The Govt has announced:
113,000 New Zealanders will become shareholders in Mighty River Power following a successful share offer, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.
The final price will be $2.50 per share.
Of the shares issued, 86.5 per cent will be New Zealand owned: 26.9 per cent by New Zealand retail investors, 8.6 per cent by New Zealand institutions and with the Crown retaining a majority 51 per cent shareholding. That leaves 13.5 per cent for overseas institutions.
“This is an outstanding result and fulfils our commitment to ensuring at least 85-90 per cent New Zealand ownership of the company,” Mr English says.
“The share offer will raise $1.7 billion, which is a very good return for New Zealand taxpayers. Those proceeds will go into the Future Investment Fund, allowing the Government to control debt while continuing to invest in public assets. More details will be announced in next week’s Budget.“The Government has achieved all of its objectives for the Mighty River Power share offer, so the company will list on Friday.
“Given the strong response to the share offer, and the price we have set, Mighty River Power will have a market capitalisation of $3.5 billion.
“And with over 110,000 New Zealand shareholders, it will have the largest share register – by some margin – of any New Zealand company on the exchange.”
Mr Ryall says that due to the strong level of demand, some scaling has been necessary.
“We have decided to apply progressive scaling, which means that larger applications are scaled more than smaller ones,” Mr Ryall says.
“That means that more than 80 per cent New Zealanders will get what they applied for.”
Yay, this means I’ll get all the shares I applied for. It also means I picked up the shares for around $600 cheaper than they might have been, thanks to Labour and Greens.
I will get 2,000 shares, which is 214 more than I would have got if the price was $2.80. Assuming the real value is $2.80 if the nationalisation policy never eventuates, then those 214 bonus shares are worth $600.
68% of applicants did not have a CSN number, which implies they are first time investors. That is great, because having more people invest in capital markets is a good thing.Tags: Asset Sales, Mighty River Power
They needed 308,753 valid signatures but fell short by 16,500.
That is a massive fail and gross political incompetence. They didn’t have to submit the petition when they did. They could have carried on getting more signatures to make sure.
Around 25% of their signatures were found to be invalid. That is a massively higher proportion than other petitions have had, and makes you wonder about their tactics. Did they sign up children? The Clerk has stated there were also duplicate signatures.
But surely they were intelligent enough to determine for themselves how many signatures were probably invalid, to work out how many they needed to collect. Both parties have access to an electronic electoral roll so they could have done exactly what the Electoral Commission did – take a sample of a few thousand names and check how many are on the roll.
Now the law provides that they can resubmit their petition with more signatures in the next two months, so if they persist, they can still qualify. But it means they have lost any moral claim that the Government shouldn’t proceed until the referendum – because they have failed (for now) to qualify.
It also means that the referendum may now occur after all the energy companies have been sold – making it even more of a farce.
It is bad enough they have wasted over $200,000 of taxpayer funding on trying to by signatures for their petition, and failed. Even worse to use more taxpayer money to gather the extra signatures and waste millions of dollars on a pointless referendum which may not even be held until a few months before the general election. They should instead go into the election with very clear policies on whether they wil buy back the shares or not and let the public decide at the ballot box.
I’m still staggered for now that despite spending $400,000 and having the entire memberships of the Labour and Green parties, and most unions, they proved unable to get enough valid signatures. You could understand it if they were close to the deadline to submit – but they were not. They made a tactical decision to submit early for political posturing, and have ended up with egg on their face.
UPDATE: They claimed to have 400,000 signatures but got 292,250 valid ones. That means 107,750 were invalid which is a massive 26.9%. Maybe they should have put their paid petition gatherers on performance pay!Tags: Asset Sales, Greens, Labour, referendum
The Mighty River share offer does not close until tomorrow but plans already underway to sell stakes in the other two state owned electricity generators.
It appears Treasury is keeping the option of selling stakes two more companies later this year.
The Wall Street Journal reported overnight that the Treasury has called for investment banks to tender for leading roles in the partial privatisation of Meridian Energy and Genesis Energy. The report said pitches for the work were due by the end of this month.
This morning a spokeswoman for Treasury confirmed the agency was ”undertaking preparatory steps for the next IPO/s, including selecting JLMs [joint lead managers].”
She added: ”Ministers have indicated publicly that they would like to see at least one more IPO [initial public offering] in 2013, subject to market conditions and the preparedness of the companies.
”No decisions have been made about which company will be next, or the timing of any offer.”
I am really looking forward to the Meridian float. Their strategy to date has impressed me, and I think they will do well in future. I wish they’d spin off Powershop so I could buy shares in them directly also!
