Govt will not approve Auckland Airport sale
I rarely make predictions, but I am going to predict that the Government will not approve the sale of Auckland Airport to a Dubai company.
The xenophobia over foreign ownership to “Arabs” is as repugnant here as it was in the US when port management was blocked on much the same grounds. People talk about foreign control of an asset as if we might wake up one day and find the airport has suddenly been moved overseas.
And as for profits going overseas, well to be consistent you should then support overseas countries banning New Zealanders and NZ companies owning any overseas assets. Plus people forget that if the airport is sold for $2.6 billion, then that $2.6 billion is available for investment in other companies (which may make even bigger profits), or in the case of Councils in local infrastructure.
So why do I predict the sale will be turned down, even though it shouldn’t be? One word. Winston.
He collapsed the coalition in 1998 over the sale of Wellington Airport. It wasn’t actually about the airport at all (that issue got resolved) but was about NZ First trying to recover in the polls.
And we have the same situation in 2007 – NZ First supporting an unpopular third term Government, below 5% in the polls, and without even an electorate seat as a safety net. And remember since re-elected in 1984 Winston Peters has never once gone into an election supporting the Government of the day. So this issue is a perfect excuse for him to walk out over. He has vowed to “vowed to battle right through to the final decision”.
So if I was Helen Clark, and Helen is a student of history, I would be telling the two Ministers who officially decide, that they can go and commission all the reports they want, and get all the advice they want, but unless they want to be having an early election, they should turn down the proposal.
I mean if Winston was ready to use the excuse of Wellington Airport being sold to a NZ private company as a reason to collapse one Government, how can he not do the same to stop a bigger airport sale to not just a foreign company, but shock horror, “Arabs” with “security concerns”. Of course in this case the Govt is not the seller or owner – it is just the permission given, but Winston doesn’t tend to deal with unhelpful facts and subtle distinctions.
July 25th, 2007 at 8:43 am
Was Winnie wearing his “Foreign Minister” hat (and therefore speaking on behalf of the Labour/NZFirst government) when he made his charming “Arab” digs?
July 25th, 2007 at 8:44 am
Good post.
July 25th, 2007 at 8:50 am
Winston is certainly doing his best to scramble back above 5%.
It’s a bloody outrage that the Foreign minister is resorting to xenophobia.
His best way of blocking the sale, without annoying international friends, would have been to target the current owners of the Airport. It would have been much more appropriate if he’d said: “Auckland Airport should not be sold. I don’t trust those scumbag local politicians in Auckland not to waste the proceeds of the sale. Local Government is wasteful enough as it is. No bloody way.”
Instead he takes the easy option.
Winston will be looking at his options, and wouldn’t be surprised if he pulled the plug soon. It’s his only means of survival.
July 25th, 2007 at 9:09 am
The only way NZ first can survive is if someone rolls Winston as leader.
Dubai Aerospace and their NZ backers and advisers must be the thickest idiots in the world to make this offer comming up to the local body elections. No party will support it because it would be (a) suicide and (b) detract from the real issues such as rates hikes, council excesses and the direction of Auckland city. What mindless tossers.
July 25th, 2007 at 9:20 am
It was national that broke the coalition agreement.
Any fool could see they had the most to gain by ditching Winston. In fact that was the reason why Bolger had to go first. The coalition agreement had a looming date for increasing NZF cabinet representation, which would have seen existing cabinet members from national lose their jobs.
Selling infrastructure was in the coalition agreement, which can be found online for those whos memory of those mad cap days is faullty even though they were in the beehive at the time
[DPF: I was there at the time and saw how hard National Ministers worked to keep the Coalition together. They actually reached a compromise agreement with NZ First and everything was settled. There was disbelief when Winston staged a walkout from Cabinet, because the issue had already been settled some hours earlier. Winston was playing a PR game where he wanted to pretend the walkout is what led the compromise agreement, so he would look strong. He was surprised when he found out that if you walk out from a Cabinet meeting you might not get to wlak back in again]
July 25th, 2007 at 9:31 am
The software for generating automated posts is really state of the art these days isnt it?
