web analytics

The Government must be crazy

Written By: - Date published: 7:15 am, March 1st, 2013 - 22 comments
Categories: assets, national, Privatisation - Tags:

Apparently National are considering 3 asset sales this year.  Mighty River in May / June, and perhaps 2 in November, as there are only 2 windows you can really make a sale in (due to rules around accounting numbers etc).

Can they really be serious about having 2 major sales at the same time?  How much spare “mum and dad” capital do they think is out there?  How do they expect to get a good price?

Selling all 3 electricity companies over the course of 6-12 months is going to mean that this sector is completely saturated.  The NZSX will be completely lopsided and unbalanced towards the utility sector.  All free capital for productive NZ companies will have been soaked up, meaning a lack of cash for our exporters and manufacturers to expand.

By the time they flog the last power co, shares in Mighty River (and those Contact ones remaining in NZ hands) will be heading to foreign hands at a rate of knots.

It’s a stupid idea to sell these assets for so many reasons, from lost revenue to lost sovereignty, higher power prices to higher current account deficit and taxes…

But if National are determined to do it, they could at least try and be a bit competent about the sales process.

22 comments on “The Government must be crazy ”

  1. Draco T Bastard 1

    Can they really be serious about having 2 major sales at the same time?

    When their only goal is to sell them off as fast as possible for as little as possible? Yes.

    • framu 1.1

      and the other goal to reduce the purchase price

    • prism 1.2

      Didn’t Richard Prebble say he would be prepared to give the railways away? Government two-legs bad, private ownership four-legs good!

  2. fatty 2

    There are plenty of mum and dad’s in China and USA. I’m sure they’re ready to take our candy from us babies

  3. Colonial Viper 3

    it’s like National is schizophrenically trying to lose the 2014 election when they could go all out and return for a third term. Weird behaviour driven by factional backers.

    • Tiresias 3.1

      Well, no. Given that the average voter has the political memory span of a goldfish the Nats will be able to use some of the $billions raised in the asset sales in 2013 to bedazzle them in 2014 with a couple of shiny news schools, a 5-star prison and half-a-cent off the basic rate of tax, and they’ll all go “Oooooh.”

      • Addison 3.1.1

        Of course,didn’t you realize that was the plan. A bit like working for families and free student loans.

      • Peter 3.1.2

        Agreed. If the average voter was really concerned about what is going on politically the Nats would be long gone already.

  4. odysseus 4

    So Ben, is Labour promising to renationalise the companies or regulate the market ? I think you are probably in favour of the latter but is that Labour policy ? And if it is, when is it to be trumpeted from the rooftops?

  5. johnm 5

    They’re up themselves arrogant antidemocratic crooks in other words rubbish! They know 80% of kiwis want those assets to stay in kiwi control. They’re aided and abbetted by the well orf smug sector of divided New Zealand who don’t give a flying f*ck for their poorer compatriots.

  6. Addison 6

    I thought reducing the value of these companies was a cunning Left plan to stop the sales. If not why all the threats to denationalize.

    • McFlock 6.1

      Nah. Renationalisation is the cunning plan of the “Left”. Heck, some reckon that it should be renationalisation without compensation, so lowering the sale value is pointless – but it’s only fair to give folk a heads up.

      What is perplexing is why devaluing would be part of a cunning plan of the tories. Gosh, it’s almost like they want them and their mates to be able to buy up as much of New Zealand’s essential infrastructure as possible.

      A conflict of class interest, if you will.

  7. There’s something that concerns me and that is how these power companies that are
    going to be ‘hocked off’ suddenly are making millions of dollars of profit,in a time
    when demand for power has gone down,
    Someone with more business knowledge than me might be able to shed some light
    on why.
    If the figures are being ‘made healthy’ to attract buyers of shares,surely there is
    something dodgy going on here.
    I am totally against selling off our tax-payer assets,in any shape manner or form.

    • tc 7.1

      Profit numbers are artificial at best in the power sector as it has a captive monopoly market, been dodgy since it devolved from NZED.

      Prices are controlled by themselves, they decide what to invest/spend on and they provision as they please with Audit being a tick box rather than a rigorous examination of ‘fair and accurate’.

      My guess is the hard word’s gone out to give up as much dividend as you can as the gov’t revenue base has been deliberately shrunk so it serves a dual purpose in making them look attractive.

      They’re attractive because they’re a monopoly and will always be profitable no matter what supply/demand is doing, that’s why they will be flogged regardless of any obstacle, it’s all part of the hollowman agenda.

      • Thanks for your explanation tc, There really needs to be tougher rules around taxpayer
        assets so that they aren’t pillaged and robbed by successive incomming governments,too
        late now though, they will be all gone in the blink of an eye soon.

    • Draco T Bastard 7.2

      This may help explain.

    • Simple 7.3

      VivaciousViper

      lets work through the issues:

      1. Power demand hasn’t gone down, we all need to live and work, so baseload consumption is predictably stable, where you have variability is weather (hydro in the SI), production output by large users (Tiwai Point, Glenbrook type plant). See stats http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/electricity – none show a reduction.

