Second term asset sales
May 22nd, 2010 at 8:26 am by David FarrarNew Zealand is the only country in the OECD that has a ban on asset sales. Even socialist governments throughout Europe have sold assets where there is no need for the state to own them, or at least own 100% of them.
A welcome sign that National may go into the 2011 election with a more flexible policy is reported by the NZ Herald:
The National Government has given its strongest indication yet that it will sell state-owned assets should it get a second term.
Finance Minister Bill English yesterday singled out Kiwibank as a particularly attractive asset for buyers.
But he said the Government would not sell assets without a mandate from the public.
The public will get to decide.
Mr English, fresh from delivering the 2010 Budget, told a gathering of South Island business people yesterday that the Government might consider a change of policy “to free up capital and put product on the market for Kiwi mums and dads”.
Kiwibank was a good example of an asset that needed to be dealt with. It had reached the size where it needed either a Government guarantee or an “awful lot of capital”.
“If there’s any asset that’s regarded as risky by credit rating agencies, it’s a small, fast-growing bank,” he said.
“So one option would be to go to the market and raise capital. Keep majority Crown ownership, but raise the rest of the capital from the market.
Makes sense to me.
Labour leader Phil Goff said state-owned asset sales were “absolutely all on” if National won a second term, “and they might not even wait until then”.
Mr Goff should know all about selling assets without a mandate. However National has made it very clear they will only sell or part sell significant assets with a specific mandate.
May 22nd, 2010 at 8:44 am
I went to the bank recently for some small foreign exchange transactions, and suffered a $10 Fee and a 700 basis point spread. That’s not a commercial transaction, is thievery, and my bank is just a bunch of criminals with a share market listing. Keep Kiwibank. Let’s try to keep the bastards honest. Besides, it’s the only good thing Jim Anderton has done in his life, so it would be mean to take it away.
The problem with asset sales is that they lead to privately owned monopolies or oligopolies that rack up fees and make huge profits at the expense of the customer. They make us poor, not because of the sale of the asset per se, but because we get passive (not productive) foreign investment that simply sucks money out of the economy.
So let’s see the evidence on the results of previous asset sales: I have a three part test for Bill: effect on prices, effect on competition, total productive investment, net foreign exchange flows over 10 years post-sale.
Vote:May 22nd, 2010 at 8:55 am
“The public will get to decide”
Bullshit. The nat’s will ‘float’ the idea a couple of times then if they get re-elected claim a mandate.
[DPF: You can lie, but it does not change the reality. National had an explicit policy for 2008 and it has kept its word 100% on asset sales. And it will have a very clear policy for 2011, so voters can decide]
Vote:May 22nd, 2010 at 8:56 am
If the government is going to start selling off assets I would like to see some conditions put in place along the lines of:
1) The Government will maintain a majority ownership
2) Shares can only be held my NZ citizens and residents
3) No Individual/Organisation can own more than about $10,000 worth of shares.
@Matt:” Bullshit. The nat’s will ‘float’ the idea a couple of times then if they get re-elected claim a mandate”
You should be use to it Matt, its how we lost our strike wing.
Vote:May 22nd, 2010 at 9:02 am
We have our money in kiwibank because it is kiwi owned. If National sell kiwibank then we will take our money else where.
It’s stupid to want people to save but then give all the profit from those savings to an overseas company.
One only has to look at the profit of the Australian banks here to see how much they are ripping us off. Who wants more of that.
Vote:May 22nd, 2010 at 9:02 am
“You should be use to it Matt, its how we lost our strike wing”
Vote:100% correct and I don’t want to see that happen again.
May 22nd, 2010 at 9:02 am
Tsk Tsk Tsk. All these people who want to go to heaven but don’t want to die.
Vote:May 22nd, 2010 at 9:05 am
Do most people really want ‘just another Aussie bank’ which rips off the average kiwi and kiwi business? – I think not.
I agree – we should do all we can to keep Kiwibank ‘onshore’.
And I like your three suggested points, Mr Nobody (8:56 am).
Vote:May 22nd, 2010 at 9:05 am
sell them off, increase govt spending, bribe the tax payers some more..
id much rather see a reduction in govt spending.
if you look at kiwibank, why would you sell it, its profitable and there is already enough offshore capital invested in nz banks.
Vote:May 22nd, 2010 at 9:05 am
@mpledger
Vote:I’ll add my name to that list to. It’ll do wonders for the sale if any prospective buyer is confronted with a long list of customers prepared to pull out.
May 22nd, 2010 at 9:08 am
“New Zealand is the only country in the OECD that has a ban on asset sales. Even socialist governments throughout Europe have sold assets where there is no need for the state to own them, or at least own 100% of them.”
Nobody held a gun to John Key’s head. That decision was pure political expediency. Labour’s so inept and clueless that Bill believes two terms are a forgone conclusion. Kiwibank customers may mainly be Labour voters, so it’s not as if National will lose many votes, and might even gain a few ACT voters.
We desperately need a rational third party inhabiting the middle ground.
Vote:May 22nd, 2010 at 9:12 am
vibenna: In your chosen evaluation criteria you seem to be doing what our media always choose to do – they completely ignore the direct benefits to the nation of income received from an asset sale or partial-sale. For example, less government debt and debt servicing costs, improved international credit ratings (= lower interest costs), and flexibility to invest in additional public assets and infrastructure deemed to be of greater importance.
Only in the socialist wonderland can the state do everything. In real life it’s a matter of prioritisation in the deployment of finite financial resources that have been extracted from New Zealanders through taxation. That’s where the the more valuable political debate should occur.
Vote:May 22nd, 2010 at 9:12 am
why does national bother.
there are so many more areas of the economy to address than selling soes.
Vote:May 22nd, 2010 at 9:15 am
Calendar girl – it’s true that if the government needs the money it is a good way to raise it. But bear in mind that the investors who buy it do so in the expectation of a return greater than the cost of their capital. There’s money in them thar assets.
Vote:May 22nd, 2010 at 9:15 am
Sell the fucking lot, sell them to the highest bidder (what is so special about keeping hold of these ‘assets’ or keeping them in Kiwi hands?)
Vote:May 22nd, 2010 at 9:21 am
until the government sets a debt/gdp ratio, i doubt any money from an asset sale would be used to lower debt.
even less likely it would be spent in a more profitable area.
im sure the capital in kiwibank or nzpost is earning more than the interest repayments on government borrowing.
Vote:May 22nd, 2010 at 9:25 am
profit mate, an the fact that it is gouged and taken offshore.
id be fine with NZ only ownership.
remember nz is only a very small country. sure we all want a free market but we are nothing without a bit of protectionism
Vote:May 22nd, 2010 at 9:31 am
Thinking about this further:
We are continually told we need to save for our future, and that our personal saving statistics are pretty poor internationally. If people are to save by investing in Banks (versus finance companies or shares), then surely most Kiwis would want to invest in NZ owned banks; in much the same way as they would prefer to invest in Kiwi companies, all other things being equal.
In much the same way and for much the same reasons I belief that ALL essential infrastructural assets should remain in NZ ownership; that they never should have been sold (those that were) off. Whether it be Banks, Railways and Ferries, Telecommunications, Postal System, Energy Providers and Generaters, Prisons, Armed Forces, National Air Carrier, etc.