July 25th, 2007 at 9:46 am
So Selma
WP forgot that when you play with matches, you may get burnt, thus he tried one on and his bluff was called, thus he broke the agreement not National.
July 25th, 2007 at 9:55 am
I’ll back your prediction on this one!
July 25th, 2007 at 10:06 am
Winston has held NZ to ransom how many times?
July 25th, 2007 at 10:08 am
Didn’t I hear the “liberal’ Katherine Rich (National) opining against the sale to the Dubai people on radio this morning?
Leaving aside the rights or wrongs, the fact is that it is inevitable that NZ businesses and perhaps even the whole basket case of a country will fall prey to business interests from more prosperous countries. Another outcome of lowest common denominator socialism.
July 25th, 2007 at 10:24 am
I know it’s all histrionics but it’s absolutely jaw dropping what Winston did. It’s very easy to forget the trouble this man has caused – why is that?
July 25th, 2007 at 10:30 am
As a benefical owner of shares ( apart from being a ratepayer) I wont be selling my shares. Reason They were bought at the time of the IPO as a long term investment. With Kiwisaver starting up there is no need to go looking for over seas capital to fund the growth on the company It can enter into strategic partnerships and arrangement to acquire expertise. They are worth a multiple of the current offer price in the long term I dont have any problem with DAE as they are buying up long term assets around the world with their oil money and good on them. IMHO they probably wouldnt do anything that would materially damage the NZ economy Why would they.But we need more not less NZ owned companies on the NZX Over the past 10 years theNZX has been raped pillaged and burnt by dumb arse Nz directors without5 any long term vision who have sold off the family jewels to mostly Aussies and what have we got in place . Such delights as Feltex etc. So I would recommend to any shareholders Hang in their unless you get rorted by the 90% plus rule. By the way they cost $1.67 on float There have a capital return and 4 share for 1 split plus good divvies. Why the hell sell.
July 25th, 2007 at 10:41 am
On the issue of selling Auckland International Airport; politics shouldn’t enter the equation.
If the case can be made that it’s good for the Airport & the country then I don’t have a problem with it. I don’t see how ‘right vs. left’ has anything to do with it.
People assume the Airport would be owned by foreigners ‘forever ever’. But there’s nothing stopping us from making an offer sometime in the future. And if we don’t like how they’re doing things then we’ll regulate & added another layer of tax.
Also 30% of the current shareholders live overseas as it is!
July 25th, 2007 at 10:56 am
On it goes…. NZers gradually become the sharecroppers in their own land, owning neither the property nor the businesses. Working for peanuts as all the profits, the result of their hard work, go straight out the door, over the tasman and to the other side of the world; leaving only a $10 billion dollar hole in our national accounts.
Go Winston, at least someone sees that this is unsustainable.
July 25th, 2007 at 11:53 am
I don’t hear anyone complaining about the profits which are remitted to New Zealand from other countries by Fletcher Building et al.
July 25th, 2007 at 12:30 pm
Why in hell would we sell a strategic asset like this to ANY overseas concern. Where is the value for NZ in this!
July 25th, 2007 at 1:07 pm
The sort of capital & international know-how that AIA needs to become the best it can be will require international ownership. More jobs, more flights, better terminal facilities etc will trickle down to every NZer even in ways that can’t be seen. Winston is talking through his *ss.
Auckland airport is the gateway to NZ, we need to have it up among the worlds best.
July 25th, 2007 at 1:14 pm
“Where is the value for NZ in this!
In NZ, there’s a a lot more ‘value in this’ than listening to the archaic and doctrinal opinions of narrow minded commies like you.
July 25th, 2007 at 1:36 pm
NX
“People assume the Airport would be owned by foreigners ‘forever ever’. But there’s nothing stopping us from making an offer sometime in the future.”
Yeah. How did that work out for us in the past? Air New Zealand, Tranzrail, BNZ etc etc.
“And as for profits going overseas, well to be consistent you should then support overseas countries banning New Zealanders and NZ companies owning any overseas assets.”
DavidFarrar
What New Zealand companies? Yeah New Zealand owned SMEs have alot of capital to invest overseas in large assets like Airports etc. lol.
