Hypocrisy vs Stupidity
Bernard Hickey reacts to news that a Hong Kong company is buying the Wellington electricity network by blogging that the Government has a choice between hypocrisy or stupidity.
The government now has to choose between blocking the deal, which would be stupid and dangerous, or approving the deal, which would expose the government’s recent comments on foreign ownership of strategic assets as politically motivated and opportunistic hypocrisy. I suspect it will choose hypocrisy and hope no one notices.
Indeed, they appear to be doing so. They have this magical invisible list of strategic assets which they won’t let anyone else see. And whether or not an asset is strategic or not seems to be pure political whim.
But let us look at the difference between Auckland Airport and the Wellington power lines:
- Electricity is arguably the most vital utility
- Every Wellingtonians uses electricity everyday, while relatively few Aucklanders use the airport every day
- While inconvenient there are other airports Aucklanders could use, while Wellingtonians have no other option for getting electricity to their homes.
- There are alternatives to air travel such as car, bus, train and boat. There is no real alternative to electricity
So how on Earth you must wonder does a Government deem a Canadian pension fund buying a 24.9% voting stake in Auckland Airport an evil evil takeover which must be stopped at all cost, yet having the richest man in Hong Kong buy 100% of Wellington’s electricity network not even worth a pause for consideration?
Is this the same Prime Minister who declared at her Congress that asset sales were a defining issue? WHat has happened to the lofty rhetoric in just two weeks?
Now please don’t think I against the sale. I think foreign investment is good and necessary in New Zealand. Without it we would be a lot poorer than we are. I would not stop either deal. But the Government’s hypocrisy is massive.
Bernard looks at the issue further:
Just a few weeks ago two junior ministers in the government decided to block a deal to sell a significant stake in Auckland Airport to a Canadian pension fund. They did so after Finance Minister Michael Cullen shifted the goalposts near the end of the bidding process by saying the Overseas Investment Office should consider blocking foreign acquisitions of strategic assets on sensitive land. This cost Auckland Airport shareholders dearly and damaged New Zealand’s reputation as a reliable place for foreign fund managers to invest. It was a blatantly opportunistic, political decision with little rhyme or reason apart from it helped Labour in the polls, marginally.
So the question now is: Do Michael Cullen and Helen Clark believe that Wellington’s power network is a strategic asset on sensitive land?
The availability of power to the nation’s capital sounds strategic. Would the Beehive work without power? What about the Ministries of Defence, Foreign Affairs, Agriculture (Biosecurity), Education and Health? Sounds important and strategic to me. What about the Reserve Bank of New Zealand and Treasury? Don’t they manage our financial system and wouldn’t they be our crisis managers in a financial crisis? Then there’s a mere trifle of around a tenth of the population needing that network to keep working and living.
Bernard also points out the proposed buyer has connections to the Chinese military, and there have been official warnings in the US about him. So the question again is:
But will our government judge a man who was considered by the US government to be a security threat as safer than bunch of Canadian pension fund managers to run a network supplying power to the heart of the nation? Looks like they will. …
This just shows the naked hypocrisy of the Auckland Airport decision. If Auckland Airport is a strategic asset on sensitive land then surely Vector’s Wellington power network is too. If so, the government should reject this latest deal.
Having said that, I think the government should choose hypocrisy over stupidity. We need the money and we can’t afford to damage our reputation as a safe place for international investment any more than it already has been.
I agree hypocrisy is preferable over stupidity in this case, but people should be in doubt the total lack of consistency in the two cases, and that Auckland Airport was merely about polls, not what is good for New Zealand or even a honest belief for or against foreign investment. I can respect people who honestly believe foreign investment is bad. The trouble with Helen and Michael is they know it is good (otherwise would block this deal), but when down in the polls revert to xenophobia to ramp up hysteria against foreigners investing in NZ.
April 29th, 2008 at 7:03 am
Can’t wait for that class action to start. It looks superfically to have a good chance of success based on Treasury’s advice to Cullen, although it does raise constitutional issues regarding limiting Ministerial boundaries with respect to following advice. If I were the investors, I’d look to engage Palmer-Chen.
