petition collected its signatures more quickly than any previous petition (which is a more valid comparison to make).

Salience
Labour mistook asset sales for a high-salience issue and tried to run a campaign on it, when in reality too few cared enough for it to work. I have no reason to disbelieve the assertion that most people don’t want the assets sold. But the evidence of the election, the sluggish uptake of petition signatures, and the general lack of traction gained by the Labour party, for whom this has been the only coherent policy frame since the election, show that it is not an issue about which people are strongly exercised.

20/20 hindsight. No the issue didn’t win the election for Labour. That doesn’t mean it doesn’t matter, or didn’t have an impact on the outcome (note National’s majority of 1 in the House).

Mandate
The notion that the government, having spent the entire year 2011 campaigning on it, lacks a mandate to proceed with asset sales is utter nonsense,

I actually agree with this (unlike some Lefties). National has an electoral mandate to proceed. But that doesn’t mean that the Left lacks a mandate to oppose. Part of an Opposition’s job description eh?

Plenty of bad policies are popular — three strikes, scaremongering about immigration, and most of the government’s welfare reforms are good examples. Despite what Josie Pagani might say, all are inimical to Labour and Green politics. How can they oppose these policies, if they’re so popular? Conversely, how can they insist on passing unpopular policies?

Lew seems to be arguing that popularity is the final arbiter of what governments should and shouldn’t do. That’s a very slippery slope, especially with the given point that “plenty of bad policies are popular”. Sometimes leadership means doing the unpopular thing because it is right.

Whether they “win” the referendum or not, at best Labour and the Greens will be vulnerable to legitimate accusations of hypocrisy whenever they propose policy that is merely somewhat popular, as opposed to being very popular. The will have demonstrated that consistency doesn’t really matter, and that could do deep harm to their long-term credibility.

I think the first point is simply nonsense, as above (right and wrong trumps popular and unpopular). As to the second, yes consistency does matter. Which is exactly why the Left should continue to oppose asset sales. To stop would be exactly the kind of inconsistency that Lew thinks is deeply harmful.

The discussion has changed
The left has lost the argument about asset sales. Barring some sort of deus ex machina it’ll go ahead and will probably be a net vote winner for the government. But the apparent mismanagement of Solid Energy has given Labour and the Greens an opportunity to reframe the state-owned enterprise discussion, away from who owns these businesses to how they are run.

The way the SOE’s are run is a legitimate second line of enquiry, but I don’t think it’s a suitable “replacement” to opposing asset sales.

The Left has opposed asset sales, and (rather than being blown by the winds of political expedience as Lew suggests) should remain consistent and keep doing so. Because asset sales are wrong, and we should oppose that which is wrong and damaging to the country.

80 comments on “Should the Left keep opposing asset sales?”

  1. IrishBill 1

    I don’t think Lew is saying that populism should win. I think he’s saying the opposite.

    That said, all the people that are banging on about asset sales being a dead issue have it wrong, probably because they can’t see past the next news-cycle.

    Yes there is a flurry of interest in the sale and no Labour didn’t do very well in the 2011 campaign.

    But the former was always going to be the case and the latter is because Labour’s campaign team sucked badly (and continues to do so).

    What is going to happen is there is going to be a referendum and it’s going to be a big news story for a few weeks. This will cause the government real difficulties but Labour won’t be able to capitalise on these difficulties (because they suck) and the Greens won’t gain a lot electorally from them either (but they will further strengthen and grow their campaign networks which will have a flow-on effect regarding closing the tradition gap between their polling and their result).

    On the latter point, anyone (I’m looking at you Matthew Hooton) that claims the Greens haven’t done well out of this issue are kidding themselves – the Greens have used this as an opportunity to build a significant campaign machine and to break into Auckland in a way that will give them an extra couple of percent at least. Anyone who fails to understand that, fails to understand organising, and with it, fails to understand politics.

    • Ben Clark 1.1

      If there was one issue I found resonated with people on the doorstep when campaigning in a very blue electorate in 2011 it was asset sales. It was Labour’s only way in. There were reasons for people not to vote Labour, but the main thing tempting non-Labour voters that way was to stop asset sales. Campaigning hard on it then and now is not one of Labour’s mistakes.

      I met an awful lot of people in 2011 who opposed asset sales but were going to vote for John Key (even though he wasn’t on the ballot paper.. 😉 ) – some thought he wouldn’t go through with it (despite it being their main promise), others just didn’t trust the other parties, or just liked the guy too much. I wouldn’t be surprised if an awful lot of those people are now pre-registered to buy shares – not because they’ve been converted to asset sales, but because they’ve weighed up personal finance options or are doing so (pre-registering will get you the prospectus so you can weigh things up…).

