Hide on MOM

July 8th, 2012 at 8:39 am by David Farrar

writes in the HoS:

The state-owned enterprise Mixed Ownership Model that’s causing such a fuss was pioneered by Helen Clark and Michael Cullen over a decade ago.

John Key and Bill English are simply extending it. The fuss over privatisation is a fuss about nothing much.

In 2001, the Labour Government spent $885 million bailing out Air New Zealand. Instead of taking over the company lock, stock and barrel, the Government took an 82 per cent stake and left the remaining share in private hands trading on the share market.

Hence was born the Mixed Ownership Model.

Mixed Ownership proved itself with Air New Zealand. The trading of the company’s shares on the share market means its performance is continually and publicly assessed. That continual public feedback on performance is lacking with state-owned enterprises. Mixed Ownership provides a desperately needed market discipline on SOE directors and executives. That’s a good thing.

Labour pioneered the model and fully expected to be selling down shares as National is doing.

Why did Labour never buy 100% of Air NZ, if it thinks a mixed ownership model is so bad?

Sir Michael Cullen told Cabinet, in setting up the model, that, “It may, however, be desirable to divest some or all of our shares at a future date.” The Labour Government readily accepted that a future sell-down may well prove desirable. And not just some shares, but all of them.

Sir Michael also knew that the Super Fund was set up to be funded out of surpluses, not to be funded from borrowing.

The greater discipline that the trading of shares applies to these businesses will enhance their performance. There’s no way Air NZ would have done as well if it were an SOE.

For Kiwis, it’s the companies’ better performance that will enhance the country’s economy, not whether the Government makes a profit or loss on sale.

Yep. In my view the Government should not own a company, just because it wants the dividends from it. It should only own companies that are strategically necessary – such as arguably Transpower and Kordia – national infrastructure operators.

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47 Responses to “Hide on MOM”

  1. Leaping Jimmy (16,697 comments) says:

    It should only own companies that are strategically necessary

    The definition of which is…?

    This strays into the commanding heights of the economy argument which is the foundation of the Keynes vs Hayeck debate. The “Commanding Heights” being what in the 1920’s were the heavy industries such as mining and railroads etc and what today would be telecoms and satellite companies and even Fonterra. If Fonterra’s not a strategic company in the NZ context then what is?

    http://www.pbs.org/wgbh/commandingheights/

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  2. Rodney Hide (63 comments) says:

    Strategic asset : the next bit of property a socialist wants to nationalise.

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  3. calendar girl (1,258 comments) says:

    Good contribution by Hide, well argued.

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  4. Keeping Stock (9,380 comments) says:

    Excellent piece Rodney. It makes one wonder why Labour made this such a die-in-a-ditch issue.

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  5. elscorcho (155 comments) says:

    Old Labour isn’t New Labour…

    As someone has already pointed out, what matters is the “commanding heights”. The Government should own these for a variety of reasons, not least of which is national security vs. threats both foreign and domestic (including natural disasters).

    However, even beyond the commanding heights argument is the “profitable” argument. It is much more moral for a Government rather than private enterprise to operate in areas where an SOE can be profitable (I doubt it could be running icecream stands for example), which includes a whole bunch of not-quite-commanding-heights-areas.

    And of course we want to nationalise things. It is far better than an asset is owned by a pure philosophical (and glorious) concept like the state, rather than individuals – who do very grubby things.

    And for those who cling to “private industry always does everything better than the state could”, I present exhibit A: the failure of mercenary companies during the late Middle Ages / Renaissance. They proved very clearly that the profit-motive is inferior to service-to-the-state.

    (I do however agree that bureaucracies need to be thoroughly weeded – we don’t want time servers, we want Stakhanovites in our Departments)

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  6. krazykiwi (8,040 comments) says:

    There’s no way Air NZ would have done as well if it were an SOE.

    It would do better if it weren’t governed as the transport arm of Tourism New Zealand. Private investors must currently suck up the fact that the company’s internal mission statements (I believe there are 5) do not include the words profit or growth.

