Pacific Forum Line

October 1st, 2012 at 11:00 am by David Farrar

Labour’s ideological obsession with state ownership rears up again. Stuff reports:

A Government plan to sell a state-owned asset considered vital to Pacific development is expected to be rubber-stamped this week.

The Sunday Star-Times understands an urgent meeting took place last week in Tonga, to be followed by another this week in Fiji, finalising plans to sell the 35-year-old Pacific Forum Line (PFL) to Singaporean firm Sofrana.

Founded in 1978, PFL was intended to encourage economic development in the islands and provide competition to ensure private shipping operators were unable to create a monopoly in the Pacific.

New Zealand and 11 island countries have equal voting rights in PFL, but practical control is exerted by New Zealand, Fiji and Papua New Guinea which between them own around three-quarters of the company’s shares.

So we only own 23% of it. But why is Labour insisting we own 23% of a shipping company?

McCully defended the decision to sell and said PFL no longer fitted its purpose.

“PFL was established to fulfil an important need, namely to offer regular shipping services that the private sector was not able to provide in the Pacific,” he said. “Since that time a great deal has changed, to the extent that the PFL no longer fulfils a number of its obligations. It now owns and operates no ships and participates in what is effectively a code share relationship with private sector shippers.”

Oh my God, so it is a shipping company that owns no ships! And this is an example of what we need to retain part ownership of? What next, an airline with no planes?

Despite once being a profitable enterprise, PFL has recently financially deteriorated, with losses totalling $14 million in the two years to June 2011.

Sounds like we’ll be lucky to find anyone to buy it. What would you pay for a shipping company with no ships?

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20 Responses to “Pacific Forum Line”

  1. Brian Smaller (3,983 comments) says:

    But they are our assets? ASSETS!! Wont someone think of the assets?

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  2. Manolo (13,327 comments) says:

    McCully is right. As usual, the wasteful socialist Labour Party is wrong.

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  3. tom hunter (4,369 comments) says:

    Perhaps this is an opportunity to inject private enterprise directly into politics?

    We can sell PFL directly to the Labour Party. Who knows, between now and the 2015 election Silent T may well engineer a brilliant business turnaround and PFL will be worth bucket-loads of money, while also demonstrating what he can do with the larger NZ economy. Labour will then have a tangible (well, semi-tangible) product to bring to the next election rather than just bribing people with their own money. Win, win.

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  4. Brad (75 comments) says:

    I wouldn’t go throwing around phrases like ideological obsession when your’s and your party’s own ideological obsession is the privatisation

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  5. Peter (1,577 comments) says:

    Labour confusing “asset” with “liability” again.

    Someone loan them an Econ101 textbook….

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  6. Monique Watson (1,062 comments) says:

    I can see the value of ownership in shipping givn new Zealand’s distance from market. Why the hell didn’t those cocks Clark and Cullen et al buy some ships instead of a useless railroad to nowhere?

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  7. dime (9,368 comments) says:

    lmao @ labour

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  8. hmmokrightitis (1,506 comments) says:

    Question: Unions invest their surplus funds for the benefits of their workers. So, why cant those same unions invest their money directly into ownership of organisations where their workers are being made redundant? This way, instead of just whinging and whining about “its all managements fault” they can be a positive force for good, supporting their workers and the economy, and showing us all how collective management really works.

    Maybe start with the shipping company with no ships?

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  9. nasska (10,622 comments) says:

    Monique

    …”Why the hell didn’t those cocks Clark and Cullen et al buy some ships instead of a useless railroad to nowhere?”…..

    Two words….Maritime unions. Even Labour could see that going back to endless strikes & industrial unrest aimed at crippling NZ’s trade would create unnecessary headaches for whoever was in government.

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  10. Viking2 (11,125 comments) says:

    tom hunter (3,582) Says:
    October 1st, 2012 at 11:17 am

    Perhaps this is an opportunity to inject private enterprise directly into politics?

    We can sell PFL directly to the Labour Party. Who knows, between now and the 2015 election Silent T may well engineer a brilliant business turnaround and PFL will be worth bucket-loads of money, while also demonstrating what he can do with the larger NZ economy. Labour will then have a tangible (well, semi-tangible) product to bring to the next election rather than just bribing people with their own money. Win, win.

    And the Maritime Unions and wharfies can start their own port to service them.
    Now that will be fun to watch

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  11. tom hunter (4,369 comments) says:

    Indeed.