Final day to buy MRP shares is today. I reckon whatever price they are at below $2.80 will be down to the Green/Labour sabotage tactic. So if buying 2,000 shares and they are at say $2.50, then Greens and Labour will have saved me $600. I’m tempted to donate my savings to National as a campaign donationTags: Asset Sales
The Herald editorial:
Air New Zealand’s soaring fortunes were confirmed last week when it flagged that its annual earnings would more than double this year. Normalised pre-tax earnings would be between $235 million and $260 million if current market conditions and the trading environment persisted, it said. Air New Zealand’s share price immediately shot up 8c to $1.52, signifying a 10 per cent rise this year. …
As it is, Air New Zealand may well hold more appeal, especially for the mum-and-dad investors the Government aims to attract. The airline industry has always had an allure despite the vast sums of money that have been lost in it, and the national flag carrier has a special place in the hearts of New Zealanders.
It has faced a multitude of problems in the past few years, including high fuel prices, landing fee increases, earthquakes in Christchurch and Japan, and discount competition. Yet it has managed to not only survive but to achieve a profitability more commonly associated with budget operators while maintaining a high standard of customer service.
A strong management team, headed by new chief executive Christopher Luxton, provides reason for confidence in the future, including a strong response to the challenge that will arise from the transtasman alliance between Qantas and Emirates, which awaits only the Transport Minister’s go-ahead. Jetstar is also talking of expanding its domestic network to regional centres, flying routes that it says are a “big profit play” by Air New Zealand. Balancing these threats to some extent is the benefit that the national carrier will undoubtedly gain from the Government’s $158 million boost for promoting tourism.
There are also practical reasons to encourage the Government to promote Air New Zealand. It is already listed on the stock exchange, so a prospectus will not be required. The selldown of the Government’s 73.4 per cent stake to 51 per cent will be more straightforward than those of the power companies. There will be no repeat of the late rewriting of Mighty River’s documentation.
If ever there is a time to sell shares in Air New Zealand, this appears to be it. Investors wary of the unpredictability of the airline industry may not touch it, but there is considerable appeal for mum-and-dad investors. It could offer succour as the Government licks its wounds.
I agree. The Government doesn’t even have to do it in one go. They can just release parcels of shares when the price is high.
I look forward to hearing intelligent arguments from opponents as to why the Government should own exactly 73.4% of Air New Zealand – not a share less or a share more. Tell us why it should not be 51% or why it shouldn’t be 95%?Tags: Air New Zealand, Asset Sales, editorials, NZ Herald
Professional investors, while still nervous of the proposal, have begun to question whether it will be implemented, even if the Opposition wins next year’s election.
AMP Capital’s head of equities, Guy Elliffe, estimates it will take at least five years to design and implement the plan, exposing it to the same policy about-face that has National so concerned.
“Most people think it is [going to take] more than one electoral term … but then what is the probability of a Labour-Green coalition being elected twice?” he asked.
Mr Moghe, meanwhile, has maintained his recommendation that investors subscribe to the share offer, which closes on May 3 for retail investors.
I think Mr Elliffe is largely correct.
To implement this policy, first Labour and Greens need to get 61 seats between them. If they have to rely on NZ First, he may not support the policy.
Secondly implementing the policy would be massively complex, probably the subject of huge litigation, and take years to do. It is most unlikely to be done in one term. And with Green/Labour policy veering radically leftwards (printing money, nationalising industries) the economy could be seriously tanking after three years.
But also look at who the Labour and Green energy spokespersons are, who would be the ones to implement this incredibly complex and controversial policy – Moana Mackey and Gareth Hughes. Now I like Moana and Gareth, but a policy like this would need a Michael Cullen or Steven Joyce to implement.
So I think the chances of this policy ever being implemented are in fact quite low.
Hence why I am increasing the amount of Mighty River Power shares I was planning to purchase. Thanks to Greens and Labour, they are likely to be priced more towards the bottom end of the indicated range. This means I’ll pick up the shares for a discount. This is of course bad for the taxpayer, but good for me as an investor. Thanks Russell and Davids.
Feel free to comment below if you are pre-registered and if you still plan to invest.
Note that this blog post is not financial advice.Tags: Asset Sales, Mighty River Power, nationalisation
Finally, it is out. The announcement:
New Zealand retail investors in the Mighty River Power share offer will receive one loyalty bonus share for every 25 shares they hold for two years from the offer, up to a maximum of 200 bonus shares, Finance Minister Bill English says.
Mr English also announced that the indicative price range for the shares is $2.35 – $2.80 per share, with the final price expected to be announced on 8 May after the retail offer has closed and the institutional offer has been conducted by a book-build process.
“The loyalty bonus scheme that I am announcing today is another way to encourage widespread and substantial New Zealand ownership of shares in MRP,” Mr English says.“It also recognises the loyalty of those New Zealanders who retain their shares and contribute towards the country’s savings culture.”
The loyalty bonus scheme is available only to New Zealand retail investors – not to institutions in New Zealand or overseas.
A 1 in 25 bonus is basically a 4% premium for holding on. Experienced investors will buy and sell regardless as potential gains are greater than 4% but for first time investors, the bonus will probably encourage them to hold onto their shares for at least the initial period.
