What’s the sense in selling?

Written By: - Date published: 9:09 am, June 29th, 2010 - 64 comments
Categories: privatisation - Tags:

Papers obtained by Radio New Zealand under the OIA (not yet online) show Treasury told the Government that investing $100 million in extra capital in Kiwibank would bring the Crown a healthy return. Not long after, Bill English and John Key started talking about selling Kiwibank (until Key was reminded of his pre-election promises never to sell it). It raises the question: if people are so keen to buy are our assets, why would we be keen to sell?

Obviously these private would-be buyers think that they would make a worthwhile return on their money if they bought, which implies that if we don’t sell we would be the ones making the worthwhile return instead (or private buyers plan to increase profits by asset-stripping).

It seems to me there are three times that selling a profitable asset makes sense:

– when you’ve got an unsustainable debt problem.
– when you’ve got other places that the capital could be invested more profitably.
– when joining forces with a private company would increase the profitability of your share.

The first condition is not met. New Zealand has low debt by international standards and even compared to where we stood a decade or so ago. And, although we are borrowing at the moment, the debt track sees us return to surplus in a short amount of time without the need for the drastic measures we’re seeing in Europe. Our net debt will peak below 30% of GDP in 2015.

With the other two conditions, we would need to see evidence in individual cases that they are met, but I am doubtful.

The Nats seem intent to spend every spare cent (and borrow more) on tax cuts, which all the evidence shows is a very inefficient way to promote growth and is unlikely to be a better investment than keeping ownership of an SOE.

And, while we constantly hear this mantra that introducing private ownership to SOEs will somehow bring the magic of the market to them and turn them from caterpillars into super-profitable butterflies, no-one seems quite able to explain how that works or why SOEs can’t adopt any more efficient practices that exist without privatisation.

If the Nats want to sell our assets, they need to make the case that the sale matches one of these tests. So far they haven’t even tried, which tells you how weak their case is and that their drive for privatisation is purely based on ideology.

64 comments on “What’s the sense in selling?”

  1. American Gardener 1

    Fair enough – if the conditions for sale are not met then we should not be selling.

  2. SELL IT being the first reaction to being told Kiwibank needs $100m is telling.

    There are other ways to raise the money

    Maybe it’s the start of the 2011 election campaign

    KEYBANK not KIWIBANK

  3. Pascal's bookie 3

    “If the Nats want to sell our assets, they need to make the case that the sale matches one of these tests.”

    nah. We’ve been discussing, doing, and living with the consequences of privatisation for the thick end of 30 years.

    The cases for and against have been put. The arguments, made. I’m not seeing anything new.

    80 percent oppose. 80 percent.

    Privatisation is a fringe right idea, and anyone pretending to be ‘centre right’ and pushing it in public is a liar.

    That’s the only disussion the left needs to have with the right on the matter at this point in time.

    • Bored 3.1

      We have also seen the result of asset sales over the last 30 years, resulting in asset stripping and denuded services (e.g Telecom, Rail), rentier / monopolist behavoir by buyers, higher prices, no real competition, etc etc.

      The theory was a pig, the result a sow.

      • Draco T Bastard 3.1.1

        Bingo

        Assets sales have left us worse off than we were before. Even “unsustainable debt” isn’t a reason to sell assets that produce a return. The simple fact of the matter is that the country doesn’t need to borrow – all it needs to do is print the money just as the banks do but as it will be without interest then it’s repayable unlike the money from banks. Nationals only reason to sell assets is to make themselves and their rich mates richer at our expense.

      • a human 3.1.2

        “The theory was a pig, the result a sow”
        and still no bacon on the table

      • prism 3.1.3

        A sow is a proud productive member of Planet Earth, unlike other strutting movers and shakers too common to list!

  4. tsmithfield 4

    Maybe the government has caught a whiff of sub-prime disaster potential with Kiwibank. Paper profits are one thing. But I think Kiwibank could be badly exposed to a sudden drop in property values etc given that they have taken on loans that other banks wouldn’t ordinarily go near.

    • Bright Red 4.1

      I love how you just make uup facts, ts.

      Banks aren’t exposed to dropping property prices directly – the mortgage doesn’t drop just because the house value does.

