Asset Sales Labour v National

June 20th, 2012 at 7:00 am by David Farrar

Based on a release from Tony Ryall, a useful guide as to how and did . And recall Phil Goff, Annette King and Trevor Mallard vote for the asset sales.

  Labour 1988 – 90 National 2012
Announced policy before election No Yes
Used urgency to pass legislation Yes No
Kept majority in Govt hands No Yes
Sold all or most to foreigners Yes No
Priority for NZ investors No Yes
10% share cap No Yes
Allowed select committee hearings No Yes
Public float No Yes

Labour sold a total of 15 assets, so some answers vary by asset sold.

What this shows is that National have acted entirely properly with their partial asset sales, and in fact it was Labour that did everything they accuse National of doing.

Tags: , ,

48 Responses to “Asset Sales Labour v National”

  1. Keeping Stock (9,788 comments) says:

    Tony Ryall’s speech yesterday in the Part One debate was a corker; it’s visible in full here, with some commentary:

    http://keepingstock.blogspot.co.nz/2012/06/tonys-onto-em.html

    It must embarrass Phil Goff, Annette King and Trevor Mallard to have their noses rubbed in the dust of their past decisions and the stealth that underlayed them, but they simply cannot be allowed to rewrite history and pretend that 1984-1990 never happened.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. KiwiGreg (3,129 comments) says:

    So fundamentally Labour’s privatisation process was FAR superior to the Nats and more likely to maximise returns to the fisc than the half-arse “privatisation” currently proposed.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. Paul Walker (41 comments) says:

    Apart from the top two and the second to bottom, Labour looks better on asset sales than National.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. KiwiGreg (3,129 comments) says:

    Thanks Paul, that’s a more accurate assessment.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. Keeping Stock (9,788 comments) says:

    @ KiwiGreg; no. Labour sold to whoever would stump up with the cash. I remember that Health Computing Services went for a song, and Paxus made an absolute killing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. mikenmild (8,798 comments) says:

    Interesting, but of marginal relevance to the current debate, which should be about whether the proposed sales will benefit the country.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. KiwiGreg (3,129 comments) says:

    @ KeepingStock who did you think they should sell it to? People who wouldn’t pay? They ran auctions and sold to the highest bidder. Unsurprisingly many of the new owners proved to be superior managers than the state and so made money from the transaction. Would you rather the state STILL owned these assets?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. Pete George (21,806 comments) says:

    Kept majority in Govt hands.

    There was very nearly no guarantee of this. National originally proposed guaranteed 51% ownership, but when they introduced the MOM Bill they had changed it to “voting rights”. Stuff reported on this as Loophole allows sale of over 49pc.

    But due to UF intervention this has been bought back on track, but National are claiming it as their own:
    National on 51% ownership.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. KiwiGreg (3,129 comments) says:

    Well Fuck United Future then. A victory for socialism. Newsflash. It doesn’t work.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. MT_Tinman (2,790 comments) says:

    DPF, Mr Ryall left out one category;

    Sold at bargain basement price Labour Yes

    Notably also the sales were finalised after the demise of the great and good Sir Roger Douglas (and for Rail at least after Labour campaigned on not selling it).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. onthenumber8 (20 comments) says:

    In their defense, they are really sorry.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. Rat (377 comments) says:

    have you included the weighted average ROI on those assets Labour sold ?,

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. m@tt (535 comments) says:

    You missed the row titled ‘supported by more than 1/3 of NZers’ . They both failed that test.
    Labour were wrong to sell, you are correct, but at least they have learned from there mistake.
    National are slow learners obviously. I wonder if the CIR and then the 2014 election result will help drive the message home finally?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. KiwiGreg (3,129 comments) says:

    “Sold at bargain basement price Labour Yes”

    Evidence?

    You might think your house is worth a million dollars but if you run an auction and the highest bidder is $250k, that’s your market.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. david (2,482 comments) says:

    Railways in particular was a case of an asset-rich poor performer sold for a song. NZR was, in reality a property company that ran some trains. It would be mind-boggling to know the value of land-holdings cashed-up by the subsequent owners. Newmarket alone has hundreds of housing units built onn what was Railways land and that pattern was repeated up and down the country. We would all have been better off if NZR had been shut down and Government broke up the land assets. Trouble was that the country had been royally fucked by previous Labour Governments and Douglas had to get quick cash as a simple matter of survival. A buyer’s market? you betcha.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. david c (254 comments) says:

    Ummm Labour did a lot of stuff in the 80s that this current crop don’t agree with…I’m unclear what your point is?

    This is a pretty weak defence for a policy that is near universally disliked.

    Grade: D, must try harder.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. Keeping Stock (9,788 comments) says:

    @ Tinman; quite right. You may remember the game show of the era Sale of the Century; Labour’s wholesale asset sales were similar, and the Price wasn’t always Right.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. Manolo (12,624 comments) says:

    Soldier on with the assets sale. No point in wasting time listening to socialist Labourites or communist Luddites.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. Kovac (28 comments) says:

    Labour does stupid things in the 80s therefore they are now intelligent to do now?

    Rather than arguing the point that the Labour party is hypocritical I would much rather see National present us with a coherent argument over the benefits of the asset sales. Solid numbers instead of vague promises.

    It shouldn’t go ahead just because of some bone headed ahearence to policy not based in reality.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Luc Hansen (4,573 comments) says:

    What a red herring post. No one is questioning the propriety of the sales or the sales process. But the policy clearly remains unpopular even though the country re-elected the government (just), which simply demonstrated the usual ebb and flow of electoral (mis)(fortunes in NZ. Labour was out of favour and we remain basically a two party system.

    However, the whole idea is crazy at a time of global meltdown. Even economists can mostly see no economic benefit in the proposal. National seems intent on impairing its main sources of revenue with tax cuts at the top deciles of income earners and now flogging off highly profitable, oligopolistic SOEs and at least halving reliable dividend flows.

    And the ordinary citizens who step into the market for these shares, instead of relying on their diversified funds eg Kiwisaver to invest professionally on their behalf are highly likely to get burnt if they don’t unload the shares as early as they can.

    And the dividend outflow from our small country will gather even more momentum. Can we afford that?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. alex (298 comments) says:

    Who cares what Labour did? They are only one small part of a huge coalition of groups working to stop this current round of partial privatisation.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Martin Gibson (206 comments) says:

    It amazes me how poorly National are communicating against the bleating of Labour Greens Mana and NZF.

    I would have thought the key points to talk about would be the projects that could be done with private capital, the poor performance of and participation in the NZX by kiwis and the potential for Kiwisaver to be a source of the investment, along with the question “would you guys buy back AirNZ?”

    There are a whole lot of people waiting to be convinced and they never seem to get there while the “Four legs good two legs baaad!” brigade loudly do their reactionary thing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. scrubone (2,971 comments) says:

    However, the whole idea is crazy at a time of global meltdown.
    and now flogging off highly profitable, oligopolistic SOEs

    Either these are good assets with reliable cashflows, or it’s crazy to sell them when demand for this sort of asset is at it’s highest.

    You can’t have it both ways.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. Mark (1,301 comments) says:

    DFP process is important but not as important as price and whether this is a good deal for the country. If the country is not going have a material financial gain from the sales then they should be held back until the market going to provide better value for the assets. Fyfe came out this week and said it is not a good time to sell shares in Air NZ. Fortunately Key agreed that the government would not rush headlong into a sale if the price was not good enough. He has not made such a statement in respect of the power company assets. In fact he has , IF the media reporting is correct, suggested that National intends to push on with the sales regardless. I would like a definitive statement from Key that the sale will only proceed if in is economically sound to do so.

    I have no argument philosophically with the sale of the assets but I am fucked if I will accept a process that gives them away cheaply because this government is hell bent on ideology over rational commercial judgement.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. Mark (1,301 comments) says:

    Stuff reports: “Cheap share packets and bonus shares are being considered as the Government prepares its first sell-down of state-owned assets.

    Legislation for the sale of four energy companies was subject to fierce debate in Parliament yesterday, as it nears passage into law.

    Treasury has been investigating ways to maximise local interest in the share float, as it tries to meet a target of 85 to 90 per cent Kiwi ownership. It has also employed market researchers to test what potential investors might be attracted by.

    Discounted prices and bonus shares could be offered exclusively to Kiwi investors”.

    Fuck me this makes all sorts of sense. So the government is going to sell our assets cheaply … it may suggest that this is not about rational commercial judgement at all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. Pete George (21,806 comments) says:

    Martin Gibson – you’re right, this is another case of very poor selling by National. The antis get away with repeat mass misinformation – I don’t know how many times I’ve heard Norman talk about sellling all the assets – and I haven’t seen any comprehensive case made for MOM.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. wat dabney (3,455 comments) says:

    Luc,

    National seems intent on impairing its main sources of revenue with tax cuts at the top deciles of income earners and now flogging off highly profitable, oligopolistic SOEs and at least halving reliable dividend flows.