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  7. krazykiwi (8,040 comments) says:

    Strategic asset : the next bit of property a socialist wants to nationalise.

    Exactly. By any definition the distribution of food (supermarkets), energy (oil companies) and information (telcos) must be strastegic assets.

    Our political spectrum has drifted inexorably left over the last few decades, and labour’s dalliance with the trainset was just a little test for the public.

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  8. nasska (12,095 comments) says:

    The generating companies may be better as MOM identities & I see few problems resulting from the present proposals. There is, however, a world of difference between make believe competition between generators, same as power retailers & any proposal that may come up in the future to sell down Transpower.

    Private enterprise ONLY works where there is real competition for the customer dollar. This is basic 101 type economics. Where privately owned companies can buy a monopoly distribution setup they can charge what they want and/or run down the parts of the system they’d rather not bother with. The only choice for the customer is put up with expensive, crap service or move to another part of the country.

    If anyone needs an example look to the takeover of the former Wairarapa EPB assets by Powerco & the state of the creaking, unreliable infrastructure they mismanage, then consider the effects of this on a national basis. The country would get royally screwed!

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  9. mister nui (1,030 comments) says:

    Why the hell should the government own all of Kordia? Or any of it for that matter?

    They’re winning some very large contracts in Australia with the resources boom, are you saying that everything they do is strategically important to the gummint? I’m sure you’re not.

    I would love to buy shares in Kordia, they’re going to make a motza in Oz, knowing the state of the contracts they have one. It will be variation order after variation order for them, and we all know how valuable VOs are.

    http://www.google.com.au/imgres?um=1&hl=en&biw=1680&bih=959&tbm=isch&tbnid=_CyzPzD3t2DJhM:&imgrefurl=http://www.derailleurconsulting.com/blog/the-cost-of-waterfall-contracts&docid=Xafb7IZRSsxL1M&imgurl=http://www.derailleurconsulting.com/Media/Default/Images/blog/Mar29_2012/change_order_boat_closeup.jpg&w=778&h=500&ei=jKv4T_bUHPC8iAf87ezeBg&zoom=1&iact=hc&vpx=174&vpy=159&dur=1013&hovh=180&hovw=280&tx=157&ty=95&sig=110998537554632494817&page=1&tbnh=120&tbnw=187&start=0&ndsp=35&ved=1t:429,r:0,s:0,i:70

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  10. AJC (16 comments) says:

    Government only really needs to own assets if there the asset concerned operates in a market where a monopoly would exist and there is no effective way to regulate it. Public ownership is no guarantee that a business would be run efficiently as was the case in the mid 1980’s where services were rubbish and produced a net return of zero for the government. Neither is private ownership but in the case of private ownership the shareholders get spanked which in most cases is enough incentive to produce what the market wants/needs at a decent price.

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  11. philu (12,989 comments) says:

    “..Rodney Hide (51) Says:
    July 8th, 2012 at 9:02 am

    Strategic asset : the next bit of property a socialist wants to nationalise…”

    state-asset:..the next bit of property a neo-lib/rand-ite wants to privatise..

    yr point is..?

    phillip ure whoar.co.nz

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  12. philu (12,989 comments) says:

    kk said..

    “..Our political spectrum has drifted inexorably left over the last few decades..”

    i have to agree…the rightwing revolution is fading fast..

    ..and the return of socialism to france is just one example of the re-emergence/rise of the left/social/environmental-justice parties…

    …(with the libor-acandal just the latest example of how the ‘right’ way has so miserably failed..)

    ..and this govt flogging off the state assets..an action opposed by 85% of the country..will ensure key will see the end of national as the voters’-choice..and this for a very long time…

    ..(and of course with the average national party member being about 70 yrs old…

    ..nationals’ support will fade for those same reasons they have so long scoffed at peters for..namely the dying-constituency…

    ..a decade out of power will well see national reduced to just a rump/special-interest party..by pure natural attrition alone..

