Lefties ginger up asset debate
A left wing Christchurch ginger group wants to “save” public assets – at national and local level.
Keep Our Assets-Christchurch is a coalition of political parties, unions and activist groups including Labour, Alliance, Greens, Mana, Democrats and the Hobgoblin Network.
Familiar mouthpieces include Bill Rosenberg, economist and policy director for the NZ Council of Trade Unions, CTU stirrer Marty Braithwaite and activist Sharna Butcher.
The arguments are well known at national level but have taken on a sharp focus in Christchurch where Employers Chamber of Commerce chief executive Peter Townsend has been exhorting the city council to sell assets to pay for the government's central city rebuild plan.
“In the finest traditions of disaster capitalism the political and big business cheerleaders of privatisation are demanding that Christchurch’s Council-owned assets be flogged off to pay for the huge cost of quake recovery and, not coincidentally, to line their pockets," activist Murray Horton says.
“If they’re flogged off the city will be left without the major income stream generated by these assets and ratepayers will be left to shoulder the disproportionate burden of greatly increased rates.
“Christchurch provides a very clear warning of the perils of privatisation. Some things are just too big and important to be left to the market, and disaster recovery must be a core function of the State.
“For all EQC’s shortcomings, the situation would be a damned sight more dire without it. Imagine if we were entirely at the mercy of the insurance transnational corporations, who are playing hardball and holding the city, and the whole country, to ransom,” the group says in a statement prepared by Mr Horton.
He told NBR ONLINE the group is equally opposed to state asset sales.
“No matter how much the Government tarts it up, the glaringly obvious fact is that Mum and Dad already own the five state-owned energy enterprises. We have paid for them by our taxes, why should we be expected to pay for them again?”
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Comments and questions48
“No matter how much the Government tarts it up, the glaringly obvious fact is that Mum and Dad already own the five state-owned energy enterprises. We have paid for them by our taxes, why should we be expected to pay for them again?”
no, offshore investors have paid for them via NZ Govt Bonds
How hard is it for some people to understand?
You buy an asset (like a house), over the years you gain equity in it, you raise a mortgage against it’s now inflated value and you use that money to buy more assets...
Or you borrow money to build a business and you slowly build equity in it and then when you need more money, you sell off 49% and use that money to buy more assets or to further build the business.
Facts:
1) NZ taxpayers will still have the final control over the asset through their 51% shareholding
2) NZ politicians will have less "absolute" power over the day to day running of these assets - a good thing for all New Zealanders!
3) Yes, taxpayers have a valuable asset which they have paid for over the years (or has naturally appreciated in value) and now they can use these assets to buy more assets
4) Taxpayers will be paid handsomely for 49% of the shares, so that we can use that cash to buy more assets without loosing control of the original assets. Taxpayers aren’t loosing anything – in fact we’re getting some cash in for a share in some assets – that cash can then be used to buy more assets – so where’s the problem?
5) All Kiwi's will have a relatively safe haven for them to invest their savings (KiwiSaver, etc) in buying these shares , rather than sending more than 95% of our KiwiSavings off shore because we currently don’t have enough suitable shares on the NZ market!
Instead of "Asset Sales", this issue could equally be called "Asset Purchases" or "Freeing up Equity" or "KiwiSaver Opportunity"
Please wake up Left NZ - this is actually one of National's more progressive and wiser decisions!
You forgot to state that the Govt is using the money to invest in non income producing assets which will depreciate and require considerable maintenance over time
Very good point - but I do think we can discount that a bit, as our power co's will be needing some serious maintenance and (as I understand it) some serious re-investment to keep them efficient & up to date with technology.
Also our remaining 51% shares are highly likely to appreciate faster in their value under the mixed ownership model than if we just leave them under 100% public ownership as we'll have one or two 10% international partners who are likely to bring some fresh "smarts" technically and certainly greater diversity to the decision making.
Regardless of the subject - anytime someone shrilling from the left starts another round of bleating it all sounds like "sour grapes" over the trouncing NZ handed to them at election time.
The left need to remember the largest, most comprehensive electoral petition, referendum and mandate was handed to National in November 2011 - whilst Labour had the largest ever loss.
"Diddims" to the bleating whingers that lost - NZ has spoken and over 1,000,000 people voted for the Mixed Ownership Model - that's a huge mandate in anyone's language.
As for the sorry collective of left-wing whingers - take a concrete pill and have some sex and travel...
Seems the unions in Greece had the same philosphy.For many years the unions and their sycophants enjoyed the trappings of their status.When the chickens finally arrived in Greece,to roost.Haven't heard how the unions would solve the problem they most likely created.The result a begging bowl from Greece to the nations who knew what austerity was.Fast forward NZ if common sense policies are not adopted.Union solution,get the begging bowl out. Seems the NZ unions are living in a fools paradise,with them the biggest fools of all.
True Right wouldnt sell their assets either, its just not wise business economics.
Why not? If the assets are so valuable their sale will return a great price.