Vote:This way the shareholders (us) get both return on investment AND competitive rates when using such services that these assets provide. Rather than minimal or no ROI and excessively high rates which all currently go to (largely) offshore shareholders.
May 22nd, 2010 at 9:39 am
Vibenna, since you are so passionate along with others that Kiwi Bank is such a great investment could you please enlighten those sceptics among us;
Vote:How much money have we invested as taxpayers and what returns have we had.
What is the value of the piggyback arrangement with N Z Post and what does that earn for us as owners of that iconic asset.
If Kiwi bank is to grow, where do you propose the required capital is to come from.
When you look at the Board of KB how do they stack up as successful business operators alongside the brains that successfully operate the opposition banks that apart from the BNZ disaster have managed to survive without my money and even look likely to pay us a good bonus because they apparently misjudged the law and were ruled to be in breach.
Kiwibank is a glorified building society surviving because it has the financial and political backing of socialist politicians who in spite of overwhelming evidence to the contrary, think they can run a competitive and successful business. It operates in a protected climate, attracts deposits because it has a mythical image that it is “ours”, when the reality is that it is theirs ie the government and IMHO that means it will take more of MY money to keep it as the model has serious deficiencies in the commercial reality of BANKING.
May 22nd, 2010 at 9:42 am
For those that think we should sell off ALL our national assets, let me ask this question: How many of you CHOOSE TO rent the place you live in as opposed to own your own home? And if owning your own home is more economic AND is a more secure living environment, then why would you ever choose to sell your house? – especially if as a renter you would be worse off financially and less secure as a result of being subject to the landlord’s whim.
Vote:May 22nd, 2010 at 9:48 am
would we remove all the overseas investment and monopoly laws….
Vote:May 22nd, 2010 at 9:50 am
See no reason at all why NZer’s shouldn’t own shares in their own assets rather than the Govt. owning them all. I would be happy to have the Govt. as the major shareholder at 51% and the rest vested in the super fund and in Kiwi’s.
49% is enough to ensure commercialism is injected into the system. Would I be happy to invest in shares in say MRP. You bet, exporting their knowledge and technology of geothermal power generation to the world. Can we assist that gorwth in business and therefore income for the benefit of kiwi shareholders. Sure can and do it on a non compulsory basis, sure can and not require the Govt. to pour tax money into thew business, SURE CAN.
The sooner the better, provided its done right and Kiwi’s remain the owners.
Do we want to own TVNZ and Radio NZ. HELL NO. GOOGLE IS ON THE BRINK OF COMPLETELY STUFFING TV.
Bring it on and hurry up. Can’t wait till we don’t have to prop up those completely useless repeaters and grand father Holmes etc.
Vote:May 22nd, 2010 at 9:56 am
Confirmation that the Nats are neither listening to their support base nor to the biggest sector of the NZ economy nor to the public and are now attacking their coalition partner.
Does this confirm for us all that they have done a deal with the Racist party because of the racists forest holdings. It seems so.
Farmers side with Act over ETS fears
By Adam Bennett
4:00 AM Saturday May 22, 2010
Agriculture Minister warns Nat MPs of concerted campaign to stop the scheme
National MPs have been privately warned about an Act-Federated Farmers bid to stoke farmers’ fears over the looming emissions trading scheme – suggesting National’s relationship with its coalition partner is under increasing strain.
MP Shane Ardern says Act’s campaign is a ploy for political survival by scaring up support from rural voters, and it should “put its money where its mouth is” and reconsider its coalition agreement with the Government if it is really committed to stopping the emissions trading scheme (ETS).
An internal memo from Agriculture Minister David Carter to MPs warns of a “concerted campaign to raise opposition to the ETS in rural communities”.
“Many of the figures being circulated in support of this campaign are at best misleading, at worst wrong and are simply aimed at raising fear among farmers.”
Wild claims that the ETS would cost the average dairy farmer up to $10,000 a year were simply rubbish, Mr Carter wrote. He included figures produced by Meat & Wool NZ which he hoped would be “of help in rebutting some of the misinformation being spread among rural electorates”, and urged MPs “to be active in addressing this issue and in allaying local farmer concerns”.
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Act’s campaign comes as its MPs have attacked National with increasing belligerence in the House over the ETS and other issues including the signing of the Declaration of the Rights of Indigenous Peoples.
Mr Ardern said Act was behaving as though it was in Opposition.
This week Act leader Rodney Hide suggested National’s own rank and file were rebelling against the ETS with 300 members at its Central North Island conference last weekend unanimously passing a remit demanding the Government defer introduction of the scheme.
Environment Minister Nick Smith denied that, as did National MPs spoken to by the Herald, including Mr Ardern, who said Mr Hide and his colleague John Boscawen’s motives were political.
“They can see an opportunity to go out there and pinch some National Party voters and I would describe that as the most flakiest politics of all.”
He said Act’s tenuous political situation was why “they’re desperately out there trying to clutch at straws trying to shore themselves up”.
Mr Carter told the Herald Act was not doing well in any polls and were trying to raise a profile in rural New Zealand and secure some votes, but weren’t doing particularly well at it.
However, Mr Ardern, who conceded Act would be doing some harm to National, indicated Mr Hide could stop the ETS if he wished by reconsidering his party’s confidence and supply agreement with National.
“They’re out grandstanding around rural New Zealand on this issue. If they’re really committed to this why don’t they put their money where their mouth is?”
Federated Farmers dairy chairman Lachlan McKenzie confirmed his organisation had co-operated with Act in efforts to defer the ETS, which was opposed by more than 80 per cent of its members.
WHAT IT WILL COST
Annual financial impact of the emissions trading scheme on the average dairy farmer from July 1:
* $3900 according to National
Vote:* $7800 – $10,000 according to Act
By Adam Bennett | Email Adam
May 22nd, 2010 at 9:57 am
Sorry edit ain’t working.
Vote:May 22nd, 2010 at 10:00 am
Wasn’t there an idea floated a while ago that we should sell our ports to the Japanese or something? That was downright stupid. Things to do with security of a country, or money, or the ownership of assets that provide power, heat, light, phone should NEVER be sold. What if there is a disagreement or a war and whomever owns the power decides they don’t want to supply it anymore because they’re not on our side.
He who pays the piper calls the tune.
Vote:May 22nd, 2010 at 10:02 am
National should just transfer the shares to everyone’s KiwiSaver accounts. And, in doing so, establish a KiwiSaver account for everyone who doesn’t already have one. The only people who would be opposed to the biggest ever transfer of wealth from the NZ Government to individual NZers would be a few dinosaurs like Goff and Anderton.
Vote:May 22nd, 2010 at 10:09 am
Fletch>What if there is a disagreement or a war and whomever owns the power decides they don’t want to supply it anymore because they’re not on our side.
So you’d be quite happy for every other country in the world to ban the import of NZ food products? After all, what if there was a disagreement or a war and NZ farmers decided that they didn’t want to supply them food anymore because they’re on our side rather than theirs?