      They are exposed if borrowers start defaulting but that’s more a factor of unemployment than house prices. Even borrowers that are underwater will still have a reason to keep paying their mortgage unless there is a huge drop.

      Kiwibank is not exposed to sub-prime and you misunderstand the problem with sub-prime – it was defaults due to poor people having borrowed too much, losing their jobs, and facing higher interest payments – the falling house values were an effect, not a cause.

      In NZ, house prices are steady and unemployment is forecast to edge downwards. No symptoms of a subprime crisis.

      • tsmithfield 4.1.1

        I’m not saying there will be a sub-prime problem with Kiwi Bank tomorrow. So, to that extent I agree with your analysis.

        However, if the government is looking further out, they might see the potential of such a risk and feel it is better to pass that risk to the private sector, who at least would be taking on the risk by their own choice compared to tax-payers who have no option. Key himself has said recently that he expects more global economic crashes in the future. The way a lot of economies are incredibly geared up, it would not surprise me if that were to occur within the next 5-10 years.

        To that extent then, it is quite possible there will be a major crash in house values over that time, and major unemployment that could affect the ability of many low income borrowers to repay.

        So far as the effect of house values on bank solvency is concerned, this is precisely why the US has changed the rules for banks with respect to asset values. They now account for values at the time of sale rather than the expected recoverable value. Thus most of their housing assets are on their books at the purchase value rather than current value. If this were not the case many US banks would be insolvent.

        • Pascal's bookie 4.1.1.1

          However, if the government is looking further out, they might see the potential of such a risk and feel it is better to pass that risk to the private sector, who at least would be taking on the risk by their own choice compared to tax-payers who have no option.

          Never ceases to amaze how quickly folks forget shit that’s inconvenient.

          Savings and loan crisis

          Bank of New Zealand

          Citigroup

          American International Group

          etc,
          and so on,
          and so forth.

          • tsmithfield 4.1.1.1.1

            True, there are plenty of examples of spectacular failures in the private sector. That is how the private sector purges itself of inefficiency. On the other hand, there are plenty of government department/state owned enterprises etc that will never go bankrupt no matter how inefficiently they are run because the taxpayer keeps getting called on to bail them out (e.g. ACC). I think that is worse.

            • prism 4.1.1.1.1.1

              I think they should try large dose of cod liver oil when purging, it may taste nasty but has omega 3 and I think 6. The private parts will end up clean and healthy. Says so in all the women’s mags which are good at PR and dodgy facts and efficacious emollients. About the same as private business approach to financial health in the economy.

            • Pascal's bookie 4.1.1.1.1.2

              ts, you are still not remembering the inconvenient thing.

              All those failures, and plenty more, got bailed out by the taxpayers. There is no reason to believe that even in your alternate reality where kiwibank goes boom, the taxpayer won’t be on the hook. That’s why I enboldened the pass that risk to the private sector bit. It’s not actually true.

              But anyway it’s fringe right wing idiot stuff. Privatisation. Pfffft.

              • tsmithfield

                Who said I agreed that the taxpayer should have bailed them out. That is just as stupid as the public bailing out publicly owned organisations.

                • Bright Red

                  they need to be bailed out because the country can’t afford the effects of major infrastructure companies or banks falling over.

                  What that means is the private buyers can never lose, they can asset strip their companies into the ground knowing the government can’t afford not to step in

                  • tsmithfield

                    These major type businesses wouldn’t fall over. Some other private enterprise would most likely pick up the pieces and so it would continue.

                    The problem you have identified is “moral hazard”. Think about it. What sort of financial decisions would you make if you knew a rich aunty would bail you out every time you got yourself into the financial pooh?

                    Except in this case the “rich aunty” is the taxpayer guaranteeing to bail out various public and private entities because they are deemed “to big” or “too important” to fail. What a crock.

                    • Pascal's bookie

                      So your argument for privatisation only holds in some fantasy universe where there are no bailouts, no business gets too big to fail, and politicians will just wear the shitstorm that would occur should such institutions be allowed to fail.

                      That’s awesome I suppose, for certain instances of awe.

                      In this, actually existing universe, the risk is not passed to the private sector.

                    • tsmithfield

                      OK Pascal. I will agree with you completely if you can answer one simple question for me.