    (..let alone for the clear/obvious bankruptcy of their policies..)

    it is also encouraging how for the first time the centre-left parties are presenting as a viable alternative..and able to work together..

    phillip ure whoar.co.nz

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  13. mikenmild (12,351 comments) says:

    The present proposals seem to lack a clear rationale.
    Are they being sold to:
    1. improve the government’s finances
    2. improve the performance of these companies
    3. provide opportunities for investment?

    Rodney his seems to suggest 2, but there seems some doubt about this.

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  14. thor42 (971 comments) says:

    A very well-argued column by Hide!
    Oh dear. How sad it is when the words of past Labour politicians come back to bite them. I wonder how Shearer and co will escape from this little “cornering”.

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  15. mister nui (1,030 comments) says:

    milkymike, I hope they’re being sold for all of the reasons you put forward. But one thing I understand that they’re being sold for, is not so much to improve the government finances, but to put the realised capital to better use building needed infrastructure, such as Transmission Gully and the Puhoi to Wellsford extension.

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  16. Inky_the_Red (764 comments) says:

    I recall that Labour didn’t buy shares off the shareholders instead Air NZ issued new shares which the Government purchased.

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  17. mikenmild (12,351 comments) says:

    mister nui
    So you mean that these billions currently invested in assets that provide an economic return will be reinvested in assets that have poor to non-existent economic returns? Sure that can’t be the reason.

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  18. Viking2 (11,672 comments) says:

    Actually the Govt.’s need to own assests is very limited. They don’t need to own any buildings,not eve the Beehive, they don’t need to own any companies that provide services that can be done by private individuals indeed Govt. doesn’t need to ownvery much at all. Its a complete fallacy that they do.
    All govt. needs to do is have a clear vision of what NZer’s need, (note not want), Have a constitution the prevents them from interferring in anything other than Saftey and Security of the country and people within and requires them to govern in a manner that will meed the philosohpy aspired to by NZers.

    If you watched Q=A this morning a very interesting interview with a gentleman who touched on this very need.

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  19. calendar girl (1,258 comments) says:

    “… will be reinvested in assets that have poor to non-existent economic returns? Sure that can’t be the reason.”

    Why not? “Poor to non-existent economic returns” are what we expect and accept when the Government builds schools, state housing, hospitals, prisons and a whole host of other public assets that tend to be non-profit-making in conventional terms. But that’s the kind of asset that we as a population demand that our Government invest in.

    What’s your alternative? Set the model so that all the publicly-owned assets of the type listed provide a 10-15% return per annum (probably the minimum to enable them to be self-sustaining and capable of growing)? I didn’t realise, MM, that you are quite so prepared to accept “user pays” on such a broad-based scale.

    V2@10:56, not often that I agree with you so whole-heartedly!

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  20. philu (12,989 comments) says:

    and of course an industry that needs to self-reform..before facing legislative-imperatives to do so..is the food-supply groups..

    ..from the extortionate-prices we are forced to pay for the basics of life…(c.f..shocked tourists on their first supermarket experience in this country…)

    (..we are a low-wage/high-cost-basics economy…perfectly the wrong way around..)

    ..to the fact that much/most of what supermarkets peddle from their centre-aisles..

    ..is salt/sugar/cancer-causing-fats-laden products pretending to be/disguises as food..and a diet of which will cause ill-health/major burdens on our health infrastructure..

    ..if they don’t get their act/shit together…

    ..it will be done for them…

    that food/health battle is on our horizon…

    ..and when the public mood changes/anger-rises..forced-reforms will be fast..

    ..so..their choice..change is coming..and they either accept/adapt..

    ..or it will be forced on them..

    ..(and not before time..)

    ..here’s a thought…!

    ..let’s take this mixed ownership model a step further…

    ..and have a program of our super-funds etc. taking strong/strategic shares in our food duopoly…(as just one example..)

    ..the privte owners can retain 49%….(kinda nationalisation-lite..)

    ..and of course with all those benefits as touted by key..