    Ummm – Viking – any chance you could start learning how to encapsulate other people’s comments using the *blockquote+ and */blockquote+ HTML tags? It would make reading your posts a hell of a lot easier.

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  12. Roflcopter (420 comments) says:

    “Sounds like we’ll be lucky to find anyone to buy it. What would you pay for a shipping company with no ships?”

    Labour would pay $1b without blinking an eye.

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  13. freedom101 (462 comments) says:

    I’m pretty sure that that the Labour Party will want to buy it back for $200m and make it a KiwiRail subsidiary.

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  14. Positan (383 comments) says:

    To judge from Labour’s ever increasingly hell-bent efforts, the party seems almost suicidally determined on proving to all the world the extent of its lacking in even the most miniscule skerrick of administrative competence, let alone the faintest understanding of the priorities of government. All those school teachers … yet the dumbest utterings conceivable.

    God help us when the inevitabilities of the silliest, most shackling and most backward-facing political system we could have picked render us a Labour/Green government.

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  15. PaulL (5,872 comments) says:

    I have no problem with owning a shipping company with no ships. I have a big problem with owning a shipping company that has no ships and also makes a loss. That’s effectively saying it’s buying capacity on ships that are already going to Fiji or whereever, and then selling that capacity on the open market at a loss. Presumably the loss isn’t driven by the wholesale pricing being higher than the retail price, rather the overheads in between are the problem.

    Surely we could simply replace the entire organisation with a grant that is given to any shipping line that regularly visits specified ports – say, $10,000 per visit. That would presumably get the same or better outcome at much lower cost.

    Brad, it is ideological to want to keep every company in state ownership regardless of the outcomes it’s delivering. Labour opposes every privatisation and supports every nationalisation.

    It is not ideological to observe that a particular organisation is no longer a fit with govt ownership or is no longer generating the outcome intended. If National wanted to privatise _every_ state owned company, that might be ideological.

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  16. Monique Watson (1,062 comments) says:

    @nasska, agree re the perils.

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  17. RF (1,263 comments) says:

    Labour the party of soft cocks except maybe Mallard so I hear. Labour can buy it back plus throw in a few ships as we need assets.

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  18. Viking2 (11,125 comments) says:

    Ummm – Viking – any chance you could start learning how to encapsulate other people’s comments using the *blockquote+ and */blockquote+ HTML tags? It would make reading your posts a hell of a lot easier.

    Ummm. no. Too busy Will under line them for U if it matters.

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  19. chiz (1,119 comments) says:

    It only takes few seconds V2, less if you use italics rather than blockquotes.

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  20. Reid (15,917 comments) says:

    Under the UKUSA pact which creates the tight five the domain of Aus is SE Asia and for NZ it is the South Pacific Islands. As we all know China has been making significant inroads into the South Pacific with its chequebook diplomacy and this is THE major reason why the US has switched its strategic focus to the Pacific in the last year or so.

    In light of that this is a short-sighted move to get rid of a vehicle that doesn’t cost much and which has the capacity to win hearts and minds in the region, if it is used properly: i.e. ships painted with “NZ hearts you” signs whenever it pulls into port. Put John Ansell onto it and see how quickly many SP people start loving the west to bits.

    I’ve never rated McCully. He’s a bastard. He’s a useless strategist, both in domestic politics and in geopolitics. He’s a Machiavellian politician after his own selfish interests 100% of the time. This is reason #42967872 why I don’t rate the useless prick. I wish he’d just fuck off and retire. He’s the reason why Cromwell said:

    It is high time for me to put an end to your sitting in this place, which you have dishonored by your contempt of all virtue, and defiled by your practice of every vice; ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country for a mess of pottage, and like Judas betray your God for a few pieces of money.

    Is there a single virtue now remaining amongst you? Is there one vice you do not possess? Ye have no more religion than my horse; gold is your God; which of you have not barter’d your conscience for bribes? Is there a man amongst you that has the least care for the good of the Commonwealth?

    Ye sordid prostitutes have you not defil’d this sacred place, and turn’d the Lord’s temple into a den of thieves, by your immoral principles and wicked practices? Ye are grown intolerably odious to the whole nation; you were deputed here by the people to get grievances redress’d, are yourselves gone! So! Take away that shining bauble there, and lock up the doors.

    In the name of God, go!

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