Comments on: SOEs buying private companies

By: KordiaGroup

KordiaGroup — Tue, 27 Oct 2009 22:47:56 +0000

Kordia operates as a commercial business and has shareholders like any other – it’s just that the Kordia shareholder happens to be the NZ government. The government doesn’t direct the business strategy, and recent acquisitions have been about shifting the business from a heritage broadcast space into more telco and media activity.

The trans-Tasman cable is another commercial venture and will not be funded or ‘guaranteed’ by the government – if the business case stacks up by the beginning of next year, Kordia will push ahead with it, and customers will be signed up on a commercial basis.

If you’d like to know more about Kordia, visit our website: http://www.kordia.co.nz/
Or visit our blog: http://kordiagroup.blogspot.com/

By: KiwiGreg

KiwiGreg — Tue, 27 Oct 2009 06:29:18 +0000

“Why doesn’t the government just be done with it and buy all property too – like the Chinese government has. ”

Umm China is undertaking the largest privatisation program in history at the moment.

They never bought the property in the first place of course, just pretty much killed all the property owners.

By: Viking2

Viking2 — Mon, 26 Oct 2009 04:27:31 +0000

RodD ask Whaleoil, he knows a bit about them.

Jack; see my post about Street. Suggested the same thing.

By: RodD

RodD — Mon, 26 Oct 2009 03:40:27 +0000

Kordia/Orcon is very confusing as it keeps buying other privately owned ISP’s. The Govt is therefore building up a vertically integrated Telco.

If Kordia builds another trans-tasman cable – will it be cost plus?, will govt departments be forced to use it? will it wholesale?

Kordia could be the vehicle for a FibreCo but as it buys more private companies and competes with the private sector it all gets a bit confusing.

Kordia are doing some great things – but what are they?

Rod

By: Jack5

Jack5 — Mon, 26 Oct 2009 02:34:01 +0000

This Government is starting to be a big disappointment. It is continuing the dirigiste policies of Labour. Perhaps Labour and National should amalgamate.

By: Gooner

Gooner — Mon, 26 Oct 2009 01:40:21 +0000

Why doesn’t the government just be done with it and buy all property too – like the Chinese government has. Then it can lease it back to us, the peasants, and we can work for the government for 365 days instead of 120 as we currently do.

By: Viking2

Viking2 — Mon, 26 Oct 2009 00:46:40 +0000

In yesterdays Herald.

By: ben

ben — Mon, 26 Oct 2009 00:29:54 +0000

Viking – if true, then that is shocking. Governments are not the sort of organisations known for bringing expertise and making the hard decisions required to turn failing oranisations around.

The more things change, the more they stay the same. I thought Labour was voted out last election. Now the government is running a 10 billion deficit and STILL SPENDING MORE MONEY.

By: ben

ben — Mon, 26 Oct 2009 00:27:25 +0000

but don’t have, universal health care

Careful, it is universal in the US in all but name. Two important reasons why not everybody is currently legally covered is illegal immigration and because people eligible for Medicare only sign up for it when they get sick. The statistic of 47 million not covered used by the Democrats to get elected is mostly an illusion.

Yes, the government can help competition, but odds are its not the sort of competition that is helpful. Its not helpful competition when the government subsidises its operator, or gives it special rules, or gives it an implicit guarantee to prop it up before failing (which is always true).

By: Viking2

Viking2 — Mon, 26 Oct 2009 00:24:14 +0000

The bit left out is that DTZ hasd been losing money, just like rail. Oh Dear here we go again another bloody sinkhole to puff up the ego’s in Wellington.
Kordia efforts haven’t been up to much so don’t expect much from this. Its a long way from doing property valuations of a very poor standard (for the benefit of the other beneficiary arm of Govt. called local bodies) to running a property management co.

P,S. was That fellow Mr Brown involved in this as well?

By: ben

ben — Mon, 26 Oct 2009 00:23:12 +0000

I do not understand the voter appetite for public ownership that drives this sort of thing.

Much if not most of the available evidence is that these companies do not perform as well under public ownership. As you say David, the implicit guarantee is part of that. So are the mixed objectives and incentives for revenue (size) maximisation rather profit maximisation.

Without public ownership, the government still collects one third of the profits these companies earn with no public money down and with no obligation to bailout a failing institution and none of the political distractions that interfere with governments running core services, like roading or health.

Yet voters still vote out governments that want to privatise and vote in governments that want to nationalise.

I suppose there are faster ways for a country to make itself poorer, but that doesn’t make nationalisations like this a good idea.

By: kiwirights

kiwirights — Mon, 26 Oct 2009 00:22:28 +0000

Governments can help competition in markets where market forces produce results that are bad for consumers (who are also taxpayers). The best example is the healthcare market in the US, where they can afford, but don’t have, universal health care. So be careful what you wish for in the ISP market – the government owning Orcon could be a very smart move for more reasons than just economic ones! (Or not, depending on how it is handled!)