correct

So why is the government and regional council investing millions in a dam in Central Hawkes Bay ??

Why does the public need to own a coal mine? Or a power company? Or an airline?… Here in New Zealand we pay high prices for monopoly services that are effectively government-owned.

I’m not too familiar with the coal mining sector, but neither the electricity market nor the airline market are controlled by government monopolies.

You got a few Rakon shares then……?

should have had a property instead – then it wouldnt be subject to the gambling tendencies that many company managers have. If you are going to suffer a value loss – best organize it yourself than let someone else do it……..

I’d think it is generally agreed that the privatisation of power has been a disaster.

I don’t think so. I think that the three or four years from deregulation, the breakup of Electrocorp, and the sale of contact until the reregulation by the Clark governmnet were pretty good – the price of electricity actually dropped. The sad thing is that the government didn’t sell two more energy companies to ensure that they were only a small player in the market instead of the major player. That would have led to proper competition instead of a state owned cartel.

I also agree with Pete George – they should have chosen one SOE to sell in its entireity rather than parts of four and retaining the controlling interest in the industry.

As for Solid Energy, it should have been sold years ago, after recovering from its first bailout.

I agree we should sell pretty much all our commercial companies, and not just 49% of them.

I think National got their package of SOEs to sell wrong. Rather than committing to a policy of selling half of a set number of SOEs they should have looked at indivuidual SOEs incrementally, as market and other conditions allowed.

They should have started with one energy company and seen how that went before committing to more.

They made their policy decision two years ago, there have been a lot of chnages in the economic situation and in individual SOEs since then, especially SOlid Energy obviously.

Political cycles and election campaign priorities do not fit well with making sensible business decisions.

The rat directors who oversaw the decline of a once very profitable business have all run away when the bucket got lifted to the fan, to seek cover behind their well connected friends who helped to install them in the first place.

If our media actually got off their arses and exposed these directors and management for the frauds they are it may stop it happening again, the absolute minimum of scratching is required to gather this information

Warren Buffett, The Sage of Omaha said this about airline shares:

There’s no worse business of size that I can think of than the airline business. You’re selling a commodity product with no variable costs. Huge fixed costs. It’s a terrible business.

I have an 800 number now which I call if I ever get an urge to buy an airline stock. I say, ‘My name is Warren, I’m an air-aholic,’ and then they talk me down.

‘Or an airline’? Are you and Colin seriously ‘rationally’ questioning why the taxpayer owns 3/4 of Air New Zealand?

In the words of an exec-level consultant to AirNZ: Air New Zealand operates more like the travel department of Tourism New Zealand than it does a commercial enterprise.

http://www.nbr.co.nz/article/don-elders-future-not-discussed-ch-129455

I’d think it is generally agreed that the privatisation of power has been a disaster.

http://www.nbr.co.nz/article/govt-blocked-grandiose-solid-energy-plans-2009-bd-136424

Rakon hasn’t collapsed, though it’s taking a hammering.

It’s lowered its forecast for preliminary earnings for the year, but its shares are still at 23c on the NZX this morning.

IMHO Rakon would have been better off staying privately owned. Hyped to hell by the broker community and its hangers on when it went on the stock exchange. Such technology companies will always be liable to wild swings of tech progress and market demand.

Like family farms, family-owned enterprises can ride out the down turns better, without the equity vultures pecking into them while they are recuperating.

‘Or an airline’? Are you and Colin seriously ‘rationally’ questioning why the taxpayer owns 3/4 of Air New Zealand?

[DPF: Yes. The Govt should have allowed Singapore Airlines to buy a greater stake of Air NZ when it was in financial difficulty. Their refusal made the crisis even worse and made the taxpayer investment inevitable as they wouldn't allow Singapore Air to invest more.

Ironically they then tried to get Qantas to do aa deal with Air NZ which would have been awful for the consumer and destroyed TT competition. Why you should not own and regulate. Singapore Air was already part of Star Alliance so a sale to them would not have have competition issues]

Solid Energy was pushing into biofuels such as rape seed oil and wood pellets at the same time it was trying to explore the vast mineral resource of Southland lignite for fuel (and latterly fertiliser).

Both are industries that have produced only with subsidies and Government support. Money spent investigating liquid fuel from Southland’s huge lignite resource was always spending on a remote possibility. Fuel from lignite was feasible in Germany in World War 2 because they were desperate for diesel and petrol, and by SASOL in South Africa only because the world was shutting off South Africa’s supply of petrol during the apartheid era. It’s time may come in NZ, but not soon.

However, above all Solid Energy was far too optimistic in expecting the world coal price boom to continue steadily, just as the rest of the country is overly optimistic in expecting commodity dairy prices to stay high permanently. NZ was always going to be one of the first squeezed by the dive in world coal prices, thanks to its well overpriced currency, and thanks even more to the high cost of transporting coal, first by rail over the Southern Alps to an export port, and then to market.

Solid Energy management was highly paid, too, compared with most private firms. The outgoing CEO was on a pay a number of times the multiple of John Key’s salary as Prime Minister, and in a company with a staff of not a helluva lot over 1000, there were tens of staff on $200,000 a year plus.

Should it have been Government owned? IMHO, no. However, there should still be good regulation of an industry like coal, as the West Coast disaster showed.

The tragedy of the Pike River disaster understandably overshadowed the whacking of investors in that mine by incompetent management at very top and board level, and I don’t mean the hapless mine manager left to face the music. The developers failed to meet time goals, underestimated difficulties and costs, and generally failed all round. Fuck them.

Has Espiner had a brain transplant. That’s not lefty talk.

All good though and lets get it done. Education and schools as well.

Best news I’ve seen for years.

The best bit saved for last.
Without all the empires we sure would not need 120 political overheads.

I have absolutely no doubt that if Solid Energy was not state owned, it would not be in as dire a situation as it is now.

But…but…we elected the party of business to lead us not into financial ruin…

As for the privatisation story, I believe governments shouldn’t own/run businesses. I believe more strongly that governments shouldn’t waste my money on electoral pork designed to keep them in power. Given our government’s willingness to indulge the latter, I’m not really keen for them to sell assets so that swing voters can be more readily bought.

Same goes for mainzeal and Rakon – and quite a few others.

Incompetant leaders cant be blamed on the owners – although I guess in many cases it is the owners who put those idiots in charge.

Ive been following NZ Post for some time.
For the years up to 2010 they continued to lose postal business yet they continued to budget an increase. Only someone from mars would have not seen the effect of the internet. Incompetant management.