    It’s a sign of your total lack of understanding of the situation that you complain about marginal tax rates being cut in the same sentence that you praise the “highly profitable” state monopoly with its “reliable dividend flows.”

    why are these basic utilities “highly profitable”? They shouldn’t be, and they wouldn’t be in a competitive market.

    And do you think those “reliable dividend flows” consist of magical money that appears out of nowhere to fund state spending?

    The answer, of course, is that the State has abused its monopoly position to artificially increase power prices. You complain about cuts to marginal rates in the same sentence you support this highly regressive stealth tax.

    Put another way, if these assets were sold into a competitive private market we would benefit from cheaper power. The state might increase taxes to cover the loss of dividends, but since income tax is progressive the wealthy would now be paying a great proportion of the amount.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. Nookin (2,887 comments) says:

    “and I haven’t seen any comprehensive case made for MOM.”

    You have not been helped by a media that has no real interest in pointing out the advantages.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Ross12 (927 comments) says:

    Martin Gibson is right. The Government is absolutely hopeless at communicating its position , as I have said many times before. It is not just this issue , there have been many others. Blaming the MSM is not good enough –the “complaint” is fair enough but there has to be other ways around it , even if it is just taking out full page “ads” to explain it in simple terms.

    Many seem to be concentrating on the importance of extracting the highest price. What the Govt. is doing this time is different to the 1980′s because they are keeping a controlling interest so they will never get the “highest/best price”.
    The Govt. is trying to raise cash without borrowing more to enable it to fund projects they deem to be important to help push the economy along. For those who oppose the partial sales the challenge to come out clearly and say what they would do to raise cash to pay for these projects or the projects they think are important or say they simply don’t need the cash because they would not do anything.

    The power companies have always been cashcows or defacto tax gatherers. I have always objected to how the dividends just goes into the general slush fund. If it went into a separate account where it was clearly transparent as to where the funds went I might have some sympathy for the argument that it is a waste of income to partially sell them off.

    There was a comment on thread yesterday that tried explain how competitive the companies are — the writer was correct in his argument for competition on the supply side but there was not mention of competition on the sale side , for there is little competition on that side, as far as I can see.

    PS. I agree Wat Dabney @ 10.48

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. Martin Gibson (206 comments) says:

    Here was the best justification I read for mixed ownership (which I read here) yet you rarely hear about these:

    http://www.kiwiblog.co.nz/2012/05/cameron_on_mixed_ownership_model.html

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. KiwiGreg (3,129 comments) says:

    “If the country is not going have a material financial gain from the sales then they should be held back until the market going to provide better value for the assets. ”

    So you or “the government” think you can time the market? KKR just sold $6.5b of Boots to Walgreen today. Do you think they are fools for selling at the wrong time (or Walgreen for buying)?

    The government is simply awful at making commercial decisions.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. ross69 (3,637 comments) says:

    they simply cannot be allowed to rewrite history and pretend that 1984-1990 never happened.

    I love how the Tories fail to articulate why asset sales are necessary, and instead prattle on about what Labour did a quarter of a century ago.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. ross69 (3,637 comments) says:

    It seems that assets will be sold so there can be a makeover of the NZ High Commission in London. Yeah that’s a productive use of the proceeds. What other brain explosions will the government have when the assets have been hocked?

    http://www.3news.co.nz/Bills-Budget-blunder—central-London-makeover/tabid/1607/articleID/255610/Default.aspx

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. minto57 (197 comments) says:

    It would appear the justification is based on the behaviour of labour in the 80s proving National too can be morons.
    As for Peter Dunn he should be given a bell. so as to annouce his filth

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. KiwiGreg (3,129 comments) says:

    are ross69 and minto57 different people? Or does the left have a naming convention for their KB handles?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  36. RightNow (6,338 comments) says:

    ross69 (445) Says: “I love how the Tories fail to articulate why asset sales are necessary…”

    The problem is between your ears, not with the Tories. I’ve listened and am satisfied with the reasons given.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  37. ross69 (3,637 comments) says:

    > I’ve listened and am satisfied with the reasons given.