      I would say the left haven’t lost the argument on asset sales, despite Lew’s conclusion. Polls still say that 2/3rds – 3/4 of voters agree with the Left – if that’s a loss, I don’t know what a win looks like in Lew’s world.

      • Lew 1.1.1

        Polls still say that 2/3rds – 3/4 of voters agree with the Left – if that’s a loss, I don’t know what a win looks like in Lew’s world.

        A win looks like 50% of them voting for you.

        L

        • Daveo 1.1.1.1

          By that logic the Left should abandon any campaign that doesn’t by itself win them an election, regardless of how popular it is. Of course, no single issue campaign by itself has ever won anyone an election, so by that logic we should all just give up the hard work of campaigning and instead set up niche political blogs and whinge on Twitter. Seems to work for Lew.

          • cricklewood 1.1.1.1.1

            No they shouldn’t stop and labors position is clear. But carping on about it, basing your whole campaign on it is demonstrably foolish. All the anti sale noise has done is drown out anything else in the way of more positive messages. It is fair to say it has been a strategic mistake and I beleive it would be more positive to be hearing about what Labour proposes to ease unemployment etc.
            The best way to put pressure on National to stop would be a slump in the polls while they are riding high obviously anti asset sale isn’t a catalyst for that.

    • Jim Davis 1.2

      Well it’s typical Lew, isn’t it? Smug armchair critic who’s never actually had to dirty himself with the day to day grind of organising and campaigning. That’s how he can make the basic mistake of thinking 1) an online registration, with 2) multi-million dollar advertising and 3) a way for wealthy people to make money in any way compares to the herculean effort of collecting 400,000 offline signatures for a political petition. It’s true that it’s easy to be so far in the game that you lose perspective, but Lew’s guilty of the opposite sin. He wouldn’t know real life politics if he tripped over it, which he often does.

    • SpaceMonkey 1.3

      The anti-asset sales campaign has enabled the Greens to extend and strengthen their network in at the grassroots. This is where real change happens, and with it the Greens will emerge in the next decade as the dominant party on the left.

      • Colonial Viper 1.3.1

        Yep. The last count I heard was that the Greens collected almost 52% of the signatures.

        The remaining 48% being made up by groups such as Labour, Grey Power, etc.

        • the pigman 1.3.1.1

          ^^ the neener/neener above is exactly the reason I will probably never be a Green Party voter no matter what the Labour caucus drags the Party through.

          • felixviper 1.3.1.1.1

            It’s not a neener/neener at all, it’s just a fact. The Greens collected a lot more signatures than Labour.

            Of course it’s possible that Labour have been working hard on some other plan to oppose asset sales, but if so they’ve pretty much been doing it in secret.

  2. Agreed Rob. There is no way that any self respecting progressive or leftie could sit idly by and watch the nation’s most important strategic assets being sold. If we did not oppose this then there is little left which we could oppose.

    Lew’s comments suggest that he has analysed the process as the playing of a game where the only measure of success is whether or not you score points. This issue is much more important than that.

    His comments are also very simplistic. There were a huge number of reasons people voted the way they did. The quality of the campaigns were part of this and in this regard Labour really needs to have a review of what happened.

    PS I just heard RNZ report John Key as saying that many of the signatures on the anti sale petition will prove to be “bogus”. Shame on him. I spent quite a lot of time collecting signatures and every single one was that of a genuinely concerned Kiwi. Some of the signatories may not prove to be identifiable as being on the roll through a lack of information or because they are not on the roll for their current address but that does not make their signatures bogus.

    Shame on him. Shame on him. Shame on him. He needs to go.

    • Anne 2.1

      There were a huge number of reasons people voted the way they did. The quality of the campaigns were part of this and in this regard Labour really needs to have a review of what happened.

      There were indeed. They voted NAct because they thought they were entitled to another term. They voted NAct because they fell for the Key charm. They voted NAct because their mates were voting NAct. They voted NAct because…. any reason other than those that matter like Asset Sales. My pick is, less than 20% gave the Asset Sales a thought before they entered the polling booth, and that 20% were full time Tories looking to make a handsome buck for themselves and to hell with the rest of the country.

      Yes, and it didn’t help that Labour ran a second-rate campaign (still feel sorry for Goff on that count even if he is blaming the wrong people) and there’s no way Labour will conduct a review of what happened while those responsible for the campaign failure are still in charge. Hell will freeze over before they acknowledge their role… and thus allow the party to move on to a better place.

      • Tim 2.1.1

        They voted NAct because they fell for the Key charm.
        That’s one of the things that disappoints me most with fellow NZers – the fact that they actually think John Key has ‘charm’. No wonder so many got taken in by finance company salesmen.

        And can anyone explain to me why there is such binary thinking whereby simply because someone pre-registers (and even goes through with a purchase), they therefore must be in favour of asset sales? I’ll bet many with the means will want to purchase to ensure the asset stays predominantly NZ-owned

  3. tc 3

    Power generation is an essential utility, a natural monopoly and national asset built by our parents and parents parents power bills.

    It became a money spinning machine through poor regulation and a structure that protects those profiteering from the retail consumer as big business users pay fractions of what you and I pay.

    Asset sales shouled be considered on a case by case basis which the NACT blurr with all the spin around PPP and best practice market efficiency twaddle. They don’t want you looking carefully at the generators.

    As such essential infratsructure that can’t be competeed against stays in public hands whereas a bloated non essential asset such as TVNZ should’ve been sold before alot of it’s value was wiped away.

    NZPost needs a revisit to, not to sell but to trim it back to delivering the dwindling mail volumes at minimal cost and not wasting money in ventures it sucks at….YouPost and various other E-Comm plays spring to mind.

    • Yep and in a world that will become energy constrained as the cheap oil runs out these power generators are going to become gold plated, for a few elite rather than for all of us.

      • Lew 3.1.1

        I should elaborate that I think Labour and the Greens pledging to buy back — or re-nationalise — the privatised half of these SOEs wouldn’t be a bad strategy. But with two caveats.

        First, it has to be clearly signalled well before the first sales go through, so the market can adequately judge the risk involved. If a credible threat, this should also have the effect of depressing demand, which strengthens the opposition’s argument that selling them now under these circumstances is bad economics.

        And second: any buyback must be part of a radical reframing of how Labour and the Greens approach government and how they regard the role of the state in society. It can’t just be a one-off policy in isolation. Chris Trotter has written a good post on this topic.

        I don’t necessarily support this strategy — though I’m ambivalent rather than opposed — but I can see how it could work.

        L

  4. The left will continue to oppose asset sales but labour won’t – pragmatism, political reality, votes and all that.

  5. Te Reo Putake 5

    Out in the malls and streets, I got plenty of signatures from Tories, even from some who volunteered that they would buy the shares when they became available. The reason was the same everytime; they didn’t think the Government had a mandate for the sales and they wanted it put to a vote.

    Some good points from IB, too, particularly what a shot in the arm this has been for the Greens organisationally. This experiance should help keep their party vote solidly in the low teens. All we neeed is for the Labour party membership to endorse ending and reversing the sales and, between the two parties, we have an election winning policy platform.

  6. Matthew Hooton 6

    The question is not whether Labour and the left should oppose the share floats. Labour is opposed and should keep saying it is opposed, of course. But Labour has allowed the issue to totally dominate its political strategy for over two years now, probably just as John Key intended, and the electoral results, and some of the polling ones, are pretty clear that Labour and the left will never be elected on this issue alone. It just doesn’t matter to as many people as some of the writers here, and some Labour strategists, think.

    • Cayte Shepherd 6.1

      And National was not voted in on this issue alone! So, therefore, what is the validity that Nat have this thing termed a mandate to sell, what all of us, the state, own? The government does not own the electricity generators, the state.-the people, own them.

      Let’s be consistent in the analysis.

      But then a Nat is never consistent as spin is the bread and butter of Nat policy and practice; to really mess and confuse the people, so popularity rules. What a complete and utter mess.

    • The Chairman 6.2

      Mathew

      Labour has not allowed the issue to totally dominate its political strategy.

      You have overlooked Labour’s warmly received new hosing policy for one.

      • Matthew Hooton 6.2.1

        Correct. And when Labour announced that policy it went up in the polls, which sort of supports my point.

        • bad12 6.2.1.1

          Which sort of has you as usual dancing upon the head of a pin, you first claimed that Labour had let it’s anti-asset sales stance dominate it’s strategy,

          You then, when that has been pointed out to you as utter bovine defecation slide away from your previous piece of waffle,

          Slippery has already been taken as a moniker perhaps yours ought to be Slimy…

    • Populuxe1 6.3

      Actually Matthew, Labour isn’t entirely opposed to asset sales:

      “Labour published a closed list of assets that we believe ought to be run in the New Zealand interest because they have monopoly characteristics – assets such as electricity line networks, water and airports.

      The list excludes telecommunications and electricity generation”

      http://www.labour.org.nz/news/robert-walters-finance-breakfast-speech

  7. Karl Sinlcair 7

    Anthony, your comment

    ‘Lew is comparing Apples (online registration for what people hope will be free money) with Oranges’

    Absolutely bang on, a rather pathetic attempt for self justification by Lew. Also its appaling that one cannot vote online for such issues

    If people had been able to vote online then I suspect this kiwi asset sale would have been canned long ago.

