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Fear of state asset sales 'nonsense' - Brash

New Zealanders are opposed to state asset sales because they have been fed a “line of nonsense” by the Labour Party, according to Act leader Don Brash.

He made the comment during an interview on TVNZ’s Q+A show yesterday, which also featured Labour’s Finance spokesman David Cunliffe.

Dr Brash said it made “perfect financial sense” for the government to sell the big state-owned power companies and it’s “just absolutely a no-brainer at all.”

The interviewer Guyon Espiner asked why “poll after poll when you ask New Zealanders, overwhelmingly, it comes back, they say they don’t like it. Are they just stupid?”

“Basically, because the Labour Government under Helen Clark sold New Zealand a line of nonsense, quite frankly,” Dr Brash said.

“I think… we’ve been taught that this is in some way dangerous and detrimental to our interest, and, frankly, that is simply nonsense.

“I mean, if it made sense for New Zealand to own three competing power generators, why not also have the government buy Foodstuffs and Countdown?”

Mr Cunliffe said, “We make a very very tidy return on those energy assets while maintaining a guarantee that they behave in the national interest.

“Now, we pay 6% for the cost of that debt; we make about 17% total shareholder return on those assets.

“New Zealanders understand, Guyon, you don’t sell your ladder when you’re in a hole. And once that family silver’s gone, it’s gone, and we are starting again.

“That money that Don Brash talks about will pay for less than six months of the current government’s operating deficit, and then where would we be? New Zealanders understand that.”

Although Dr Brash said there was “no logic at all” in the government owning competing power companies, he said he wouldn’t sell Transpower, which he described as the “ultimate natural monopoly.” 

More by Niko Kloeten

Comments and questions

Sir Don Brash has my vote.

Sir Don Brash has my vote.

NZ is too small to have a deregulated free market power supply industry.Too much duplication from company to company. What has deregulation done for the end user? Nothing except push prices sky high so that shareholders,directors and numerous CEO's can squeeze every last cent out of the asset.

Electricity prices rose by 75% in a decade under the last Labour government, yet they didn't deregulate the electricity market, & National's Max Bradford's reforms were nothing like a deregulation. Evidence that a left wing government will screw the consumer far worse via tax by proxy than a company will by putting up prices to make a profit. The worst part is that the government is supposed to look after the interests of the country & it's people, whilst the company is supposed to look after it's economic well-being.

I find it strange that some people place so much trust in politicians who are rated by the public to be less trustworthy than used car salesmen & only marginally higher than real estate agents..

On the subject of trust.I have great difficulty in trusting "vulture merchant bankers"(taken from Not Happy's post)and traders whose only incentive is making obscene amounts of money for themselves and their masters .Not when it comes to assets so vital to the functioning of the country.We(the western world) have tried the great experiment called deregulation which Reagan and Thatcher kicked off in the late 70's/80's and Roger Douglas et al latched onto circa 1984.What has it given us?Economic chaos, debt up to our eyeballs, growing social unrest, youth unemployment off the scale, a widening gap between haves and have nots and a monetary system on life support .Trickle down economics....yeah right!

Sure thing Bob, keep trusting those politicians. The widening gap between the haves & have nots is really the difference between those who look after themselves & those who rely on government - which category do you belong to? At least bankers & traders are truthful about their motives, politicians are lying sleazebags whose decisions are driven by political reasons related to elections (especially the socialist ones).

Interesting comments given what is currently going on in the retail electricity market.The two publically listed companies operating in NZ(Contact and Trustpower)also happen to be the the MOST expensive for the domestic consumer.And how has the consumer finally worked this out? Through a govt funded advertising campaign. Contact lost 8000 customers last month alone and their bottom line has dropped as a result.I am sure their Australian masters at Origin Energy will be none too impressed.And who keeps coming up trumps as one of the cheapest options? State owned Enterprise Meridian Energy who I happen to be with.Nothing like a bit of state intervention to keep the greedy privateers honest eh.PS don't try to pigeon hole me as a left wing green eyed bludger literally have no idea! PPS Bankers and Traders are truthful about their motives alright - sheer greed.I used to buy into the Gordon Gecko "greed is good" speech from "Wall Street" too.....

Well it looks like you're with the wrong power company if you live where I do Bob, Contact are cheaper than Meridian at the moment, as they were through 2008, 2009, and part of 2010. Looking at the other centres, many show a similar result. Contact's prices are nose diving, I'd be swapping to them if I were you.

Pretty good how we all get a choice of who our providers are as opposed to the government running a monopoly & using it as a means to make unemployment figures look good. The good old free market.

