Some common sense emerging from Labour
November 29th, 2010 at 7:13 am by David FarrarOn Friday, Labour released a speech David Cunliffe gave on Thursday. It gave me hope for a more rational Labour Party. First:
Crucially in a capital constrained fiscal environment, we will better leverage the Crown’s balance sheet in new and innovative ways.
We can expand public-private partnerships for new transport infrastructure. The project scale must be right and the PPP benefits must outweigh any increase in cost of capital, but that leaves plenty of scope for win-wins .
Yay. PPPs should be on the table as an option in pretty much all circumstances. Decisions on whether to have a PPP should be made on the merits of an individual case. Great to see Labour starting to take steps away from ideology and towards rationality.
We can unleash State Owned Enterprises to create and grow new subsidiaries with private partners and shareholders, without diluting the taxpayer’s equity, or wholly or partially privatizing the SOE.
Again this is a good step in the right direction. While still a very modest step, it at least means that Labour are no longer saying the private sector has no role in assets owned by the state. And trying to argue that a partial stake in an asset owned by an SOE is good but a partial stake in an SOE is evil, will test the finest debaters.
Now Labour have pointed out that their policy is intended to apply to new subsidiaries only, but that is frankly illogical. Take Kordia for example. A while back they purchased Orcon. This means the taxpayer now owns an ISP. Labour seems to be saying that Kordia is not allowed to sell Orcon.
This is the bizarre outcomes you get from blanket bans. Private sector investment in any state asset should be considered on a case by case basis. There is a pretty strong argument to own Transpower, and there was a very weak argument to own a chain of competitive vehicle testing stations.
In the legal area, National has in fact nationalised certain aspects (crown defence service) and allowed private sector into others (build and manage a prison). That is because decision are being made on the basis of what will achieve the best outcomes.
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November 29th, 2010 at 7:34 am
I prefer “I am Harvard”
Vote:November 29th, 2010 at 7:45 am
We can unleash State Owned Enterprises to create new unaccountable overpaid board positions for unemployable failed socialist hack politicians and their lackeys.
Vote:November 29th, 2010 at 7:56 am
That “common sense” will only eventuate if Cunliffe, not Little, succeeds Goff.
Should the reverse occur Labour will, in fact (to quote Wallace Rowling at one of his more enlightened moments) take a bloody great step backwards.
Vote:November 29th, 2010 at 7:59 am
The project scale must be right and the PPP benefits must outweigh any increase in cost of capital, but that leaves plenty of scope for win-wins .
I actually do not think this suggests any change in Labour’s position. The criticism is always that the promised benefits to not materalise and many PPPs overseas have developed into white elephants or worse.
The reference to “new subsidiaries” rules out the privatisation of any existing entities, specifically Kiwibank.
I do not see this speech as suggesting that privatisation by stealth can or will occur under the next Labour Government.
Vote:November 29th, 2010 at 8:02 am
Its the nationalisation by force thats the real issue….
Vote:November 29th, 2010 at 8:13 am
Not to worry. It is likely the comrades will appoint English to the board of New Zealand Post or KiwiRail next time it is elected.
The tit-for-tat, the merry-go-round between the political twins (Labour and Labour-lite) continues.
Vote:November 29th, 2010 at 9:18 am
You can see Cunliffe is setting up the Wellsford-Puhoi vs Central City Rail Loop argument nicely for next year. Len Brown has proposed PPP to fund the rail loop which can be paid off as Auckland grows (80% of national population growth in the next 25 years). So it would be a bit hypocritical for Labour to not support PPPs.
Vote:November 29th, 2010 at 9:25 am
Recognising what is genuinely in the public interest and what isnt is a tough one: and the stakes are higher when there is a significant public interest there, but the private sector claim to be able to do better. Once its privatised, it’s privatised (unless there’s an Air NZ style crisis or a record of real failure of the private (Kiwirail))- so you’d want the guardians of the public interest to be prudent. The people promising privatisation nirvana are the ones who should be looking sheepish, after our past experiences! Same goes for expanding the public good through smart subsidiarisation. I dont doubt Labour will be as prudent as Cunliffe says in this area: why wouldnt you be?
Vote:November 29th, 2010 at 9:50 am
What about this one? NZ Post bought a third of MaltaPost. I’m not sure if they still own it. It can’t be sold by this National government of course and if you were against PPPs that would mean the NZ government would have to buy the other two-thirds! The blanket ban on selling SOEs is just ridiculous.
Vote:November 29th, 2010 at 11:01 am
Partial floats of some SOEs in a retail offer would be quite popular and would help boost our savings and sharemarket. Why not float 49% of Meridian and put the proceeds of the sale into the Cullen fund ?
Vote:How about letting Solid Energy develop a gold mine with partial retail funding (anyone with shares in Oceana Gold will know the huge benefits).
I am hoping that JK will use his very innovative brain to get things moving next term, a bit more Joyce and abit less English perhaps.
November 29th, 2010 at 11:02 am
In a small macro economy such as New Zealand PPP’s are the only way to move the country forward. Before that can happen the S.O.E. Act needs to be overhauled so that assets could be freed up for redevelopement or sale. New Zealand needs the money and can’t function on overdraft indefinitely.
Vote:November 29th, 2010 at 1:27 pm
Cunliffe can say what he likes – he will not be in any real power for some time.
What does Little Andy have to say on the subject as he will be calling all the tunes, not Cunners?
Vote:November 29th, 2010 at 2:14 pm
I would LOVE to know how Silent T gets on with the multiple hat wearing Little. Little seems to be just right of being a Commie and T wants to be seen to be clever but can’t be as he is a Labour MP.
Vote:November 30th, 2010 at 12:38 pm
jaba,
Right on the mark. My first thought was this isn’t Labour changing tack; this is one speech from one reasonably secure Labour MP. Watch and wait to see them fight it out.
Vote:January 27th, 2011 at 10:42 pm
And not surprisingly now that John Key has announced National will sell up to 49% of some SOEs and Labour says it’s a bad idea, Labour have removed the post from their website that is linked to from this post (and many others across the Internet). According to a Google search it was still there on Jan 25th and now it’s gone two days later.
Vote: