State Assets
Just to prove I have not yet succumbed to the borg and become a mindless clone (N a t i o n a l i s a l l k n o w i n g – r e s i s t a n c e i s f u t i l e) I thought I would take a mild whack at one of National’s policies – their SOEs one.
The policy pledges to:
* Retain Kiwibank for at least the first term in government
* Retain the rail track network
* Retain TVNZ
* Retain the state-owned electricity companies
* Retain national grid company Transpower
Now let’s just go check that again, It does say retain, not sell – damn it.
Now I understand entirely the political necessity for the policy. Most of the public react to the word privatisation with the same enthusiasm Grey Power show for visits by Jack Kevorkian. The number who fall into the “If it moves sell it” camp like me are very very small. And there is no point spending 21 years in opposition just so one can sell TVNZ one day. For the same reason there is a zero percent chance of National breaking its word not retaining any of these assets during its first term.
But here’s what my SOE policy would be:
Agriquality New Zealand Limited – sell
Airways Corporation of New Zealand Limited – hold
Asure New Zealand Limited – not even sure what this one does, so sell and see if anyone misses it
Genesis Power Limited – sell – it is silly owning private commercial companies competing with the private sector
Landcorp Farming Limited – sell most farms
Meridian Energy Limited – sell sell sell
Meteorological Service of New Zealand Limited – sell
Mighty River Power Limited – sell
New Zealand Post Limited – fully deregulate and sell
Solid Energy New Zealand Limited – sell
Television New Zealand Limited – either sell TV2 only or sell whiole company
Timberlands West Coast Limited – sell
Transmission Holdings Ltd – possibly keep
Transpower New Zealand Limited – keep
Air New Zealand Limited – sell before we lose money on it
Accident Compensation Corporation – reintroduce competition then sell
Crown research institutes – keep
District health boards – keep assets
Earthquake Commission – keep
Housing New Zealand Corporation – sell houses to long term tenants
Museum of New Zealand Te Papa Tongarewa – better not privatise I suppose 
New Zealand Fire Service Commission – keep as long as the union stops demonising volunteer firefighters
Public Trust – probably sell – is mainly just another financial services company
School boards of trustees – keep but maybe allow to devolve to community trust ownership
Tertiary education commission – no-one would buy it!
Tertiary education institutions – keep all but Waikato which gets sent to Tasmania
Transit New Zealand – keep
That should fetch a good $20 billion or so which equates to $10,000 per household. The trick is not to sell them to one large owner, but to allow mom and pop shareholders to invest in them. The Contact Energy float was hugely popular when done that way.
Oh well I can keep hoping.
July 17th, 2005 at 7:50 pm
Oh FFS – keeping Kiwibank? That just pisses me off.
I think Asure NZ is some sort of biosecurity dept – it may work with the meat industry. If its the one I am thinking of it is quite important but nothing that can’t be sold as long as appropriate regulations are in place to maintain standards.
Why do you want to keep TV1? What possible role does the state have in owning TV stations?
Did you mention selling (or paying someone to get rid of) National Radio? Both listeners will be pissed but heh, the taxpayer doesn’t sponsor radio sport …
July 17th, 2005 at 9:04 pm
Landcorp farming = sell? I don’t know if they do but if these farms support ag science then you’d better make sure you keep enough cheap and efficacious research facilities for the ag scientists to use without unreasonably heavy costs. Otherwise NZ waves bye bye to world ag science leadership in thousands of areas across insects to crops to animals to machines.
It is not simple to maintain the raw matrials of science as you need to keep multiple inviolably separated sets of genetically similar herds of various animals, similar crop conditions, etc, etc, etc. You can’t do science without it.
If we (NZ) can’t continue world ag science leadership, then bye bye living standard.
July 17th, 2005 at 9:31 pm
Dunno if I’d sell the met service, but totally agree with the rest, particularly the bit about sell to mum (not mom this isn’t America yet) and Dad shareholders. And I think Reid has a point about Landcorp.
July 17th, 2005 at 9:36 pm
why not sell the met service – we will still get weather (and the forecasts will still be mostly wrong)!
asure NZ are (or were) meat inspectors. Not sure you can sell them given that most countries demand that inspection be done by Government employees. Nothing in principle against contracting, its a hangover from the Chicago mob corruption in the 1920′s but as with so many things in food, ancient history drives current practice.
July 17th, 2005 at 10:00 pm
You seem to forget that Mum & Dad shareholders sell onto foreign institutions once they see a small profit. The profits then all go off-shore.
Let’s try and learn at least a little from the past – i.e. Telecom.
July 17th, 2005 at 10:06 pm
What’s wrong with Telecom? It is a success story of deregulation and privatisation. Almost overnight the cost of toll calls dropped, and the company stopped losing money. There was competition in 1990, driving tolls down further, and nowdays usually takes only a day or so to get a phone connected compared with up to six weeks in the early ’80s. Personally I don’t care who owns telecom, as long as the service doesn’t go to shit, and the Government doesn’t seem to offer that.