      2. Selling anything like a house or a car, presentation matters, how you looked after it with a car, did you maintain it affects resale. As with a house, how the town is perceived, local school etc all have an impact, so if you apply this logic to selling a SOE, you would think about in the post GFC environment, that a ‘stable asset’, with predicable returns, from diversified sources is going to do well, when compared to other assets choices.

      As an example your KiwiSaver fund manager needs to make choices right now (so that you can have a better retirement) do they invest in Sky TV with the risk of technology change, demand change (demographics), content risk etc, which could produce a higher but more volitile return, or do they have a more predicable investment return, with less volitility.

      3. It is hard to make things look healthy, suddenly. You want a trend, causality with investment, so financials over the last 5 years averaged are going to be given more weight than ‘window dressing’ and a coat of paint.

      Hope this helps, happy to reference these items if that helps.

  8. Rogue Trooper 8

    ssssshh! a tip from The Daily Planet;
    is it true that Shipley is on the board of Chinas’ state-owned bank China Construction, specializing in energy-sector development, or, is it false that Treasury / Goldman Sachs are running the ruler over Kiwibank for an alternate cash-injection… (Bruce)

  9. Ed 9

    The court said that there could be compensation to pay for excluding Maori from water management. Surely any government would look to provide that compensation from the electricity generation industry itself rather than finding cash elsewhere. One possibility could be increased charges for use of water for generation, imposed on all generators. Another issue is that any government will surely look to the electricity generation industry for ensuring that there is the ability to meet future demand for electricity. If any one or more company appeared to be not willing to share in such an aim it could be necessary to impose levies from which to fund such industry expansion. In either case that would effectively represent regulatory risk for any share float of an electricity generation company.

    Have any potential regulatory risks been identified in the prospectus for Mighty River? If we don,t know perhaps someone should help the government by pointing out the risks …

