The Government has struck back at claims that controversial state-owned asset sales have cost more than $1 billion.
Green Party energy and resources spokesman Gareth Hughes said the party had not ruled out buying back Mighty River Power, Genesis and Meridian.
Oh good. A policy of asset confiscation will be just the thing to get National a 4th term.
The latest dividend figures showed the Crown had missed out on $945 million in dividends since listing, with a further $96m spent on the sales programme, he said.
The Greens are confusing foregone income with costs. They are not the same thing, as any stage 1 accountancy student would know. Also it is not foregone income.
Cameron Burrows, a spokesman for Finance Minister Bill English, said the Greens’ comments confirmed they did not understand how business worked.
“The share offer programme has brought valuable private sector discipline to public assets,” he said.
The Government now received more in dividends than it did when it owned the companies outright.
“For example, dividends from Genesis in the decade before the float averaged $32m,” said Burrows.
“This year, as a 51 per cent owner, the Government received $83m in dividends from Genesis.”
Yes, the Government is receiving more in dividends now with 51% than it did with 100%.
The Greens think ownership doesn’t matter and that 100% public ownership would have resulted in the same level of profitability and dividends. The history of the world is that ownership does matter. It is ridiculous to assume this level of profitability and dividends would have occurred under fully public ownership.
Hughes said it would only be a few more years before the total costs eclipsed the money raised.
No the Government is receiving more money now from its 51% share than it did from 100% share. It has more dividends, and reduced debt. A win-win.
National won the 2011 and 2014 elections despite the campaign against partial asset sales. The Greens think that somehow people will care in 2017?
“As ordinary Kiwis open their power bills this winter and see the price rising again, they’ll be asking, ‘how has the power company sell-off benefited me?'”
Electricity prices went up 64% or 7.1% a year under nine years of a left wing Government.
In the last three years electricity prices have gone up only 2.45 a year.
So in summary:
- Smaller price increases than previously
- More dividends to the Government
- Less debt for the Government
- More dividends for investors such as KiwiSaver funds
Looks like a great success story to me.
The Greens and Labour were criticised for releasing their NZ Power policy just before the companies were listed, which some commentators saw as an act of sabotage.
The resulting fears may have reduced final sale prices by hundreds of millions, meaning a substantially reduced return for taxpayers.
“That’s for commentators to speculate, and play hypotheticals on,” Hughes said.
It was an act of economic sabotage. But it backfired. While some investors were scared off, those who did invest (like me) made a large capital gain after the election – all thanks to Labour and the Greens.
Mighty River Power is trading at a 4 per cent premium to its $2.50 float price, despite touching $3.50 a year ago.
Genesis Energy has also pulled back from last year’s highs, but remains 21 per cent above its $1.55 float price.
Meridian Energy has been the star performer of the three, up 57 per cent from its initial price of $1.50, which investors paid in two instalments.
I purchased in all three. I invested for the dividends but thanks to the Greens and Labour I made a good capital gain also.