You’d enjoy North Korea, I think. In order to ensure the supply of clothes in war time conditions they’ve built a giant factory to manufacture their own textile, called vinalon. Vinalon might be “stiff, uncomfortable, shiny, prone to shrinking and difficult to dye” (Wikipedia) and far more expensive than cotton, but at least they don’t have to rely on imported Chinese t-shirts.
Vote:May 22nd, 2010 at 10:09 am
Introducing Google TV
Vote:
May 22nd, 2010 at 10:14 am
davidp, if there was a worldwide war, that’s probably what would happen. I find it hard to imagine NZ Farmers exporting to a country we were at war with.
Vote:May 22nd, 2010 at 10:20 am
Viking, google TV sounds interesting, but…
I’m not sure I want to watch lo-res youtube vids on a hi-def screen anyway.
I’ve never found a satisfactory site for watching TV either (or do they mean something like TVNZ On Demand?).
Otherwise, the search for programmes is a bit hit and miss and I doubt the producers of programmes would be happy with people downloading them off torrents.
Unless there is a proper delivery system for these, I think Google TV has some work to do.
Vote:If it is going to come down the line in HD, it’s also going to suck up my monthly broadband allowance.
May 22nd, 2010 at 10:20 am
There’s only one Kiwi bank that has stayed loyal and will continue to be Kiwi owned… the TSB Bank.
Vote:May 22nd, 2010 at 10:30 am
I’m vehemently opposed any SOE sales. The proceeds will simply be wasted on bludgers and corrosive welfarism. Both by this government and the next, who’ll use the money to bribe you and your neighbours.
Do not flog the family silver to give a cash injection to venal politicians who have shown time and time again that they will use your money and sell your future, to fund their own short-term gain at the polls.
I support the government’s desire to turn NZ into a share-owning society and increase the viability of the NZX. They should divest the SOEs by issuing shares to NZers. That is both fair and democratic and would achieve their aim without the “resource curse” of a large cash injection for the pollies to waste.
The power stations, transmission system and other SOEs do not belong to the current government. They belong to us. They have been built up over a long period by the taxpayers and consumers of NZ and should not be flogged off for a last few fixes of welfarism.
/rant off.
Vote:May 22nd, 2010 at 10:38 am
Why I say keep Kiwibank.. 100% Kiwi Owned.
The History of the TSB Bank..
Note. in 1986. The deregulation of the financial sector.
In the face of industry and government opposition, Taranaki’s bank was determined to remain independent.
1850 New Plymouth Savings Bank established by proclamation of Governor in Chief Sir George Grey. The rationale…”If New Plymouth can help themselves to obtain independence or at least accumulate resources wherewith to meet any unexpected crisis they would be less likely to lean upon state or [New Zealand] company support. The bank will be self-reliant, unsupported by government expenditure or the aid of British money. New Plymouth settlers are to become independent and provide a means for them to accumulate resources to assist should any crises develop.”
Business was conducted from an office at the New Plymouth Police Station on Mt Eliot, where the regional museum ‘Puke Ariki’ now stands. The first deposit made by Waitera Te Karei, who rode 100km along beach and coastline from Mokau to make a deposit of 35 Pounds. The Bank’s accountant was paid an annual salary of 20 pounds in those days, so Waitera’s deposit was sizable.
1860The first branch office opens in New Plymouth’s old Post Office Building on Brougham Street. Throughout the following 100 years 14 more branches open in Taranaki.
1964To align with the network expansion outside of New Plymouth District, the Bank renames to Taranaki Savings Bank.
1972The Bank installs its first computers.
1975First to offer free, interest-bearing cheque accounts.
1976First in New Zealand to research, develop and use bank-wide, real-time computer processing.
1978Bank deposits reach $50 million.
1981First in New Zealand to develop automated teller machines – ATM’s or ‘Cashflow’. In a bold move, the Bank ordered four machines for its City, Centre, Fitzroy and Hawera branches. As the population of Taranaki at this time was about 104,000, this decision was seen as radical.
1984Labour Government is voted in and begins deregulation of the financial sector.
1986Other regional Trustee Savings Banks merged because it was necessary to survive in the new economic conditions of deregulation, and many of New Zealand’s banks became owned by overseas interests. In the face of industry and government opposition, Taranaki’s bank was determined to remain independent. The self-reliant vision of the bank’s forefathers had been retained to ensure that it remained 100% New Zealand owned. With this confirmed independence came the establishment of the TSB Community Trust – the Bank’s shareholder.
1988First to develop and use employee-written software to form the most modern and sophisticated information system in the Southern Hemisphere.
1989Taranaki Savings Bank changed its name to TSB Bank to better reflect its now nationwide presence.
1994TSB Bank deposits reach $500 million.
1996With the sale of Trustbank to Westpac, TSB Bank is at this date, now the only bank to be 100% New Zealand owned.
TSB Bank Direct established for banking customers outside Taranaki catchment region.
1999TSB Bank deposits reach $1 billion. TSB Bank Loan Direct established for lending customers outside Taranaki catchment region. For the first time, the Bank was rated ‘Best Bank’ in the University of Auckland Survey of Residential Bank Customers.
2001Christchurch Home Loan Centre is established.
2002TSB Bank Auckland Home Loan Lounge opens in Newmarket, Auckland.
2003Lending portfolio reaches $1 billion milestone.
2004TSB Bank deposits reach $2 billion.
2005National network expansion continues, with the opening of TSB Bank Wellington.
2006Opening of TSB Bank Hamilton.
Deposits reach $2.5 billion.
2007TSB Banks Tauranga and Hastings open.
2008Deposits hit $3 billion. TSB Banks Palmerston North, Auckland Central and Takapuna open.
2009Deposits reach $3.5 billion. TSB Bank Napier opens.
Vote:May 22nd, 2010 at 10:43 am
So then who is going to pay this bill?
Unintended consequences for the Treasury. Surcharges anyone.
Tax cut threat to universal super: expert
4:00 AM Saturday May 22, 2010
Change means wealthy retirees pay much less towards pensions
A retirement-policy expert says New Zealand’s universal old-age pension is threatened by the flatter tax scale unveiled in this week’s Budget.
Dr Susan St John, co-director of Auckland University’s Retirement Policy and Research Centre, says the universal flat-rate pension from age 65 was adopted when wealthy retirees effectively paid back almost two-thirds of their pensions through a top tax rate of 60 per cent.
But the cut in the top tax rate to 33 per cent from October would effectively raise the cost of future pensions because wealthy retirees would now pay back only one-third of their super.
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10646748
Vote:May 22nd, 2010 at 10:47 am
it astounds me how upset people get when it comes to banks and/or selling state owned assets.
i like bills choice of language – “to free up capital and put product on the market for Kiwi mums and dads” lol
its the sort of emotive language labour used to use. he just needs to get the word “kiwi” in there somehow…
Vote:May 22nd, 2010 at 10:50 am
I am sick of hearing this b/s about profits going to ‘overseas ‘ banks. The Banks in NZ are largely subsidiaries of Australian Banks – yes. Millions of NZ dollars are invested in these Australian banks by NZ individuals and funds. These banks are not only a good investment for NZ’s, (they maintain value and return dividends) they are well run, well capitlized and, according to recent survays after the Banking crisis, amongst the safest, most secure banks in the world (4 were in the top ten). Stop the ridiculous xenophobia and try and come to terms with the fact that Aust. & NZ are joined at the hip. Our avoidance of the worst effects of the global recession is only by virtue of the strength of the Aust. economy. Many others like myself have their saving invested in Australian securities because the NZX is still the wild west and financial markets here are as dodgy as all get out.