Is it more important to rebuild the city than to own its port?
This is one of those great myths. In fact, the cash return on these assets (which is all you get if you're never going to sell them) is less than would be available from putting the money in the bank.
What Horton should actually have said (if he wanted to be accurate) is:
“If they’re not flogged off the city will be left without the major income stream it could otherwise have had and ratepayers will be left to shoulder the disproportionate burden of greatly increased rates needed to keep them while at the same time paying for the rebuild."
Rubbish. Fairfax has sold off a minority share in Trademe. Not only is it good economics, its just common sense, which hobgoblins and their mates seem to lack.
It is one of the many fictions around this whole asset debate that business people do not sell assets. I have built or bought assets and then developed them to what I consider is their maximum potential and then sold them on to someone who wants to buy a high perfoming asset. I then take this money and start the process again. The main advantage of this asset selldown is giving depth to the NZ sharemarket which is slowly dying. We have the crazy situation where people are investing in Kiwi Saver and most of this money is being invested overseas as there are limited investment opportunities on our NZ sharemarket.
Why are all right thinking people labelled lefties? and why are all wrong thinking people not labelled righties?
You're right - loonies would be a much more accurate descriptor than lefties.
There's already a perfectly good name for right-wing idiots that is widely in use. It rhymes with bankers.
It all comes down to the fact that left-wingers, aka socialists, have as an article of faith that The State should own everything, and us peasants should do what we are told by Those That Know Better, ie The State. Think the Soviet Union, it collapsed under socialism. Think Cuba, only now starting to struggle out of the socialist mire. Think North Korea. Go to the former East Germany, and see the sub-standard housing that Communism wrought. See the Trabant - a socialist triumph. Socialist governments under-achieve. To mis-quote Winston Churchill, capitalism isn't perfect, but it's a far better system that socialism.
yes but what the recent financial collapse in the USA when socialism was called upon to bail out capitalism?
or to use another misquote,
"capitalism will always survive as long as socialism is there to save it"
Nader
The financial collapse in the US was a result of banks giving into government pressure (started by a socilaist called Clinton) to lend money to people who couldn't afford to borrow, to buy houses they couldn't afford to buy. Unlike NZ, a US mortgage borrower can just walk away from their mortgage (another socialist idea), which many did. The government TARP program involved relatively expensive (to the banks) preferred stock being issued to the government at the expense of other stockholders, who saw the value of their shares trashed. The government has since sold or redeemed most of the stock it was issued at prices that, combined with the preferred dividends received on that stock, has made the whole exercise profitable for the government. Hardly a bail out by socialism.
The underlying issue with the financial crisis in America is that it was built on the notion that housing will always increase in value.
Don't be a dreamer Paddy, we're all being told what to do, and the state does know better regardless of who is in power.
It would all be true what you say if the market to operated freely, but it doesnt.
Small & medium size business add just as much, if not more, to the economic than large business. Yet what do you thing the chance is of small/medium businesses to get the government to change the laws of the land to create employment? Very little.
It is an uneven playing field, and always has been. If there was a trickle down effect on this, we would see more on our skilled workers stay in the country. Unfortunately, we are seeing the opposite, which suggests the trickle is upwards & there is now clear evidence of it.
Private companies that get there hands on strategic assets will only exploit the power of the market; even more so than the government. The big differences with higher prices then is they are a private tax, which successive governments have failed to legislate on.
The net effect on the nation is a higher cost of living for the masses, poorer people and the social consequences that go with that.
I would consider my financial situation better than most, however what concerns me is there seems to be too much self interest and short term gains which will negatively effecting us all in the long run. All for a select few, which probably dont live in our country anyway. It just doesnt make sense at all.
interesting - in the context of the Canterbury Earthquake Authority's central planning programme for Christchurch under the current government
I wish to register my strong disapproval of the terms in which human beings who have a different point of view from the author's are described. "Familiar mouthpiece?" "CTU stirrer"? When the (wildly misnamed, by the way) right starts playing the man instead of the ball, you know they have lost the argument!
The argument never started since the Left are unable to produce a single argument against asset sales that withstands a moment's thought.
Examine the drivel:
"We already own them." Fatuous. If you did you would be in charge of selling them. Since when did you pay for them anyway? And even if you did own them, why is that an argument against selling them if the cash is more valuable than the future income.
"The future income stream is worth far more than the sale price" Equally fatuous, since a) you don't know the sale price until you test the market, and b) the sale price value is determined by the future income stream, and c) if it is sold too cheaply then buy the shares and make your fortune.
"The revenue is greater than the cost of borrowing" That may or may not be true today but the cost of borrowing is highly likely to increase especially if NZ has to borrow more jeopardising its credit rating (eg to rebuild Chch.)
"We will become tenants in our own land." Huh? You are already a tenant or else you own your own land and can decide whether to sell it or not.
Honestly, it is no wonder NZ is poor when the quality of thought in so many is so lousy.
