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

  • Protect seamounts and ban bottom trawling right now
    The Green Party is renewing its call for Minister for the Environment, David Parker to immediately ban bottom trawling on seamounts. ...
    10 hours ago
  • Building Auckland’s transport future
    We’re making sure Auckland has the infrastructure it needs for the future, so Aucklanders can get around safely and efficiently as our biggest city grows. The new, linked-up transport system we’re building will include partially tunnelled light rail between the CBD and the airport, as well as another Waitematā Harbour ...
    12 hours ago
  • Build Auckland light rail for benefit of everyone
    The Government’s decision on light rail in Auckland is the first step towards building the climate friendly, accessible city our communities deserve. ...
    12 hours ago
  • Put our most vulnerable first
    Don’t forget whānau and communities most at risk, says the Green Party, as the Government lays out its three-phase plan for Omicron. ...
    2 days ago
  • Boosting our immunity against Omicron
    With Omicron in the community, it’s vital we all do our bit to help to slow the spread, keep each other safe and protect our health system. One of the most important ways we can reduce the risk of Omicron is to get a booster dose as soon as we’re ...
    2 days ago
  • Equitable response to Omicron vital
    The Green Party supports the Government’s decision to move Aotearoa New Zealand to traffic light level Red at 11.59pm tonight, but says its success will depend on the support that is made available to the most vulnerable. ...
    5 days ago
  • How we’re preparing for Omicron
    As countries around the world experience Omicron outbreaks, we’re taking steps now to ensure we’re as prepared as possible and our communities are protected. ...
    1 week ago
  • What’s Labour achieved so far?
    Quite a bit! This Government was elected to take on the toughest issues facing Aotearoa – and that’s what we’re doing. Since the start of the pandemic, protecting lives and livelihoods has been a priority, but we’ve also made progress on long-term challenges, to deliver a future the next generation ...
    2 weeks ago
  • Tackling the big issues in 2022
    This year, keeping Kiwis safe from COVID will remain a key priority of the Government – but we’re also pushing ahead on some of New Zealand’s biggest long-term challenges. In 2022, we’re working to get more Kiwis into homes, reduce emissions, lift children out of poverty, and ensure people get ...
    2 weeks ago

  • Tupu Tai graduation-It’s time to step up
    Greetings: Kia orana, talofa lava, Noa’ia e mauri, malo e lelei, taloha ni, fakaalofa lahi atu, ni sa bula vinaka, talofa, kia ora, tena koutou katoa.  I would love to begin by acknowledging everyone here in attendance, especially the families and friends of the 2021/22 Tupu Tai cohort, and those ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Building and shaping a city: Future-proofing Auckland transport infrastructure
    The Government is bringing Auckland’s transport infrastructure into the future by moving forward with an additional Waitematā Harbour crossing, progressing light rail from Auckland’s CBD to the airport, and creating a linked-up rapid transport network as part of a 30-year plan. Key decisions on additional Waitematā Harbour crossing to be ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Penguin rehab and native forest restoration get helping hand
    A long-running penguin rehab facility which has been hard hit by the tourism downturn, and work to restore native forest habitats in the Catlins are being supported through Jobs for Nature funding, Conservation Minister Kiri Allan says. Otago’s Penguin Place and The Hokonui Rūnanga Catlins Biodiversity Project will receive combined ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Resilient economy reflected in Crown accounts
    The Government’s financial accounts continue to reflect a resilient economy that has performed better than expected and puts the country in a strong position to respond to Omicron, Grant Robertson said. The Crown Accounts for the five months to the end of November were more favourable than forecast in the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government announces three phase public health response to Omicron
    Reducing isolation period for cases and close contacts at Phase Two and Three to 10 and seven days Definition of close contact required to isolate changes to household or household like contacts at Phase Three Increased use of rapid antigen tests with test to return policy put in place for ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Ambassador to Thailand announced
    Foreign Affairs Minister Nanaia Mahuta today announced the appointment of Jonathan Kings as New Zealand’s next Ambassador to Thailand. “Aotearoa New Zealand has a long-standing relationship with Thailand, celebrating the 65th anniversary of diplomatic representation between our countries in 2021. We also share much in common at regional and multilateral levels ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government’s Family Package continues to deliver for New Zealanders
    The Families Package helped around 330,000 families in its first year - more than half of all families with children in NZ These families received an estimated $55 per week more from Families Package payments in 2018/19 than in 2017/18, on average Families Package increases to the maximum possible Accommodation ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand retains top spot in global anti-corruption rankings
    Justice Minister Kris Faafoi has welcomed news of New Zealand’s ongoing position as top in the world anti-corruption rankings. The 2021 Corruption Perceptions Index released by global anti-corruption organisation, Transparency International, ranks New Zealand first equal with Denmark and Finland, with a score of 88 out of 100. “This is an ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Testing improvements see New Zealand well prepared for Omicron