July 17th, 2005 at 10:10 pm
so moggy what was the lesson from telecom again?
was it reliable phones? cheap calls? fast connections? better service?
the old post office was crap, it cost more than it earned and it treated customers as tho getting a phone was a privilege. Just to spell that out simply. Until it was privatised THERE WERE NO PROFITS to go anywhere, tax payers subsidised the whole bloated monolith.
If you get reasonable service at a competitive price, and the system works, who cares where the “profits” go?
Now of course you could argue about the cost of broadband etc, but thats mostly about rubbish government and poor regulation, nothing at all to do with ownership, altho of course if the state still owned telecom,i reckon we’d still be using telex machines and the cost of services would be much higher – look at all the state owned telcos across the Pacific.
July 17th, 2005 at 10:14 pm
How about voucher privatizations?
Almost all the debt is gone and the mafia isn’t too powerful in these parts?
It ought to be a rather successful and popular option?
July 17th, 2005 at 10:16 pm
How about voucher privatizations?
Almost all the debt is gone and the mafia isn’t too powerful in these parts?
It ought to be a rather successful and popular option?
July 17th, 2005 at 10:20 pm
key lessons – 1. profits are going off-shore, 2. key infrastructure being owned by people with no concern for the welfare of the country. Perhaps TranzRail is a better example – poor “private” owners that sucked the company (and country) dry.
How about looking across the Tasman – Australia haven’t had huge asset sales but are often quoted as having a better performing economy. Telstra have lifted their game while still being govt owned.
July 17th, 2005 at 10:30 pm
is that the best you can come up with Moggy
1. profits go offshore- so what?
2. owners don’t care about infrastructure? owners that dont look after infrastructure don’t make money- this tends to make customers and shareholders quite grumpy.
Your rail example is a little tendentious.
Incidentally, rail only “worked” in the past because Muldoon rorted the NZ transport network – and that rort was hidden in the cost of goods for ordinary New Zealanders – remember the monopoly on long-distance freight?
I reckon Canwest must have lost heaps trying to make the clunky mess work. We still have the rails they didnt go anywhere, and now the State is back subsidising them again – another glorious success?
Even suburban passenger rail only exists because of the SUBSIDIES – rail just isnt economic. When did you ask for your car or petrol to be subsidised?
Australia is about to float Telstra so there’s that argument gone too.
If you want to be taken seriously, why don’t you mention that the post office COST money rather than made money, or the high cost of calls, or the 6 week wait for a phone. All of these things are well known facts – want to take any lessons from them?
July 17th, 2005 at 10:32 pm
oops it was Wisconsin Rail, my blue.
July 17th, 2005 at 11:22 pm
Privatisation stalled in Australia because the Senate blocked it (Labor and minor parties). That will change soon enough.
July 17th, 2005 at 11:46 pm
Governments should only do what private enterprise can’t or won’t do, and even then it should only be for the public good.
What has Kiwibank really achieved, nothing much really.
Air New Zealand should have been sold to Singapore Airlines period. I’d rather have shares or rights in that parent company than the ones I now have.
TVNZ, sell it to Fox, then we might get something to balance the editorial views of the Canadian outfit.
Is there are market for a used Families Commission with low mileage and very little wear & tear?
July 18th, 2005 at 12:57 am
No one wants Air NZ now – missed the plane on that deal…
July 18th, 2005 at 10:16 am
On the assumption that each would return about 5% to the government on average, you can also cross $1 billion out of the surplus…
July 18th, 2005 at 11:31 am
A few comments:
Telecom – yes, getting a phone put on is a lot better than it ever used to be whilst I was growing up in this country. The downside? Well the government seems to think that Telecom needs some kind of protection from full competition. This results in high telephone charges, very high indeed in some telecommunication areas when compared with other OECD countries, particularly for cellphones and for broadband. Can’t remember all details now but a report issued last year by the OECD on NZ’s telecommunications charges was less than complimentary and the government buried it for four months.
The Met Service – I’d probably keep
Te Papa – lets sell the damn thing. We might get some new owners who permit displays that are a bit more complimentary about European settlers and their contributions to this country. We might also be able to visit exhibitions like the Lord of the Rings costume expo for free, which we should as NZ’ers be able to do considering New Line Cinema was given large tax breaks to help persuade them to make the movie here.
July 18th, 2005 at 11:35 am
Governments should only sell the things they would be happy to see fail. Otherwise they can end up having to buy the discarded husks back later, and having to inject zillions in public money to get them up and running again.
July 18th, 2005 at 11:42 am
I’d sell InternetNZ:-)
July 18th, 2005 at 12:10 pm
ACC deregulate then sell ?
Do you mean deregulate for the insurers but keep the regulations for the insured.
Why no remove the no fault basis so that claimants can sue . This would be a truely level playing field. That is if a major private AC insurer doesnt go bust like the HIH did in Australia and leave the government to pick up the tab.
When the private Ansett went bust the Aussie government picked up the tab -with a special ticket tax.
As for NZ Post its fully deregulated now, dont you see those blue post boxes of the private competitor that went bust and in towns like Taupo there are local post companies which only cover their own area. Too bad if the farmers dont get RD anymore, National doesnt want an unprofitable service to be continued.
Selling internetNZ , dont be silly, as well know the internet was developed by private business to serve the needs of commerce so we wouldnt want control in private hands it would end up with telecom
July 18th, 2005 at 1:55 pm
If the state owned asset is making money for the government why sell it???
Likewise any infrastructure and retailing companies (power ones come to mind), split them to the infrastructure, which is kept, sell the retailing bit (this is where Labour f’ed us on Telecom and the Nats did the same with NZ Rail IMO). Own the infrastructure and invest in it so its world class, open access on payment of an access fee and then let the market do it’s thing. Don’t give an incumbent the advantage of owning the infrastructure like Telecom has…
Anything that is monopoly or near monopoly in a competitive industry, keep. Monopolies often satisfy the profit thing and then there is the issue of regulating private monopoly.
Privatisation is messy and likely to switch some of the swing voters off National but if the policy is not declared up front then watch the government crumble if Winston First is part of it..
July 18th, 2005 at 2:30 pm
DPF, you neglect to mention the TAB and Lotteries Commission. Should they stay or should they go now?
They should both go public. The racing clubs would garner a lot more raceside punters if on-course bookies were allowed. One race meeting has more style and character than a thousand Lotto draws.
And when will Wellington be allowed a casino? With an R20 licence, it would keep the teenagers away from mature drinkers and a proper dress code could keep out poor people (in sharp contrast to Sky City Orkland).
July 18th, 2005 at 3:35 pm
It would seem to be a death wish for National not to sell Labour TV. though of course Winston won’t agree to selling any stateowned asset. If it was sold no doubt John Hawkeby,Judy Bailey and Holmes would want to be cornerstone shareholders, maybe even buy the whole lot.
July 18th, 2005 at 7:44 pm
Asure New Zealand Limited provides simple and efficient solutions to complex food safety issues… hhhmmm well… u r probably right… who would miss this one!
July 18th, 2005 at 10:08 pm
and Vehicle testing – A friend cornered Anderton on a plane about the rationale for the nanny state owning Vehicle testing – even he could not come up with a reason for owning it.
July 19th, 2005 at 11:51 pm
Well, with all those state owned assets for sale I guess NZ would have to roll out the red carpet for the robber barons Fay, Richwhite, Gibbs etc to return. With the prospect of Don Brash becoming PM these boys will already be circling.
Of course these sharks and fellow reef fish are already p(l)aying their part by kicking big bucks into National coffers (to the cost of ACT). See: http://www.nzherald.co.nz/index.cfm?c_id=466&ObjectID=10331942
While this Fran O’Sullivan story is mostly about potential tax breaks for those that don’t need them the smell of blood in the water from wounded state assets and the shark’s recall of past obscene profits made at ordinbary NZer’s expense will no doubt see them and their acolytes back in NZ waters.
As for Mum and Dad shareholders profiting from such sales – you have to be kidding or deluded!
July 20th, 2005 at 8:04 am
Has anyone told Moggy that New Zealand Law makes it the sole duty of Directors in a company is to serve the best interests of the company – a directors of Telecom NZ have to tell overseas owners to shove it if they tell him to do something they don’t agree is in the best interests of Telecom.
I guess Moggy thinks Paul Collins, Michael Fay, etc think of New Zealand’s interests before deciding where to invest their money?
Moggy is a gullible MUG repeating a brainless slogan.
July 20th, 2005 at 9:13 am
What does the NZ Govt pay on debt these days? The assumption that these assets return 5% to the surplus is false if we are paying 5% on the debt that we would otherwise retire when we sold them.
The thing people miss when they talk about profits going offshore is that when an asset owned by NZers is sold offshore a whole bunch of capital that used to be owned for foreigners comes into the country. There is no net change in ownership by NZers. Presumably we then take that money and buy something with it – the only time we end up worse off is when we buy something that is worth less than what we sold.
The question is what we would do with money returned. Options are:
– retire debt. Don’t know what rates we pay on debt, but if they are close to the return we are currently getting on these assets, then that may be a good idea
– build infrastructure that genuinely should be govt owned. Maybe some roads or some dams?
– invest in the future – lower taxes (increasing growth), improved education, etc
– return the money to the ultimate owners (the taxpayers) for them to spend it on something that they think worthwhile
July 20th, 2005 at 2:21 pm
So you sell Metservice. The buyer decides to dispense with all those expensive computers and employ a few old dears with pieces of seaweed. The airline industry blacklists NZ because it’s too dangerous to fly to a country without accurate weather forecasts. The government is forced to start a new met service at a cost of many times the price they sold out for.
Incdentally, I always thought tertiary institutions were nominally independent?
Why not go the whole hog and privatise the cops – then if you want cops, you can pay for them, otherwise not.
July 22nd, 2005 at 10:41 am
Go easy on Waikato Uni David. Todd Muller (Bolger staffer) was student pres there and I (Nats East Coast 99 candidate)went there too – its not all dodgy. Moving it to the Italian riviera would be a nice move though – no fog.
August 4th, 2005 at 10:55 am
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