The weak neolib defence of asset sales

23 comments on “The weak neolib defence of asset sales ”

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1. mickysavage 1

   1 June 2010 at 9:55 am

   Interesting comment. It boils down to NZ Government evil, foreign corporation good!

   The nelib mindset feels like a faith based belief system rather than one based on experience.
2. tc 2

   1 June 2010 at 10:19 am

   They have an ideology and they’re not afraid to use it……umm in fact that’s all they’ve got.
3. BLiP 3

   1 June 2010 at 10:20 am

   Sad. They really sound like a bunch of fawning economics Honours students greasing for extra merit.
4. Nick C 4

   1 June 2010 at 10:28 am

   It seems the evil neo-liberals have taken over the victoria university students association and are selling its assets!

   http://www.salient.org.nz/news/vuwsa-van-to-be-sold
5. Olwyn 5

   1 June 2010 at 10:35 am

   Or a greed-based system dependent on the propagation of naive faith in others. Or an Iliad played out in terms of wealth and destitution rather than the traditional weaponry – where you get to lord it over the destitute until a bigger warrior forces you into destitution as well. In the meantime you believe in it as much as you see yourself or your team in the lording-over role, and do not want the government queering the pitch for you.
6. Bunji 6

   1 June 2010 at 10:56 am

   Wow. I liked your original article, but I think they’ve highlighted your points even better! Often nothing makes the left’s points more obvious than listening to those on the raving right…
7. insider 7

   1 June 2010 at 11:31 am

   I dunno, the kneejerk ideology you criticise is matched here by an equally weak ‘not on my watch’ anti privatisation agenda and petty ‘neo liberal’ name calling BTW to them that’s probably as offensive as me calling you a socialist, so the names only appeal to your fellow travellers.

   backed up by evidenceless assertions, like the one on the electricity market. Well, if you look at the evidence, there has been some real gains since that time. Reliability of the system which is what most of us want most of all – tends to be better now than in the golden era of government ownership where there were rolling power cuts and grand projects loved by faceless and unaccountable engineers but not necessarily the best for the customer. Prices are no longer cross subsidised which is better for long term decision making, and decisions over the system that affect you and me are done in the open not by a cosy club.

   If you are not kneejerk anti privatisers, are there any government assets that you would consider selling if the price were right?
   • felix 7.1

     1 June 2010 at 12:38 pm

     I dunno, the kneejerk ideology you criticise is matched here by an equally weak ‘not on my watch’ anti burglary agenda and petty ‘burglar’ name calling.

     If you are not kneejerk anti burglars, is there anything in your house that you would consider letting the burglars have?
     • insider 7.1.1

       1 June 2010 at 1:26 pm

       Felix Johnson is right!
   • snoozer 7.2

     1 June 2010 at 1:34 pm

     neoliberal is the name of the ideology. It’s not name calling any more than socialist is.

     “If you are not kneejerk anti privatisers, are there any government assets that you would consider selling if the price were right?”

     “If the price is right” is a tautology. Of course if the conditions needed to make me do X are satisfied I do X.

     “If you were hungry enough, would you eat a rat?”
     “Sure, if I was hungry enough to eat a rat I would eat a rat”

     The above example comes from National’s policy formation after Key took the leadership.
     • insider 7.2.1

       1 June 2010 at 1:52 pm

       Live or dead? 🙂
   • rainman 7.3

     1 June 2010 at 8:17 pm

     @Insider: If you’re not a kneejerk anti-nationaliser, are there any currently private assets you would consider nationalising?
     • insider 7.3.1

       2 June 2010 at 10:17 am

       Well the government owns so much of NZ’s national scale businesses it’s hard to find one! To me it would have to be something that we desperately need as a country and that is failing badly in private ownership, and for which there are no alternatives.

       If energy security circumstances were differnt you might be able to make a case for NZ Refinery, but it is working well as it is and regulations for emergencies in place, so why bother? You could argue for the telephone network, but there are plenty of alternatives to that so what do you gain?

       Of what they already own there are some that I just don’t see the point of owning, others that I could go either way on and some I’d retain – but most of them aren’t ‘businesses’ as such.
8. tc 8

   1 June 2010 at 12:37 pm

   yes insider, TVNZ and a few of these other ‘commercially focused’ SOE’s that are surplus to requirements as not providing essential services or in a monopoly/duoploly providers scenario are long overdue for some float off to inject better management and practices.

   I thought there’s plenty of research and evidence that shows privatising essential services (power and water) escalates cost to consumer as you introduce a profit element that never existed before and in rare cases this is done properly it’s because the private partner is heavily regulated/covenanted to maintain service/investment and the prices rises are controlled…..I read it all here as links last year from memory.

   The public sector may have inefficiencies but from memory the evidence pointed to a lower cost outcome for consumers than a private/shareholder element did…..private management contracts without actually ownership leaving the public’s addresses most of your ‘best practices’ being adopted.

   I all for getting a more effective service being delivered but not selling the farm……once it’s gone it’s gone.
   • insider 8.1

     1 June 2010 at 1:13 pm

     “once it’s gone it’s gone”

     I bet that’s what Labour thought when they sold off that airline 🙂
   • insider 8.2

     1 June 2010 at 2:01 pm

     I’d be all for keeping part of TVNZ as long as it was reformed. Either that or boost the charter approach. I tend to see it almost as part of the education system where the state should have a role as part of building a healthy democracy.