People who pre-registered will be posted or emailed copies of the share offer document once the offer opens, expected to be Monday 15 April.
686 million shares are up on offer.
A useful summary of risks is here:
- The availability of the fuel (mainly water, geothermal fluid and gas) that Mighty River Power requires to generate electricity may reduce for a wide number of reasons;
- Mighty River Power’s power stations may not be able to generate electricity as expected if they cannot operate in the normal manner or at all;
- If the Tiwai Point aluminium smelter were to significantly reduce its electricity consumption or cease consumption altogether, the resultant drop in demand could lead to a sustained reduction in electricity prices in general;
- The wholesale price at which Mighty River Power sells the electricity it generates, or buys electricity to sell to customers, is subject to significant variability and may be unfavourable;
- The volume and price at which Mighty River Power is able to sell electricity to customers may be adversely affected by competitor behaviour, economic conditions, changes in customer demand or regulatory changes;
- Investment in geothermal development activity requires significant early stage capital and may encounter unexpected delays, increased costs, a requirement to impair assets or not be commercially viable;
- International geothermal development faces additional risks associated with operating in jurisdictions outside of New Zealand;
- Changes in the regulatory environment that adversely impact Mighty River Power;
- A single (or multiple) catastrophic event generating losses not covered by insurance;
- Insufficient access to future capital; and
- Treaty of Waitangi and other Māori claims relating to ownership and governance of land, water and geothermal resources that directly or indirectly impose additional restrictions, conditions or additional costs
I plan to buy shares, despite those risks. There are no rewards without risk. I’m pleased that I will be able to make an individual choice as a citizen about whether to invest my money into Mighty River Power, rather than have the decision solely up to the Government,Tags: Asset Sales, Mighty River Power
Southland Chamber of Commerce chief executive Richard Hay urged people to consider what was really going on.
Pacific Aluminium, a business unit of Rio Tinto and the majority shareholder of New Zealand Aluminium Smelters, had been perceived as playing hard ball, he said.
“If anybody was getting the short end of the stick, it would appear to be the smelter.”
Rio Tinto was shown as begging from the Government and using the Mighty River Power partial asset sales policy as leverage to get what it wanted, he said.
“However, has any consideration been given by the public that it’s Meridian playing hard ball.
“After all, it has been making a yearly profit of $200 million off the Manapouri power generator, while NZAS is losing $50m and is in the shadow of closing,” Mr Hay said. …
“Rio Tinto wants Meridian to reduce the power price in tough times but be prepared to pay more for it again when the market improves.”
I understand that essentially Rio Tinto want the price they pay for electricity to be linked to the price they get for aluminum. This is very understandable from their point of view. Electricity makes up over 30% of their operating costs.
What they are effectively asking Meridian to be more a partner than a supplier. To share both the risks and rewards of the aluminum market.
While Meridian is 100% Government owned, I’d be very reluctant to have a Government owned business getting involved in a risky commercial enterprise such as aluminum – beyond their current role as a supplier. Why should taxpayers be forced to invest in the aluminum market?
But if Meridian was fully or partially privately owned, then Meridian shareholders could well want their Board of Directors to accept a deal where the price they charge is linked to the aluminum price.
So my hope is that Meridian and Rio Tinto can reach an agreement for now. Once Meridian is no longer an SOE, then it should have greater flexibility to consider variable price agreements.Tags: Asset Sales, Meridian Energy, Rio Tinto, Tiwai Point
Some interesting comments were made yesterday on the Tiwai Point thread, with people disagreeing with me that the Government should not be involved:
In a detailed post by “Tempest” in Kiwiblog yesterday, is was spelled out that the new infrastructure required to put Manpouri’s electricity on the NZ market would cost $2 billion and would take eight to ten years to complete.
DPF thinks the SOE board should negotiate this contract. This is about more than some electricity price subsidy. How would Meridian raise $2 billion to bring Manapouri electricity north with a wait of six to eight years before it received any revenue from this spending?
There’s a better case for the Government negotiating here than there was for its role in helping the film industry. And there were film-industry tax subsidies (yes, special industry tax breaks are subsidies), as well as labour rules involved.
The aluminium industry is in upheaval round the world thanks to a dive in demand and prices, and rising competition from China. Australia and New Zealand have a special difficulty because of the two countries well overvalued currencies.
In France the French Government is working with Rio Tinto and local community representatives and unions to try to find a buyer for Rio Tinto’s aluminium smelter at Saint-Jean-de-Maurienne.
Finding a buyer for Bluff, might be harder, however. In Australia, Norsk Hydro announced 12 months ago it was closing its aluminium smelter at Kurri Kurri. Alcoa’s smelter in Victoria is staying open for two years, thanks to a state-federal subsidy.
If Australia is bailing out its smelters, NZ will have to follow or lose a billion a year in foreign currency earnings. It would also have to raise $2 billion for new infrastructure, and spend heaps on social support in Southland (just as it props up farmers in droughts and kiwifruit farmers in disease outbreaks).
