Why asset sales – it’s politics

Written By: - Date published: 5:06 pm, July 30th, 2012 - 20 comments
Categories: assets, john key, privatisation, same old national - Tags:

Finally the truth is out – politics are the real reason for asset sales.  They make no sense economically. They are not about debt reduction – Ryall is careful always to talk about control of debt. According to John Armstrong  in the weekend Herald:

The motive is political as much as economic. It fits National’s long held belief that boosting an individual’s ownership of capital inevitably induces a slow, but perceptible transfer of political allegiance from left to right. National is pulling out the stops to ensure the float is a success. Quite simply, it is putting politics ahead of maximising the return to the taxpayer.

As always with Key, it is all about shoring up the centre for National by offering something which – when you strip it down – amounts to a tidy tax break in drag.

And with more to come. The subsequent floats will be crucial in maintaining the momentum in building National’s “property-owning democracy”. The phrase – borrowed from the mass privatisations of Margaret Thatcher-era Britain – is not one Key uses, however. That may be because he used it some five years ago in Opposition to make what in hindsight were some pretty rash promises about making it easier for families to achieve their dream of home ownership – especially in the overheated Auckland property market.

Brian Gaynor had the same analysis in the same Herald edition:

The problem facing the Key Government is that a sharemarket float is a political decision because retail incentives can be targeted and right of centre governments can use these incentives to expand their support base.

So Key’s asset sales are a political bribe – nothing more and nothing less.

20 comments on “Why asset sales – it’s politics ”

  • Comments are now closed

  1. Draco T Bastard 1
    30 July 2012 at 5:14 pm

    And it’s a political bribe that will eventually destroy our community.

  2. captain hook 2
    30 July 2012 at 5:23 pm

    I agree Mike Smith but the next question is who exactly is it that will benefit!
    how about getting Jimmy Olsen on to the job and finding out?

    • BernyD 2.1
      30 July 2012 at 6:27 pm

      Y’know I reckon it’s another dig at Unions,
      government shops still have a lot of “People Power”,
      if they’re privatised then it’s easy to start the redundancy cycle.

    • BernyD 2.2
      30 July 2012 at 6:44 pm

      The education system never did pick up the missing knowledge after the death of union/trades.
      If they keep it up, no one’ll be able to aford a house anymore ,…. whoops
      And they aren’t supporting the education system either.
      All in the name of reduced wages and down beaten workers who are “Happy” to have a job and “Thank you master” at the end of the day.

  3. Carol 3
    30 July 2012 at 5:23 pm

    Now that sounds like social political engineering.

    Well, at least Key’s not referring to it as “property asset-owning democracy” – it as another right wing Orwellian manipulation of language, and such political manipulations have zilch to do with democracy.

  4. bad12 4
    30 July 2012 at 6:26 pm

    The rhetoric surrounding National’s ‘bribery’ of the electorate in 2008 with tax cuts is all that was needed for anyone to understand how the Slippery lead National Government gained power and intended to hang onto it,

    Anyone remembering the advocacy from the Prime Minister Himself that recipients should ‘save’ their tax cuts now fully understand the politics at work with asset sales,

    National simply placed a larger and unfair burden of the tax take upon the shoulders of those who National ‘seen’ as never likely to give a vote in support of that party, while rewarding it’s core 40% of the top tier of income earners with the tax cuts,

    Cynically, the Prime Minister has told the faithful to save the ill gotten gains of tax cuts off of the backs of those who earn the least and future generations who will be forced to pay down the debts incurred in the process knowing full well that stage two of the plan was to begin the looting of the assets of the State held there on behalf of us all…

  5. captain hook 5
    30 July 2012 at 6:31 pm

    so who is going to get the shares?

  6. Descendant Of Smith 6
    30 July 2012 at 7:12 pm

    Hence my on-going questions about whether Labour even believes in left wing policies any more.

    We are so far to the right that ordinary notions of 8 hour working days are not even a consideration for Labour.

    That was normal when I started work and now it’s not even close to being a Labour policy.

  7. DH 7
    30 July 2012 at 8:35 pm

    I dislike issues like this being put down to politics or ideology. It legitimises it, makes it an issue of theology, dogma or belief. I see these asset sales as plain theft, looting, there’s no politics or ideals in it as far as I’m concerned. IMO venal people with no scruples are stealing publicly owned assets in order to enrich themselves.

    One thing I’ve learnt in business is that when there’s money being made on a deal that’s as far as you need to look for the motives behind the deal – it’s always about the money. There is a *lot* of money being made by a small elite on this deal.

    • Draco T Bastard 7.1
      30 July 2012 at 11:11 pm

      I see these asset sales as plain theft, looting, there’s no politics or ideals in it as far as I’m concerned.

      Yes, it’s theft but that doesn’t make it any less political.

      There is a *lot* of money being made by a small elite on this deal.

      There’s more than money being made here. IMO, the money is the minor aspect of it. The major aspect is the shift in control from the people to the few because as more and more of the state is shifted to the few the less control the people have.

      • DH 7.1.1
        31 July 2012 at 11:55 am

        “Yes, it’s theft but that doesn’t make it any less political.”

