An idea for the Government

June 16th, 2012 at 7:41 am by David Farrar

When the Government floats the SOEs on the NZX, they should announce that supergoldcard holders get a 5% discount on their share purchases.

It would be worth it, just to see Winston combust.

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29 Responses to “An idea for the Government”

  1. Yvette (2,745 comments) says:

    For that, I would buy some

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  2. dog_eat_dog (763 comments) says:

    Yes, because the playing field is just far too level when it comes to integenerational advantages!

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  3. peterwn (3,216 comments) says:

    And there ahould be a five year ‘hold’ on selling them unless the oldie coughs up the 5% first.

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  4. barry (1,317 comments) says:

    Dont be idiots – Winston would say “see what Im still achieveing for you – and Im not even in government!” Just imagine what more i could do if i were in Government – and hed run it right thru till the next election.

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  5. tvb (4,263 comments) says:

    I hope the government announces some fairly bold moves to encourage retail investors including beneficiaries. Say a 5 year deferred payment etc. the government needs to broaden the constituency for asset sales if the policy is to be secure. And those treasury boffons need to get that message lpus and clear. Their policy of trade sales was highly unpopular and took asset sales off the agenda for about 15 years.

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  6. mikenmild (11,246 comments) says:

    Why should there be any encouragement for any domestic investors? Assuming the ill-considered sales go ahead, surely the prime concern should be to secure the highest possible price. Any discounting would simply amount to a transfer of wealth from the current shareholders (all of us) to a select group of wealthier New Zealanders.

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  7. Mark (1,436 comments) says:

    If the NZ Herald report yesterday that Key intends to proceed with the sales no matter what the state of the markets I have real concerns. I have said this before I support the partial sales but not at any price and the deals have to make sound commercial sense for the Government. The Government should be drawing a line in the sand in terms of value and if they are not going to get there then the sales should wait. Currently the debt servicing saving is going to be less than the foregone SOE profits. So unless there is a price premium to compensate why would the sale proceed. It is hardly going to be about profitability risk.

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  8. mikenmild (11,246 comments) says:

    The analyses I have seen suggest that there will be a net financial disadvantage in selling.

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  9. wikiriwhis business (3,883 comments) says:

    Sounds good but can Mr Farrar explain to us why National took govt assurance off savings. John Key is not telling us what Ben Bernanke and Christine Legarde has warned him of in the coming months during their weekly conversations.

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  10. Paulus (2,568 comments) says:

    I was speaking to a senior Kiwisaver fund Manager yesterday and asked whether they would buy the partially sold SOEs – he said in reply “is the Pope a Catholic ?”
    Of course, we, and all the other Kiwisaver fund managers, will subscribe, as it’s a good long term investment for our members.

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  11. tvb (4,263 comments) says:

    These sales have political objectives as well as financial objectives. It is important to build the constituency for asset sales and bring retail investors into the market. The trade sales which shut the retail investor out may have met financial objectives but they were a miserable political failure.

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  12. mikenmild (11,246 comments) says:

    Are the political advantages sufficient to justify selling the asset at a discounted price in a sluggish market?

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  13. Viking2 (11,286 comments) says:

    mikenmild (4,412) Says:
    June 16th, 2012 at 9:46 am

    Why should there be any encouragement for any domestic investors? Assuming the ill-considered sales go ahead, surely the prime concern should be to secure the highest possible price. Any discounting would simply amount to a transfer of wealth from the current shareholders (all of us) to a select group of wealthier New Zealanders.

    You fuckwit you are not a shareholder in any SOE.
    You are a peon and possibly a TAXPAYER. And I say possibly for haven’t you recently been claiming a benefit of some kind.
    Like all negative tax grabbers you should never have a say.

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  14. Nichlemn (63 comments) says:

    Eric Crampton on BERL’s report on asset sales

    Of course assets have a higher return than government debt, that’s because they’re riskier. If you don’t get this basic point there’s no more room for discussion.

