Say no to asset sales! Vote Labour! Or National!

I might be a bit picky here, but I really get annoyed when people say National has a policy of asset sales. They don’t. <insert whinging from left propagandists about National selling off our country to overseas>

Asset sales is seen by most New Zealanders as the Privatisation that we saw in the late 80s to early 90s. The things that saw us sell off assets like Air New Zealand and Telecom. Sure, technically asset sales would include a mixed ownership model like National is proposing, but that is very different from New Zealanders perceive “asset sales” to be.

There is a major difference. What National is proposing is the sale of up to 49% of assets. This would leave at least 51% of the assets in Government control, ensuring the company will remain working in the best interests of the public and providing the Government with dividends. The remaining 49% will be sold, giving New Zealanders the opportunity to invest in companies that are almost guaranteed not to fail. Yes, if New Zealanders do not take that opportunity, it may be sold to offshore interests, but that’s not a bad thing. Foreign investment is positive for an economy.

I also don’t buy the “but we already own the company. Why would we buy it again?” argument. Sure, the Government, as a representative of New Zealand, owns 100% now. But with 4.4 million people, that means each New Zealander owns 0.0000227% of the SOE. Not very much, is it? In fact, with Merdian Energy’s profits for the last financial year, each New Zealander made about $50-60. Assuming dividends would be no more than 10%, that’s $5-6 in dividends a year.

Let’s look further into energy companies, as these seem to be the SOEs getting the most spotlight. There are currently two Government owned energy companies. Both of these companies have exactly the same shareholders. Remembering that a company’s number one priority is to it’s shareholders, there is no reason why the two companies need to compete, because they are working for the same people. This makes the companies inefficient.

If we increase the efficiency by making the companies accountable to different people, consumers will benefit with lower prices in the long term. If these lower prices are on average more than 50 cents a month, the consumer has gained.

So, let’s stop saying that apples are actually pears. Mixed ownership and Privatisation are two very different things. And to get a little bit political on it, if you’re voting on policy (which every person should – voting for a party because of that party is silly), and honesty is the best policy, then you probably shouldn’t vote Labour…


About Daniel Farrell

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Posted on September 20, 2011, in New Zealand Politics and tagged , , , , . Bookmark the permalink. 3 Comments.

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