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.
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