The answer is probably yes. The fact that you think otherwise shows you in a poor light.

Oh *giggles* that was a funny wordplay!

Afraid I have to disagree with you on the substantive point. You’ve seemingly lived a sheltered life in the academic ivory tower. In the real world, where commerce is done, I challenge you to find one example of a PPP where the private party didn’t require significant commercial protection of its interests. That fact alone tends to rebut your proposition: “A partnership with the government is a pretty safe investment“.

But of course, you know better?

POC: The fact that you even ask this question shows you in a poor light. The answer is probably not.

The answer is probably yes. The fact that you think otherwise shows you in a poor light.

If electricity and telecommunications were returned to public governance I would probably be for solid energy going PPP – though obviously the pros and cons would have to be measured up (i.e. would it affect our National energy security to let the international market dictate the extraction of our coal?). I can’t think of any other SOEs that would fit a partial-privatisation model though.

On the bright side at least there will be no lasting physical legacy unlike the failed Auckland Waterfront Stadium if it had gone ahead. The Railways will be eventually allowed to fail and sold off or written off. There will be no lasting monument to the fifth labour government, set in concrete, which people can point to and show what has been.

But you know this, and is presumably why you decided to not link through to the thread. You appear to have been dishonest.

Actually it was an oversight on my part – I have a practice of providing links, as you well know. Here’s the link.

The thread was not about privatising the health sector. Here’s DPF’s post in its entirety:

Minority ownership stakes in SOEs

National’s policy to consider allowing minority private sector investment in some SOEs has been public for months, so Bill English confirming it on Agenda is hardly anything new. But it has allowed Clayton Cosgrove to predict the end of society etc etc.

First let us dispose of the nonsense about the Government needing the dividend stream from SOEs. This overlooks that if the Govt sells say 10% of an SOE for $50 million, then that $50 million will generate a return either as it is invested into other things, or is used to retire debt. Hell if one puts the proceeds of any sale into the Super Fund, you’d get a much better return.

The reason we have the Crown own certain SOEs is not just so that can make money out of it. If that is the rationale, then the Crown would own every supermarket and every restaurant.

You have Crown ownership where it is the most appropriate owner for that activity – usually because it is a monopoly also. So the Crown owns Transpower because it is a monopoly.

Now allowing a minority private ownership means the Government still has overall control, and appoints the Board, but will give companies the ability to raise capital from private sources for investment etc, and the benefits of the discipline of being a publicly listed company.

One has to ask yourself, does the Crown need to own 100.0000% of:

* A company which supplies testing and QA systems for agricultural products
* A company which provides food safety solutions
* A company which owns farms
* a coal mining company
* a forestry company
* a vehicle licensing company

If you say yes we must, then you should be prepared to argue for the state to own any garage in NZ, every forestry company, every source of power, every agricultural company.

About privatising the health sector you say? I suggest you stop telling lies.

A partnership with the government is a pretty safe investment after all isn’t it?

The fact that you even ask this question shows you in a poor light. The answer is probably not.

Look at how cheap our cellphones are and how fast our broadband is today, by world standards. The Market and private enterprise sorted it all out for us. Thank heaven for The Market!

Oh no, wait, I forgot…

PS: I quite liked that Slane cartoon in the Listener a month or so ago, with Rodney Hide as Dr Frankenstein with the jumper wires standing over the just re-animated corpse of Roger Douglas as he rises from his grave!

“This may be your current thinking, but I don’t think it’s a fair summary of your Kiwiblog contributions over time.”

The thread which you quote from was about privatising the health sector. As I said above, I’m against health and education being privatised, because both of them are social services, rather than businesses. They’re not well suited to a market model, because if you apply supply and demand to them, some miss out, and I don’t believe that any person should miss out on an education, or having their health professionally looked after. To me they both fall into the category of fundamental human rights.

But you know this, and it’s presumably why you decided to not link through to the thread. You appear to have been dishonest.

“So now you’re on record as supporting public-private partnerships – a concept that doesn’t generate widespread agreement but, in fact, is bedevilled by disagreement on crucial details – what public utilities would you like to see partly-privatised?”

I would probably be for a PPP type arrangement for our electricity and telecommunications sectors. Telecom in particular appears to have been abusing its virtual monopoly for some time now with price-gouging and under-investment in infrastructure.

I’m not familiar with the legal technicalities, but don’t believe that a PPP would have trouble getting private money on board. A partnership with the government is a pretty safe investment after all isn’t it?

why thank you roger nome…”

Vomit..

What utter crap….

oh, and POC. Seeing as you seem to so enthusiastically support Gaynor’s ideas on privatisation, would you be for bringing out telecommunications and electricity networks under a PPP model?

That’s a false hypothetical, if we take the status quo as the starting point.