    Is it not odd that you can preregister for shares online, bank, buy etc yet you cannot vote (on the major agendas within government).

    Im sure the Government would then be very different form than the one we have now (i.e. it would be actaully democratic).

    Here is an example of what the future should be.

    http://votebox.cs.rice.edu/

    What is VoteBox?
    VoteBox is a prototype electronic voting machine created by researchers in the Computer Security Lab at Rice University. It is designed to be a platform for broad e-voting research, particularly in the areas of security and usability. The code is written in Java, and runs on computers with Windows, Macintosh, and Linux operating systems.

    VoteBox is an excellent starting point for new research projects and could even be used as the basis for a new commercial voting system, but it is not currently production-quality code. VoteBox is free software, licensed under version 3 of the GNU General Public License (GPLv3). For more information please read our FAQ.

    So even if you get stuck with an antiquated monolith like the National party you could effectively start to expand the possibility of choice within their term by ensuring electronic online voting on key issues within their term (they would’nt like it, spoilt brats never do)

    • Cayte Shepherd 7.1

      And, a million dollars of tax payer money spent to advertise purchasing a share in an entity which everyone already has a share in! With $50,000 to collect 390,000 signatures for referendum, face to face in all sorts of places across the nation, to oppose the stupidity.

  8. Lew 8

    Obviously the number of signups for MRP and CIR signatures are different. But when you get 100k in 24 hours, the difference doesn’t much matter: That’s massive interest.

    Re the asset sales campaign not being an election winner — you can say 20/20 hindsight if you like, but I called it in February 2011. I’m hardly alone in that regard; the only people who seem to have thought it impossible are Labour party activists.

    As to my argument about populism, you have me backwards, as IrishBill says. Populism isn’t a winner for the principled left; at least not over the long term, and certainly not in government.

    If there was actually a hope in hell of getting the SOE float stopped then continuing the present strategy probably wouldn’t be a bad move. But there isn’t, so the emphasis now has to go on what comes next.

    The point is not that Labour and the greens should now turn coat and support the privatisation — of course they shouldn’t. But it’s not worth dying in a ditch for; there are bigger issues to deal with, and the country is going to need a competent and credible left after 2014. We have serious problems with corporate culture in NZ — finance companies, Pike River, Mainzeal falling over despite being the preferred construction partner in Christchurch, others. At this very moment the trouble with Solid Energy is being used by the government to demonstrate that only the private sector — the private sector who’s done such a bang-up job in all those other cases — is fit to run anything. We’re going to hear that “real” businesses in the mighty private sector only fail because the state makes it impossible to succeed by tying them up in red tape, minimum wages, tax, and what not, so let’s leave the business to the businessmen, and get the state out of the way. Am I right? Look at the RMA reforms. What’s going on here is bigger than just selling half of some assets; it’s about the role of the government in the economy, and in society.

    L

    • Um let’s see an online registration takes seconds and could be worth a significant amount of money.

      Real signatures requires effort and dedication by a number of people willing to give up their weekends to collect signatures.

      And bigger issues? Well there are but not that much bigger. Sure corporate culture is a biggie but what would you do about them Lew?

      RMA issues? Sure they are important and I have spent a great deal of time campaigning on them but they are only for lawyers and intellectuals and do not have the simplicity of description that privatisation does.

      • chris 8.1.1

        Your dismissiveness of what lew is saying is perfectly reinforcing his point!

        If an issue is super important to the future of the country, but currently only framed as to be an issue for intellectuals, change the f’n framing of the issue, don’t just cede it because there’s an easier issue to campaign on. FFS.

      • JK 8.1.2

        Mickey S- you said “RMA issues? Sure they are important and I have spent a great deal of time campaigning on them but they are only for lawyers and intellectuals and do not have the simplicity of description that privatisation does.”

        Without disagreeing with anything you’ve said re asset sales, I don’t think you can just dismiss the RMA issues as being just for lawyers, intellectuals, etc.

        Somehow we need to come up with a few easy-to-understand slogans on the RMA changes because these will drastically affect just about anything anyone does with land development, environmental changes, businesses, building, mining, industry – you name it – and everyone needs to know about it.

    • Wayne 8.2

      And Lew’s point is the key here. Oppossing assets sales is essentially a negative.

      People actually want to hear the positive message that a political party has – what new things they will do. Hence the reason that on various comments on this site I have mentioned a much more substantial innovation strategy, or a more imaginative use of the Super Fund. Surely a creative centre left party can think of better things to do with $20 billion, rather than investing it all on the NYSE. Surely it could be used (or at least some of it) to drive new economic initiatives here.