    ..the expertise of private industry able to be harnessed/used…but with the 51% controlled by the state…

    ..and thus making programs of reform in food content/supply so much easier to implement..

    ..and with the imperative that as such a strategic-industry..that the common-good is high on any list of imperatives/corporate-culture..

    ..what’s not to love about that…?

    ..with of course the booze/tobacco/gambling industries also ripe plums for that tweaked ‘mixed ownership model’…

    ..of the govt nationalising-lite them..and taking a 51% share..

    phillip ure whoar.co.nz

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  21. Leaping Jimmy (16,697 comments) says:

    It makes one wonder why Labour made this such a die-in-a-ditch issue.

    Crikey, does it? Since when have Liarbore been interested in doing the correct thing, vs the thing which got them the most votes? If a policy of murdering socialists would get Liarbore elected, that’s what they’d advocate, every single time. They have no ethics, at all, and never have had. The only party worse than them for this, are the Gweens.

    As someone has already pointed out, what matters is the “commanding heights”. The Government should own these for a variety of reasons, not least of which is national security vs. threats both foreign and domestic (including natural disasters).

    Try not to be disingenuous el scorcho. As you well know this is the central argument between the two greatest economic minds of the 20th century. If what you said is what you think, then you’re going to have to explain why in great detail in your opinion, Hayeck’s arguments are incorrect. And for those who don’t know, Hayeck is also known in the media as Rogernomics, Reganomics, Thatcherism, etc. And he has some great economic minds backing him, like Milton Freidman for example. But apparently el scorcho has it all sussed so go ahead el scorcho, we’re all ears.

    BTW as we all know, it was the worldwide application of Keynes’ policies which led to the stagflation of the 70’s. This is why Keynes’ arguments don’t fly. They have been tried, worldwide, and they don’t work. Liarbore and the Gweens don’t seem to understand why they don’t, but fact is, history has proven, without doubt that they do not work, and even Liarbore and Gweens can’t pretend that history didn’t happen. They can ignore it, which they do all the time, but they cannot lie and pretend Keynes ideas will be successful because they have been tried, and they don’t work.

    So all yours el schorcho, tell us what’s wrong with Hayeck.

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  22. Paulus (2,707 comments) says:

    Current Labour has to be seen moving to the left to satisfy Greenpeace Party’s aspirations.

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  23. BillODrees (94 comments) says:

    Air NZ is a red herring in this debate. It was bailed out as a matter of urgency because Brierleys, the Board and the CEO screwed up. There is no comparison between the current context and the one back then.

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  24. philu (12,989 comments) says:

    “..They have been tried, worldwide, and they don’t work..”

    tell that to hollande…

    ..he is showing the way…

    phillip ure whoar.co.nz

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  25. thedavincimode (6,890 comments) says:

    milky

    The stated reason is to enable gummint to invest in the next generation of infrastructural assets without borrowing to do so. The return on assets argument isn’t valid for a gummint IMO. Gummint’s shouldn’t be borrowing and taxing citizens in order to raise funds for investment. It does so elsewhere in effect (ACC and Super) for quite different reasons; irrespective of whether you might agree with those reasons.

    The test for investment is ultimately the return to the economy that these new projects will generate through increased economic activity eg broadband, roads, irrigation. That increased economic activity and the tax generated from it is gummint’s real return; not the nominal return on investment. Gummints can tax; private inverstors can’t which is why the arguments around these sales are completely missing the point; the present faux outrage has been limited to the opportunity cost of dividends forgone on the sell-down (which is not valid IMO having regard to the sums invloved and the potential impact of for these new projects). The real opportunity cost is the forgone economic activity through not selling to invest. It may be that on the face of it, upside suggests that these projects should be borrowed but to avoid doing so manages downside in a number of respects; including balance sheet issues that were discussed the other day.

    Key and Co have done a piss poor job in explaining this point around opportunity cost in economic growth terms and have effectively allowed Liebour and the melons to confine the battle to an issue that is not central to these decisions.

