Stuff and NZPA report:

Filming of The Hobbit will be delayed after director Sir Peter Jackson was hospitalised with a perforated stomach ulcer.

 Jackson was admitted to Wellington Hospital last night with acute stomach pains.

A statement said he had undergone surgery for a perforated ulcer.

“Sir Peter is currently resting comfortably and his doctors expect him to make a full recovery.”

Sir Peter’s surgery is not expected to impact on his directing commitment to The Hobbit beyond a slight delay to the start of filming, the statement said.

The Hobbit author JRR Tolkien suffered from a perforated ulcer before dying in 1973.

That last line (bolded by me) is just tacky. What relevance is it to the story, except to suggest Sir Peter may die from the ulcer. Note Tolkien was around 82 when he died.

Readers may recall Marlene Campbell. She is one of the ringleaders in the Principals Federation campaign against national standards, and got national publicity for calling Anne Tolley Minister Hitler.

Well she’s at it again, with Whale supplying this e-mail:

The Sewell she refers to is is Karen Sewell, who has been Secretary of Education since 2006.

What I can’t work out is whether Marlene includes herseld in the group description of logical thinking human beings. Her e-mail and previous utterances would suggest logical thinking is to her, what pork is to a Bar Mtizvah.

Marlene is of course a public servant, paid for by the taxpayer. She is in fact effectively employed by the Secretary of Education.

NZPA report:

Jailed former MP Taito Phillip Field is going to the Supreme Court in another bid to have his fraud convictions overturned.

Field filed papers in Wellington this week after the Court of Appeal last year dismissed his appeal against his conviction and sentence.

He was jailed in October 2009 after being convicted by a jury in the High Court at Auckland of 11 charges of bribery and corruption as a MP, and 15 charges of perverting the course of justice.

Field was jailed for six years, the first MP to be jailed for bribery, corruption and perverting the course of justice. He was an MP for 12 years, for Labour then as an independent.

Field obviously still believes Labour’s official line that he isn’t guilty of anything more than trying to help his constituents.

Claire Trevett in the Herald reports:

Labour will introduce a member’s bill to ensure holidays that fall on a weekend can be taken another day.

New Zealanders will miss out on two of 11 public holidays this year because Waitangi Day is a Sunday and Anzac Day falls on Easter Monday – already a statutory holiday.

Labour MP Grant Robertson said the holidays should be able to be taken on a Monday in such instances.

I actually support such a bill. Not to make a last minute change to 2011 which would be a silly panic. But to have certainity in the future that you always have 11 days of public holidays.

Incidentially Mondayisation would not solve the issue of ANZAC day and Easter Monday being the same day in 2011 but this is not scheduled to happen again until the 25th of April 2095. I hope Labour aren’t saying that this is an issue that needs a legislative fix.

But Waitangi Day and ANZAC Day falling on weekends does happen two out of seven years. ANZAC Day will next fall on a weekend in 2015 and Waitangi Day in 2016.

So Labour’s bill is worth supporting, but it is not urgent, and should take its chances in the ballot.

Stuff reports:

Brian Easton, an economist known for left-of-centre views, is wary the scheme will block future policy options for the electricity sector but supports the benefits it can bring to the local investment scene.

“By increasing the opportunities for New Zealanders by offering shares in minority stakes in SOEs, you would partly moderate the stupidity that happened over the finance company sector,” he says. “That enrichment of the financial market, which incidentally, curiously, Rob Cameron and I agree on, is a very strong case.”

And Mark Weldon notes:

“What I really like about the policy is it’s not left wing, it’s not right wing … It’s based on the Air New Zealand model which has the great attribute of actually being shown to work.”

Air New Zealand, 75 per cent government-owned since its taxpayer rescue 10 years ago, has performed well and delivered better dividends than the power SOEs in recent years.

“If you talk to [CEO] Rob Fyfe or [chairman [John Palmer] they will tell you that the majority long-term ownership of the government has been a real positive,” says Mr Weldon, “because it means they can focus on long-term planning and not worry about being taken over, as they would if they were a fully free-float company.”

As I have pointed out on many occassions, allowing the private sector to invest or buy some shares in state owned companies is absolutely common practice aroundthe world amongst governments of the left and right.