     To me health and education are the two places where a state presence is important even though private models exist. That doesn’t mean 100% control and doesn’t mean lack of contestability.
9. SteveR 9

   1 June 2010 at 1:10 pm

   A bit off-topic, but this is very good:

   http://www.guardian.co.uk/commentisfree/2010/may/31/state-market-nothern-rock-ridley
10. Rharn 10

    1 June 2010 at 5:37 pm

    Call it what you will but to my mind the free market is nothing less than a bunch of ‘freebooters’ pillaging and raping those at the ‘coalface’ producing the wealth. The arseholes are only better than pirates in as much as they have the governments support for plundering our state assets.
11. Paul Walker 11

    1 June 2010 at 5:37 pm

    A response to his reply.
    • Luxated 11.1

      2 June 2010 at 2:28 am

      I’ll admit I only skimmed this and I might get around to writing a full reply if I remember to read it in full. There is however one clear and probably not surprising thing, this response completely and utterly missed the point.

      Anyway, none of this has anything to do with my point, which is very simple: we the people do not have residual control rights over state assets, the government does, and thus the government, and not we the people, is the owner of those assets.

      As you nearly completely avoid in your post, the government derives its power and therefore its possession of assets from the people, the government has no power in and of itself only the power the people invest in it. Some things (the military for example) disturb this somewhat but that doesn’t erode the basic tenant.

      Well actually the electricity market is doing better thanks to the Bradford reforms so Marty is wrong here.

      …

      I would like to see Marty’s evidence for this assertion: “The introduction of privatisation to natural monopolies has historically lead to under-investment and competition based on advertising, not quality and price.”

      Simultaneously making unfounded assertions about the effectiveness of privatisation while calling on Marty to provide evidence is fairly hypocritical (Not that Marty shouldn’t provide evidence mind you). Note the main page of someone’s blog isn’t what I would call a good source (no matter how good the author is or isn’t), link directly to posts which happen to be cited, hopefully making it a reasonably secondary or tertiary source.

      Later own you do actually directly cite a report, which is great. Except that you’ve really got to take ‘independent’ research institutes work with a grain of salt. When speaking about privatisation its best not to listen too closely to a group whose members include Telecom, Meridian Energy, Contact Energy and Westpac. Also when the chairman has his career described as including:

      …
      In 1987 he established the investment banking services of Fay, Richwhite & Company Limited. Here, he was a Director and Head of Investment Banking and led a number of their M&A and capital management mandates. They included advising Bell Atlantic and Ameritech on the acquisition of Telecom New Zealand, and managing the public float of Telecom New Zealand.

      It might just pay to ignore him when he rambles on about how much ‘better’ rail in NZ was under private hands, just a little bit of self interest and justification perhaps?

      Furthermore,

      The 2009 analysis reveals little evidence to suggest that overall the economic outlook for rail has improved since 1999…

      Report published on the 23 of June 2009, Kiwirail established on the first of July the previous year. So most of that economic outlook would be down to Toll then? Granted the Government did buy the track earlier than that (2004-2005 from memory) but that won’t magically improve Toll’s performance if they don’t invest in improved services.

      Perhaps I’ll have some time later to address the post more than superficially (someone else will probably beat me to it mind you).

      P.S. Before you accuse me of such, I’m not dismissing the ISCR report out of hand just pointing out that it isn’t exactly ‘independent’ in this matter.

      P.P.S. The quote regarding Rob Cameron ISCR chairman is supposed to be cited, doesn’t seem to work. Its all on the ISCR webpage anyway http://www.iscr.org.nz/
      • Armchair Critic 11.1.1

        2 June 2010 at 10:03 am

        “P.S. Before you accuse me of such, I’m not dismissing the ISCR report out of hand just pointing out that it isn’t exactly ‘independent’ in this matter.”
        I read the report and found that parts of the analysis and the assumptions were just wrong. Which leads to the conclusions being wrong too.
        Otherwise, I did pretty much what you did and agree with your response to PW.
        It also occurred to me that two of the last three comments from PW that I have seen were pure link-whoring, and the other was a mix of link whoring and engaging in discussion. What’s up with that?
12. joe bloggs 12

    2 June 2010 at 9:54 am

    this scaremongering about an orgy of asset-stripping is a clear distortion of what English has said.

    The Capital Markets Development taskforce recommended a broader range of high-quality equity offerings for retail investors by encouraging “partial listings of central and local government-owned companies, agricultural businesses like Fonterra and local subsidiaries of financial services firms”.

    That’s a world away from asset-stripping – don’t you recognise the straw-man tactics that Bill’s used to rark you up?
    • McFlock 12.1

      3 June 2010 at 11:43 pm

      So the basic problem is:

      are National a threat to every NZer who isn’t a millionaire because they’ll do what they say they are considering; or are National a possible threat to every NZer who isn’t a millionaire because they’ll do something other than what they say?

      The essence of NZ “democracy” in action…

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