    To the extent that these projects are unable to obtain private capital, that suggests that they are unable to generate sufficient return for a private investor. But as I said, Gummint gets tax revenue also and the economy as a whole benefits.

    The decision to invest should focus on the economic benefit generated and the payback in terms of tax revenue. If that is insufficient for any particular project then it ought not to proceed. That is not to say that ROI shouldn’t be a factor in the decision-making, but it should not be the driver.

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  26. philu (12,989 comments) says:

    “..Current Labour has to be seen moving to the left to satisfy Greenpeace Party’s aspirations…”

    of course a counter-analysis wd be that labour are centreising..

    ..thus leaving room on the left for greens/mana…

    ..and thus the centre-left owning the political-battlefield..for the forseeable future..

    ..(dosen’t that seem more logical/probable..?..)

    phillip ure whoar.co.nz

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  27. philu (12,989 comments) says:

    “..The decision to invest should focus on the economic benefit generated and the payback in terms of tax revenue. If that is insufficient for any particular project then it ought not to proceed. ..”

    so…if following that formula…how do you explain/justify the holiday-highway nth of auckland..?

    ..economic-benefits zero/nada/nothing…

    ..and just moving the standard holiday traffic slowdown..just a few further k’s down the road…

    ..where are the/any economic-benefits there..?

    ..especially factoring the eyewatering cost to build it..?

    ..outside holiday-rush-times…the highway as is works just fine..

    phillip ure whoar.co.nz

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  28. mister nui (1,030 comments) says:

    milky, I’ve been outside, so missed your question: reinvested in assets that have poor to non-existent economic returns? Sure that can’t be the reason.

    But, both calendar girl ad davinci have answered it just as well as I could’ve.

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  29. mister nui (1,030 comments) says:

    The drug fucked loon said:

    (..we are a low-wage/high-cost-basics economy…perfectly the wrong way around..)

    How do you propose phil that we become a high wage economy with low costs?

    It is simply impossible, high wages drive inflation, therefore driving costs. Just look at what is happening in Oz at the moment; The high wages of the resource sector is driving up living costs, but because these high earners aren’t spending money, they’re saving it, the economy does not have liquidity. Therefore, people in the low paid jobs, such as retail, are getting screwed. Because shops are shutting left right and centre they no longer have jobs and cannot afford the day to day necessities, because high wages in other sectors have pushed these prices beyond their reach.

    Anybody who thinks things in Australia are rosy, needs to put down their copy of the bullshit NZ Herald and get their head read.

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  30. HB (331 comments) says:

    this is just all ideological arguments.

    I would rather see evidence. As in, $.
    How much better/worse off will we be overall next year, 5 years, 10 years etc from now if we sell the 49% share.
    Including all factors such as dividends, interest, capital investment required etc.
    A table comparing the two (selling and not selling) would make a better argument for or against either way.

    Evidence based policy please, not ideology.

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  31. mikenmild (12,351 comments) says:

    HB. I don’t think that is going to happen. The best rationale we will get is Hide’s assertion that the economy will benefit from advanced private-sector management techniques being applied to running these enterprises. Sounds fab.

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  32. Viking2 (11,672 comments) says:

    calendar girl (737) Says:
    July 8th, 2012 at 11:15 am

    “… will be reinvested in assets that have poor to non-existent economic returns? Sure that can’t be the reason.”

    Why not? “Poor to non-existent economic returns” are what we expect and accept when the Government builds schools, state housing, hospitals, prisons and a whole host of other public assets that tend to be non-profit-making in conventional terms. But that’s the kind of asset that we as a population demand that our Government invest in.

    What’s your alternative? Set the model so that all the publicly-owned assets of the type listed provide a 10-15% return per annum (probably the minimum to enable them to be self-sustaining and capable of growing)? I didn’t realise, MM, that you are quite so prepared to accept “user pays” on such a broad-based scale.

    V2@10:56, not often that I agree with you so whole-heartedly!