The demographic that is philosophically opposed to foreign investment is very possibly the same as those who imagine deep down that capitalism=exploitation. Perhaps one needs to use the same tactics on those people as the feminists have used to impose their agenda. That’ll learn em.
April 29th, 2008 at 7:16 am
If they had accepted the Canadian offer and rejected the Chinese one it would have been labelled racist.
April 29th, 2008 at 7:19 am
It is very, very simple.
Vector is owned by the AECT. The beneficiaries of the Trust are the people of Auckland who stand to gain $750million if the sale goes through.
There is no way in my lifetime that the government is going to deny the voters of Auckland, where elections are won and lost, $750million in election year.
Who knows. Cullen may even call that a ‘tax cut’ for Aucklanders!!
April 29th, 2008 at 7:48 am
http://monkeyswithtypewriter.blogspot.com/2008/04/who-will-really-benefit-from-fta.html
Owen Glenn gets big dollars from FTA – bank-rolls Labour Party. Chinese Magnate gets 100% stake in NZ infrastucture.
Pretty soon Helen and Co won’t even need the unions.
Everyone happy. – Go on! Ask our left wing trolls. They’ll tell you.
April 29th, 2008 at 7:49 am
oh here we go again. If you don’t want me to put links on my comments David just say so and I will stop.
April 29th, 2008 at 8:16 am
Quick stop the press!!!!
NZ government demonstrate stupidity and/or hypocrisy!
Their predictability now confers the status of BORING aswell.
April 29th, 2008 at 8:23 am
My hand trembles as I find myself agreeing with Helen Clark that the sale of State assets will be a defining issue in the election. Problem for Labour however is that their position can be defined as flip-flopping/opportunistic/unprincipled/
nonsensical/stupid/crazy/pandering to China/anti-Canadian/foolish etc, etc (your choice, any or all, I prefer all.
At least Winston First and the Greens are consistent in their stupidity but then again they make good bedfellows.
April 29th, 2008 at 8:26 am
Why is this not getting Mr Peter’s up in arms, it must go against everything he stands for? This time it is a state owned asset and by someone with links to the Chinese Communist party no less!
I do wonder what Helen has got on Winston that he gives her such a free pass?
April 29th, 2008 at 8:35 am
Lee – the system marks it as spam sometimes – I can not control that. But I do clear the folder regularly.
April 29th, 2008 at 8:47 am
The lesson, boys and girls, is that short-term political opportunism bounces back and bites you on the arse surprisingly quickly. And surprisingly often. If there is a new government later this year, lets hope they have taken note.
I guess that leaves Labour still scrabbling around for a ‘defining issue’. Other than ‘John Key will eat your grandmother and sell your children into slavery’
April 29th, 2008 at 8:51 am
What has the main stream media’s response been to this issue?
April 29th, 2008 at 9:02 am
Bernard is naive if he believes that the Auckland Airprt decision was made by “two junior ministers”. You can bet your boots it was made by the Cabinet!
April 29th, 2008 at 9:11 am
Actually I agree that electricity isn’t vital for Wellington. Just turn it off. Instead of an Earth hour, let’s have an Earth century. Back to a more simplistic way of life as Jeanette Fitzsimons wants us to live. Including early deaths and all that, as people live way too long now, and we’re killing the planet anyway.
With Wellington out of power, we will meet our CO2 emission target I suppose.
[DPF: Superb comment!]
April 29th, 2008 at 9:11 am
I find the framing that has already occured in this debate as limiting the discussion we should be having. It is a given that the Government’s blocking of AIAL (to a friendly nation who hold similar values to ours) is wrong, so therefore to depart from that decision WRT Vector and label it as hypocrisy is a minor point, compared to the bigger elephant in the room.
We are dealing with a regime in Beijing that last week was shipping arms to Zimbabwe via a South African port. (The SA Government declined to intervene despite the obvious problems with such a transaction.) The same regime is also involved in similar shipments to the Sudan, where I note again the slaughter in Darfur is rising (not that the two are causitively linked, but it is objectively right to say that an increase in violent deaths in Darfur is NOT good). China executed more of its own citizens for crimes last year then any other country in the world, and I suspect more then all the other countries which use Capital punishment combined. Where does NZ stand on Capital punishment?