Too much is at stake with the smelter to leave it to a State-appointed board.
However, that is where it is. Stuff reports:
Mining giant Rio Tinto has walked away from talks with the Government over the future of Tiwai Point aluminium smelter, Prime Minister John Key has confirmed this morning.
Key said Rio had withdrawn after nine months of negotiations over possible taxpayer subsidies and had now resumed discussions with state-owned power company Meridian.
It was revealed last week the Government had been negotiating with Rio Tinto over the smelter after contract negotiations between subsidiary Pacific Aluminium and Meridian effectively stalled.
The Government had made it clear there would be no long-term support, but agreed to look at short term bridging assistance because of the thousands of jobs at stake, and to facilitate a smoother transition should Tiwai Point close, Key told TV3′s Firstline.
“We made the call that we would look to help bridge a small amount of that gap for a short period of time.
“They came back over the weekend and said ‘no, we are rejecting the Government’s intervention; we will go back and talk to Meridian’. So that’s what they are doing now.”
He acknowledged ultimately that might mean Tiwai Point closed.
Just as Solid Energy suffered due to low global coal prices, Tiwai Point suffers from low global aluminum prices. There is a limited amount one can do locally in the face of global price changes.
This reinforces to me why the state shouldn’t be in commercially risky enterprises. Why should I as a taxpayer be carrying some of the risk around global aluminium prices? If Tiwai Point closes, it will reduce the value of the energy SOEs.
Rio Tinto apparently decided to walk away after the Government made it clear it would not subsidise the deal long-term.
Key confirmed this morning the Government had no interest in that.
Good.Tags: Asset Sales, Meridian Energy, Rio Tinto, Tiwai Point
An excellent column by Brian Gaynor:
The writer expressed his strong opposition in the following way: “The [asset sales] represent asset stripping. They are publicly owned by everyone, including poor people. The dividends they produce will no longer be returned to the population as a whole but to a small, wealthy minority. There is no innovation or expansion, just a continuation of the rich getting richer, and the poor poorer”.
Gaynor first points out:
The first point is that the sale of 49 per cent of MRP to 300,000-plus New Zealanders is not asset stripping as none of the company’s assets will be sold for the benefit of the Crown or the new minority shareholders.
And in fact a mixed ownership model will allow the former SOEs to acquire more asset and expand, if they so wish.
The second point is that the Government will continue to receive 51 per cent of MRP’s dividends and the payout should increase in the years ahead.
Port of Tauranga is a good example of this.
The Mount Maunganui company listed on the NZX in March 1992 after the public acquired a 44.7 per cent shareholding. The Bay of Plenty Regional Council owned the remaining 55.3 per cent.
Port of Tauranga paid a total dividend of only $2.2 million in the year before its NZX listing and the Regional Council’s shareholding was worth just $44 million at the $1.05 a share IPO price.
Twenty years later the Bay of Plenty Regional Council’s economic interest in the port company has increased as follows:
The council’s shareholding has declined from 55.3 per cent to 54.9 per cent but the value of its holding has soared from $44 million to $1.015 billion.
The council now receives an annual dividend of $34.6 million from the port company compared with just $2.2 million when it owned 100 per cent.
This is the model that the unions and their allies have tried to destroy.
Everyone is a winner – the Bay of Plenty Regional Council and its ratepayers, Port of Tauranga’s minority shareholders and the company itself.
It is totally inappropriate to look at partial privatisation as a zero sum game, a game where there must be a loser for every winner. Partial privatisation can lead to a substantial increase in value and income for a regional council, or the government, if the listed company is well governed and managed.
Absolutely. There can be no argument that privately owned and managed companies do better overall than wholly owned public ones. By this I do not mean no private companies fail and no public companies succeed. Of course not. But if you look at decades of economic data across OECD countries, the difference is stark.
And Gaynor gives a local example:
In the following 12 years, before the company was taken over by its majority shareholder, the Auckland Regional Council’s economic interest increased as follows:
The council’s shareholding remained at 80 per cent but the value of its holding soared from $318 million to $678 million at the $8 a share takeover price
The council’s annual dividend from the port company jumped from $8.5 million to $34.3 million.
The company’s performance has been poor since it was fully acquired by the Regional Council, now Auckland City, in 2005.
Auckland City’s annual dividend has fallen from $34.3 million in 2005, when it owned 80 per cent of the company, to $20.1 million in the June 2012 year, even though it now has 100 per cent ownership.
When a company is 100% owned by the Government (or a Council), it will make sub-optimal decisions due to influence of the shareholder.
If they are listed on the NZX they have a legal duty to treat all shareholders equally and do what is best for the company as a whole. If the major shareholder wishes to influence their decisions they have to do so transparently through public shareholder resolutions.Tags: Asset Sales, Brian Gaynor, Port of Tauranga, Ports of Auckland
Tamsyn Parker at NZ Herald reports:
Analysts said the negotiation issue could have a small negative effect on the pricing of Mighty River Power’s shares.