        I think it does. You seem to view these asset sales as being theft by false pretenses in that they are ideologically driven but they’re lying to us about their real motives in order to gain enough votes/support. I don’t buy that. To me it’s just looting camouflaged as politics, too many people are making serious money out of it.

        This might interest;

        NZX faces more tough going

        http://www.stuff.co.nz/business/industries/7382562/NZX-faces-more-tough-going

        Note the comment about how the NZX should benefit from the asset sales and TAF

        On a side note it’s also interesting because of this;

        Weldon sells most of NZX stake

        http://www.stuff.co.nz/dominion-post/business/7210253/Weldon-sells-most-of-NZX-stake

        • Draco T Bastard 7.1.1.1
          31 July 2012 at 12:09 pm

          NZX faces more tough going

          Note the comment about how the NZX should benefit from the asset sales and TAF

          Yeah, ideology. The NACTs ideology isn’t working and so they’re using taxpayer funds to keep it going. Theft as you say but it’s still politically based theft.

          On a side note it’s also interesting because of this;

          Weldon sells most of NZX stake

          Yep, not surprised:

          According to NZX’s 2011 annual report, Weldon’s shareholding in the company was around 3.8 per cent, although he has since qualified for a further 250,116 shares under the chief executive’s share plan.

          Following a major share buyback and share split, it is estimated that Weldon would have owned around 10.26 million shares before the sale.

          It’s part of his remuneration.

          • seeker 7.1.1.1.1
            31 July 2012 at 2:32 pm

            “Theft as you say but it’s still politically based theft.”

            Thought about this since last night, and wonder if it should be rather described as business based theft, but politically managed.

          • DH 7.1.1.1.2
            31 July 2012 at 3:17 pm

            “Yeah, ideology. The NACTs ideology isn’t working and so they’re using taxpayer funds to keep it going. Theft as you say but it’s still politically based theft.”

            I’ll leave it here, we’re not getting anywhere with this.

            “It’s part of his remuneration.”

            The point is that he sold his shares a month before a lower-than-expected profit announcement was made. That announcement caused the share price to fall substantially. He was CEO of the NZX until May and one might reasonably ask how much he knew about the NZX’s financial position when he sold his shares.

  8. Colonial Viper 8
    30 July 2012 at 11:54 pm

    I totally admire National: they are sticking with what is a highly unpopular policy electorally, because it serves the interests of their core voters, loyal supporters and top activists.

    If only Labour had a fraction of the fucking guts to do the same.

  9. seeker 9
    31 July 2012 at 1:18 am

    DH @ 8.35pm

    “I dislike issues like this being put down to politics or ideology. It legitimises it, makes it an issue of theology, dogma or belief. I see these asset sales as plain theft, looting, there’s no politics or ideals in it as far as I’m concerned. IMO venal people with no scruples are stealing publicly owned assets in order to enrich themselves. ”

    Very well put. I totally agree. To call it ‘political’ fogs the issue and, as you say, legitimises it. Draco carries on using the word “political” in the following comment – and it just turns my stomach over, it seems so far from the actual truth, hence my gut feeling/ instinct is, that it is very misleading to call it such.

    @CV @ 11.54pm

    “I totally admire National: they are sticking with what is a highly unpopular policy electorally, because it serves the interests of their core voters, loyal supporters and top activists.”

    This is the greatest confidence trick I have ever witnessed – one man Key and dog, sorry government, enticing an entire country to purchase their own public utilities from themselves at huge social and sovereign cost – and you admire them CV? Please….

    This is Key’s one claim to fame- the ultimate con artist!

    • Draco T Bastard 9.1
      31 July 2012 at 1:33 am

      Draco carries on using the word “political” in the following comment – and it just turns my stomach over, it seems so far from the actual truth, hence my gut feeling/ instinct is, that it is very misleading to call it such.

      Did you read past my first sentence? I ask because your comment would indicate that you didn’t.

      This is the greatest confidence trick I have ever witnessed – one man Key and dog, sorry government, enticing an entire country to purchase their own public utilities from themselves at huge social and sovereign cost – and you admire them CV?

      Seems that you failed to understand what C.V. said as well.

  10. seeker 10
    31 July 2012 at 2:13 am

    Draco no I didn’t, but I was just too tired to pull it apart as effectively as you often do with comments you don’t agree with.

    If “political” means “activities associated with the governance of a country” and “the role of a government is to protect the interests of its people” (Tariana Turia, TV3 23.7.12, 6pm news, when speaking about tobacco bans) then at the very least the sale of public utilities is very, very, bad governance.
    This should just about tie together your point, my point and my point about CV admiring National because they serve the interests of their devotees, rather than the interests of the country who they should be serving at this time and comparing this group of self serving tricksters to Labour who, he feels, do very little. Thus I still dislike CV stating he admired an, ironically, self serving National, for ..serving themselves! .

    Now I really am beyond tired. Knew I shouldn’t have got into this.

    edit: sorry this should have been a reply to Draco @9.1

  11. tracey 11
    31 July 2012 at 7:08 am

    Shame mr armstrong leaves this bit of analysis til the eleventh hour…