This doesn’t mean that other Governments have unblemished records, but there comes a point where they go too far. On that basis, it is their activites that make them unsuitable for foreign investment, not the colour of their skin. Would we trade with bin Laden and say his human rights abuses are a separate issue?
April 29th, 2008 at 9:12 am
BTW, what’s John Key’s reaction? If it’s a defining issue, it’s an issue for John Key as well. He squirmed and turned on the Auckland Airport issue, so what’s the deal John? Would National sell Vector or wouldn’t it?
[DPF: I don't think National or the Government owns Vector to sell it]
April 29th, 2008 at 9:25 am
There are a whole class of assets that are either owned by the government, used to be owned by the government, or the government fancies the idea of owning that might be termed “strategic” by a Labour government some time in the future. If they do that, then the value of that asset to anyone unlucky enough to own shares decreases dramatically. So no sensible local investor, knowing the record of the current government, would touch them with a barge pole.
That almost guarantees that the only people in the market for these assets are foreigners. It’s another Labour policy that achieves the opposite outcome to the stated one… like their environmental policies that have seen the fastest deforestation in half a century.
April 29th, 2008 at 9:25 am
berend: Would National sell Vector or wouldn’t it?
John Key is on record as saying National, if elected, would not look at full or partial asset sales in it’s first term.
April 29th, 2008 at 9:35 am
Helen & Michael are obviously South Park fans (who knew?!) … they now just how evil and nefarious those Canadians can be!
April 29th, 2008 at 9:35 am
Deleted
April 29th, 2008 at 9:42 am
There are some things you shouldn’t think about to avoid inner angst.
Eventually most “profitable” NZ govt “businesses” / utilities will be owned by overseas entities….in return for the desperately needed upfront payment and the employment they provide.
You chose.
April 29th, 2008 at 9:59 am
soooo its not strategic assets that are the problem.. its the strategic assets that sit on strategic land?? for fucks sake!!!
i hate this govt with all my heart.
April 29th, 2008 at 10:15 am
ok thnx David, I’ll be back this evening! Oh yes I will….
April 29th, 2008 at 10:20 am
Can’t we just sell the government?
April 29th, 2008 at 10:21 am
If asset sales are to be a debated point in the upcoming elections, this sale will have to be blocked. Do not do so will open Labour to cries of hypocrisy from a much wider audience than has been claiming so to date.
Of course Auckland Airport is a politically strategic asset. Vector is not so much.
April 29th, 2008 at 10:21 am
Good foreign investment builds capital assets — facilities, factories, hotels, oil fields etc.
Selling off an electricity lines network seems to me like a farmer selling off a paddock. If Li Ka-Shing wanted to finance a big power station that might be beneficial though you have to have reservations about the old Hong Kong capitalist’s close and long-standing ties with big Reds in Beijing.
Selling a minority stake to a Canadian pension fund would have been far more justifiable. It would not have affected ownership control and management control. It would have provided a secure long-term, sleeping partner. There is a huge difference between selling a minority stake in the country’s biggest airport to a similar country — Western, democratic, English-speaking, with very similar legal and accounting regimes — and selling complete control to a mogul from an authoritarian, at times brutal, Communist nation. We’re not talking about race, but about the struggle between democracy and communism, which continues while the world’s biggest country is communist.
Would Stiassny have sold the Wellington network to Nazi Germany or imperialist Japan in the 1930s? If the price was right, yes.
Canada is a soft-liberal country that ought to appeal to Helen Clark, but obviously it is too centrist for her. Clark would prefer to deal with Beijing Reds.
Also, the DominionPost raises the possibility of Stiassny buying power networks from local trusts. It mentioned Christchurch’s. In Stiassny’s dreams! Orion Networks is such a money spinner for Christchurch that there might well be an armed revolt if the Christchurch City Council under Bob the Light tried to sell Orion or its network to quick-buck Aucklanders.
April 29th, 2008 at 10:21 am
“Actually I agree that electricity isn’t vital for Wellington. Just turn it off. ” Can’t do that Berend, Helen would not be able to make it to all the funerals for a photo op.