Milford Asset Management senior analyst William Curtayne said the situation would probably result in the bankers having to alter the pricing of the offer moderately.
For those looking to buy Mighty River Power shares it could mean the company would now be cheaper.
But Mighty River Power was still a great company which was giving off a lot of cashflow compared with what savers could get by putting their money in the bank.
Curtayne said it might also be good news for Meridian in the long term.
He said if the company pulled out of selling power to Rio Tinto, it could sell the power to other energy companies such as Genesis or Contact which would enable them to shut down more expensive operations like the Genesis-owned Huntly and Contact’s Otahuhu power station.
“It sounds bad at the headline. But in the long run if the market reacts effectively we could end up with a relatively benign outcome.”
Curtayne said it was better that the situation be revealed now.
“It’s good for them to come out and signal where they are now. It gives the situation more clarity.”
He said it could mean the Government got less money for Mighty River Power, but more for Meridian, which is worth twice as much.
Devon Funds Management analyst Phillip Anderson said it would affect the price of Mighty River Power at the margins.
Even more reason for the Government to stay out of this, and leave the negotiations to Meridian.Tags: Asset Sales, Meridian Energy, Rio Tinto, Tiwai Point
The SST headline:
Call to ban ministers from share float
Except they already are. Ministers absolutely can not take part in the share float.
In fact the conflict of interest obligations are taken so seriously that when Contact Energy was sold in the late 1990s, I was one of those banned from buying shares when it floated as I worked in the PM’s Office. Now I had zero involvement in the float, saw no papers about it, but still was banned.
So a headline that suggests Ministers are not already banned is absolutely misleading.
We asked our readers if they wanted a similar rule to Australia’s “Standards of Ministerial Ethics” that require ministers “to divest themselves of all shareholdings other than through investment vehicles such as broadly diversified superannuation funds or publicly listed managed or trust arrangements”.
That is a very separate issue to the suggestion that Ministers can take part in the Mighty River share float.
Incidentally I think it is a good idea for Ministers to follow the lead of the PM and put their shareholdings in a blind trust. But a one size fits all rule may be overly prescriptive You may have a Minister who has say 10,000 shares in one company prior to becoming a Minister and requiring them to set up a Trust for such a minor shareholding could be a bit over the top.Tags: Asset Sales, Cabinet Handbook, Media, shares
Adam Bennett at NZ Herald reports:
Almost one in five New Zealanders who oppose the partial sale of Mighty River Power intend buying shares in the company anyway, according to a Herald-DigiPoll survey.
But the survey also indicates opposition to the sales plan is softening, with just over half of the 750 respondents saying they are against it compared with almost two thirds a year ago, and as much as three quarters before the 2011 election, which was largely fought on the issue.
According to the poll, conducted between March 11 and March 17 during the Government’s initial Mighty River Power advertising blitz, 52.2 per cent of respondents opposed the sale and 41.9 per cent supported it.
That’s a big change – from almost 75% against to just over 50%.
I have always assumed that any referendum vote would be a massive vote against.
Every CIR to date has always had a massive vote in favour of the desired outcome of the petitioners. The results have been:
- Firefighters 88%
- Size of Parliament 81%
- Justice reform 92%
- Smacking law 87%
How much of a political disaster would it be for Labour and the Greens if they lost the referendum? They’ve spent $400,000 of their parliamentary budgets on getting people to sign the petition. The referendum may cost the taxpayer up to $10 million to run. They’d be laughing stocks if they lost the vote they spent so much money on trying to achieve.
Of those opposed almost a fifth intended buying shares while 30 per cent of all those polled said they would buy shares. The survey has a margin of error of 3.6 per cent.
Turnout could be fascinating. Those who have purchased shares and support partial asset sales may be highly motivated to vote in the referendum as if the referendum endorses the sales it would discourage Labour, Greens and NZ First from confiscating their shares back after the election. And those against may wonder what is the point when one or two companies have already been floated by the time of the referendum.Tags: Asset Sales, Polls, referendum
I’ve blogged on the leaked comments showing that Labour, Greens and the unions spent probably around $400,000 (mainly taxpayer funded) on gaining enough signatures for their referendum petition.
I thought it would be useful to contrast that with the previous successful petition, on the smacking issue.
I e-mailed the organiser, Larry Baldock, on how they got enough signatures and they did it the old fashioned way. They didn’t use taxpayer money to hire people to collect signatures. Larry says:
My wife and I spent almost 16 months travelling around NZ almost 4 times, some of the time in a sign written camper van collecting signatures in towns and cities, at AMP shows, field days and any events like V8’s, home shows etc. Many days on the beach at Mt Maunganui. Some elderly supporters, spent many days each week right through winter sitting at a table outside a Post shop and collected thousands of signatures. There are many stories!