                      If you study the cronology of recent market crashes you will find they have been getting progressively bigger. Consequently, it is reasonable to assume that the next crash is likely to be bigger again than the previous one. Given that the next crash may well come quite soon and given that most nations will still be up to their eyeballs in debt from “rescuing” everyone from the last one, tell me this:

                      Who is going to bail the world out next time the market crashes?

                    • Pascal's bookie

                      Well we know it won’t be the private sector, because they have never done so yet. Your idea that other banks would have stepped in to save the failures in 08 fails when you notice that in fact they didn’t/couldn’t. They were too big for the private sector to save, and too intrinsic to the economy to be allowed to fail.

                      So the question is, who should we make pay for any bailout deemed necessary?

                      I say the bond and stock holders in the first instance, the the executives and directors in the next instance, and the people that benefited most from the system that failed after that. I agree that moral hazard is a problem, but that stems from the fact that we letting the corporate bureaucrats get away with it. A few high stakes mofos sent the poor house and a few outright nationalisations, and we’ll soon see directors taking their duty to shareholders seriously. Bailouts must not be without severe cost to those that caused the failure

                      What is a stupid idea, is bailing out institutions and leaving the same people and systems in place, largely untouched. I think we can agree on that.

                    • tsmithfield

                      Pascal, I actually agree that there was little option but to bail out the system in the recent crash.

                      However, what irks me is that we should never have got the that situation in the first place. This has been the result of many decades of many countries living well beyond their means to fund lifestyles that couldn’t be afforded. The result is a highly over-leveraged system that is very vulnerable to the slightest thing going wrong. It seems to me the over-leveraged nature of the system has if anything got worse and the debt has been transfered to sovereign nations. The recent jitters re Greece et. al. have not been solved and the can has been kicked down the road…for now.

                      Had the system been allowed to function within reasonable parameters from the word go then it would have been safe for organisations to fail without having the same devastating effect on economies. Thus, recessions would have been a part of the normal economic cycle, like breathing and exhaling. Recessions would not have had the same dramatic impact as we have just experienced, but would be much more mild.

                      The problem of who is going to bail the system out next time is very real and is not a question only being asked by myself.

                      And yes. I agree with your last point entirely.

                    • tsmithfield

                      Pascal, just a further point to my last post.

                      You haven’t really answered my question. That is because the next crash is likely to be at the sovereign state level rather than the level of individual businesses, as that is where the debt has been transferred to.

                      So, the big question is who is going to bail out sovereign states when most countries are geared up to the eyeballs anyway? Don’t count on China as that has been identified as a bubble likely to burst in the not too distant future.

                    • Pascal's bookie

                      Pascal, I actually agree that there was little option but to bail out the system in the recent crash.

                      Ha. 🙂 So I guess in your comment at 1:16 you were just saying a whole bunch of shit you don’t believe for some reason to do with ideological convenience or cognitive dissonance or some such.

                      I certainly agree that there are real problems with the way things were and are. I don’t think that we can look for answers purely within economics. Economics is useful, but never complete. It is descriptive and what it describes is always dependent on a host of presuppositions about how we think of what an economy is. Those are political and linguistic questions and changes there is where the answers will come from. I have no idea what they might look like.

                      But to get a bit more specific re sovereign debt, there are funny things going on. Even within the norms of economic talk of the last half century or more, I’m led to understand that if there is a sovereign debt crisis it’s going to show up where? What’s the metric according to market based thinking? Long term bond rates. That’s where. US rates are at what? About 3 percent I’m told, which doesn’t sound like the markets are skittish.

                      And yet the people that have been telling me about efficient markets and all that are now telling me to be afraidy, and that we need Austerity, and that the poor must be punished to protect the investments of the wealthy from the inflation boogey man who isn’t showing up, at least in the US. Even though they’ve been doing all the things I’ve been told we can’t do because it causes inflation. Seems causes doesn’t mean the same thing to economists.

                      Inflatio-boogey showing up here though, strangely enough, with our pure RB act which Must Not Be Touched and our government that is cutting taxes and, ahem, *capping* spending and such like.

                      Ireland has launched it’s own austerity drive to avoid the dreaded sovereign debt monster, Spain not so much. What do those bond markets think about that? Weird shit.