Vote:And, yes we depend of overseas Banks to provide funding for our infrastructure, and continued borrowing to support the lifestyle to which we have become accustomed.
May 22nd, 2010 at 11:06 am
The long gone Insolent Prick wrote this in February 2007.
John Key should transfer all state owned enterprises to the Super Fund. This will have an immediate effect on the size of the super fund, into a significant public asset worth some $40 billion. The Super Fund guardians can then decide which of the SOEs to keep, which to partially or wholly divest from, and which to float on the capital markets.
http://insolentprick.blogspot.com/2007/02/funding-our-future.html
Vote:May 22nd, 2010 at 11:06 am
“But he said the Government would not sell assets without a mandate from the public”
I dont give a fat rats about kiwibank, but after 87.6 percent in favour of repealing a law was ignored, why am i finding it had to believe him
[DPF: On the anti smacking law, Key is sticking to his pre-election pledge. He never said he would change his mind if there was a referendum.]
Vote:May 22nd, 2010 at 11:17 am
100% correct and I don’t want to see that happen again.
Then you are free to cast your vote for the Labour party.
Vote:May 22nd, 2010 at 11:36 am
Why are people so obsessed at who owns these “assets” rather than the quality of service? If you oppose asset sales then fuck off and join Labour or the Greens.
On my auction list:
TVNZ
Rail
NZ Post
Kiwibank
Air NZ
Sell them and if you want Kiwis to own them, perhaps offer them to members of the public. I don’t know what the obsession is with politicans running businesses already working well in the private sector. What sort of right wingers are you?
Vote:May 22nd, 2010 at 11:43 am
1. Define Asset.
2. Why is the Government involved in Banking anyway? The TSB has been mentioned as a National Bank, as should PSIS, and the Credit Unions which in other countries are a strength in the banking business. The Government is largely absent from them here.
3. Government needs to BOTH prune spending – radically, and delete all lines which are capable of being provided through private effort, and then prune all “assets” where the return on Taxpayer funds is less than 12.5% annually. Shares can be offered to the Taxpayers if wanted, but my experience of Auckland International Airport is that Governments cannot be trusted to run according to commercial rules.
Vote:May 22nd, 2010 at 11:45 am
Who here banks with Kiwibank?
I know that every time I see a Kiwibank cheque book or ATM card I immediately think “socialist idiot”
Vote:May 22nd, 2010 at 11:45 am
it’ll be great, mum and dad investors owning a part of this country, just like in russia post-soviet collapse!! Man it must be nice ignoring history
Vote:May 22nd, 2010 at 11:51 am
Clint, we’d have to pay someone to take TVNZ away – would you buy it?
And as for Kiwi Rail …lol
Vote:May 22nd, 2010 at 12:00 pm Vote:
May 22nd, 2010 at 12:10 pm
A better example would be the UK, where you had ordinary people with at least some nous about capitalism and shysters due to living in a capitalist society
As opposed to Russians emerging from the caves of their communist lifestyle, blinking with watered eyes at the glare of full-on, crony capitalism.
On the other hand I appreciate the implied argument that 70 years of egalitarian social democracy has reduced us to such serf-like thinking.
Vote:May 22nd, 2010 at 1:30 pm
TSB Bank unlike kiwibank is Taranaki owned not government or overseas owned…
Vote:The government though still dictates that it has its own govt appointed members on the TSB Bank board of directors.
If the bank is not owned by the govt… then why the hell do they have govt appiontees on the the board.
It’s not a SOE… so the govt has no right to have appointees… like a DHB which is run on govt money.
The govt’s involvement in the independently owned bank is just socialist govt interference.
May 22nd, 2010 at 1:33 pm
Start giving away state ‘assets’ to the people of New Zealand and all of a sudden the scary P word will become the nice P word.
Vote:You call that popular capitalism
May 22nd, 2010 at 2:19 pm
So forget about asset sales this socialist Govt. are about to buy out whats left of Telecom without phones.
Never mind getting out of business its getting right back in just like at Kiwi Rail. FFS we don’t need this.
Telecom ultrafast strategy revealed
By TOM PULLAR-STRECKER – The Dominion Post
Last updated 05:00 22/05/2010
SHOCK RESULT: The race to the fibre future is in the final furlong and the finish may be “sooner than some of us expect”.
EXCLUSIVE: The momentum behind the breakup of Telecom is becoming unstoppable. A majority stake in network arm Chorus will be sold to the Government and other investors.
Chorus, recapitalized with $1.35 billion of taxpayers’ money, will take responsibility for connecting three-quarters of the country with fibre-optic cable delivering ultrafast broadband. Electricity lines and fibre companies may be given a piece of the action.
Chief executive Paul Reynolds will exit gracefully through Telecom’s now spinning revolving door, able to claim he has led the company and the country into a radical, world-first telecommunications environment.
There are plenty of details to be ironed out and it is still possible it might not all go to script.
Taxing negotiators’ minds at the moment is where Telecom’s Public Switched Telephone Network should sit in the new structure and how it should be regulated.
http://www.stuff.co.nz/business/industries/3726259/Telecom-ultrafast-strategy-revealed
Vote:May 22nd, 2010 at 2:27 pm
Indeed emmess. Its one thing to bitch about the government selling the silver, but when the silver is given to kiwis, some of whom flog their assets to buy plasma tvs and lotto tickets, those folks can no longer complain. Could be quite a good strategy – distribution to placate the masses, and then gradual accumulation by those keen to invest over the long term.
Vote:May 22nd, 2010 at 2:41 pm
News flash. Jim Anderton is a shareholder of “Aussie Banks”. Yep, those profits shipped offshore are then partially shipped back to him. And you can get the profits as well by buying some CBA/Westpac/NAB/ANZ shares.
Vote:May 22nd, 2010 at 3:01 pm
Why not be a shareholder in an Aussie bank? They take enough money from New Zealander why not get some back in dividends?
Vote:May 22nd, 2010 at 3:07 pm
Why not sell all our state owned assetts to Australia… then join them when we have spent the money.
Vote:May 22nd, 2010 at 3:18 pm
There are several things here.
The Nats harp on about mum and dad investors. Two points on this.
Firstly how many ordinary kiwis directly own shares? I own a few from a demutualisation. My father owned a few freezing companies shares that my grandfather accumulated as a worker there. These were sold in the early 80s when the firm got bought by a farmer cooperative. Most shares are owned by corporation or pension funds.
Secondly buying shares off someone else is not investing. It is saving. The share market does assist in some investment (so did BridgeCorp). However most of the activities trading shares. Part ownership passes from one entity (person, pension fund, trust, company etc) to another. This is not investment. Profits are sometimes invested but a significant proportion are returned to owners in form of dividends (or management in the form of bonuses)
Investing is creating a new form of production. If more GDP is what you want you want people then selling SOEs and not increases their fixed assets (or the production from the existing fixed assets) then the economy is not growing any faster (or slower) than before.