The SSC report in the vetting of Stephen Wilce has been released.

The State Services Commissioner notes the following lapses by the SIS:

• that NZSIS did not check with counterpart overseas agencies to see what they knew about Mr Wilce. This was contrary to standard practice in cases where the applicant for a security clearance had worked overseas;
• that NZSIS did not follow up on Mr Wilce’s failure to disclose convictions once the Police check had revealed that he had convictions; and
• that NZSIS did not record or follow up on information received on Mr Wilce after the announcement of his appointment in the NZDF

I have to say these are pretty massive lapses. I mean they discover he had undsiclosed convictions and they did nothing. They had information supplied to them he wasn’t legit and they did nothing.

The SSC concludes:

The Director of NZSIS accepts the findings of both Mr Walter and the Court of Inquiry. He also accepts my finding that the anomalies occurring in Mr Wilce’s vetting process amounted to failings by the NZSIS in the provision of a professional security service.

That is a pretty big slap.

John Key notes:

“The State Services Commissioner has said further action needs to be taken to demonstrate confidence in the vetting system, and he will report back to me in the first half of this year. I have also asked a group of senior officials to closely monitor progress around this issue,” says Mr Key.

Two key initiatives will underpin the programme of action. An independent, international review of the current vetting system, along with other work, will be started in order to provide better information on the vetting system’s performance. In addition, the Director of Security is currently sampling 5 per cent of the Top Secret vettings undertaken at the time Mr Wilce was checked to provide an assurance that the failures were an exceptional event.

We were lucky that the failures only let through a braggart, rather than someone hostile to NZ’s interests.

I’ve made the point in the past that NZ Labour’s insistence that not even a single share of any currently owned crown company can be sold, is way outside the mainstream for not just the centre right but also the centre left. Left wing Governments around the world have seen the merits of allowing the private sector to invest in companies that were once solely state owned.

The latest example we have is in Laos. It is basically a communist dictatorship, and has been since the revolution of 1975. The Lao People’s Revolutionary Party is the only allowable party, and it is a Marxist-Leninist party.

But even in Laos, they move with the times and recognise unrelenting hostility to the private sector is ideological madness. A December 2010 news report states:

A state-owned power company plans to mobilise as much as 930.5 billion kip (US$115.4 million) to build more power plants after putting 25 percent of its shares on sale this week.

The EDL Electricity Generation Company is allowing local and foreign investors to subscribe for shares until December 24, after obtaining permission from the Lao Securities Exchange Commission.

The company will sell about 217 million shares, with about 86.9 million allocated to foreign investors and 119.4 million to local investors, at an initial price of 4,300 kip per share. Some 10.9 million shares will be available for purchase by company employees at 4,000 kip per share. …

The company will use the money it raises from the sale of shares to finance new power projects and maintain existing plants. …

The EDL Electricity Generation Company is the second state-owned enterprise to offer shares for public sale.

Let us hope that one day the NZ Labour Party may become less ideological than the marxist-leninist Lao People’s Revolutionary Party.

This blog runs on WordPress. It started life originally as a Movable Type blog, but a few years ago we migrated it to WordPress, and I have to say it made a huge difference. Not only was the blog heaps faster (as it did not rebuild the whole site after each post), but the functionality was greatly improved. And even better, one had thousands of WordPress plugins one could utilise to add on more features.

So being a big WordPress fan, I’m really looking forward to attending WordCamp NZ on Sat 19 and Sun 20 February. It is being held at Te Papa.

The guest speakers are a mixture of local and international, including John Ford from Automattic – the company behind WordPress. Local speakers include Julie Starr, Lance Wiggs and Richard McManus. I’m also talking for a bit about the challenges of a blog with over 600,000 comments on it. There’s also sessions commercially focused such as Search Engine Optimisation.

You can register to attend on the wordcamp website. Cost is only $85 for the weekend.

I’m hoping I’ll come out of it with some good ideas about ways I can make Kiwiblog better.

Labour are telling massive whoppers, such as the Government is borrowing $120m a week to pay for tax cuts for the wealthy.