                      I’m starting to think that the ivory towered economists telling me to be afraidy are protecting their models in spite of the data, and that we should be more mindful of the needs of the poor than of the wealthy. For a change.

                      Everybody likes change.
                      Except for them what don’t,
                      (but they’ve never had it so good
                      and there’s no pleasing them.
                      So fuck’em).

                      Afterall, even if we ignore justice, morality, common decency and all that squishy liberal leftie bidness, (which I don’t, but I don’t need them to make the argument), there are many, many, many, many more of the poor than there are of the rich, and if it does turn to shit, and all that wealth evaporates and what some poet called the gossamer threads of social contract all burn away, well, I’ll be standing with the mob.

                      Your mileage may vary, of course.

                      I guess I’m saying that if the elites want to take away our pensions, savings, security, work conditions, healthcare, welfare systems, environment, and all the rest of it, to secure their next bailout, then the system will break one way or another.

                    • Pascal's bookie

                      You haven’t really answered my question.

                      Oh, I thought I did here:

                      So the question is, who should we make pay for any bailout deemed necessary?

                      I say the bond and stock holders in the first instance, the the executives and directors in the next instance, and the people that benefited most from the system that failed after that

                      They may not need to pony up immediately, even without a revolution.

                      As an example, if you take a lookie at this chart,

                      http://www.talkingpointsmemo.com/archives/2010/06/chart_o_the_day.php?ref=fpblg

                      you’ll see just who and what is responsible for the US deficit monster. Now think about who benefited mostly from that policy with the big flashing “it was me what dunnit” sign on it’s forehead.

                      Funny about how with these Austerity Measures that are becoming so popular these days with the Serious People; we are being told that Everything Is On The Table, which is code for welfare, health and pensions.

                      Why not ‘less stupid fucking wars’ and ‘taking the tax from the people with the money’. Are crazy ideas like that on the table? They better be, coz like the man sang

                      Them belly full but we hungry
                      A hungry mob is an angry mob
                      A rain a fall but the dirt it tough
                      A pot a cook but the food no ‘nough

                      You’re gonna dance to jah music, dance,
                      We’re gonna dance to jah music, dance,

                      Forget your troubles and dance,
                      Forget your sorrows and dance,
                      Forget your sickness and dance,
                      Forget your weakness and dance

                      Cost of livin’ gets so high
                      Rich and poor they start to cry
                      Now the weak must get strong
                      They say oh, what a tribulation
                      Them belly full but we hungry
                      A hungry mob is an angry mob
                      A rain a fall but the dirt it tough
                      A pot a cook but you no ‘nough

                      We’re gonna chuck to jah music chuckin’
                      We’re chuckin’ to jah music, we’re chuckin’

                      Belly full but them hungry.
                      A hungry mob is an angry mob
                      A rain a fall but the dirt it tough
                      A pot a cook but the food no ‘nough
                      A hungry mob is an angry mob

                    • tsmithfield

                      Yeh. This was I case where I was deliberately overstating the strength of my views to be a bit provocative. Undoubtably it will give felix another reason to gripe. 🙂

                      However, it is what I would believe in an ideal world.

                      The problem with the amount of debt in the world is that it is beyond anyone to bail it out now if/when it all goes pear shaped, which is actually quite scary. More money can always be printed of course. However, that has major inflationary implications of course. So it doesn’t really solve anything. Think of how well the poor are off in Europe at the moment with the major reduction in the value of the Euro, for example. The price of petrol and other imports must be going through the roof.

                      Unfortunately, the prospect of no more bail outs might be forced upon us whether we think bail outs are a good idea or not.

            • Craig Glen Eden 4.1.1.1.1.3

              Acc are not Bankrupt far from it so stop making up shit, for Pete sake!

        • Alexandra 4.1.1.2

          ” However, if the government is looking further out, they might see the potential of such a risk and feel it is better to pass that risk to the private sector,”
          The problem I have with your theory tsf is that no such argument has been presented by the government. Indeed all the evidence points to Kiwibank being in very good heart.