Partially privisation is like being partially pregnant. It doesn’t happen. Eventually a future government will sell the lot.
If people felt so great about ANZ buying Kiwibank or Westpac bying most of the Trustee Savings Banks then why do people bank at Kiwibank? (or the SBS, PSIS and TSB for that matter)
Vote:May 22nd, 2010 at 3:44 pm
Inky – I think you may be confusing investment and capital raising. If I buy shares at an IPO its both a capital raising exercise for the company, and a choice I make about how my own capital is to be used. If I buy shares from you, this is you and I choosing to use/allocate our capital in a different way. But these are both examples investment actvity.
Vote:May 22nd, 2010 at 3:44 pm
Gravedogder. The entire global banking industry has business model that consists of:
- Rip off the customers
- Take big risks
- Get a government bailout
In other words – privatize profits and socialize losses. I’m quite happy for the Government to own a bank that doesn’t follow that business model. At least the taxpayer gets some benefit from carrying the risk. Privatizing the asset doesn’t privatize the risk, as the BNZ bailout demonstrated..
Vote:May 22nd, 2010 at 3:45 pm
I couldn’t praise National more highly for sticking to its 2008 commitment not to move on assets (both because I happen to agree but also, more importantly, because keeping to your commitents is the right way to behave).
But it doesn’t work in reverse – bundling a commitment like asset sales in with an array of other policies and then claiming a mandate for that one particular course of action when you’re elected is disingenuous.
It’s entirely possible that you were elected because, on balance, the majority of your policies were preferred by a majority of the voting public but that a significant majority oppose one particular policy.
In this case, the choice for people opposed to some or all asset sales would be to vote National and accept asset sales as the price of other policies they favour, or force them to vote for a party whose other policies they oppose just to save what’s theirs in the first place. And what about those who might be happy to see asset A sold but not asset B?
Every New Zealander is a part owner of any public asset and has a right to be consulted one a case-by-case basis about its sale.
Should National be re-elected, the honourable course is to produce a list of assets they wish to sell, then put that list before the public as a binding referendum.
Vote:May 22nd, 2010 at 3:57 pm
Rex, since when should the government own a bank?
Vote:May 22nd, 2010 at 4:09 pm
Ripping off customers?
which bank has the highest Fixed rate break fees? Kiwibank
which bank has the highest LMI (lenders mortgage insurance) Fees? Kiwibank
Whos ripping off who?
From people i know at NZPost, Kiwibank is only ‘profitable’ becuase it is effectively not paying rent. they do some creative accounting but it gets cheap infrastructure and subsidised staff from the post office. if it had to stand on its own via the full branch model it would need to make the costs higher. effectively we are all paying for Kiwibank.
and why would i want to own shares in Kiwibank? the NZ market is .2% (or 2% i can;t remember) of the global market, its too volatile. at least the aussie banks have more stability (as a previous poster mentioned).
AL
Vote:May 22nd, 2010 at 4:11 pm
Did someone say binding… LOL… govts don’t let the common people have the final say on their own assets.. god forgive this is not Switzerland… the NZ system is about giving absolute power to the govt absolutely… thats what they vote every three years… Power to the people… sometimes I worry about you Rex.
Vote:May 22nd, 2010 at 4:25 pm
Whilst I’m definitely in the “sell the fucking lot” camp, I realise this is not going to be politically possible.
My suggestion to Mr. English, is sell 50% of kiwibank, but the only entities that can buy the shares are kiwisaver funds. This may need to be done in a couple or three tranches, as there probably is not enough cash in kiwisaver funds to sell 50% at once. I bet most NZ’ers (excepting brainsrightout, toad and sonic) would be agreeable to a transfer of ownership along these lines.
The problem with kiwibank, is it is not a commercial success as a stand alone entity yet, it needs capital to grow, so it can have its own branches, sign up bigger clients, rather than the few down and outs from South Auckland etc.
The only reason why there is any modicum of intelligence to having some government ownership, is so the bank can attract cheaper funds, until it is big enough to foot it with the big boys. Once it is as big as the rest, sell the remaining 50%.
Vote:May 22nd, 2010 at 4:40 pm
What I am calling investment is Gross Fixed Capital Formation in GDP
http://unstats.un.org/unsd/sna1993/tocLev8.asp?L1=10&L2=3
Vote:May 22nd, 2010 at 4:51 pm
Big Bruv:
“Who here banks with Kiwibank?
I know that every time I see a Kiwibank cheque book or ATM card I immediately think “socialist idiot” .”
A -fucking- men! Well said.
Aside from banking not being something a Government is supposed to be involved in ( just how does that relate to its only legitimate role which is the protection of individual rights?) Kiwibank is only an “asset” to the State as another reason to tax and control us more and to bludgers who bank with it or who are employed by it.To we poor raped taxpayers its a liability…it takes value AWAY from us.This point needs to be made strongly to the dopey nana’s in this country re Kiwibank and every other State run liability that we are all forced to fund.And the fact that they inevertiblily LOSE money is the shit icing on the crap cake…
As to profits going overseas…doesn’t every NZ dollar get spent back here buying our goods so theres no real loss at all? Someone a bit more informed on such matters may enlighten me.
Vote:May 22nd, 2010 at 4:52 pm
“why would i want to own shares in Kiwibank?”
Because if you have a bank with a prudent lending policy and sufficient capital, you can’t help but make money. You’d have to be a moron not to.
Getting capital at the right price is the killer when the markets tank and that’s why NZ Post did a Capital Notes issue earlier this year. Apart from that, there are no significant worries since the economy’s currently stable although if global markets don’t get over Greece etc those worries recur and the tax reforms for property investors are going to keep the local market soft for some time which means low growth for residential lending apart from taking market share off another player – which is expensive.
Kiwibank’s achilles heel is that its loan portfolio is imbalanced because the business sector is under-represented relative to the other banks.
Kiwibank however does occupy a strong market niche in that its positioned itself as a low-rate leader and a patriotic alternative and don’t underestimate that latter factor.
I don’t personally see anything wrong with floating it on the market but if the govt sold it to another player then it would destroy that niche its carved out and given that its portfolio is geared toward residential that would have a significant effect on the potential sale price, unless that other player kept it going as a separate brand instead of absorbing it, but then it loses all credibility and people aren’t stupid.
And if it did that, it would have to keep operating a branch network and as Gendel says, at the moment they pick-a-back upon NZ Post’s Postshops.
I think National would prefer to sell it to a third party cause they need the cash but I think the reason English mentioned the idea now is so they could gauge public reaction to the various alternatives. It will be an interesting ipredict stock: will the Nats do an IPO but the question is, how would you do that? Would you give everyone shares like they did with the Bolshevik Biscuit Factory (see Commanding Heights), or the Electricity companies to use a local example?
Lots of options.
Vote:May 22nd, 2010 at 5:20 pm
I can’t believe that, in the middle of the greatest banking bailout in history, people are still sticking resolutely to the line that the government shouldn’t be involved in banking. You might as well say that government shouldn’t be involved in justice or defense.
Open your eyes. Don’t let ideology blind you to the current earth shaking events, and their implications.