    Ah well you should listen a lot more often and apply a bit more self responsibility to stuff. (not you personally but to everyone). The Govt. are thieves in that they take from others to give to others and steal a huge chunk on the way thru.

    Their is a need for some but frankly we should halt all income tax and have GST only with no exceptions to anything including imports that fly under the radar via crediticards. Force the governmant to get out of peoples lives.

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  33. mikenmild (12,351 comments) says:

    I think you are setting up false alternatives there V2.

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  34. wat dabney (3,840 comments) says:

    mister nui,

    high wages drive inflation, therefore driving costs.

    This implies that high-wage economies necessarily have high inflation, which is demonstrably not true.

    The high wages of the resource sector is driving up living costs, but because these high earners aren’t spending money, they’re saving it, the economy does not have liquidity.

    If these high earners are not spending the money, how is it driving up living costs? It doesn’t make sense.

    Therefore, people in the low paid jobs, such as retail, are getting screwed. Because shops are shutting left right and centre they no longer have jobs and cannot afford the day to day necessities, because high wages in other sectors have pushed these prices beyond their reach.

    Again, this doesn’t make any sense. Service sector wages rise along with general productivity, even though their own productivity doesn’t increase anything like the same rate. If this wasn’t true, you would not be able to get a haircut in Germany, yet I’m pretty sure you can.
    Here’s a photo title that basically disproves your analysis. It concerns North Dakota’s oil boom: “This waitress at a local truck stop said it’s not uncommon, for some, to make $750 a day waiting tables”

    http://www.businessinsider.com/youve-never-seen-anything-like-the-williston-oil-boom-2012-3#this-waitress-at-a-local-truck-stop-said-its-not-uncommon-for-some-to-make-750-a-day-waiting-tables-29

    God forbid that NZ should have a similar boom.

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  35. philu (12,989 comments) says:

    “..The drug fucked loon said:

    (..we are a low-wage/high-cost-basics economy…perfectly the wrong way around..)

    How do you propose phil that we become a high wage economy with low costs?..”

    well..short answer…we reverse what has been done to us since the 80’s..

    raise wages…

    raise taxes on the richest..(like hollande..?..75% tax on anything over a million..?..who needs more than a million a year..?..really..!..)

    ..a financial transaction tax on the banksters..(which through a small charge..will raise serious money..)

    ..nationalise-lite..(take 51% control) of the food duopoly…)

    ..and screw this minimum-price thing on alcohol..just seriously screw up the excise…(as an attempt to make alcohol user-pays..for all the social costs from the poisonous muck..)+ nationalise-lite/mom the big pushers (manufacturers and retailers..)

    ..make the pollutors pay..(farmers/dirty-industries..)

    ..and uses economic-tools to reward clean/green/new industries…and to excise the dirty-ones out of business..

    ..legalise/tax pot…

    ..serious raising of excise on tobacco…+ nationalise-lite/mom the industry…with the aim of ending it..

    ..capital gains tax…

    ..nationalise-lite/mom the gambling industry…

    ..how is that for starters..?

    ..all do-able…just needing the political/common-will..

    phillip ure whoar.co.nz

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  36. UpandComer (537 comments) says:

    Phil those are some high calibre lefty policies there – why didn’t Labour ever use them?

    Capital gains tax is really harmful, because it hurts small investors more then the big boys. When you only have a few thousand to invest, having been taxed on your wages, then your savings, you will then be taxed on your small marginal capital gains in shares. It’s a very bad policy to have.

    I can’t agree with the pot business. I think it should be decriminalised and taxed, but not legalised and sold. Too many doctor friends see people come to them who are regular pot smokers with all manner of mental problems, notably a lack of motivation to get a job or go to school for instance.

    I agree with tobacco, but it’s actually being raised heaps now.

    Hitting farmers is all well and good, but I suspect you know nothing whatsoever about how a farm is run, and what standards these guys actually keep. You get a crafar who is a cruel incompetent prick, but you have many young farmers who are motivated to maintain environmental standards. They needs to be worked with, not punitively dismissed as ‘polluters’ . Those farmers are the ones paying your benefit.