      And Ben, yes the good voters of North Shore may have politely listened to you, but they did not hear a new narrative from Labour, though to be fair 3 years after a new Govt was too early for that. After all I know what is was like in 2002, even in North Shore!

      • Colonial Viper 8.2.1

        Agree completely. Now that Labour has stated what they are against in terms of these SOEs, they need to state what they are for in terms of SOEs. Is it simply to stick to the status quo?

      • Ben Clark 8.2.2

        Hi Wayne –

        Yes, a negative message like “Stop Asset Sales” (should’ve been “Keep our Assets” for a start…) isn’t enough.
        Yes, a positive narrative of what a party will do (rather than won’t do) is needed, and yes, it’s hard to change the framing, freshness and perception in 3 years after government.
        I guess yes, it is hard to get multiple messages out with a media that likes single issues (there was a lot of good stuff in the Labour manifesto that struggled to get any exposure – not least the children’s policy); so you have to be careful which issues you run with.

        Hell, yes, I’d like to see some more of the Super Fund invested here to boost our (clean, green) economy.

        Hmm, that’s a lot of agreeing…
        My point was that I don’t think it is/was wrong to go big on Keeping Our Assets – but yes, it shouldn’t be the only message.

        And competency and the ability to show that through the media are at least as big issues for the public as any policy. People seem to want things to be done, even if they don’t necessarily agree with them…

        Policy was our strong point and we were right to try to campaign on policy, but policy isn’t enough… (except for policy wonks like me).

    • bad12 8.3

      What you call ‘massive interest’ is in fact massive self interest off of the back of some very Slippery marketing from the National Government,

      Given that those who pre-register their interest have been promised up to 25% more shares at the point of actual sale than those that do not pre-register it is no surprise that those who have the money and the intention to buy shares in Mighty River Power have all rushed to get their interest registered,

      My view is that both Labour and the Green Party have weakened support for both anti-asset sales in general and the petition calling for a referendum by ruling out putting the sold assets back into the hands of Government ownership upon becoming the Government…

    • aj 8.4

      I only registered an interest as an easy way to keep up with float details. Although I can afford to buy, I almost certainly won’t.
      Others may well have done the same. Tyre kickers.

    • Murray Olsen 8.5

      The problems with corporate culture and the myths surrounding the efficiency of kiwi entrepreneurs are directly tied to asset theft and sales. What do you think is going to happen to the workforce of the privatised companies? Who are going to be in charge? The same people that were responsible for deaths at Pike River, the woeful performance of Solid Energy, and the shifting of liabilities and shafting of the people of Christchurch that is the Mainzeal collapse. These people can’t run anything; their whole culture is to get everything handed to them on a plate by ACT governments. Then when they run something down, the government buys it back and gives them something else.
      How on earth can you not see that asset theft is a significant part of this whole problem, and a good point from which to fight it?
      Shearer obviously doesn’t, because he even believes that military operations can be privatised. What role does he actually see for the state besides arresting roof painters and turning them over to private prisons? Winston First will be against the sales because he’ll see that they’ll result in higher power prices for pensioners, without seeing the wider picture. The Greens probably have a broader view, seeing private generation as being an enemy of environmental concerns at least. However, once again I think the most consistent opposition will come from Mana. Unfortunately, ABC will help marginalise this opposition. I wish they’d just hurry up and join their mates in ACT.

  9. ak 9

    Tautoko r0b. At a glance, several howlers by Lew in this one.

    For starters, as you point out the petition take-up certainly wasn’t tepid at all. And it’s debatable whether Labour campaigned “hard” on asset sales. Not from my memory.

    And far from a mandate for asset sales, every poll before and since showed that 2011 was Key’s despite the promise of unwanted asset sales. The voters’ desires on this issue have never been in doubt, simply that other issues overwhelmed.

    The heavily-touted pre-registration exercise was always going to be a flood. Free money. A government-guaranteed finance company. The exact equivalent of the “north of fifty dollars a week” that brought us Key in the first place. Nothing remotely to do with perceptions of merit of the policy.

    But most importantly, as you note, Consistency. Labour must stick to the intention for a cast-iron mandate, either way. It’s consistent even with Key and tory rhetoric: if they’re so sure of the “mandate” then they’ll welcome the referendum as rock-solid confirmation.

    “Mr Key says kiwis want asset sales, but doesn’t want to ask them directly. Labour will be bound by the result of the referendum, it’s up to you New Zealand”.

  10. Erentz 10

    Re the MRP sign ups. The thing is you sign up to keep your options open. It does not indicate you will buy. Nor does not indicate you support privatization.