Such a contrast to having 10 paid staff work on co-ordinating the petition and using taxpayer funding to pay people to collect signatures. What Larry and others did is what CIRs are meant to be about – the public petitioning Parliament. Not the losing parties in an election trying to over-ride the election result.
Now the smacking petition got their signatures and a referendum was held. The result was beyond over-whelming. In response to the question:
“Should a smack as part of good parental correction be a criminal offence in New Zealand?”
87% voted no. Now one can quibble that the use of the term “good” is a bit loaded, but anyone who seriously thinks the result would have been vastly different with deletion of that word is deluded.
The referendum was held at the end of a two year high profile debate on the anti-smacking law. It is silly to suggest that NZers did not know exactly what they were voting for. Maybe a slightly differently worded question would have got say 80% in favour instead of 87%. But that result was a massive landslide, You just can not credibly suggest that there was not a majority against the ban on correctional smacking.
Also polls every year since the referendum has shown a vast majority think that the law should allow correctional smacking that is reasonable (the old law allowed reasonable force). Family First have released the 2013 one which Curia did for them. I think the question is quite fair. In full it says:
In 2007 Parliament passed a law that removes a defence of reasonable force for parents who smack a child to correct their behaviour, but states the Police have discretion not to prosecute if they consider the offence was inconsequential.
Do you think the anti-smacking law should be changed to state explicitly that parents who give their children a smack that is reasonable and for the purpose of correction are not breaking the law?
So the question include what the law change was, specifically mentions the inclusion of the Police discretion and asks if they think correctional smacking should be legal, if reasonable. Now I am sure some can and will quibble over exact wording but considering the results were 77% said yes and only 18% no I am utterly confident that any alternate wording would produce much the same result, so long as it wasn’t totally slanted (such as should parents be able to assault their children).
There can be no doubt that the majority of New Zealanders want correctional smacking to be legal, and there was a referendum that said so by a massive 7:1 margin.
Now one can have the view that a party’s policy should triumph over a non binding referendum. I certainly hold that view.
But what is absolute hypocrisy is to be a party that ignored the results of this 2009 referendum, and then two years later to then demand that the Government should break its election policy on the basis of the asset sales referendum.
What many do not know is that a bill was selected for first reading in Parliament in 2010, just a couple of weeks after the referendum result. The bill would have implemented the referendum result by amending the law so that:
it is no longer a criminal offence for parents, and those in the place of parents, to use reasonable force for the purpose of correcting their children’s behaviour and there are clear statutory limits on what constitutes reasonable force
The law was basically identical to what the referendum called for. Now how did Labour and Greens vote on this bill, just three weeks after the referendum? The voted it down (along with every other party except ACT) at first reading.
Now I think National should have voted for the bill, but at least National is consistent that their party’s policy over-rides a referendum result. They have never ever said that referenda should trump elections.
But the actions of Labour and Greens in 2010 show that they are happy to ignore referendum results – unless it is a result they personally agree with.
Their asset sales referendum is nothing to do with democracy. It is mainly a device for them to use taxpayers money to get people onto their e-mail and direct mail lists.
So every time Russell Norman or David Shearer demands that the Government should not proceed with asset sales due to the proposed referendum, someone should ask them when will they be voting to amend the Crimes Act to allow correctional smacking. There is no response they can give which isn’t hypocritical.
And we should change the law to stop parliamentary parties from spending their parliamentary resources on promoting a referendum petition. CIRs are meant to be initiated by citizens, not by the losing parties in an election campaign.Tags: Asset Sales, Larry Baldock, referendum, smacking
David Shearer was on The Farming Show and asked about whether he will go along with Winston’s policy to confiscate the shares of people who purchase Mighty River Power shares.
As before, he won’t rule it in or out. How can you fudge a policy of this magnitude?
But the best is yet to come. David Shearer explain why they are unlikely to buy the shares back because the proceeds from asset sales will be spent on schools and hospitals and they couldn’t afford to buy them back.
That’s a stunning implicit admission that the schools and hospitals would not be affordable without the asset sales. He also agrees that spending money from asset sales on irrigation would be money well spent but warns that most of the proceeds will go on schools and hospitals, not irrigation!
You have to listen to it yourself to believe it.
Later on is also a clip with Larry Williams on the car park tax. Now it is obvious to almost everyone that the Government is going to back down on this tax. So you’d think it would be a simple thing to do and say you will abolish it, if it is implemented.
Larry Williams asks him if he would wind it back – the equivalent of an easy pitch. And the answer is “We’ll certainly look at it”.
The audio is embedded above. If that doesn’t work you can listen to them here. It’s great to have the Labour Party Leader talking about how the asset sales will be used to fund schools and hospitals!Tags: Asset Sales, David Shearer, FBT
Jason Krupp at Stuff reports:
NZ Post says its balance sheet will have to wear the $100 million in capital Kiwibank needs to meet its regulatory requirements and replace an ageing banking system.