          “Key himself has said recently that he expects more global economic crashes in the future.”
          On one hand the government plays up the recovery as its own achievement. On the other it warns of more recession to come. Are we or are we not out of recession? All commentary indicates that Kiwi bank has weathered the storm, just past. Hocking off kiwibank because of a future risk that may or may not be realised is at best an over reaction. At worst is just spin to support your ideology.

          • tsmithfield 4.1.1.2.1

            I agree. It probably is in very good heart…at the moment.

            • prism 4.1.1.2.1.1

              ts You remind me of a guy that used to hang out with a sandwich board – Repent the end is nigh. He stuck to his task, and was out every day. He was a true believer – put all his effort into thinking about it and not in living a positive life.

              There is a lovely sketch by the Python team or is it Rowan Atkinson and friends. ‘A mighty wind’ is a theme. The time of the ending of the world is foretold and they gather and wait… At the end it’s ‘Same time tomorrow lads’?

              • tsmithfield

                Prism, there have been numerous examples of banks getting into trouble recently. Have a look at the failure rate of banks in the US. Why are you so confident that Kiwibank will never get into trouble?

              • insider

                It was Secret Policeman’s Ball. Peter Cook was in it too. Might have been his originally

                capcha – reminds 🙂

  5. Nick C 5

    If the government owned a chain of corner dairies would you sell it?

    • Bright Red 5.1

      It doesn’t. And if it did, there would have to be a reason to sell other than privatisation for its own sake.

    • felix 5.2

      Could you give me some more info about these dairies please?

      Such as the reason for their establishment, their position in the market, their prices relative to the competition, the effect they have on the prices of the competition, their profitability, who gets the profits, the benefits to consumers, the benefits to small communities, the services they provide over and above those provided by the competition, etc.

      Of course if you just want to discuss blind ideology then ignore the above.

    • Draco T Bastard 5.3

      Ah, corner dairy’s – a small but natural and unnoticed monopoly. Like hospitals, schools and libraries you won’t find more than one servicing the same area.

    • Jum 5.4

      Great idea. Then Kiwibank and a postage counter could be installed in there when the *s try to sell off NZ Post in many of the smaller towns because they’re trying to ruin the very reason Kiwibank has been so successful and then try to sell Kiwibank off as underperforming! *s.

      Well they reckoned without people who give a damn about other people.

  6. Did it not used to be because few of us saved enough to keep ownership in NZ? Though now with Kiwisaver I would hope that is no longer the situation. But the way investment is [dis]organised in NZ I am not suprised that so few put their money into shares and so many go for something they can see like a house. A far as Kiwibank I don’t object to a minority part of it being sold to raise capital for its progress so long as those shares remain in NZ hands for ever, and maybe any other SOE etc. Selling overseas simply builds up a continuing expense that we have to try and cover by exporting goods, which we are failing to do, have failed to do for ages, and yet ‘they’ want to sell more and increase our burden. Complete madness from my point of view.

    Is the only way out of this dilema that inflation reduces our past debt so that today and future captial will be able to pay it off in dollar terms?

  7. National already have the chosen few to buy Kiwibank and other SOE’s.

    That is why the tax breaks were given to high earners so they can snap up the shares when they are floated on the sharemarket.

    Who cares about a country,who cares about it’s people when there is money to be made…Not John Key and his cronies that’s for sure, in their eyes we are just here to keep the country working.

    Went to 2 interesting lecture on economics in Auckland by Jim Stanford, Canadian Economist, check out his website, http://www.economicsforeveryone.com you can even download some important chapters for free. Good value and very interesting, no mumble jumble, just straight talking.

    • Jum 7.1

      Margaret,
      “That is why the tax breaks were given to high earners so they can snap up the shares when they are floated on the sharemarket.”

      Very good point. And the real ‘mums and dads’ are paying twice as much in GST, etc. so they have no chance of buying any shares. The gap between rich and poor is widening fast. We need to get rid of this government before it gets any worse.

      • jcuknz 7.1.1

        >>>are paying twice as much in GST<<<
        Typical leftwing nonsense for the faithful …. the extra 2.5% GST on my super comes to about $15 while it will rise by $31 in October. Other increases would have happened irrespective of the budget. I will loose out on my Nat Prov Super becuase that has always come tax paid, but that was the gamble from way back when [ was it Muldoon running things?] and we stopped getting tax concessions?