    New Zealand’s PCR testing capacity can be increased by nearly 20,000 tests per day to deal with a surge in cases as part of our wider COVID-19 testing strategy, Associate Minister of Health Dr Ayesha Verrall said. “We have continued to adapt our public health response to safeguard the health ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • 5,000 portable air cleaners for schools on their way
    As schools are preparing to return, Education Minister Chris Hipkins has announced 5,000 air cleaners have been ordered for New Zealand schools. “As we know, along with vaccination, testing, good hygiene and physical distancing, good ventilation is important in minimising the risk of airborne transmission of the virus that causes ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand to move to Red from 11.59pm today
    All of New Zealand will move to the Red setting of the Covid Protection Framework (CPF) at 11:59pm today as Omicron is potentially now transmitting in the community, Prime Minister Jacinda Ardern says. “Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region are now confirmed as Omicron, and a further ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Mandatory boosters for key workforces progressing well
    More than 5,785 (82%) border workers eligible for a booster vaccination at 6 months have received it so far, COVID-19 Response Minister Chris Hipkins says. “That’s a really strong uptake considering we announced the requirement the week before Christmas, but we need to continue this momentum,” Chris Hipkins said. “We ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ to move to Red
    Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region have now been confirmed as the Omicron variant, and a further case from the same household was confirmed late yesterday. These cases are in a single family that flew to Auckland on 13 January to attend a wedding and other events ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand to provide further help for Tonga
    Aotearoa New Zealand is giving an additional $2 million in humanitarian funding for Tonga as the country recovers from a volcanic eruption and tsunami last weekend, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. This brings Aotearoa New Zealand’s contribution to $3 million. “This support will ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Quarterly benefit numbers show highest number of exits into work
    The Government’s strong focus on supporting more people into work is reflected in benefit figures released today which show a year-on-year fall of around 21,300 people receiving a main benefit in the December 2021 quarter, Minister for Social Development and Employment Carmel Sepuloni said. “Our response to COVID has helped ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Northland to move to Orange, NZ prepared for Omicron 
    Northland to move to Orange Rest of New Zealand stays at Orange in preparedness for Omicron All of New Zealand to move into Red in the event of Omicron community outbreak – no use of lockdowns Govt planning well advanced – new case management, close contact definition and testing rules ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • RNZAF C-130 Hercules flight departs for Tonga as Navy vessels draw nearer to Tongatapu
    A Royal New Zealand Air Force C-130 Hercules has departed Base Auckland Whenuapai for Tonga carrying aid supplies, as the New Zealand aid effort ramps up, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “The aircraft is carrying humanitarian aid and disaster relief supplies, including water ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand prepared to send support to Tonga
    New Zealand is ready to assist Tonga in its recovery from Saturday night’s undersea eruption and tsunami, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “Following the successful surveillance and reconnaissance flight of a New Zealand P-3K2 Orion on Monday, imagery and details have been sent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Aotearoa New Zealand stands ready to assist people of Tonga
    The thoughts of New Zealanders are with the people of Tonga following yesterday’s undersea volcanic eruption and subsequent tsunami waves, Foreign Affairs Minister Nanaia Mahuta says. “Damage assessments are under way and New Zealand has formally offered to provide assistance to Tonga,” said Nanaia Mahuta. New Zealand has made an ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Record high of new homes consented continues
    In the year ended November 2021, 48,522 new homes were consented, up 26 per cent from the November 2020 year. In November 2021, 4,688 new dwellings were consented. Auckland’s new homes consented numbers rose 25 per cent in the last year. Annual figures for the last nine months show more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Report trumpets scope for ice cream exports
    Latest research into our premium ice cream industry suggests exporters could find new buyers in valuable overseas markets as consumers increasingly look for tip top quality in food. Economic Development Minister Stuart Nash has released a new report for the Food and Beverage Information Project. The project is run by ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Honouring the legacy of legendary kaumātua Muriwai Ihakara
    Associate Minister for Arts, Culture, and Heritage Kiri Allan expressed her great sadness and deepest condolences at the passing of esteemed kaumātua, Muriwai Ihakara. “Muriwai’s passing is not only a loss for the wider creative sector but for all of Aotearoa New Zealand. The country has lost a much beloved ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Have your say on proposed changes to make drinking water safer
    Associate Minister for the Environment Kiri Allan is urging all New Zealanders to give feedback on proposed changes aimed at making drinking water safer. “The current regulations are not fit for purpose and don’t offer enough protection, particularly for those whose water comes from smaller supplies,” Kiri Allan said. “This ...
    BeehiveBy beehive.govt.nz
    3 weeks ago