Testifying before Parliament’s commerce committee today, chairman Sir Michael Cullen said the postal service operator had requested funding from the Government to meet the capital needs of its bank subsidiary, but hadn’t received a definitive answer yet.
The board was operating on the assumption that no further funds would be forthcoming, which is “not surprising in the current situation”, Cullen said.
That meant the state-owned enterprise would have to provide the additional Kiwibank capital, with the lender not yet profitable enough to fund its own capital requirements.
If NZ Post and/or Kiwibank had some private shareholders then they would be able to raise capital without needing taxpayers to borrow money from overseas to fund a competitive risky enterprise.
We should learn the lessons of Solid Energy. Reduce or eliminate the risk to taxpayers.Tags: Asset Sales, Kiwibank, NZ Post, SOEs
Audrey Young at the NZ herald reports:
Labour leader David Shearer won’t rule out supporting Winston Peters’ policy of buying back Mighty River Power shares at cost if they form the next Government. …
Mr Shearer said, “We won’t rule it out but we won’t rule it in either.” Labour would not be able to make any commitment on it before an election.
Incredible. They are saying we might confiscate your private property but we’re not going to tell you whether we will or not before the election.
No Right Turn is outraged, saying it is “spineless chickenshit” behaviour.Tags: Asset Sales, David Shearer, Labour
A mole has leaked to me a couple of strategy documents from Labour and Greens on the referendum they have just purchased with our money. The documents are embedded below, and they show the extent of taxpayer resources used to purchase this referendum.
CIRs are meant to be about the public being able to send a message to MPs, not MPs using taxpayer funds to relitigate an election result. Some key revelations:
- They aimed for 400,000 signatures as they knew a fair proportion would be found to be invalid.
- At the 300,000 mark the Greens collected 150,000, Labour 105,000 and Unions 40,000. The Greens are the ones who used taxpayer funding to hire petition collectors.
- Labour pledged 30 hours per week staff time from their taxpayer funded budget
- Greens were using their permament taxpayer funded staff to co-ordinate
- The unions had a paid national co-ordinator
- They refer to unions gathering “car loads” of organisers and activists to travel to areas
- For their day of action, Greens said they will committ five full-time staff – presumably all taxpayer funded, if Labour does the same. That’s 10 taxpayer funded organisers.
- A list of unions to pressure to do more, including PPTA, NZEI, Nurses Organisation – minority shares in power companies of course being key education and health issues!
It is very clear that there has been very few ordinary citizens involved in this petition – mainly a legion of taxpayer funded staff and union staff.Asset Sales, Greens, Labour, parliamentary spending, referendum, unions
Labour said in January 2011:
Election Will Be A Referendum On Asset Sales – Goff
Mr Goff said Prime Minister John Key had made this year’s election a referendum on whether New Zealanders wanted to see their most important strategic assets sold.
Labour and the Greens are using taxpayer funds to try and relitigate the election result. As the Labour Party Leader said, the 2011 was to be a referendum on asset sales. It was the most debated policy of the campaign with 11 months of campaigning about.
I do look forward to seeing media asking David Shearer if he agrees with his predecessor that the 2011 election was a referendum on asset sales.
Well done Inventory2 for finding this gem at Keeping Stock.Tags: Asset Sales, Labour, Phil Goff, referendum
A pre-asset-sale study in 2011 for the Government had highlighted over-optimistic coal price assumptions and questionable alternative fuels investments, which led ultimately to changes to the board and management, he said.
O’Connor said the previous government had supported Solid Energy as a sustainable business that was looking into alternative developments, while National saw it solely as a cash cow which could help it fund tax cuts.
Very nice of Damien to claim credit for the alternative developments which of course failed, and led to the increased debt. Solid Energy did not borrow money to pay dividends. Dividends come out of profits. Debt is used to fund “developments”.
This reinforces for me why the Government should not own commercially risky trading enterprises. If people want to fund “alternative developments” they should do so voluntarily as direct shareholders.Tags: Asset Sales, Damien O'Connor, Solid Energy
Matthew Hooton writes in NBR:
What Mr Peters may recognise, but Labour does not, is that, before Mr Key suggested the share issues, most voters had never heard of Mighty River Power, Meridian Energy, Genesis or Solid Energy, much less worried about their ownership structure.
Compared with disposable incomes, the local school competently teaching maths, grandma getting her hip replacement, the cops tracking down the local crims or even keeping Asian immigrants out, whether a Waikato River dam is owned 100% or 51% by the state simply doesn’t rate.
The actual policies of those who claim to oppose share issues prove it.
Through nine years of the Helen Clark regime, when a global economic boom fuelled massive fiscal surpluses, the government bought back not a single share in Contact Energy.
Nor did Phil Goff promise to buy back shares in Contact. Nor does Mr Shearer promise to buy back shares in the companies Mr Key plans to list.
