Labour flogs dead asset-sale horse
"The poor management of past privatisations and the lack of benefit to the country from them are compelling reasons why they are (still) so widely unpopular."Featured comment
Labour desperately needs a new issue.
Two years ago, John Key surprised the political establishment by announcing plans to sell up to 49% of five state-owned companies, dramatically contradicting year his reputation for policy timidity at the start of election year.
Following Mr Key’s script, Labour built its entire election campaign on the slogan “Stop Asset Sales.” It achieved 27.5% of the vote, its worst result since 1928.
Since then, Labour has continued prattling on about the sales, even siding with Maori efforts to fully privatise water to stop the sale of minority stakes in dams.
Unsurprisingly, Labour has remained below 35% in the polls, bouncing up only when David Shearer has provided some bloodsport in dealing to David Cunliffe.
Now, with the share issues dominating the news, along with Mr Key’s “hands on” management of SkyCity and Warner Bros, Labour support has dropped back again, putting National in pole position for 2014 for the first time in months.
What was it Einstein said about insanity?
Do a poll or ask people to sign a petition and most will say they oppose asset sales. But that tells you nothing about their interest or passion.
As even the old charlatan Winston Peters has recognised, government share offers, once underway, tend to become popular.
As Treasurer in 1998, he hailed “popular capitalism” when he sold the government’s shares in Auckland Airport, attracting a record 68,000 investors through his $4 million advertising campaign fronted by Sean Fitzpatrick.
“I'm pleased that high-profile New Zealanders like [Mr] Fitzpatrick are involved in promoting the float, which shows it is a float for the people,” he declared.
Like Bill English today, Mr Peters assured us: “The purpose of this exercise is to shore up the Crown against future risk of developmental cost and free up money for other investments and interest servicing charges.”
If Mr Peters’ $4 million advertising campaign did well attracting 68,000 investors, the response for Mighty River Power is even better, with more than 35,000 kiwis pre-registering on day one, crashing the website [200,000 had pre-registered by 3.30pm Thursday - Editor].
What Mr Peters may recognise, but Labour does not, is that, before Mr Key suggested the share issues, most voters had never heard of Mighty River Power, Meridian Energy, Genesis or Solid Energy, much less worried about their ownership structure.
Compared with disposable incomes, the local school competently teaching maths, grandma getting her hip replacement, the cops tracking down the local crims or even keeping Asian immigrants out, whether a Waikato River dam is owned 100% or 51% by the state simply doesn’t rate.
The actual policies of those who claim to oppose share issues prove it.
Through nine years of the Helen Clark regime, when a global economic boom fuelled massive fiscal surpluses, the government bought back not a single share in Contact Energy.
Nor did Phil Goff promise to buy back shares in Contact. Nor does Mr Shearer promise to buy back shares in the companies Mr Key plans to list.
If it is OK for national symbols such as the Clyde Dam and the Wairakei geothermal network to be 100% privately owned – and majority foreign owned – how could it possibly matter that Waikato River dams will be only 51% government owned and perhaps 20% foreign owned?
While averse to nationalisation, Labour also argues that not a single share in any of the Crown’s $50 billion of commercial companies should ever be sold – in effect freezing more than $30,000 per New Zealand household in a portfolio that is a mere legacy of the tumult of the 1980s and 90s.
Moreover, while National’s justifications for the share sales have been weak, given it is difficult to see what impact they will have on the Crown’s net worth, Labour has failed to provide any case at all about why they would be so terrible.
Alleged links between minority ownerships and retail prices are spurious, with the market structure changing not at all.
Arguments that the state must own 100% of “strategic assets” – a meaningless phrase, never defined – would suggest the government should nationalise all food production and distribution, something Labour is yet to propose.
In fact, an immovable asset producing a commodity involving no proprietary intellectual property would seem to be exactly the sort of thing where ownership is irrelevant.
Arguably most pathetic over the last two years has been Labour’s claim that “once they're gone, they're gone forever.” It’s a slogan that is clearly absurd in physical terms, which is only true in commercial terms because of Labour’s own policy of not buying back shares, and which, in any case, is undermined by the experience of Air New Zealand and KiwiRail.
Believe it or not, though, even that idiocy has been surpassed, when Labour SOE spokesman Clayton Cosgrove crossed the line this week from energetic opposition to abject nonsense, claiming histrionically that the assets will be flogged off to foreigners after being sold at the bottom of the market.
He knows, of course, that it is impossible for the companies to ever have anything other than minority foreign ownership. But it is quite credible he is so out of touch that he doesn’t know the NZX20 has boomed by around 30% in the last year and that the Dow Jones index has reached an all-time high.
Mr Peters is moving from opposing the sales to demanding a future government buy the shares back, something he will never need to be accountable for and which confirms him as a hypocrite given Auckland Airport.
The Greens are happy that their anti-asset-sale petition has won them tens of thousands of new email addresses to spam in election year.
Both are moving on to new issues.
Only Labour appears to have nothing to offer other than flogging the asset-sale dead horse.