        • BLiP 7.1.1.1

          Registered your car yet?

          • jcuknz 7.1.1.1.1

            GST has gone up 2.5% or an increase of 16.6R%, depends on how you look at the increase, I prefer the first figure. Other rises we are or will experience would have have happened anyway so really are not part of the picture in my book … though I appreciate that some think that way.
            I will not find out the new cost for my vehicle until January 2011.

  8. Con 8

    Kiwibank is more than just a bank. It’s an anti-monopoly measure. When Kiwibank was gearing up to launch, they advertised that they would be offering really competitive interest rates, and they planned to grab a huge share of the mortgage lending market in that way. They did grab a big share of that market, but crucially their low rates forced all the other banks to cut their lending rates as well, saving borrowers approximately one zillion dollars. And let’s remember, those other banks are generally foreign-owned, so that change had a net effect on NZ’s balance of payments.

  9. BLiP 9

    There is already a component of privatisation in KiwiBank. Any personal loans are actually funded by GE Money . . . given that company’s track record it seemed a silly move at the time. Perhaps it was just the opening gambit.

    • Jum 9.1

      As a budget adviser I dealt with them. They liked offering people money they couldn’t afford to pay back. Who brought them on board? I hope they’ve changed their spots.

      (There is a 15 year contract on water with United Water – parent coy Veolia – in 7 councils in NZ. Perhaps that is just the opening gambit – given JKeyll and Hide want to sell off our water assets, management of quality and supply and are trying to pretend that is not privatisation.)

    • jcuknz 9.2

      If people do not read the fine print and work out what they can truely afford it is their problem not the finance company. I was very happy to take advantage of GE Finance, and still have their card and credit limit from when I purchased computer and camera gear on no interest terms …. I worked out what I could afford and took advantage of the offer at a time nobody else was offering such terms.
      My only argument was when on going overseas to visit family for a couple of months I sent them post dated cheques and they innitially tried to dun me a $25 charge for breaking their rules which I hadn’t read … they relented after some correspondence.

  10. Brian Drury 10

    why isnt assett selling called what it really is
    siezures and sales
    surely even national can see having soes making a profit and
    giving them a return can provide money for tax cuts for their overseas owners
    asset sa;lles are little more than piracy
    and should be treated as such

    • Jum 10.1

      Captcha ‘incomes’!

      Isn’t internal piracy domestic terrorism? Therefore, this government is committing a terrorist act on its own citizens. Isn’t there some sort of law against that.

  11. Lucy 11

    Ive reposted an updated version of a previous comment here as the Stop Privatisation thread is not displaying properly.

    If you want to see who’s behind the Privatisation dreams and Public Private Partnerships the National Party are spouting about take a look at the World Bank website and their Disney fantasy promotion on Public Private Partnerships.

    http://wbi.worldbank.org/wbi/about/topics/public-private-partnerships

    Their site looks pretty innocent until you watch a BBC clip about the World Bank and what they get up to. You can watch that clip at

    http://www.youtube.com/15jonathan

    The BBC talk to Joseph Stigletz about the World Bank rigging the Russian elections. Joseph Stiglitz is Formerly Chief Economist of the World Bank and at the time of the alleged rigging of the Russian elections Stiglitz was in Clintons Cabinet as the presidents Cheif Economist.
    Joseph also talks about how the world bank do not help the people but actually work against them for their own corporate inhterests and Stiglitz should know he was one of them.

    As you might be aware the World Bank is a private for profit Bank. Who benefits from their business I don’t really know but here you have a powerful multinational company thinking they have the right to rig a countries election and doing it.

    When you see the National Party want to follow World Bank protocol of privatisation i.e. Public Private partnerships,water and health privatisation well that puts a completely different spin on who the National Party represent and why we should not vote for them.

    There is a video playlist on water privatisation in other countries at this link

    http://www.youtube.com/15jonathan

    Spread the word by mouth, email folks, becuase our corporate media are not going to tell Kiwi’s whats actually going on.

    When National got into office one of their first moves was to threaten the jobs of TVNZ staff and you can bet in difficult times those people want to keep their jobs so our media have been coerced into silence here. If they loose their Job with TVNZ the only other well paid media jobs are with the corporate owned media.