    How many people have signed up, so they can decide later if they want to buy, and then how many people who signed up still oppose the sale? I have. I madly oppose the sale. But it’s going ahead I am going to consider buying some shares – whether ultimately I do or not I haven’t yet decided. It’s as stupid as saying you drive a car so must support RONS. M

  11. vto 11

    The left has absolutely NOT lost the debate etc on asset sales. It has in fact won the debate. That this arsehole-filled government is running roughshod over that debate, the issues and the will of the people because they got almost half the votes in 2011 means shit-all.

    The left, and the non-left in fact, must keep the hefty base issues that sit underneath these particular asset sales alive. The fundamentals are just that – fundamental. Fundamental to our long term wealth and prosperity as a society.

    Do not stop.

    • Ed 11.1

      Those fundamentals are indeed what we need to talk about. I am not opposed to all asset sales – if for example a school is closed or the needs of a ‘department’ change so that a building is no longer needed, it may make sense to sell off the land and buildings before they deteriorate through vandalism; if obsolete office furniture is sold to a dealer we regard that as normal operations.

      I am opposed to the sale of electricity generation companies however:
      1. These are strategic assets on which our future depends – how they are managed and how they charge for their services will affect he future of our country. Use of water is not a simple issue of ‘ownership’.

      2. The break up of the state monopoly into separate companies has diminished the ability of government to determine strategic decisions for New Zealand – the pricing policy for energy; when to charge at cover current costs, and when to charge at a “market” rate that either encourages development of alternative energy sources or encourages lower energy use; how to pay for development of further generation (usually through a mix of building up reserves and higher future costs). Moving from an aim of generating electricity to meet the needs of the country at minimum cost, to an aim to maximise shareholder profit, is not a good strategic decision for New Zealand.

      3. The government has not made a financial case for the sales – they are selling assets with historically good returns to repay low cost government borrowing, at a high cost. They have not shown that we will be better off. Treasury forecasts appear to be either hidden or kept out of the public eye (do they even exist?). The artificial boost to reported profitability by ‘internal’ sales forced by government to generate accounting profits should be seen as the cynical manipulation of results that it was – serious investors should be aware that recent returns have been affected by political manipulation. Why are questions about the investment case (or lack of it) for sales not being asked of the government?

      4. Now is not a good time to sell any major asset – as we keep getting told, the “global financial crisis” has caused this government to miss every one of the economic goals that it has publicised for itself, and to slip in many international rankings) – what makes them think that there are investors out there prepared to pay high values for shares in a government controlled company? It is even worse as a court has recently confirmed that there are unresolved Treaty of Waitangi issues, which will increase uncertainty of future value of Mighty River at least.

      Have I missed any “fundamentals”?

      As for the alternatives, I believe that the break up of the industry has not been good for New Zealand. the so-called ‘competitive market’ is clearly an collection of moving price escalators, moving at different rates for short term tactical reasons, costing money for the ‘churn’ of customers and giving a pretence of true competition. It has not delivered greater efficiencies, or greater innovation. Opposition parties need to at least indicate that they will the structure of energy companies with a view to enabling better coordination of research and development. lower costs to consumers, and less fragmented advice to government.

      • Murray Olsen 11.1.1

        If a building is no longer needed, surely it’s more of a liability than an asset?

  12. SpaceMonkey 12

    The Shearer camp must tacitly support the sales. All they need to do is state publicly that any SOEs sold will be bought back at cost or current share price, whichever is the lower of the two. That will stop any further attempt to extract wealth from the commons.

    Lew is right about bigger issues though… it’s called the TPPA. What is in that may scupper any future attempt to renationalise anything that is owned by a foreign corporate and it’s a no-brainer that that’s where the ownership of our power-generating assets is heading.

    • Colonial Viper 12.1

      Or as Ad has previously suggested, even friendlier measures like committing to active seats on the board, pricing/profit caps, other forms of stricter or more severe regulation/taxation,…

      There are lots of things that Labour can do to materially oppose the sales. But it means pissing off potential investors, and also big capital. Not the kind of thing that a centrist market sympathetic party is likely to do.

  13. Karl Sinclair 13

    TWO SIMPLE REASONS FOR KEEPING OUR RENEWABEL POWER GENERATION ASSETS

    1. By 2025, 35% of all cars sold will be electric, 25% of which will be hybrids and 10% pure EVs.
    http://www.triplepundit.com/2012/02/electric-vehicle-market-forecast-10-year-horizon-looking-strong/

    2. Energy Security (which means economic security) – the price of oil etc will be going up kids

    NZ should not be the WINZ of the Pacific and bail out unimaginative bankers and impotoent traders. YAWN, they bore me…..

