Isn’t this the one issue where we truly know what National will do? Didn’t John Key say ‘there will be no asset sales in the first term of a National Government (we’ll save that or the second term)’?
Yes, he did. But that goes against the deepest of National principles and caused real disquiet about his leadership, both amongst National MPs and its big business backers. Fortunately, Slippery John knows there’s more than one way to skin that cat.
Straight out buying and selling is old fashioned. Now, you keep ownership of the asset but you make that asset take a pile of money from a private financier, probably a foreign bank or consortium, in return for which the private money men make money off the interest (or rent, it’s all the same) they charge to the asset. So, now, the assets’ profits are flowing to them rather than to the public, just as if a sale had taken place. And, just as if he had sold the asset, Key gets a pile of cash with which to fund tax cuts for the rich.
You can dress this trick up in all kinds of confusing terms; use all kinds of fancy financial vehicles. Rumour has it that National is looking at the options of having the SOEs issue ‘strategic bonds’, or having them sell their assets, then lease them back from the buyers, or selling the SOEs altogether but leasing them back. In fact, they could just invent a new debt vehicle that no-one understands. And that’s the nice thing about finance, you can sale all the value out of an asset but still not break your promise to not sell assets. The people don’t want their assets sold but you can slip this kind of trick past them and they won’t even know.
So, Mr Key. Is this your real assets policy? Or are you prepared to rule out any kind of debt issuing by public-owned assets or any other means of extracting the capital value of the asset in return for its future profits under a National Government?