One thing National does very well is spend a lot of time softening the public up for unpopular moves so that the public attention has moved on by the time anything actually happens. Look at GST. The ‘rabbit from a hat’ trick of borrowing for larger income tax cuts served to divert attention from the well-signaled GST hike.
They’re running the same strategy on privatisation. All of a sudden the government is concerned that Kiwibank, which it has never liked, does not have enough money to grow. And the Nats’ solution is sell some of it off.
It’s patently ridiculous to suggest that a partial sale is the best way to raise any more capital Kiwibank needs. All that will mean is profits going overseas. If Kiwibank needs more money it should be allowed to retain its profits rather than paying a dividend to the government.
If it really needs a bit more cash the cheapest place to raise that is from the government. It’s less than what has just been borrowed for tax cuts and all the profits stay in public hands. But I think they will struggle to pull another GST when it comes to privatisation. This is a situation more akin to mining.
It can be attacked on a number of rock solid grounds, the first of which is that it doesn’t make any economic sense. Like mining, there are national self-image and economic sovereignty angles too. As we are proud of our conversation lands, New Zealanders are justifiably proud of our Kiwibank and the way it has restored competition to the banking system by taking on the Aussies.
We know, too, that any sale will see more Kiwi profits go overseas, just as mining on schedule 4 land would.
National knows that going into the campaign on a platform of asset sales is an election loser. But selling off the State to its mates (to pay for tax cuts for its mates) is also a core part of National’s business. There’s no point being government if it’s not distributing public wealth to private interests. So, National is starting its propaganda early.
No worries though. It’s a fight, like mining, that the Left can look forward to winning if we stand firm.