The reality is that National’s tax and spending packages will in fact lead to around $2.8b less debt by 2014, than ehwt Labour were proposing. Bill English’s office has released this table showing the components:

Net fiscal impact of the Government’s tax changes ($million increase (decrease) in the operating balance)

1. Fiscal impact = revenue (removal of R&D tax credit + KiwiSaver changes + cancelling remaining tranches of Labour’s tax cuts) minus costs (personal tax + IETC). Source: Cabinet Paper CAB(08)585.

2. This is not an increase in taxes but the cancellation of future intended tax cuts which were already in the fiscal forecasts. Source: Treasury Report T2009/418.

3. February 2009 SME tax package. Source: BEFU 2009, Table 1.7.

4. Fiscal impact = revenue (GST increase + depreciation + LAQC + thin cap + WFF + GST base + tobacco + increased audit) minus costs (personal tax + company + PIE and savings vehicles + GST compensation). Source: Budget 2010 Executive Summary, Table 1.

The key thing to remember is that the combined tax and spending changes have been not just fiscally neutral, but in fact debt reducing. In the first two years they were slightly expansionary (which is not altogether bad) in a recession, but by the end of next financial year they would have been positive for the Government fiscally..

Patrick Gower blogs at 3 News that he belives Hone Harawira’s “Plan A” is in fact to take over the Maori Party.

Hone Harawira clearly wants to take over the Maori Party. It was the signs outside his “disciplinary hearing” saying “Hone’s the Man!” and “change the leadership!” that gave the game away. …

Harawira’s been peddling a “I don’t have the tact and diplomacy to be leader, I’m an activist to my bones” line. That language shifted this week. In my one-on-one interview on Wednesday where he referred to John Key as a “smiling assassin”, Harawira refused to rule out taking the leadership if called upon by the Maori Party support base.

I tend to agree with Gower, that this is what Harawira wants. In his own way he is trying to do a Winston  constantly white-ant your colleagues to build up your own popularity, and then try to use that popularity to force his way into the leadership.

But like with Winston, it may not work as he wants it to.

Then there is of course the “change the leaders sign” at the hui yesterday. They’re obviously for Harawira. He claimed on Morning Report this morning that he didn’t know the signs were there. I burst out laughing: I watched his brother Tai get them out of a Harawira emblazoned vehicle, and put them up under instructions from their mum, Titewhai.

I think that says a huge amount.

Of course Harawira could get kicked out. This may not come to pass – but it doesn’t mean its not Harawira’s plan; I’m sure he wants to stay in. However, the party may decide he is becoming too dangerous and get rid of him. Obviously he would go out in a blaze of glory and win as an independent. So what of this “Left party”? It would dilute his goals for Maori, be hard to set up. The Maori party has the infrastructure, the brand, the membership and the history he wants. I’d say independent would be the Plan B – with a comeback in time still on the cards.

If Gower is correct in his analysis, then it is more likely they will kick Harawira out. Otherwise they risk being stabbed by him again and again.

Both major parties selected their Botany candidates last night, and they have a certain amount in common. Both are married men in their 20s (actually Michael may have just turned 30) and both are currently elected local body representatives.

There are differences also of course. Jami-Lee Ross is local, and Michael Wood is not. Also Jami-Lee is on the Auckland Council, and Michael on the Puketepapa Local Board. Michael is a professional trade unionist and Jami-Lee has been an elected Councillor since he was 18.

Jami-Lee ran an error-free campaign for the nomination, and expectations are he will do the same in the by-election. He is an experienced campaigner and his wife, Lucy, works tirelessly on his campaigns also. People at the selection meeting say he gave a good victory speech, and importantly thanked Pansy Wong who still has considerable good will.

It is hard to see a scenario where Jami-Lee does not become the MP for Botany, and has a long parliamentary career ahead of him.

Incidentially the person most delighted with Jami-Lee’s win is probably Len Brown. Jami-Lee was very effectuive at holding the Mayor to account.

Labour’s candidate Michael Wood, is also expected to run an excellent campaign. Michael is an experienced campaigner and will be effective at prosecuting Labour’s case against the Government. Equally Jami-Lee will respond robustly.