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  15. wikiriwhis business (3,883 comments) says:

    “Of course assets have a higher return than government debt, that’s because they’re riskier”

    And Goldman Sachs which runs NZ hates risk

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  16. cha (3,856 comments) says:

    why National took govt assurance off savings

    @ wikiriwhis business

    Got a link for that?.

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  17. KH (694 comments) says:

    I am all for selling these things. But the shares should only be able to be held now, and forever, by individual New Zealand citizens, and NZ entities such as Iwi and Kiwisaver Funds. Such an idea would drive the Financial Services industry crazy. Which is worth doing in itself, as well as indicating it’s a good idea broadly.

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  18. heathcote (103 comments) says:

    The Crown Retail Deposit Guarantee Scheme expired 31 December 2011. For the most part the NZ Government does not guarantee deposits like bank deposits, and neither should it. For example look to Ireland where the government there socialised bank losses and the taxpayer is now liable for (previously) privately held debt.

    The Crown G Scheme was introduced in the last weeks of the Labour Govt in 2008, at the depths of the Global Financial Crisis and in response to a similar scheme introduced by the Australian government. For us not to do so would have risked significant capital flight to that country.

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  19. mikenmild (11,246 comments) says:

    V2 – abuse or argument, must have been a difficult choice for you.
    KH – that would require a discount off the sale price to the advantage of the small subset of the current owners that will invest in individual shares.

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  20. heathcote (103 comments) says:

    mikenmild (4,414) Says:
    June 16th, 2012 at 11:57 am
    Are the political advantages sufficient to justify selling the asset at a discounted price in a sluggish market?

    Where’s your evidence re sale at a discounted price? That’s right, there isn’t any and there won’t be any.

    There is no reason to sell at a discounted price. They will sell at market price, based on normal valuation metrics, for example a multiple of future earnings. But I guess you wouldn’t know that. Much easier just to exaggerate and obfuscate.

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  21. mikenmild (11,246 comments) says:

    heathcote – this discount refers to any scheme to encourage (subsidise) domestic or ‘mum and dad’ investors. If we do sell these assets, at least do so for the best possible return.

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  22. heathcote (103 comments) says:

    Mikeenm

    There is no ‘scheme’ as you say (Jeez, how many times). Mum and Dad will invest if they feel the investment case justifies it. And why wouldn’t they? Majority crown ownership, solid infrastructural asset, etc. But there is no preferential treatment for them, compared to any other class of investor. And neither there should be.

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  23. Viking2 (11,286 comments) says:

    mikenmild (4,416) Says:
    June 16th, 2012 at 6:08 pm

    V2 – abuse or argument, must have been a difficult choice for you.

    Nah not at all. If you are that dimmwitted that you are not sure if you are a taxpayer, a beneficiary or a shareholder then you undoubtably are a peon. One with socialist or communist leanings. You don’t own anything so stealing anything from the Taxpayer is right up your alley.

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  24. mikenmild (11,246 comments) says:

    That’s exactly what I said (in contrast to some other comments above).

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  25. mikenmild (11,246 comments) says:

    V2 – What brought that rant on – did you forget to take your meds? I am a taxpayer. You seem to have some obscure objection to equating citizenship with ownership of the people’s assets. Sure, technically the SOEs are ‘owned’ by two individuals, but they do so on behalf of the rest of us.

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  26. Viking2 (11,286 comments) says:

    that doesn’t make you a shareholder, still leaves you as an ordinary peon in the scheme of things.
    Citizenship doesn’t make you an owner either. Being a net taxpayer helps but still doesn’t make you and owner.
    The Govt. is the owner. If the Govt. choses to sell down some of its shares than so be it.
    Buy some and then you become and owner. Till then you are just a noise.

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  27. Nick K (1,138 comments) says:

    They should give discriminatory subsidies just so they can score political points? Surely this is said in jest.

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  28. graham (2,295 comments) says:

    Nick K: Ya think?

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  29. calendar girl (1,203 comments) says:

    Surely you jest, DPF. This is a serious project to knock off some of the country’s burgeoning debt, not an opportunity for silly little political games that the Wellington set like to play.

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