Vote:May 22nd, 2010 at 5:26 pm
Can you spell out the implications for us vibenna?
Should we all buy Anderson Shelters or what?
Vote:May 22nd, 2010 at 5:37 pm
RKBee (632) Says:
May 22nd, 2010 at 10:20 am
There’s only one Kiwi bank that has stayed loyal and will continue to be Kiwi owned… the TSB Bank.
RKBee, you forgot SBS (which is now a bank, no longer a building society).
Vote:May 22nd, 2010 at 5:44 pm
Reid, the banking system is an integral part of our society – as integral as roads and courts. The failure of a major part of the banking system is about as acceptable to government as the dismantling of State Highway One. As a result, banks benefits from implicit government guarantees and favours. To claim the banks are efficiently managed private sector institutions at risk of failure in the market is just plain wrong. Rather they are expert oligopolists backed by the government.
This backing can be seen in the huge bailouts around the world, in the tacit support of banking oligopolies and their exploitation of market power by governments (in the name of capital adequacy), and in the tolerance for rapacious practices. In Australia, for example, the explicit “four pillars” policy has long promoted a banking oligopoly with huge market power. All around the world, governments are turning a blind eye to rapacious practice by the banks because they are secretly pleased the the super-profits are helping to rebuild stable bank balance sheets.
Right now, there is one of the most massive wealth transfers in history going on. It is a direct transfer from governments (taxpayers) to bankers. Without this, the entire banking system would be broke. So saying the government should stay out of banking is not something I can agree with.
Personally, I think the libertarians have got the wrong target. Government isn’t the biggest problem. Private sector monopolists and oligopolists and the ones set on beggaring the public and stealing our freedom. The banks are some of the worst of them. Of course, they would love government to “stay out of banking.”
Vote:May 22nd, 2010 at 5:52 pm
big bruv (6355) Says:
May 22nd, 2010 at 11:45 am
Who here banks with Kiwibank?
I know that every time I see a Kiwibank cheque book or ATM card I immediately think “socialist idiot”
Big Bruv, meet gander, a “socialist idiot” and a loyal ACT member and voter.
I bank with Kiwibank because they charge (at least charged, when I switched my accounts there) the best deal for my business’s needs.
What, I should bank with bank A just because bank K is ideologically incorrect? That sounds pretty socialist to me.
Vote:May 22nd, 2010 at 6:09 pm
The ETS is going ahead regardless of any opposition to it. Neville Key and Nick Smith are determined to inflict this additional tax on us, oblivious to any political cost.
Are there any people with any backbone in the coward National Party?
Vote:May 22nd, 2010 at 6:13 pm
Whoa. I couldn’t decide whether to say “They offer (…) the best deal” or “They charge (…) the lowest fees” so I typed half of each phrase.
gander = idiot
but not socialist idiot.
Vote:May 22nd, 2010 at 6:20 pm
vibenna personally I think centrally-controlled fractional reserve banking is at the heart of the trouble re the banking system however since the only nations that don’t have this mechanism are North Korea, Iran and Venezuela (Iraq didn’t have one either until they got invaded) we’ve really got to deal with the reality and not the ideal.
If Kiwibank disappeared in a puff of smoke tomorrow, ‘the system’ would continue.
I’m not quite sure what the rest of your comment is saying. Are you talking about the system per se or Kiwibank? You might be interested to know that govt control of banking is what got us into the fractional reserve system in the first place so not quite sure why you’re advocating it’s a super idea to continue their involvement.
(Sometimes it’s shocking for people to learn that Big Govt isn’t *always* benevolent (I know!) so sorry to drop that on you just like that.)
Vote:May 22nd, 2010 at 6:45 pm
If taxpayer funded assets are to be privatised, then they should be done so in the manner of listing of giving shares to NZ taxpayers, and leave them to decided whether they want to keep them or not, Not sold to fund even more pet projects of the government of the day.
After all, they are the ones who paid for them in the first place.
Vote:May 22nd, 2010 at 6:50 pm
Wise up guys. Just think back over the last couple of months and all the talk and steers by Key and English re property taxes of one form or another. Only in the last few days did we get near the truth of their thinking, same for tax rates. Who predicted the company rate. No one not even mentioned anywhere.
Vote:English is floating red herrings in the mato sauce at lunch.
They have other fish they are going to fry.
Buy Chorus for a start, spend heaps on Broadband; that’s heaps of our money.
Sell some chunks of power co’s, sell TV which is good, sell hospital and school buildings which is OK. Prisons are already on the go.
And stuff we haven’t thought of.
Key and He have an undisclosed agenda.
May 22nd, 2010 at 7:04 pm
Reid: agree with most of what you say. Part of my argument is that as the government is underwriting the sector, they might as well be exposed to some of the profits as well as the losses. Also, Kiwibank offers limit pricing to keep the banks honest – so undermines the oligopolistic market power of the big banks. And, as you note, the ideas that the government should stay out of banking is positively Victorian.
Vote:May 22nd, 2010 at 7:08 pm
Let’s put RNZ on the chopping block and see the usual suspects get in a tizzy.
Vote:May 22nd, 2010 at 7:19 pm
I sure as hell hope so V2, cause their disclosed agenda hasn’t yet cut the real mustard…
I would LOVE to hear Sean, Jeff and Mary interview English about that one. I think Sean or Jeff would be professional, Mary would lose it. That would be funny. I’d laugh and laugh.
Vote:May 22nd, 2010 at 8:23 pm
The Government has no role in the owning of any business; it’s role is to regulate business. Governments are incapable of making sensible business decisions because they do not have a business imperative (enterprise for profit). The SOE’s are a valiant attempt to put space between the enterprise and the meddling politicians. Has it worked? – ask TVNZ (which is slowly but surely going down the drain because the politicians delayed the takeup of digital tv), or the energy SOE’s (who are in the middle of yet another restructure. And whose idea was it to build Whirinaki which is now to be demolished?).
Vote:The success of Kiwibank is a politically constructed illusion; the Company makes a profit, yes, but it does not give an adequate return on shareholders (the Govt.) funds and as mentioned above it is a parasite in NZ Post which is having to increase postal rates to cover losses.
May 22nd, 2010 at 8:47 pm
nickb asks:
Kiwibank was a clumsy response to the usurious behaviour of the Australian-owned banks. Behaviour that has seen them (in Australia at least, nor sure about NZ) forced to drop gouging such as $30 or $50 “dishonour fees” for a transaction that took an account a few cents into the red. Nonetheless they are facing a huge class action suit which they look like losing.
In Australia there is sufficient market size to allow smaller competitors to flourish without (so far) being absorbed by the larger banks… though Commonwealth Bank recently grabbed Bankwest and Westpac grabbed St George, taking out the second tier of competition.
Nonetheless smaller operations like the Bank of Queensland and Bendigo Bank thrive. The former uses a franchise model, with each branch owned and operated by its manager. The latter is akin to, say, the TSB. I bank with Bendigo and couldn’t be happier.
What ought to have happened long ago is that the regulators should have refused to allow the big banks to take over the trustee banks. But given that there was insufficient competition in the NZ market, which allowed the banks to collude to keep fees artificially high, the previous government thought Kiwibank was the answer.
And to some extent it is, but it’s also a totally inappropriate operation for a government to be running. However it’s profitable so – other than the principle that governments ought not to run banks – at this point there’s no pressing need to sell it.
Perhaps the answer is if they basically gave it away to become a community-owned bank like Bendigo. Or roll it into the TSB. Or something other than flog it to some rapacious bastards in Sydney.
Vote:May 22nd, 2010 at 9:21 pm
The Government has sunk hundreds of millions of dollars into Kiwibank to get it established, and now it is making piddly little profits that will take years to even come close to recouping the initial investment. A complete waste of time and money.
Who are these bullshitters that talk about “Aussie-owned banks”?! They’re PUBLICLY LISTED COMPANIES!!!! Any fool, including you, can go out and buy some fucking shares in them. If you don’t like these banks making profits at your expense, you can buy shares and get the profits back.
As for “New Zealand-owned”, well that is a crock of shit too. If I’m a New Zealander and own a bag of shit, it’s still a bag of shit! But gee, it’s MY bag of shit! I’m so proud of my bag of shit!!!! Lucky those dirty Aussies don’t own my bag of shit that I paid way too much for!! I’m sure there’s gold dust somewhere in that shit. Somewhere.
Vote:May 22nd, 2010 at 9:35 pm
BlairM – nice idea, but you can’t get dividend imputation credits across the Tasman, you are exposed to foreign currency risk, and you are also supporting large salaries and bonuses in the banks before you get the profits. The banks may rort the New Zealand tax system to avoid paying their fair share. None of these things apply to Kiwibank.
Also, the answer to being ripped off is hardly to buy shares in the company. The answer is to have mechanisms to avoid being ripped off.
Vote:May 22nd, 2010 at 10:19 pm
Kiwibank has been nothing but a taxpayer backed predator on the co-operatives and local banks such as the thrifts, PSIS, TSB, all to assuage one of the many neuroses of Anderton who couldn’t cope with the loss of state influence in commercial banking when the hopelessly inept BNZ was sold. What an irony.
And I scratch my head when people insist government owned assets are ‘our assets’ The peoples assets are those owned by the people which is the private sector where ultimate control is by customers who also happen to be the people.
Government assets are owned by something other than the people, called the state, which got its money to own assets by its power to levy the people. Whereas the private sector can only get its money by offering the people a voluntary trade – my goods/ service for your money.
In the private sector the people are in control, recently in the US they sent GM into bankruptcy because they liked other car makers cars better. In the govt sector the govt is in control except for a three yearly shuffle by the people. In between the shuffle times all the people can do is scream, yell, rage. In the private sector you have your bitch and go buy elsewhere
The govt sector here in NZ is way too big, the inefficiencies of state sector businesses cost us all and help keep our long term growth curve lower than the productive efforts of the people would otherwise be achieving.
Vote:May 22nd, 2010 at 11:28 pm
Kiwibank is worthless, makes little profit and is largely dependent upon cross-subsidisation from NZ Post for its premises. If was asked to make profits- ie raised its fees, started acting like the big banks, it would have no product differentiation.
Apart from a total idiot- who would want to buys shares in that.
English is totally barking up the wrong tree on this one- the only government assets that will sell for a profit are public monopolies- whose owners will rip us off given their priviledged position and the 50% of Air NZ- who it would be nice to keep away from scumbags like Qantas. Everything else is pretty well worthless.
Vote:May 23rd, 2010 at 12:52 am
One only has to look at the profit of the Australian banks here to see how much they are ripping us off. Who wants more of that.
..I once had a Kiwibank account. It sat untouched for 6 months with a balance of 2K. I happened to check it online one day and found KB had charged me a $15 ” account maintenence fee” each month for 6 months =90 bucks. I closed the account.
Vote:Fuck Kiwibank… and all the other banks for that matter…they are all theiving bastards.
May 23rd, 2010 at 7:56 am
“I think Sean or Jeff would be professional”
Reid, why would they start then?
Vote:May 23rd, 2010 at 9:29 am
How many other people cringed at that godawful Kiwibank advert about being “better than the overseas” banks? First TV ad I saw when I touched down during my last visit… made me wonder what sort of country NZ had turned into. Ghastly!
All banks are the same, except you as a taxpayer is carrying the risk if Kiwibank falls over. Chairman Jim doesn’t care, he owns shares in an Australian bank. His rhetoric is empty, like all of his socialist comrades.
Sell sell sell!!
Vote:May 23rd, 2010 at 9:40 am
And how many people noticed the massive upsurge in Kiwibank advertising just prior to the last election?
The way the adverts kept reminding us that it was “our bank”.
There are many reasons to be embarrassed about being a Kiwi, perhaps the worst of those is the way so many of us have a irrational, immature and pathetic anti Australian mindset.
Vote:May 23rd, 2010 at 9:47 am
Kiwibank was a clumsy response to the usurious behaviour of the Australian-owned banks. Behaviour that has seen them (in Australia at least, nor sure about NZ) forced to drop gouging such as $30 or $50 “dishonour fees” for a transaction that took an account a few cents into the red. Nonetheless they are facing a huge class action suit which they look like losing.
Rex, you argument seems to be that Australian banks are behaving badly in AUSTRALIA! I have been charged a dishonour fee in AUS, but never when I was in NZ.
Another thing too, does the NZ gov still bank with Westpac? The public should be asking why they are not banking with Kiwibank, if Aussie banks arn’t as good as our own…
Vote:May 23rd, 2010 at 10:17 am
The public should be asking why they are not banking with Kiwibank, if Aussie banks arn’t as good as our own…
Reid up above said Kiwibank’s “portfolio is geared toward residential”…maybe they don’t have the capability to do ‘government’ banking yet?
Vote:May 23rd, 2010 at 10:25 am
“Personally, I think the libertarians have got the wrong target. Government isn’t the biggest problem. Private sector monopolists and oligopolists and the ones set on beggaring the public and stealing our freedom. The banks are some of the worst of them. Of course, they would love government to “stay out of banking.”
Monopolies and oligopolists can only exist with the assistance of the State Vibenna….they are unsustainible in a free market.Its only State regulation and dictate that skews the playing field that allows these banks to get away with pissing their customerrs off.In a real free market they couldn’t be so shortsighted without losing massive amounts of business.The free market has the best regulation of all….the sovereign,choosing customer with the power to go elsewhere.State regulation actually protects the big established business against new startup competition by swamping it out of existence with compliance costs and red tape.This is why you see big business lobbying FOR regulations that they know will kill any upstart newbie coming into the market.The left never clue up to this obvious fact made real by the incentives State power on offer to those who can harness it brings.
A free market is the best protection against monopolies….without the power to control business either inovates or dies out…and thats good.
Vote:May 23rd, 2010 at 10:48 am
9:47 am
The public should be asking why they are not banking with Kiwibank, if Aussie banks arn’t as good as our own…
The simple answer is.. Westpac is a international bank.. NZ banks are not.. The govt works in the world international market.
Vote:May 23rd, 2010 at 11:00 am
Well said James.
I always say, how ironic it is that the left hate big business, yet big business loves big government, which of course is the lefties utopia.
