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March 18, 2013 | by  | in Opinion | [ssba]

Everything You Wanted to Know About Asset Sales but Were Afraid to Ask

Last week Labour, the Greens, NZ First, Mana and their trade-union allies deposited the Keep Our Assets petition at the steps of Parliament, claiming they had gathered enough signatures to trigger a Citizens-Initiated Referendum (CIR). In order to initiate a CIR, 10 per cent of those enrolled on the electoral roll must sign a petition, in this case, 393,000 people. I pity the poor clerk of the House of Representatives, who now has to go about the arduous task of counting and authenticating the signatures. It did not have to be this way.

For a start, the Government is not actually selling any assets. I repeat, the Government is not selling any assets. What the Government is doing is going about raising capital through a share-float program. At best this could be called a partial privatisation. 49 percent of various state owned enterprises will be offered on the New Zealand share market for people to buy. Critics of the programme say “we already own them!” Bullshit. The government as the sovereign political entity, owns them in trust for all New Zealanders and can do with them what they like, pending the results of our triennial elections. I don’t think any New Zealander can walk into the offices of Genesis or Meridian and steal a desk can they? Physical impracticalities aside.

Partial privatisations have a pretty good history around the world. To use one example, in her second term Margaret Thatcher opted to partially privatise British Telecom (BT). Analysts in the City of London financial markets predicted it would be a flop. Instead there was a massive oversubscription for shares. They could not sell enough to satisfy demand. Most buyers were yes, the fabled mum and dad investors of legend. Mrs Thatcher called this ‘popular capitalism’.

You know who did sell an absolute shitload of assets though? We had a government between 1984 and 1990 that sold many things the state owned, many for good reason. While I am not going to give the exhaustive list of the silver hocked off, it includes what is now Telecom, our Railways (since repossessed by one Dr M Cullen), Forests and Air New Zealand. It was a Labour government.

Do you also want to know who invented the partial-privatisation model National are now using to raise capital for housing, schools and infrastructure? Labour again! Labour bailed out the failing Air New Zealand in the mid-2000s, then floated (shock horror) 49 per cent of it back on to the share market, keeping 51 per cent and retaining FULL CONTROL. Labour are protesting against an economic mechanism they brought into New Zealand.

The hypocrisy over the Keep Our Assets campaign is so rank it stings the back of my throat.


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