Recent Comments

Recent Posts

  • Project protects jobs and nature
    A Waitomo-based Jobs for Nature project will keep up to ten people employed in the village as the tourism sector recovers post Covid-19 Conservation Minister Kiri Allan says. “This $500,000 project will save ten local jobs by deploying workers from Discover Waitomo into nature-based jobs. They will be undertaking local ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Minister Shaw speaks with U.S. Presidential Envoy John Kerry
    Minister for Climate Change, James Shaw spoke yesterday with President Biden’s Special Presidential Envoy for Climate John Kerry. “I was delighted to have the opportunity to speak with Mr. Kerry this morning about the urgency with which our governments must confront the climate emergency. I am grateful to him and ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • Minister of Foreign Affairs makes three diplomatic appointments
    Foreign Affairs Minister Hon Nanaia Mahuta today announced three diplomatic appointments: Alana Hudson as Ambassador to Poland John Riley as Consul-General to Hong Kong Stephen Wong as Consul-General to Shanghai   Poland “New Zealand’s relationship with Poland is built on enduring personal, economic and historical connections. Poland is also an important ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • Major redevelopment of Wainuiomata High School underway
    Work begins today at Wainuiomata High School to ensure buildings and teaching spaces are fit for purpose, Education Minister Chris Hipkins says. The Minister joined principal Janette Melrose and board chair Lynda Koia to kick off demolition for the project, which is worth close to $40 million, as the site ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New expert group appointed to advise Government on Oranga Tamariki
    A skilled and experienced group of people have been named as the newly established Oranga Tamariki Ministerial Advisory Board by Children’s Minister Kelvin Davis today. The Board will provide independent advice and assurance to the Minister for Children across three key areas of Oranga Tamariki: relationships with families, whānau, and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • COVID-19 vaccine slated for possible approval next week
    The green light for New Zealand’s first COVID-19 vaccine could be granted in just over a week, Prime Minister Jacinda Ardern said today. “We’re making swift progress towards vaccinating New Zealanders against the virus, but we’re also absolutely committed to ensuring the vaccines are safe and effective,” Jacinda Ardern said. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New ACC Board members announced.
    The Minister for ACC is pleased to announce the appointment of three new members to join the Board of ACC on 1 February 2021. “All three bring diverse skills and experience to provide strong governance oversight to lead the direction of ACC” said Hon Carmel Sepuloni. Bella Takiari-Brame from Hamilton ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Economic boost for Southland marae
    The Government is investing $9 million to upgrade a significant community facility in Invercargill, creating economic stimulus and jobs, Infrastructure Minister Grant Robertson and Te Tai Tonga MP Rino Tirikatene have announced.  The grant for Waihōpai Rūnaka Inc to make improvements to Murihiku Marae comes from the $3 billion set ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Celebrating the Entry Into Force of the Treaty on the Prohibition of Nuclear Weapons
    [Opening comments, welcome and thank you to Auckland University etc] It is a great pleasure to be here this afternoon to celebrate such an historic occasion - the entry into force of the Treaty on the Prohibition of Nuclear Weapons. This is a moment many feared would never come, but ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Supporting disabled people to stay connected
    The Government is providing $3 million in one-off seed funding to help disabled people around New Zealand stay connected and access support in their communities, Minister for Disability Issues, Carmel Sepuloni announced today. The funding will allow disability service providers to develop digital and community-based solutions over the next two ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Voluntary saliva testing offered to quarantine workers from Monday
    Border workers in quarantine facilities will be offered voluntary daily COVID-19 saliva tests in addition to their regular weekly testing, COVID-19 Response Minister Chris Hipkins said today. This additional option will be rolled out at the Jet Park Quarantine facility in Auckland starting on Monday 25 January, and then to ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Next steps in firearms buy-back
    The next steps in the Government’s ambitious firearms reform programme to include a three-month buy-back have been announced by Police Minister Poto Williams today.  “The last buy-back and amnesty was unprecedented for New Zealand and was successful in collecting 60,297 firearms, modifying a further 5,630 firearms, and collecting 299,837 prohibited ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Jobs for Nature projects target iconic ecosystems
    Upscaling work already underway to restore two iconic ecosystems will deliver jobs and a lasting legacy, Conservation Minister Kiri Allan says.  “The Jobs for Nature programme provides $1.25 billion over four years to offer employment opportunities for people whose livelihoods have been impacted by the COVID-19 recession. “Two new projects ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New Public Housing Plan announced
    The Government has released its Public Housing Plan 2021-2024 which outlines the intention of where 8,000 additional public and transitional housing places announced in Budget 2020, will go. “The Government is committed to continuing its public house build programme at pace and scale. The extra 8,000 homes – 6000 public ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister congratulates President Joe Biden on his inauguration
    Prime Minister Jacinda Ardern has congratulated President Joe Biden on his inauguration as the 46th President of the United States of America. “I look forward to building a close relationship with President Biden and working with him on issues that matter to both our countries,” Jacinda Ardern said. “New Zealand ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Jobs for Nature funding will create training and employment opportunities
    A major investment to tackle wilding pines in Mt Richmond will create jobs and help protect the area’s unique ecosystems, Biosecurity Minister Damien O’Connor says. The Mt Richmond Forest Park has unique ecosystems developed on mineral-rich geology, including taonga plant species found nowhere else in the country. “These special plant ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pre-departure testing extended to all passengers to New Zealand
    To further protect New Zealand from COVID-19, the Government is extending pre-departure testing to all passengers to New Zealand except from Australia, Antarctica and most Pacific Islands, COVID-19 Response Minister Chris Hipkins said today. “The change will come into force for all flights arriving in New Zealand after 11:59pm (NZT) on Monday ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Bay Cadets learn skills to protect environment
    Bay Conservation Cadets launched with first intake Supported with $3.5 million grant Part of $1.245b Jobs for Nature programme to accelerate recover from Covid Cadets will learn skills to protect and enhance environment Environment Minister David Parker today welcomed the first intake of cadets at the launch of the Bay ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Cook Islanders to resume travel to New Zealand
    The Prime Minister of New Zealand Jacinda Ardern and the Prime Minister of the Cook Islands Mark Brown have announced passengers from the Cook Islands can resume quarantine-free travel into New Zealand from 21 January, enabling access to essential services such as health. “Following confirmation of the Cook Islands’ COVID ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Supporting communities and landowners to grow employment opportunities
    Jobs for Nature funding is being made available to conservation groups and landowners to employ staff and contractors in a move aimed at boosting local biodiversity-focused projects, Conservation Minister Kiritapu Allan has announced. It is estimated some 400-plus jobs will be created with employment opportunities in ecology, restoration, trapping, ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exception for some returning international tertiary students
    The Government has approved an exception class for 1000 international tertiary students, degree level and above, who began their study in New Zealand but were caught offshore when border restrictions began. The exception will allow students to return to New Zealand in stages from April 2021. “Our top priority continues ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tiwai deal gives time for managed transition
    Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New member for APEC Business Advisory Council
    Prime Minister Jacinda Ardern has appointed Anna Curzon to the APEC Business Advisory Council (ABAC). The leader of each APEC economy appoints three private sector representatives to ABAC. ABAC provides advice to leaders annually on business priorities. “ABAC helps ensure that APEC’s work programme is informed by business community perspectives ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Govt’s careful economic management recognised
    The Government’s prudent fiscal management and strong policy programme in the face of the COVID-19 global pandemic have been acknowledged by the credit rating agency Fitch. Fitch has today affirmed New Zealand’s local currency rating at AA+ with a stable outlook and foreign currency rating at AA with a positive ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Additional actions to keep COVID-19 out of NZ
    The Government is putting in place a suite of additional actions to protect New Zealand from COVID-19, including new emerging variants, COVID-19 Response Minister Chris Hipkins said today. “Given the high rates of infection in many countries and evidence of the global spread of more transmissible variants, it’s clear that ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 19 projects will clean up and protect waterways
    $36 million of Government funding alongside councils and others for 19 projects Investment will clean up and protect waterways and create local jobs Boots on the ground expected in Q2 of 2021 Funding part of the Jobs for Nature policy package A package of 19 projects will help clean up ...
    BeehiveBy beehive.govt.nz
    3 weeks ago