Vote:May 23rd, 2010 at 11:16 am
“Monopolies and oligopolists can only exist with the assistance of the State Vibenna….they are unsustainible in a free market”
James – Human history started without a state, and with a free market. It delivered Pharaoh and Babylon, and we have spent thousands of years trying to work out something better. Our current so-called ‘free’ market is a bit of a myth, as it cannot exist without the protection state institutions. Without these you simply get concentration of assets and the rule of the strong. You can see this in every page of history, and in many African countries.
I am a great fan of (mostly) free markets, as they are more efficient and deliver more wealth than any other system. They are one of humanity’s great achievements. But they cannot exist independently of the institutions of the state.
Vote:May 23rd, 2010 at 11:19 am
Rex Widerstrom@ 8:47 pm
Perhaps the answer is if they basically gave it away to become a community-owned bank like Bendigo. Or roll it into the TSB. Or something other than flog it to some rapacious bastards in Sydney.
I agree.. also I can’t see why the govt can’t loan of NZ owned banks.. for things like smaller regional roading infrastructure further down the roading list of national priorities… but are still on the top of the list of regional priorities… even if it is borrowed at a higher interest rate than the govt can raise it internationally… It is still NZ money spent on NZ assets and going back into the NZ economy. Paying interest to overseas banks and not NZ banks even if the NZ banks interest rates are higher is to me just wasted govt spending… when not used and circulated in our own economy.
Vote:May 23rd, 2010 at 12:47 pm
“James – Human history started without a state, and with a free market. It delivered Pharaoh and Babylon, and we have spent thousands of years trying to work out something better. Our current so-called ‘free’ market is a bit of a myth, as it cannot exist without the protection state institutions. Without these you simply get concentration of assets and the rule of the strong. You can see this in every page of history, and in many African countries.”
Sorry but your grasp of history and economics is pathetic.Pharaoh and Babalon the result of the free market…??? Oh please! They were the result of tribalism and conflict leading to the formation of empires ruled by dictate and force….the total opposite of the free market.You are right that our “free market” is a myth…it is nothing of the sort.It is in fact a mixed economy where capitalism struggles to continue to produce under a swamp of socialist control and stagnation.In a true free market the state is limited to the task of rights protection.It runs the police,courts and army to that end….nothing else.There is no coercive taxation.The state is funded voluntarly to carry out its functions.There is a complete seperation of the state from economics for the same reason we have a seperation of church and state…for when the force of the state can be harnessed for the ends of vested intrests liberty is threatened and conflict and impoverishment the outcome.
Free markets disperse assets and resources to the many…its the absense of the market that concentrates them in a few hands.Look at the Communist countries of the 20th century…the biggest divides between the wealthy and the poor occured in those countries.A small wealthy elite backed by state force lived like kings while the vast majority of the populace suffered crippling poverty.Capitalism delivered the reverse…a vast middle class enjoying the bulk of resources and living as only kings of past ages had done.
As to Africa…are you serious?Africa is dominated by repressive states terrorising their populaces….it is the embodiment of what happens in the absense of free markets.It is the abuse of state power that caused Africas woes and continues to do so.
“I am a great fan of (mostly) free markets, as they are more efficient and deliver more wealth than any other system. They are one of humanity’s great achievements. But they cannot exist independently of the institutions of the state.”
As a libertarian I support the need for a state to do the one thing a state can do without conflict…that is the protection of individual rights by enforcing objective law.But the state has stepped far outside that brief and causes most of the conflict and problems we see about us.Wanting the state to step in and “fix” the problems caused by previous state intervention is the embodiment revealed in the old saying about the definition of insanity being continually trying the same old thing expecting to get a different result.
Here are two great essays re the real role of Govenment and mans rights in relation to it.
http://www.aynrand.org/site/PageServer?pagename=arc_ayn_rand_the_nature_of_government
http://www.aynrand.org/site/PageServer?pagename=arc_ayn_rand_man_rights
Vote:May 23rd, 2010 at 7:53 pm
James. Why do you think tribes and empires formed? To settle disputes over the allocation of agricultural surpluses. No surplus, no state.
Vote:May 24th, 2010 at 2:13 am
“James. Why do you think tribes and empires formed? To settle disputes over the allocation of agricultural surpluses. No surplus, no state.”
Because people thought the use of force against their fellows was ok.Well it ain’t….and it ain’t now.
Vote:May 24th, 2010 at 5:54 pm
So apart from an almost religious zealotry demanding privatisation of state assets what are the other good reasons for selling down some state-ownership of NZ assets? Well for one it opens up several companies to Mum & dad shareholding. As we move more towards putting more of our incomes into saving and less into consumption it will be important to have NZ-based investment opportunities. Having said that if control of these organisations ends up overseas – like Telecom, BNZ, and previously Kiwirail and Air New Zealand – then it would just accelerate the trend towards NZ becoming a branch office of London, New York or Hong Kong funds managers. Accordingly the government may find it necessary to put in place strict controls on foreign shareholding – to ensure that the entities remain in NZ hands. If it turns out we don’t have sufficient capital locally then you have to ask why bother privatising them? The track record so far has not been inspiring – Telecom, Rail, Air NZ – once the asset strippers had bought, drained profits and flogged off poorly maintained assets there wasn’t much left to celebrate. In a small market like ours perhaps we just need to learn from history that the State will need to do more than elsewhere – and that that is not necessarily a bad thing. The last thing kiwis will tolerate is another firesale of a state monopoly to foreign shareholders.
Vote:May 24th, 2010 at 6:10 pm
Centreforward – the right claim private enterprise is more “efficient” – i.e. that it provides a (direct) greater returns to the shareholders than the taxpayer gets from publicly owned enterprises.
Which is correct. But at what societal cost?
The costs of people in prison, kids in CYFS care, the dole for those who are out of work, the WFF that needs to be paid to those with kids who have to take a low-paid job because they have been made redundant – they are all externalities to private enterprise. Costs that belong with the State.
Privatisation is all about privatising the profits, and socialising the losses, because the way it is accounted for does not go beyond the narrow ambit of the financial accounts of the entity concerned.
Vote:May 24th, 2010 at 6:14 pm
Clint Heine: “Why are people so obsessed at who owns these “assets” rather than the quality of service? If you oppose asset sales then fuck off and join Labour or the Greens. On my auction list: TVNZ, Rail, NZ Post, Kiwibank, Air NZ”
The trouble is Clint that those monopolies you are so keen to sell (like Rail, NZ Post and Air NZ) behave even worse under private ownership as owners seek to extract maximum rates of return and to squeeze costs out over a shorter timeframe. The when the pips have been squeezed they try to get the government to buy it back. Unless we want to play a risky game of chicken and pretend that NZ may not need a national airline, a postal service or rail then the govt is always going to have a role of owner of last resort – so any losses will end up being socialised if privatisation doesn’t work out in the long run. If it does work out then the private shareholders – usually overseas – will tap into a rich vein of overseas dividends propped up by non competitive prices in NZ. Those of us who lived through the 1980s saw this all before. We don’t need to go through it all again thank you. Oh and brilliant politics…using your sage advice I should depart for the hills of another party…thanks for the steer. Great to see tolerance is alive and well in the Nats. Good luck with the next election
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