Now Bob, next time you tell someone 'you literally have no idea!' I suggest you actually check your facts before spouting off you loud mouthed, self righteous jerk. Oh, and don't forget that your beloved government is also ripping everyone off by additionally clipping the electricity ticket, firstly via the ETS & secondly via the extra GST generated from it. This cost is passed onto all goods & all services. Keep backing that government Bob, I'm sure they'll look after you.

A few other points with regard to your previous post Bob:

'Economic chaos' - In blaming this on the merchant bankers & deregulated market, I note that you forgot to mention the role played by the US govt by regulating the home loan market i.e. Fanny Mae.

'Debt up to our eyeballs' - Personal debt is something that is a choice of an individual, not merchant bankers. Public debt is the result of a bloated, overspending govt.

'Social unrest' - When the parasites spit the dummy because they can't bludge of the public teat any longer.

'Youth unemployment off the scale' - coinciding with the raising of the youth minimum wage.

'Gap between haves and have nots' - a gap between those who provide for themselves, and those who expect the govt to provide for them.

'Monetary system on life support' - initiated by a tsunami of mortgage defaults (Fanny Mae), initiated by misguided US govt interference in a market.

'Trickle down economics' - I'm yet to see a reasonable level of general wealth in countries starved of business due to a lack of incentives.

Dont think so Don.
Never sell monopolies or else the customers will get sc***ed by private enterprise even though we get done at the moment at least it goes into the Govt coffers
Let the govt sell entities that are in a perfect competitive market.

You are right Dr Brash. There is no logic in holding these competing assetts. It simply isn't the best use of the capital involved, which makes it irresponsible for a prudent govt. or manager to own them.

Dr Brash, the reason many of the public are against asset sales is because of an absolute lack of trust of politicians seeking political points (and their so-called professional advisors...).
They care not about New Zealand taxpayers and see them as something to be milked for all they can get, by HIDING THEIR TRUE MOTIVATIONS AND ANY FINANCIAL REWARDS from the public purse!
The corruption in NZ politics over a long period is becoming much more widely discussed (except in the media... for now) The current governments transgressions against the public purse are becoming more obvious by the day. WHEN THEY REFUSE TO DIVULGE DETAILS involving publicly owned asset sales BEHIND THE CLOAK OF 'COMMERCIAL SENSITIVITY' YOU KNOW THEY HAVE SOMETHING TO HIDE. Any sale of publicly owned assets should be absolutely transparent, never murky. Case in point is SCF...
Taxpayers originally told expect losses of @$700M but now we are told they have lost @$1.3 Billion from a company that had $1.8 Billion of assets... in the last 12 months. That implies that all assets (including good loans) were sold at 28c in the dollar...
And the receivers are busy congratulating themselves on the asset sales..?

There needs to be an independent enquiry to achieve TRANSPARENCY into the receivers actions due to the large amount of losses incurred at the hands of KordaMentha.

Who can the public actually TRUST to deal in the other publicly owned BILLION dollar assets? Key? English? Yeah Right!!!

Gotta wonder why the PM John Key even has a BLIND TRUST? But then again the answer is absolutely obvious... He clearly has MUCH to hide.

Blind trusts were banned for politicians in the UK due to the abuse of politicians gouging the public assets there and benefiting themselves via their blind trusts.

So Dr Brash why don't you make a party policy to outlaw blind trusts for politicians in NZ?

Bugger off Penny...I thought we'd seen the back of you...

I am in what I believe will be John Banks' electorate (which is now Rodney Hide's. I intend to vote ACT, to keep National honest.


For goodness sake national is not proposing to sell more than 49% shares of these asserts to the public, It will be run under good and more transparent, management than we have now. How can the consumers be any worse off.

Gov is not transparent al all. It is not nonsense.NZ is too small to have our main

Once again Don Brash shows real concern for the welfare of future New Zealand. Honest up front thoughts and analysis and not counting votes for his future.

We have to have Don involved in government decisions. He has my vote.

Auckland Police APB; 22 Aug 2011

All units be on the lookout for a confused geriatric promoting government policy injurious to the country's economic welfare. In need of Ovaltine and an afternoon nap.

The only protection against monopolies is the Government, which regulates them.

When the Government owns a monopoly, nobody protects us. The referee and player gang up to rob the customers blind.

As an investor, I would love to be able to buy shares in Kiwi State assets. However, I would hate to see the vulture merchant bankers who will help in the float get their hands on any money. They will be falling over thenselves to be able to handle the float and underwrite it. Its money for jam for them, and I dont think they deserve it. Hopefully the govt can do it "inhouse" and save some money at the same time.

I wonder if Don Brash applies the same logic to his own assets?

Let Kiwi saver providers buy the shares only. Then real Kiwi Mums and Dads will get the rewards.