Member log in

Labour wouldn't buy back assets, Peters would borrow from Cullen Fund

Labour is ruling out buying back any of the state owned assets which are partially privatised under the government’s mixed ownership programme.

The party’s state owned enterprises spokesman, Clayton Cosgrove, told TV3’s The Nation programme at the weekend that it would be “fiscally irresponsible” to commit to any “open-ended fiscal envelope” to buy back the assets if it became the government.

And Green MP Gareth Hughes told the programme that his party would consider the matter after the election.

“Who knows what type of mess the government will leave the books in post the election,” he said.

The two potential left of centre coalition partners’ views contrasted with that of the other opposition party, New Zealand First, whose leader Winston Peters told The Nation that “ Winston Peters and our future government is going to take back those assets”.

“By that I mean pay no greater price than their first offering price. That is, if they transfer to seven or eight people doesn’t matter, we'll pay the first price or less, “he said.

He agreed that this meant that anybody who bought the shares would “take hit” if his plan was implemented.

Mr Peters said the government could fund the buyback by borrowing from the Cullen Fund.

But Mr Hughes argued that simply by signalling to the market that a future government would buy the assets back would drive their price up.

However, Mr Peters was equivocal on whether his proposal to buy the assets back could be a deal breaker in forming a future coalition with the other opposition parties.

“The problem with that is you cannot in our environment make a determination for other parties when we don’t know who's going to be there and in what numbers,” he said.

“New Zealand First is adamant that we will not go into government with parties that do not understand some fundamental critical things.

"At the last election we said we're going into government with no one, and I'm hoping that other parties are hearing that there is a need for some agreed principles and this is sounding very much like one.” 

Watch the full episode of The Nation here.

Comments and questions
14

Oh dear! Winnie flapping his tongue around again. The Cullen fund stands aside from govt. interferance. The guardian of the fund decides where to invest, not Winston or any other politician, fortunately.

Sorry pal but if Winston first becomes Government he would do exactly that. Ruin one asset to buy another. He dislikes the idea of New Zealanders getting cheaper power.
Power generators in Aus are all private and electricity is cheaper there than here. Go Figure.

Nobody has said power prices will be lowered as a result of privatization. Unless you know better.

They will be lower, more competition, sharper governance, and no more ridiculous ventures into dopey pie in the sky wind turbine technology.DOH!

We have four phone companies operating here and you can't put a piece of paper between their prices. There is nothing to suggest partially privatizing state power firms will lead to lower prices.
Private shareholders might want a bit more profit than the the state, prices may well rise. Investment may go down.
I also disagree with you on wind turbines. Sustainable energy is the future.

Lemon what rock have you been hiding under?
Since 3rd Mobile player 2Degrees arrived call rates have dropped dramatically due to competition

What is sustainable about wind, except for the hot air out of the Beehive.... .try tidal energy instead, if you want certainty of sustainable supply.

Winnie is more scarier than a roomful of ghoses

Excellent idea, only way to fix up a problem this Govt is getting irrefutably wrong.

Labour, is upset, as they did not think of the asset sales, but look at what they did sell. Air NZ, Telecom, but they were not smart enough to keep the majority. I believe Winnie, was in partnership with Labour for the Air NZ sale. Winne himself,? irrelevant! Winie can say whatever he likes as he will never be in government to make good on his boasting.

Whilst National may not get it all right, would it not be grand that when parties of the opposition went against the government of the day proposals, media would only report of the opposition if they had a relevant and viable alternative to the policy?

Of am I just being a dreamer?

Labour have to sit on the sidelines and quietly watch the "mortgagee sale" of these assets. After all, it was the lack of vision (and policies focusing on productivity and growth) on the part of Helen's government that effectively "mortgaged" them (and our futures...). C'est la vie!

There was a compelling reason to sell state assets during the Lange/Douglas era - NZ desperately needed the money and needed the discipline of market reforms to bring in efficiencies after the Muldoon communism years.

What is the reason now to sell state assets or NZ? Nothing save for Mr Key to reward some of his *anker backers before he gets kicked out of office next term. The guy has no vision and is more interested in the baubles of office than even Winston is. Look at how he quivered at delight about meeting the Queen! Pathetic.

The answer is to stop borrowing and living within NZ's means. Obviously Key cannot bring himself to do that .

And we have Labor waiting in the wings to bring everyone down to social welfare level.

Everyone that stays here

What I dont understand is why everyone is so concerned about power companies. They produce a commodity (electricity) and if the government (or anyone else) wanted to reenter, they could just build another power plant. Note that some of the SOE and Trustpower are building power plants overseas so there is not reason why people can enter the industry.

Monolies, such as Chorus are more of an issue, but no one, not even Winnie, has called to re-nationalise them.