It's time to just say no to asset sales!
The Government is intent on ramming through its Mixed Ownership Model Bill to effect the partial privatisation of our remaining state owned electricity assets and Air New Zealand. They know that these sales are unpopular amongst Kiwis (to the tune of nearly 60 percent in some polls) but the Nats are determined to proceed with them come what may.
National claims that they have a mandate to push through asset sales. Well, any reading of last year's election result does prove differently. The combined vote share of the declared anti-asset sale parties, namely, Labour, the Greens, the Maori Party, Mana, New Zealand First, the Alliance, and Democrats for Social Credit was 50.86%. Pro-asset sales parties, namely, National, ACT, United Future and the Libertarianz garnered 49.05%. Although most people didn't strictly vote on the asset sales issue and given that the Maori Party has now decamped from the anti-sales camp (thanks to a stitched-up deal between Pita Sharples and John Key over iwi shareholding rights), it can still be said that the anti-privatisation parties had a slight advantage at last year's polls.
And, as has become clearer in the last week, this might be the wrong time to push through asset sales. While no time ever would be good, Prime Minister John Key, State Owned Enterprises Minister Tony Ryall, and Finance Minister Bill English are determined to put the sales legislation through its paces in the House even with the prospect of a possible new global recession looming overhead. This might mean that the Government will net less profit from the sales than otherwise would have been the case given that many potential investors might not be prepared to pay good prices in a more straightened economic environment. This represents the risk of another fiasco, vis-a-vis the New Zealand Rail and Air New Zealand sales of the late 1980s and early 1990s when both assets were purchased by their buyers at less than their market value.
And what became of those sales? Well, they had to be reversed by the previous Labour-led Government! Who says that asset sales work again? Ah, Treasury and the Business Roundtable's successor organisation the New Zealand Initiative!
Any sales will also benefit wealthy investors and not the so-called mums and dads of New Zealand. In fact, Kiwi mums and dads (and all of us for that matter) already own the assets and they do give us a good return via dividends and taxes. What's more, these dividends and taxes are already invested into helping build and maintain schools and hospitals so why does National need to create a so-called 'Future Fund' to help build such social infrastructure again?
So, if you needed any reiteration about the need for us to keep our assets, there it is! If the National Government is to break any promises, then selling assets is the one they should opt for. This policy reversal would be welcomed just as the class size cuts backdown was. However, the reality remains that while John Banks remains in the House, National will be determined to use his presence to pass the legislation. Then the assets will be gone - for now. The challenge will then be for the Labour, Green, and other anti-asset sales parties to say whether they will reverse the process. And, as shown by the previous Labour Government's reversal of asset sales, it can be done!
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