But if we go back in time and pretend the telecommunications and electricity networks are still government-owned, then I wouldn’t necessarily object to bringing them under a PPP model, but it’d really depend on the detail.

PPP is a concept – there’s no one-size-fits-all model to speak of. Take it from me that a PPP raises complex project finance issues (including tendering process, turnkey method, and ongoing operational/management issues), all of which need to be carefully documented, and keep lawyers well-occupied. I don’t pretend to be across the finer details. What I do know is that, conceptually, a PPP (especially one involving minority ownership, if we’re talking about private sector equity investment) has marketability problems.

By the way, as I understand his position, Gaynor doesn’t necessarily oppose full privatisation over time – he simply disagrees with auctioning a block off to the highest bidder.

You claim Labour does not ban asset sales. They do. Yes in their first term they sold a company which was about to go under, and a few farms. But since 2005 or earlier they have been against any sales what so ever and Clark gets up at conferences and denounces asset sales and claims they are a defining election issue. And for the 7th time you have failed to list a single other country that bans asset sales.

So the fact that they’ve sold some is not acceptable and yet I’m supposed to take seriously you’re claimed knowledge of Labour policy…. ok Alice, so you want me to be your March Hare…. and answer some question designed to disprove a policy that don’t exist? Perhaps you’ll pull out that policy statement Helen gave you that time you and she were chatting about how many wine corks you’ll have at the end of this year!

Bollocks to that I say, so make it a 8th time, yours is a silly dance and I be not silly.

[DPF: Are you seriously claiming that it is Labour Party policy to consider asset sales on a case by case basis, and they are not against any sales what so ever? Let me quote the PM "Our job is to tell New Zealanders that we stopped asset sales.". Pretty to the point. And Paul Swain: "Mr Swain said Labour's policy of no asset sales ...". So next Paul W will argue black is white.]

I’ve been saying for a while that, where public utilities are concerned it seems some form of PPP seems to make more sense than wholesale privatisation (the late 1980s and the 1990s in NZ) , or completely state-owned and state-run model (Keynesian inefficiency).

This may be your current thinking, but I don’t think it’s a fair summary of your Kiwiblog contributions over time. To take one example, on Bill English’s partial privatisation proposal, as DPF pointed out at the time:

Now allowing a minority private ownership means the Government still has overall control, and appoints the Board, but will give companies the ability to raise capital from private sources for investment etc, and the benefits of the discipline of being a publicly listed company.

But your opening contribution to that thread was disparaging:

September 25th, 2007 at 4:42 pm

So this is why David Richwhite still sees it as worth his while to donate money to the National party. Aparently he and his cronies in the National Party are hungry for a return to the good ol’ days of the 1980s and 1990s – where a few corporate crooks had a ‘monopoly on free enterprise’ in NZ.

Just watch the polls swing back to the left after this little clanger from billy boy – talk about throwing Labour a bone.

So now you’re on record as supporting public-private partnerships – a concept that doesn’t generate widespread agreement but, in fact, is bedevilled by disagreement on crucial details – what public utilities would you like to see partly-privatised?

Thats why we have always struggled to get any real investment. heh Who want to deal with an underpar corporate governance model except of course unless you want to raid the cookie jar. Watch the new owner of the Wellington lines network. They will lucky if leaves the copper wire when he departs.

The Chinese have a superior model to ours Have a look at their post 1986 legislation and regulation their PLCs work under compared to the light weight NZ.

And wait for the deals that will go the Aussies way not ours as the Chinese companies realise how off the pace our corporate governance is.

And being the inscrutible orientals that they our business people wont even know the reason they lost the deal.

Sad.

Can’t say I disagree with Gaynor’s opinion on SOEs. I’ve been saying for a while that, where public utilities are concerned it seems some form of PPP seems to make more sense than wholesale privatisation (the late 1980s and the 1990s in NZ) , or completely state-owned and state-run model (Keynesian inefficiency).

Where health and education are concerned I think it makes sense to have an state-run model (with the option of going private if you have the money). A person’s life is worth more than a small tax cut.

And on your last post – well yes Kerr, Douglas, and their brethren at the business round table have a lot to answer for.

[Rah rah, Roger Kerr is a bad, bad, bad man]. Just thought I’d lay out his “fox in charge of the hen-house” ‘credentials’ so the discussion has some context.

On that basis I should also highlight this quote from Gaynor:

Bill English’s proposal deserves serious and rational consideration as partial IPOs, with the majority of shares going to domestic investors, particularly KiwiSaver schemes, should ensure a far more positive outcome than the hopelessly flawed asset sales strategies of the 1980s and early 1990s.

Serious and rational consideration was not forthcoming from PhillipJohn last year.