If it is OK for national symbols such as the Clyde Dam and the Wairakei geothermal network to be 100% privately owned – and majority foreign owned – how could it possibly matter that Waikato River dams will be only 51% government owned and perhaps 20% foreign owned?
Matthew gets it right on. The opposition is symbolic bluster.
While averse to nationalisation, Labour also argues that not a single share in any of the Crown’s $50 billion of commercial companies should ever be sold – in effect freezing more than $30,000 per New Zealand household in a portfolio that is a mere legacy of the tumult of the 1980s and 90s.
This is the perverse logic of Labour’s stance. They are basically arguing that the exact right number of power companies for the Government to own is three out of five. Not two, not four – exactly three.
The ideological opposition to the private sector means that we don’t have an intelligent conversation over what assets should be state owned and which should not. Instead we just have a die in the ditch defence of the status quo no matter how illogical it might be.
Arguments that the state must own 100% of “strategic assets” – a meaningless phrase, never defined – would suggest the government should nationalise all food production and distribution, something Labour is yet to propose.
In fact, an immovable asset producing a commodity involving no proprietary intellectual property would seem to be exactly the sort of thing where ownership is irrelevant.
Absolutely. There is a far stronger case for the Government to own Fonterra than a power company.
The Greens are happy that their anti-asset-sale petition has won them tens of thousands of new email addresses to spam in election year.
And they used taxpayer money to collect them! I bet you everyone who signed that petition will get an e-mail from them if they gave an e-mail address.Tags: Asset Sales, Greens, Labour, Matthew Hooton
James Henderson at The Standard blogs:
Some analysts are talking about risks of investing in Mighty River Power in the media today. Weather, electricity demand, overseas expansion. I’ll tell you what would make me think twice if I was contemplating buying shares (like most Kiwis I couldn’t afford to even if I wanted to).
Everyone acknowledges the power companies over charge because of the way National set up the system with the Bradford reforms. Right now, the government has 400m reasons a year not to do anything about it. After the sales, that will be $200m in dividends.
Any reforms to lower power prices will fall mainly* on a relatively small number of (often overseas) private shareholders and much less on the government books. That rather reduces the government’s incentive to protect the over-charging status quo, doesn’t it? Lots of votes in being the government to bring down power prices, especially when a lot of the profits are otherwise going to foreign corporates.
James is saying that when the Government wholly owns the power companies, it is less likely to regulate them if in the consumer interest. The massive profits and dividends under Labour suggest he is correct.
As James says, when the state isn’t conflicted by being sole owner and regulator, it is more likely to act in the public interest and stop over-charging. That’s an excellent reason to support the asset sales. It’s outrageous to think that people may have to continue to pay more for their power than they have to, just because the Government is the sole owner.Tags: Asset Sales
Jason Krupp at Stuff reports:
In addition, some energy sector commentators have questioned MRP’s decision to actively pursue geothermal projects in Chile and the United States as opposed to passively investing via an investment fund structure as it has done in the past.
Energy analyst Molly Melhuish said investors needed to be aware the strategy shifts MRP’s risk profile away from a “safe, utility-type investment prospect”, which is how the firm is being marketed to investors.
Countering those negatives is the company’s position within the New Zealand market, with MRP generating and selling about a fifth of the country’s power, a position that gives it fairly defensive earnings.
It is worth making the point that Mighty River Power does have risks around its investment plans. I don’t say that as a bad thing – it is in fact the risk which is one of the reasons the Government should not be sole shareholder.
Some people think running a company is easy. Just produce your product, mark it up, and sell it. Bang – guaranteed product.
Solid Energy is a good example of how quickly things can change. The global price for coal dropped 30% over two years. While power prices are less volatile, demand can be variable and you can end up with over-supply.
I am looking forward to reading the prospectus.Tags: Asset Sales, Mighty River Power
The Truth editorial:
Labour and the Greens need to come clean on asset sales. We know that both parties oppose asset sales. We get that. They have spent a considerable amount of taxpayer cash recruiting staff and manipulating for political purposes the Citizens Initiated Referendum process to try to re-litigate the 2011 election. …
Investors and voters need to know if Labour intends opposing the sales in actions and not just words.
Will Labour commit to forced buy-back of the shares, essentially a re-nationalisation of the asset. Before readers poo-pooh that suggestion remember Air New Zealand.
Helen Clark even flirted with securities laws by advising on national television for Mum and Dad investors to keep their shares in Air New Zealand…that everything would be alright. As we know everything wasn’t alright and some weeks later the government forcibly acquired as many shares as it could and left about 25% of shareholder mired without any sort of say in the company.
Would Labour do this again with the listed power companies…and if so how much would they pay for the shares…The listing price? The market price (unlikely)?
Labour and their hangers-on who oppose asset sales need to clarify before even a single share is sold what their intentions are.
I agree. Labour, as the potential next Government, has a duty to announce its policy before the offer document is issued. Will they buy the shares back or not, and at what price?Tags: Asset Sales, Labour, Truth