“New Zealand owned” assets overseas have performed well haven’t they? Lol. Air New Zealand’s Anset, The Warehouse’s Australian operations, and Telecom’s AAPT are just a few examples of bungled offshore investments made by “New Zealand companies” who are trying to foot it with the big boys.
Besides as revealed in the “Flight of the Kiwi” report by the New Zealand Institute reveals that large “New Zealand companies” are a pretty insular lot. Its much more preferable to invest in the New Zealand market as its insulated from the higher degree of competition or enjoy dominant market power in their industries.
and the small scale of the market provide some degree of insulation from
intense international competition, and because many large New Zealand
firms operate in regulated industries or enjoy some market power. This raises the returns available from operating in the New Zealand market, and makes international markets look less attractive. It is hard to earn comparable returns by breaking into mature offshore markets with well established players unless the firm has a substantial competitive advantage. This return differential is particularly likely to exist for large, established firms – perhaps less so for smaller firms. As Figure 2 shows, large internationally-focused New Zealand firms have generated lower returns than large domestically-focused New Zealand firms over the last decade (Skilling & Boven (2005b)). This is the opposite of what tends to be
observed in many international markets, where internationally-focused
firms often out-perform domestically-focused firms.”
http://www.nzinstitute.org/Images/uploads/pubs/The_flight_of_the_Kiwi.pdf
“….if we don’t like how they’re doing things then we’ll regulate & added another layer of tax.”
lol. Thats definately work out with Telecom hasn’t it?
“…More jobs, more flights, better terminal facilities etc will trickle down to every NZer even in ways that can’t be seen. Winston is talking through his *ss.”
Yeah I’m sure thats what Labour and National said about the last time they were flogging off New Zealand assets. Some people never learn. Has the experience of the last twenty years taught you nothing? The transnational corps care not for the quality of service provided to their customers. They exist to ensure a good return to their investors and if its at the customer’s expense so be it.
The New Zealand Establishment are leaving overseas investments no illusions that we’re still a banana republic, willing to flog of our assets to all and sundry. Relying on a average joes ignorance of the true value of their assets and their willingness to pay premium prices to overseas investors for the facilities that what they once owned.
The last thing you should want is to enable Council’s to have more money to cover their current inefficency and waste. And you pseudo-Libs lay all the blame the socialists for the current state of the economy. Smucks.
July 25th, 2007 at 2:21 pm
Nice informed reply Mass(Red)Baiter.
It that the best you can put into a discussion.
‘Narrow minded commies like you”
Get a life wanker.
I don’t even come close to being a Commie
July 25th, 2007 at 2:27 pm
this and other things why rodney dead,
rest his soul, but,
we want our country back,
July 25th, 2007 at 2:57 pm
“Nice informed reply”
As if your pitiful contribution of bigoted opinion warranted such.
“I don’t even come close to being a Commie’
You’re a commie. You have no respect for the principle of private property. (Airport shareholders can sell their shares to whosoever they fucken well please.)
BTW, what part of this mantra do you disagree with? “From each according to ability, to each according to need” I think its a euphemism for theft. I guess if you “don’t even come close to being a commie”, you’d have to agree with me.
July 25th, 2007 at 3:10 pm
Isn’t the government the majority shareholder in Air New Zealand? Plus the government could’ve made a bid for Tranzrail. As for BNZ, I don’t know if a government has any business owning a bank when there’s is so much competition in the market. I had a look @ Kiwi bank but it’s not significantly better than my current bank so I didn’t change. Are you with Kiwibank James?
My opinion is that when there can’t be competition then it should be government owned i.e. Tranzrail (there’s only one train track), & perhaps the local loop, science institutes, rivers etc. Most other services benefit from privatisation – helps ensure efficiency etc.
I’m not sure about the Airport. I don’t care that they’re Arab or foreign. It really depends on the case they put forward. If ten years down the track a projection shows we would regret selling the Airport.. then we should tell the Arabs to bugger off.
But if all the hype about Global Warming is true, then perhaps off loading it could be the best thing for us.
