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Kiwis can't afford to join queue

Contributor:
Fuseworks Media
Fuseworks Media

Buying shares in the Government's sell-off of state assets would break the bank for most New Zealanders says Labour's State Owned Enterprises spokesperson Clayton Cosgrove.

His comment follows an analysis of figures which show the median Kiwi household has only $1700 in savings and would be struggling to buy shares in Mighty River Power, the first of the SOEs to be floated.

"The concentration of shares in the hands of a select few is a very real risk," Clayton Cosgrove said.

"Finance Minister, Bill English, claims there will be widespread ownership in Mighty River Power. But if the state of Contact Energy is anything to go by, English is dreaming.

"When that company was floated in 1999 there was an initial surge of interest with 225,000 individual shareholders buying in. Within three years the number of shareholders halved and 13 years later that number has fallen almost two-thirds to 78,000 shareholders. 75 per cent of Contact Energy is now owned by a few shareholders with Australian-based Origin Energy controlling 51% of the company.

"The National Government is out of touch. Its estimates about the share float are all over the place," Clayton Cosgrove said.

"Just this morning Bill English said more New Zealanders will be able to invest in assets. He told Morning Report that New Zealanders 'may only have $1700 in the bank but ? This kind of investment may give them an opportunity to own something that is more accessible than home ownership'.

"If there is money in the bank it is there for emergencies. Mr English's Ministerial salary obviously gives him plenty of discretionary income, but most Kiwis have to put some cash aside for when the car breaks down or the kids get sick.

"English also said 'most New Zealanders don't feel that they own the assets of the Government and selling shares to KiwiSaver funds and through the sharemarket will give them a more direct stake'.

"Again Mr English is out of touch. Polls have consistently said that 80 per cent of New Zealanders are opposed to the sale of assets they already own. Mr English should stop treating people as if they are stupid.

"Many Kiwi mums and dads are struggling to meet their daily expenses. So while they might be interested in shares -to keep them in Kiwi hands-they are not going to be able to join the queue, let alone be first in it," Clayton Cosgrove said.

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