How is the cost of borrowing likely to increase? Tell me.
The masses cant afford repayments on current low interest rates as it is. Do you really think the banks are going to expose themselves to mass defaults by raising the cost of borrowing. Dont think so!!
The world finances are now trapped in what Japan has experienced for the past two decades.
They cant create inflation to raise wages anymore, as the labour market has now gone global; thanks to Chinas entry.
Get use to low interest rates, because they are going to be with us for a long time.
Course, if you think interest rates are going to rise shortly, lets here how thats going to happen!!
"the hobgoblin network?"
Best laugh all day...
I'm beginning to suspect that the NBR is just a tad right wing.
mmmmmm, yes, I've had my suspicions about this for a while now,
Or - the NBR are savvy business people with experiences gained in the real world of commerce - who actually understand all the associated issues - not left-leaning churnalists happy to regurgatate propaganda spoon-fed to them by the unions.
Ha ha! Thanks, Solidarity, I needed a good laugh!
I can't understand why the devout bigots from "left" and "right" don't get on better - they have a lot in common.... on the other hand I can't think of anything more depressing - or oppressing.
What about standing in the "middle" calling everyone else "bigots" rather than engaging on the issues?
Socialism & Capitalism are both mathematically economic failures.Distributism is the current economic theory that can surpass them both.
...except you can't multiply wealth by dividing it...
The government can not give to someone without firstly taking it from someone else...
These inconvenient truths must really rankle the socialists - especially in a free country like NZ, where we can fight back in public forums against socialist propaganda with factual counter-arguements.
Look out Solidarity - there's a SOCIALIST hiding under your bed!
WAIT FOR THE HIKE IN POWER PRICES
Unfortunately power prices will continue to increase as long as the RMA restricts the building of new hydro facilities that produce cheaper power. Remember that power prices increased at an average of 9% a year under 100% ownership during the labou government's last term. The advantage of partial government ownership is that the government only needs to come up with 51% of any major investment by the power companies rather than borrowing 100% of the needed investment from foeigners.
The decision to sell shares in some state-owned assets is sound.
Not only will Govt get some cash to fund our continuing deficits but it will also provide a necessary investment alternative in a market that is sadly lacking in such.
liberte
A big part of the problem here is that the left have managed to affix the highly emotive term "assets" to the procedure.
More correctly it could be called "investment opportunities"
liberte
But a bigger part of the problem is the proportion of the electorate who wouldn't know and asset from a liability or an investment from an expenditure.
That should have been "asset sales"
Yep, wish there was an edit option here.
What about the tax the Govt. will take off the dividends & the Gst. On any purchases. Looks win win to me.
Same old suspects, same old stuck records... here it is once more so the simple folk can get it... you don't sell your primary under pinner of the standard of living in your country, it's madness and treachery. Sell assets we don't need... TVNZ, Air NZ, Kordia, the list goes on but not the power, BTW the Government is not a business it a Government, some of you can't seem to get your narrow thinking beyond 'it's a business' it is not, it is our platform that in the end maintains the viability of our society in every way.
I guess that's where we differ - the "platform" is not power companies - they are just one of many required inputs in the mix. We don't have to own the ships, the containers, the land, the buildings, the trucks, the factories, etc.
It's people producing something effeciently and competitively and then selling it profitability that produces revenue, reinvestment profits and that much needed tax. We can own nice power companies (like many or the poor countries around the world - e.g. many pacific island nations) - but without a heap of effective producers we have nothing except lovely power plants - and our government has no tax - and no tax means no schools, teachers, social welfare, hospitals etc. Many of our Pacific neighbours are in this exact position with their hands out to NZ, Australian, etc tax payers to help them pay their bills & meet their needs.
No, our real "platform" is the tax take from sucessful private enterprise production and industry. For sure it's not reliant on us having 100% publicly owned power companies!
In any case, they are only here because our ancestors cut down bush and turned the land (and sea) into a taxable "cash cow" for the benefit of us all. But we can go backwards very quickly - every $ of tax takes effort from someone - and it's certainly not about the government just printing money (like some would like to believe) - that just devalues all cash, increases the cost of all goods & services and doesn't give anyone any real extra value in their purchasing.
Why is Kordia still a SOE when it is setting up communications infrastructure in AUS for mining projects.
I fail to see the benefits of this to New Zealanders?
It is good for a new country to combine the peoples resources to fund and own infrastructure ventures that no private individual would do because the market is just too small to make it pay.
But as a nation progresses and the population grows to a point that the ventures are able to be taken on by private investment then that is what should happen, the Gov. should remove taxpayer exposure to everywhere it is possible. It is called growing up.
Your article is slanted like the sides of Mt Cook. And ignores the fact the the public don't want asset sales.
What part of "NO" do you not understand?
As for this bit; "CTU stirrer Marty Braithwaite " - what a charming piece of Soviet-style slander. Do you call everyone you disagree with a "stirrer"?
never be too quick to jump to assumptions