    Your economic tools comment is Greens silliness. The government cannot simply ‘decide’ what ‘clean/green/new industries’ are to be a success or not. The most they can do is support a project which the market has determined successful already. Frankly we are in no way qualified for those kinds of tech. Our windmills don’t sell overseas, and we are not China making solar panels with huge economies of scale. You do need to get out of your computer room a bit. Like all pot smokers everywhere you spit these things and don’t really think them through. It’s all big government coercive punish money earners – all to easy when you don’t do anything much.

    Fine raise taxes on the big boys, then watch all that money disappear to the pacific island havens.

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  37. philu (12,989 comments) says:

    “..Phil those are some high calibre lefty policies there – why didn’t Labour ever use them?..”

    lack of testicular-fortitude..?..capture by the right..?..a combination of both is most likely…

    “..Capital gains tax is really harmful, because it hurts small investors more then the big boys…”

    that is just a strawman argument…the sale of trade me is all that needs to be cited to mandate a capital gains tax..

    ..no capital gains tax favours the rich/richest…let’s not kid ourselves..eh..?

    ..”I think it should be decriminalised and taxed, but not legalised and sold”..

    and how on earth does that make sense..?…how would that operate..?..and why go halfway-house..?..

    ..just legalise and tax…sold tru 51% owned-by-the-state/mixed-ownership-model pot-shops…eh..?…keep it simple..

    ..(i’ll put to one side yr anecdotal-anti-pot comment..it is as worthwhile as most slanted anecdotal-evidence..)

    re farmers:..mainly thru cancer-awareness from the product currently sold…selling bits/byeproducts of dead animals is a sunset industry..

    ..but that will not mean the end of farming…farmers will just start farming real food..not running animal gulags/concentration-camps..

    ..as long as fuel/transport costs don’t totally fuck everything up..and isolate us again…we could become massive exporters of good/healthy food..(and of course all the industries that would pop up from that…)

    ..most of our country is devoted to this cruel industry..

    ..and the basic inefficiencies of that industry globally seriously translate thru to here…

    ie..producing beef uses 60% of the arable land on the plant..yet only produces 5% of the protein needed to feed the planet..and 2% of the carbohydrates required…(and one pound of beef takes 50,000 litres of water to produce..)

    ..closing the gulags and growing real food will mean there will be no need for any to starve…

    ..(these are the ‘new/young-farmers’ i am looking forward to…)

    “..The government cannot simply ‘decide’ what ‘clean/green/new industries’ are to be a success or not…”

    i am not arguing that flawed model…

    ..it is as simple as setting environmental standards…and then industries have to either meet..or not..those standards…

    ..like the pot..keep it simple…

    ..(then you do a long ad-hom..which i will ignore..)

    ..and you finish with that excuse/threat ever offered whenever the imbalances of income/wealth are addressed…

    ..so..hollande is going to charge 75% tax on any income over a million..

    ..so won’t those pacific islands already be full of morose french tax-exiles…?

    ..that ‘we will take our money and leave!’ threat is a nonsense…

    phillip ure whoar.co.nz

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  38. philu (12,989 comments) says:

    i gotta tell ya..up and…

    the more i think about this mom-model..the more i like it…

    (but from an angle..and with outcomes..that will horrify the current authors/promoters of this model..

    ..and what could well happen should this genie be let out of the bottle…it is the natural next step..)

    ..it is a clever solution to the usual problems/upheavals caused by nationalising industries…

    ..if the state just takes 51%..giving them control..and that income…the 49% is left for the current owners…

    ..they will moan..but if any current management don’t like it/cant wear it..

    ..they can just piss off..

    ..nobody is indispensible…and there are many qualified/willing to do the jobs..

    ..such a cleanout would also be a golden opportunity to bring executive-incomes back into some form of sanity…

    ..y’know..up and…i never thought i wd be saying i support this mixed-model ownership model..