Anyway it is all quite simple, Wellington is not “sensitive land” as liarbour thinks they have it in the electoral bag due to all the public servants that owe them an easy living round here (probably right) whereas Auckland has been showing signs of throwing off the yolk of Stalinism recently and therefore has become “sensitive land”.
April 29th, 2008 at 10:44 am
As a Labour supporter I have to say that is is 60% hypocrisy and 60% stupidity.
April 29th, 2008 at 10:57 am
Helen’s rat-cunning means it won’t be total stupidity.
Gooner (7:19am) nailed it – $750million windfall to the Auckland voters… so fuck Wellington.
Plus with Helen’s new “baby” (FTA with Communist China) barely drawing it’s first breath, she will not want to be seen as rocking the boat with our new best friends.
April 29th, 2008 at 10:57 am
Can we have a list of what land is sensitive and what isn’t?
April 29th, 2008 at 11:25 am
This strikes me a bit of a booboo on Helen’s part – this has just removed “asset sales” as a key election issue from the table.
April 29th, 2008 at 11:25 am
“Can’t we just sell the government?”
I think you would struggle to give it away.
April 29th, 2008 at 11:52 am
“I think you would struggle to give it away.”
Not to China we wouldn’t.
April 29th, 2008 at 12:26 pm
Of course Wellington’s Electricity Supply isn’t a strategic asset!!! It’s not even in Auckland for a start. If it was the electricity supply to Mount Albert then it would be different. Perhaps, DPF, you could run a competiton “Spot the Strategic Asset” and send the results to Helen, Michael and Luigi for comment.
It makes you wonder if Wellington Airport is a strategic asset…..
April 29th, 2008 at 12:54 pm
The real reason vector is selling the network is that its borrowing rate has climbed to 10.8% on its latest Euro Notes issue.
Its needs the cash in the tin and the Gumint cant afford to let it get into financial strive.
Alas it is a Chinese company that has the necessary readies to complete the deal.
Quite simple really. Wish Id bought shares in Vector a swell as AIA thouIm still awaiting a replky to my letter to Cosgrove Cullen and Parker asking them which shares I should sell and which I should buy given they now control the NZX
April 29th, 2008 at 1:00 pm
IF we are to believe Cullen today, then it would appear that the airport sale was NOT blocked because it was in anyway ’strategic’; no, it was blocked because it was on ’sensitive land’.
http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10506900
Well, Mickey, if its that sensitive, then why aren’t we moving it? Or regulating development to protect that ’senstive’ land? And why wouldn’t these protections of the ’sensitivity’ be applicable to foreign owners.
He should come clean and clarify that when he says “sensitive”, he means that its the internal Labour polling that is “sensitive”, not the asset!
April 29th, 2008 at 1:43 pm
According to Cullen
“Sensitive land is defined in the Act, it borders reserves, or foreshore and seabed, or whatever it may be.
So,
It is now decreed that anybody owning waterfront property is now not able to sell it to an immigrant
But evil Multinational Corporations can buy Hamilton, Christchurch or Dunedin airports amongst others
April 29th, 2008 at 2:01 pm
Well put Spam.
April 29th, 2008 at 2:55 pm
IIRC, the NPCC sold its majority holding in Powerco to an Australian investor with the only noise coming from minor holders, so I’ve got to ask DPF, why the post?.
April 29th, 2008 at 4:00 pm
IIRC, the NPCC sold its majority holding in Powerco to an Australian investor with the only noise coming from minor holders, so I’ve got to ask DPF, why the post?.
Its about the hypocrisy of stopping the AIA deal on the grounds it is a stretegic asset, yet allowing the Vector deal on the grounds it is not. Also its nice to see Labour doesn’t object to selling the countries silver after their leader has stated that Asset sales will be a defining issue this election…
Don’t you see the irony?
April 29th, 2008 at 4:51 pm
I HOPE that this isn’t as BAD as it LOOKS…….cuddling up to the Chinese and stiff-arming some of our closest traditional friends…..
April 29th, 2008 at 7:48 pm
Bevan:
Maybe he’s got George Hawkins’ files?