July 25th, 2007 at 4:00 pm
These Arabs are richer,smarter and far more corrupt than we are.Therefore their interest in purchasing this asset makes me instantly suspicious of their motives. Winston Peters’ motives are clear enough and even though baubles have interferred with his marbles in recent years,I will support him on this issue.
If life has taught me anything,it’s that selling assets against better judgement,but from a feeling of need/urgency,is always later regretted.
July 25th, 2007 at 4:09 pm
from the Independent: Airport bid is Trojan Horse: A paragraph buried deep in papers accompanying Dubai Aerospace Enterprise’s offer for Auckland International Airport reveals a key driver of the bid is Dubai’s desire to speed expansion of its airline, Emirates.
July 25th, 2007 at 4:14 pm
NX.
“Isn’t the government the majority shareholder in Air New Zealand?”
It is now, but due to Air New Zealand’s bungled investment in buying Ansett New Zealand the government had to bail out Air New Zealand to the tune of $885 million to prevent its collapse.
http://www.sharechat.co.nz/features/unlimited/article.php/8e223e46
I wonder how much Air New Zealand’s profitablity is courtesey of its fortress hubs in Auckland and Christchurch. http://en.wikipedia.org/wiki/Airline_hub#Oceania
I also wonder what the return of investment for that has been and Rodney Hide complains about the $125 million the government paid to set up Kiwibank.
“My opinion is that when there can’t be competition then it should be government owned i.e. Tranzrail (there’s only one train track), & perhaps the local loop, science institutes, rivers etc. Most other services benefit from privatisation – helps ensure efficiency etc.”
Sure New Zealand has benefited from Roger Douglas’ reforms in the 80s, but National’s bungling of the privatisations in the 90s and Cullen’s bungling of the Tranzrail deal ensure we merely substitited public monopolies for private ones.
http://www.converge.org.nz/watchdog/06/06.htm
Many players in a market don’t necessary equal competition and much to my chagrin Kiwibank has been implicated in price fixing alonside the other bigger corporate banks.
So yes to your question I do have a Kiwibank account. I had previously closed my ANZ account due to the fact that I wasn’t earning anything at the time and still getting charged fees. I think Kiwibank has been good for the country as its kept the bigger guys from getting to comfortable and complacent. Its also received quite a few awards since its inception. CAMEX from SST twice, Consumer Magazine, and ComputerWorld Magazine to name a few. Must be doing something right.
http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&ObjectID=10410263
“But if all the hype about Global Warming is true, then perhaps off loading it could be the best thing for us.”
That I could agree with alongside the potential oil price rises as demand outstrips supply, whether you blame that on “peak oil” or the oil companies lack of incentive to find other fields due to low oil prices in the ’90s
July 25th, 2007 at 7:49 pm
Also in the Herald today it said that Manukau CC had made $108 million since 1998 and the value of the shares were worth $466 million. Thats a return on investment of something like 2.5% per year.
Unless the return is significantly higher now than in previous years thats are pathetic investment, the council would be three times better of putting the money in the bank.
But Auckland and Manukau CC’s could almost fully pay for this
http://www.ameti.co.nz/
Those idealogues against selling the shares should think of the poor bastards in the Eastern suburbs driving to work
July 25th, 2007 at 9:11 pm
Porcupine Says:
July 25th, 2007 at 9:31 am
The software for generating automated posts is really state of the art these days isnt it?
July 25th, 2007 at 10:02 pm
Emmess – I think the roi calc increases significantly if you take the value of shares at 1998. The share price has increased a lot since then, and paid reasonable dividends as well.
August 7th, 2007 at 7:44 pm
The NZ government is again sticking its nose in where it does not belong.
For sure Auckland Airport is an important asset – I own shares in it and I spend my dividends flying overseas with Emirates* after the government taxes them; but there are much more important issues like law and order, education, the dependency on social welfare and the integrity of MPs that the government should be working on.
How much public money is wasted on government interference and legislation for fringe minorities? Take the civil unions legislation for example – what did that cost the country for less then 1% of the population?
The NZ government should focus on reducing the cost (social and economic) of the major issues facing the country, lighten the tax burden and let the business experts get on with growing NZ economically.
*[I fly Emirates in preference to Air New Zealand - because they are exponentially better.]