    ..but i am warming to it by the hour…

    ..don’t forget..up and..the truism is that ‘change is the only constant’….eh..?

    ..we are constantly looking for better ways to do things..

    ..so should national introduce this model…

    ..i look forward to the next progressive govt to take those added steps…

    ..to nationalise-lite/mom those industries that need it..

    phillip ure whoar.co.nz

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  39. KH (695 comments) says:

    I keep thinking ownership of these things should be restricted to NZ citizens and clear NZ entities (say Iwi and KS funds)
    Xenophobic ? Not in a racial sense. Yes in a nationalistic sense. It’s a hard cold world out there. We need to keep together. I would prefer these stategic (or semi strategic) enterprises to be owned by us. And I would prefer to be surrounded by those who own them. Rather than offshore.
    Marx said wisely – the benefit always flows to the owner. So rather than turn leftie. I prefer to own. And as a nation we should own. It just don’t have to be the government.
    Good question as to whats strategic. It is of course a matter of degree. And central to what we do.

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  40. mikenmild (12,351 comments) says:

    But restricting ownership to NZers would inevitably result in a lower sale price, so ineffect you are arguing that those who do not buy shares shoudl subsidise the investment of those who do.

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  41. philu (12,989 comments) says:

    btw..cd i stick a copyright/first-idea claim on that advanced/progressive-mixed-ownership-model..?

    ..i haven’t seen the idea entertained anywhere else…

    ..it has all the benefits of nationalising…

    ..and none of the heartache…

    phillip ure whoar.co.nz

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  42. wat dabney (3,840 comments) says:

    I can’t think of a single reason for restricting sales to Kiwis only. Foreign owners seek the same as domestic ones: maximum legal profit.

    Kiwis benefit from inward investment and accumulation of working capital.

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  43. philu (12,989 comments) says:

    i wd be relaxed about mixed local/foreign share ownership in the new progressive/nationalised-lite m.o.m…

    phillip ure whoar.co.nz

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  44. Viking2 (11,672 comments) says:

    mikenmild (4,883) Says:
    July 8th, 2012 at 2:16 pm

    I think you are setting up false alternatives there V2.

    Yep but you would say that. Why don’t you look at this from the perspective that the Govt. is only a bunch of legislators and therefore don’t even need to own their own seats.
    If that’s so why does the govt. need to own hospitals and schools and all the rest of the junk it has accumalted in 150 years.
    Govt. by definition is a group of legiislators. The rest is mearly a function of that task and therefore the Govt. does not need to own anything to acheive those tasks.

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  45. krazykiwi (8,040 comments) says:

    Kiwis benefit from inward investment and accumulation of working capital.

    Which provides our next socialist government with more to nationalise in pursuit of Venezuelan excellence :)

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  46. wikiriwhis business (4,200 comments) says:

    so now we have MOM, an original labour policy resurrected by the Nats. As the Nats also did with the Labour EFB.

    Has the country had enough of this coalition. I think the last election showed we have . Over 60 years of them and the nation is terribly run down. An Americanism as well when we still don’t let their ships in. Although we are back in ANZUS.

    John Key has tripled the poverty of this country whilst tripling his own wealth in Waverly with Iron Sand.

    Then when he’s gone he’ll simply return to Goldman Sachs or the Fed and help raid bank accounts and make more homeless.

    At least the conspiracy deniers have had their mouths closed with Barclays that was called a conspiracy to defraud. Every time a conspiracy denier opens their ignorance again simply remind them of Barclays and Libor. Let’s just hope the FBI probe into Libor as diligently as they did Dot Com !!!

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  47. Jeff83 (747 comments) says:

    “It should only own companies that are strategically necessary” I extend this to where in a market there would be a natural monopoly, because if that monopoly is privately owned the public lose / lose, where if there it is public owned at least the excessive returns are returned to the public purse.

    Clearly where real competition is available this is preferable, but some times it is not.

    Also it is arguable that on a heavily tourist dependent economy a national airline is strategically important.

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