    As Brad Friedman of bradblog.com would say “Be The Media”. We have to start telling NZ what the media will not. Leaflet drops megafones etc etc. Get the word out any way you can. If some people don’t want to know just keep talking as a percentage will listen and the truth will soon take precidence in the public arena.

    [lprent: The Stop Privatization post works fine for me. ]

  12. john 12

    Privatization is the base supporting floor of the neo-liberal ideology which usurps societies’ decision making away from the people to wealthy elites (One here is the business round table and their Act Party lackeys). Privatization is antithetical to democracy removing financial means,and hence power to act for the good of all, from the people’s Government into the hands of private wealth. Here’s a link to Noam Chomsky’s observations on the destructiveness of private greed over the wellbeing of the people, otherwise known as the Public.Neo-liberalism eventually creates a feudal system based on huge inequities in wealth and income and can destroy itself, as per current crisis, ’cause such societies are unstable and people who could have made a difference are powerless,have no money or position. If you have no money or wealth you’re nobody! As in the USA
    http://www.newstatesman.com/south-america/2010/06/chomsky-democracy-latin

    • Bored 12.1

      Thanks John, that was brilliant big picture stuff. I was reading somewhere else http://energybulletin.net/53255 about a man who regards those who cant see the big picture as “microbes”. Lost in the detail of the current structure and missing the point.

  13. Jum 13

    Great information sharing. Thank you to The Standard and supporters.

    Information will set New Zealanders free if we can just spread it around New Zealand and our friends overseas who can pass on what privatisation has done to their countries.

  14. tc 14

    It makes perfect sense if you want to line the pockets of business and shareholder interests at the expense of the consumer for a service/product that was formerly publicly owned.

    That’s the only ‘sense’ you’ll find in the NACT world and they’ve got the msm on a short leash so don’t expect any profound outbursts of objectivity from the 4th estate.

  15. Bored 15

    Heres what happened in Toronto in protest against selling things and neo lib economics in general… http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10655240&pnum=0 , a few black blocks wrecked $900mlln security laid on by the authorities.

  16. Kia-ora
    We went through all these arguments in the 80’s. All the externalities and disadvantages to privatisation were predicted at the time. Of course all these concerns were ignored so the biggest daylight robbery in NZ ever could continue.

  17. burt 17

    OK, so who wants to sling $100m into a bank that’s heavily into mortgages in a fickle property market that could have a second dip and is not seriously predicted to make any significant gain in a hurry. Oh and don’t forget about the still relatively unstable job market and general economic adjustment waves that are still going on worldwide. Also don’t forget reduced household liquidity as the ETS starts kicking in.

    Come on we need to agree to stump up… it’s got Kiwi in the name remember, and it’s our money that built it from the ground up, so hey just put more of our tax payers money into the ideological dream that gave us the peoples bank.

    Was never any noise about funding growth under Labour, why are these Nats being so public about how a state asset conducts it’s business?

    • felix 17.1

      “so hey just put more of our tax payers money into the ideological dream that gave us the peoples bank”

      Quite right, we should instead just throw money hand over fist into the ideological fantasy that private enterprise gives the best outcomes in every circumstance.

    • burt 17.2

      Indeed felix, people should know by now that public money is well spent on risky business that competes with international organisations who’s balance sheets show more assets than the NZ economy.

      Oh and spent our money quietly, don’t tell us how many millions are being invested because we all know that if it has Kiwi in the name it just needs more and more money to fund it’s TV advertising campaigns telling us that we own it.

    • jcuknz 17.3

      So long as the borrowers repay their loans what does it matter to the bank if there is a second dip. If property ownership is a short term business venture then some will loose out but it shouldn’t be a problem for the long term home owner to ride out a second or third drop. Property is still way ahead of other investment opportunities in the long term when you consider the rent not going out as you repay the mortgage.
      A government owned bank, or a citizen’s bank [assuming some of it is sold to permanent NZ residents] keeping interest rates down for the house owner is a good thing and frees up money to build the ecconomy.

  18. jcuknz 18

    >>>the ideological fantasy that private enterprise gives the best outcomes in every circumstance.<<<
    The skill comes is working out which will and which won't … a hard exercise.

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