    So you’re satisfied that the High Commission in London needs a makeover and the only way that will be achieved is to flog assets in a depressed market?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  38. KH (686 comments) says:

    The supposed ‘priority’ given to New Zealanders is quite light. It needs the next step. Sold only to New Zealanders and only ever can be sold to New Zealanders.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  39. wat dabney (3,455 comments) says:

    So you’re satisfied that the High Commission in London needs a makeover and the only way that will be achieved is to flog assets in a depressed market?

    For the poor the power companies are not assets, they are a regressive taxation mechanism and therefore a burden.

    To be clear, the poor would be better off even if these “assets” were given away, provided the result is a competitive energy market.

    Yet Labour and the Greens are cynically and shamefully stoking up anger and actually have poor people voting for their own shackles.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  40. Inky_the_Red (718 comments) says:

    The government seems to be indicating that NZ buyers who hold on to the shares will get a bonus.

    I want to know why tax payers who cannot afford to buy the shares in Mighty River Power will be subsidising residents who can afford to buy the shares? How can that be a good use of public money?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  41. leftyliberal (601 comments) says:

    @wat dabney: There already is a competitive energy market among the generators. See EWS’s posts from yesterday as a starting point.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  42. RightNow (6,338 comments) says:

    ross69, actually IMO they should sell NZ House too, I believe they could get a decent price for it.
    I haven’t seen the business case for renovating it, have you? How do you know if it’s a good idea or not? If it stacks up (and that’s not my job to decide) then in the long run I don’t believe it matters which cost centre the renovations are paid from.

    The bigger picture is $7 billion less debt to service.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  43. wat dabney (3,455 comments) says:

    lefty,

    Power prices reflect in part fixed costs which each operator has to cover. The government dividend is one of those costs. Sure the state-owned generators compete, but they are all competing from a position of higher fixed costs thanks to the dividend, so prices are higher.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  44. leftyliberal (601 comments) says:

    @wat dabney: So it’s not due to competition (crosses that off list) but it’s due to the government wanting a return. The returns are going to go down when sold? I’m sure the investors will be happy to hear that!

    @RightNow: 7 billion less debt is actually not where the money is going – at least not directly. It’s going into the “Future Investment Fund” instead, which presumably will be used for other capital expenditure (rather than borrowing for said). This is akin to promising “quality over quantity” without giving any reasonable information of how quality will be assured. Really, you couldn’t make up just how bad a selling job they’re doing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  45. mikenmild (8,798 comments) says:

    wat
    Don’t the privately owned power companies pay dividends to their owners?
    RightNow
    If the companies are sold to reduce debt, does it matter if in the long run retaining them would make a better fiscal impact?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  46. RightNow (6,338 comments) says:

    lefty – by “- at least not directly” what you mean is “actually ultimately it is”
    mike – not in the short term. Say, you’re a public servant, would you mind if we defer paying you for a few years? It’s for the good of the country.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  47. Francis_X (143 comments) says:

    Rightnow – ” It’s for the good of the country.”

    I feel a great, big, fat, TUI coming on. You don’t really believe that crap do you? I mean, really, are you that naive? Mate, you give the Right a bad name with that kind of spectacular naivete.

    No, it’s not “good for the country”. It doesn’t create wealth, jobs, or increase company profits. It’s just shuffles bits of paper around.

    And it ain’t going to be too flash for our current account deficit either.

    But hey, it it make you feel snuggly-wuggly, knock yerself out. We’ll just point and laugh at you as the amateur that you are.

    David Farrar: re Labour’s record. So what?

    National, under Muldoon, was practically an Eastern European socialist party. How does that affect/taint National now?

    Answer; it doesn’t. National has moved on. Just as Labour has. Whereas NZ First is still stuck in a Time Warp, fluctuating between 1955 and 1975. The Greens are the most honest of the lot, whether one likes their policies or not. At least with them you know what you get.

    As opposed to that political prostitute, Peter Dunne, and his faithful lap-dog, Pete George. I wonder who he’ll offer his body – oops, sorry, I mean, vote – too, after 2014?

    If this is the best that National has to grow the economy, we’re in deep trouble, people. Cos this ain’t going to cut it; no way, no how (to quote my Kazakh neighbour).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  48. RightNow (6,338 comments) says:

    Francis_X – first, yes, I do believe less debt is better for the country. In my household we sell the second car before adding to the mortgage.

    Second – ” It’s for the good of the country” read it in context with the sentence before, dullard.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.