    • Colonial Viper 13.1

      1. By 2025, 35% of all cars sold will be electric, 25% of which will be hybrids and 10% pure EVs.

      Only the upper middle class and elite will be able to afford these.

  14. Rich 14

    I’d agree. Asset sales might be an minority concern, but opposing them is a building block for a left majority. Going through the process of getting the referendum, hopefully winning it and then having the result ignored will provide a powerful lesson as to how much people’s opinions are valued by NACT. That is likely to be effective with a significant block of reluctant voters. (Probably not so much amongst Lab/Nat swing voters, or amongst the small, intellectually confused group of ACT/Green swingers).

    • cricklewood 14.1

      You are probably right, but the key question is how many of those that sign a petition on the street will actually be suitably motivated to vote in a referendum or even more pertiantly on election day. I suspect many that signed will be to disengaged to bother…

  15. ad 15

    It probably feels like a contradiction, but Labour has to continue to oppose sales, but also prepare for gvoernment in which at least some of the assets are sold.

    That’s a different kind of government; les a sovereign government and more government as a shareholder with really specific policy intent.

    Hooton is right that Labour needs more ideas, just as good, to refresh its campaigning. Housing was great. The polity is crying out for more if the polls are to shift positively.

    Meanwhile both Labour and the Greens need to do detailed work on the corporate governance instruments they have now, what they need to tweak, how to reaggregate all public capital for policy ends, how to re-flex that muscle and re-route it into executive control.

    Solid Energy and Mighty River Power have been the wake up call to this: even with 100% control, the existing governance instruments are far, far too weak. And has been for a decade.

    Both sides of the House need to think about how they will achieve policy once full sovereignty is gone. And start writing policy about the instruments to achieve this. That simply reflects the reality of weakenign policy agency and accelerating corporatisation of the remaining state.

  16. Point one: Majorities always start as minorities. Because there is an inherent conservatism built into society. The radical minority identifies the critical issues and builds support for social change.

    Point two: What’s negative about holding onto public assets that produce renewable energy? It’s like saying that stopping global warming is negative.

    Point three: This is not a single issue but a survival issue. Ask any farmer forced onto the dole today what global warming is doing. This message is now overtaking the short-term rent seeking for the few.

    Conclusion: If Labour and the Greens stood on principles and not popularity and stated today they would buy these assets back at cost for the social good rather than market return the whole asset rippoff would collapse just as the global economy is in a slow motion freefall.

    There is a hell of a lot more people out there who need cheap renewable energy than those who have a few thousand to spend ripping off public assets.

    The sooner the Left stands up and fights back the sooner the radical minority will turn into a conservative majority while there is something still to conserve.

  17. Macro 17

    “On the latter point, anyone (I’m looking at you Matthew Hooton) that claims the Greens haven’t done well out of this issue are kidding themselves – the Greens have used this as an opportunity to build a significant campaign machine and to break into Auckland in a way that will give them an extra couple of percent at least. Anyone who fails to understand that, fails to understand organising, and with it, fails to understand politics”

    QFT

    We have living proof in our household. 🙂

  18. r0b 18

    Folks a couple of the comments above are unnecessarily targeted at Lew personally (or his blog). Let’s not do that please. I happen to disagree with Lew on this particular issue, on most other issues I agree with him, there’s nothing personal about it!

  19. ropata 19

    National has no compunction about buying votes from the wealthy by any means at its disposal.
    However they spin it as “Mum and Dad” and apple pie, it’s still a shit sandwich for everybody else.

  20. Rogue Trooper 20

    Gone With The Wind

    (all they are is dust in the wind; we are not in Kansas anymore Dorothy)

  21. gobsmacked 21

    Labour – and potential partners in government – should continue to oppose asset sales.

    But they will need to have answers to the obvious question, from the media and opponents …

    “What will you do if you win the next election?”

    It’s very easy for Key and co right now. They can jibe at Labour … “We will ignore the referendum – and so will you.”

    That jibe may not be fair, but it cannot be rebutted, because Shearer is unable/unwilling to say what he would do. It is entirely possible that Labour and National will go into the next election campaign with the SAME policy – no buying back, and no more sales.

    If that is not Labour’s position, it’s high time they said so. Otherwise the Nats have won.

  22. Ant 22

    Don’t see why registering to buy the shares is automatically equated to supporting asset sales.

    Benefitting from stupidity doesn’t necessarily make you complicit in it, or supporting of it.

    • Richard McGrath 22.1

      Except that registering is not passive inaction, it’s active participation, and is thus supportive.

      • felixviper 22.1.1

        How is it supportive? I don’t understand what you mean by that.

        Say your Harley was stolen and the only way you could get it back was to buy it from a gang members. Does that mean you approve of them selling it?

  23. bad12 23

    As a matter of interest, (or not), we may find that the pre-registration of so many ‘people’ showing ‘interest’ in Mighty River Power might be as much a matter of their KiwiSaver provider registering that interest as it is X amount of individuals all registering an interest,

    From what i have read, such providers, trusts and companies can all register the interest on behalf of the individuals so long as those individuals having such an ‘interest’ fit the Governments criteria for pre-registration, IRD number, NZ residency etc etc etc,

    As yet i do not know if such individuals must give their consent for their KiwiSaver provider et al to have ‘their’ personal interest registered but i should imagine that all the providers will have registered ALL their clients as ‘interested’…

  24. Tiger Mountain 24

    Lew is an instinctive generalist contratrianist rather than partisan commenter from my several years of reading.

    He has the grace to say say if the evidence stacks up to the contrary however. Me, ya just gotta keep on truckin, places to go, right wingers to piss off. But it takes all kinds to keep our amazing blogoshpere happening.

  25. Draco T Bastard 25

    Lew seems to be arguing that popularity is the final arbiter of what governments should and shouldn’t do. That’s a very slippery slope, especially with the given point that “plenty of bad policies are popular”. Sometimes leadership means doing the unpopular thing because it is right.

    Actually, leadership would be explaining why bad policies are bad despite their popularity and standing up for a good policy. Neither of which Labour has done with regards to asset sales.

  26. For goodness sakes some of you – HARDEN UP!!!!

    OF COURSE we should continue to not just ‘oppose’ asset sales – but STOP asset sales!

    Here’s how it can be done…

    In case you missed this in my earlier post?

    1) Back up your signature for the asset sale referendum with a personal pledge to BOYCOTT the Mighty River Power share issue!

    DO NOT BUY ANY SHARES IN MIGHTY RIVER POWER!

    BE CONSISTENT! AND PERSISTENT!

    How can you be opposed to asset sales – then buy into the SELLOUT of Mighty River Power?

    Even if you (momentarily) dropped your principles, and got sucked into all the hype and semi-hysteria, and registered an interest in buying Mighty river Power shares – IT IS NOT TOO LATE!

    There is no requirement to purchase shares even if you have ‘registered an interest’.
    The Mighty River Power Prospectus has not even come out yet!

    2) Help drive down the price of Mighty River Power, by BOYCOTTING and switching off / from Mercury Energy (Mighty River Power’s main retailer).

    Here’s what you can do right now to help stop asset sales.
    Boycott Mercury Energy.

    Download and print this leaflet for more info:

    Click to access Switch-off-leaflet-2013-1a.pdf

    Remember?
    In 2008, after already privatised Contact Energy doubled their Directors fees and raised prices 12% – their profits halved when 40,000 customers left in 5 months.

    Remember?
    “Let me make it quite clear. If the Government doesn’t get a good price – the Government isn’t going to sell”

    (Tony Ryall, Minister of SOE’s 17/6/2012 NBR
    http://www.nbr.co.nz/article/govt-wont-sell-assets-if-it-cant-get-good-price-ryall-ck-121435

    WHAT’S A GOOD PRICE Minister?

    How can Mighty river Power sell for a good price – if it’s losing customers and profits?

    3) There is NO MANDATE for asset sales.

    National campaigned for asset sales and got 59 out of 121 MPs.

    Peter Dunne and United Future did NOT campaign for asset sales – so arguably the Public Finance (Mixed Ownership Model) Amendment Act 2012 should have been LOST 60 -61 votes if Peter Dunne had not misled the voting public of Ohariu.

    So! HARDEN UP folks and let’s give this country a taste of PEOPLE POWER that will leave a really nasty taste in the mouths of shonky John Key and this corrupt Government.

    WILL JOHN KEY, BILL ENGLISH AND ALL NATIONAL PARTY MPS PLEDGE NOT TO BUY SHARES IN MIGHTY RIVER POWER?

    HOW ABOUT LABOUR MPS? GREEN MPS? NZ FIRST MPS?

    WHICH MPS STAND TO PERSONALLY PROFIT FROM THE SELLOUT/ SELLOFF OF MIGHTY RIVER POWER?

    HOW IS THAT NOT A CORRUPT MISUSE OF PUBLIC OFFICE FOR PRIVATE GAIN?

    Penny Bright
    A Spokesperson for the Switch Off Mercury Energy community group

  27. Richard McGrath 27

    Interesting that Phil Goff said the 2011 election would be a referendum on asset sales…

    http://www.voxy.co.nz/politics/election-will-be-referendum-asset-sales-goff/5/79913

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