Pansy won 56% of the vote in 2008 with a 10,872 majority. There is no doubt this will be greatly reduced. The Labour candidate in 2008 was pretty invisible and fewer than 70% of even Labour party voters voted for him. By-elections traditionally go against the Government (Mana was the exception). The majorities in the last few by-elections where the Government was defending a seat were:

1. 1998 TKC – majority of 988 (down from 10,000+)
2. 1994 Selwyn – majority of 428
3. 1992 Tamaki – majority was under 1,000 off memory, vote share went from 59% to 45%

Add in that ACT are strong in Botany, and could campaign strongly and I’d say the likely vote share for National is betwene 45% and 50%. If you also add on that turnout will be much lower, I’d be pretty surprised if the majority was over 5,000 and could even be around the 3,000 mark. I would not read too much into that if it occurs, as at the general election it normally bounces back.

Today’s shot is of a slightly damp fantail at dusk. It had been feeding off insects congregating around a small pond.

Click for larger, higher res image

Despite the fact they’re quite common, their quick agile actions & small size make them challenging to photograph.

The Herald reported:

Consumer NZ chief executive Sue Chetwin agreed with Mr Key’s assessment that electricity prices would not increase with partial privatisation.

“The power companies over the past 10 years have been rapacious in putting up their prices and I don’t see that making part of the company available for the public to invest in will make much difference there.”

However, Ms Chetwin said companies would become more transparent and would have to explain their actions to the public.

“At the moment nobody really looks at the SOEs [state-owned enterprises] because their shares aren’t being traded. But once they are being traded, the company will have to adhere to stock exchange rules and be much more publicly available.”

Having a company listed on the stock exchange means that it has to be more transparent over what it is doing, and will also require public AGMs where minority shareholders can attend and speak.

There is considerable debate about the value of some of the power companies, and hence what is a reasonable return on their asset base. A stock exchange listing will also proviide a market valuation of the company’s worth.

The Chief Coroner has found that the 29 dead miners in Pike River died within minutes of the initial explosion. While not the final word on the disaster, it is reassuring to family and friends that any suffering was relatively brief.

Chief Coroner Neil MacLean found the Pike River miners would have died either from the impact of the blast or from the poisonous atmosphere it created in the mine.

Evidence showed those that survived the explosion would have lost consciousness and died from hypoxic hypoxia, or lack of oxygen, within minutes, he said.

The focus will soon shift to the Royal Commission.

UPDATE: Jami-Lee Ross has won the nomination. It went to a fourth ballot between Jami-Lee Ross and Maggie Barry. Aaron Bhatngar dropped out on the third ballot. Commiserations and thanks to the unsucessful contenders, and congrats to Jami-Lee who will have a lot of focus on him over the next five weeks as he is set to become Parliament’s youngest MP at the age iof 24.

A reader sent in this cartoon they drew, which is timely with the selection tonight.

For those who don’t know how the process works, the selection is done by 60 party members. The Regional Chair chair’s the selection panel and has a casting vote but no deliberative vote (unless he is himself a delegate).

The five candidates will speak for 10 minutes each, The order is random. After each speech the Chairman asks them two questions, which have been provided by the Party President and the Prime Minister. They have (I think) three minutes to answer each question. There is no questioning from the floor but note they have attended three meet the candidates meetings where there is rigorous questioning. And delegates must attend at least one of those meetings, to be eligible to vote. You can’t just be bussed in for the selection meeting, and get a vote.

After the five speeches, the first round of voting starts. It is a secret ballot. To win selection, someone needs to gain 31 votes. If no person wins, then the lowest polling candidate drops out. This is announced to the delegates, and they vote again amongst the remaining four candidates. There are no further speeches. The voting carries on until there is a winner, which might not occur until the 4th ballot.

Normally one or more MPs will provide light relief as guest speakers while each round is counted.

It is highly likely that whomever wins the nomination will become an MP in March.

I’ll update with results once they are known.

Labour have a challenge in whipping up opposition to National’s likely policy to allow people to invest in four power company SOEs, while retaining majority crown ownership and control.

When Phil Goff attacks John Key for a policy of minority stakes being allowed, John Key will no doubt point out that Phil Goff enthusiastically sold off 100% of NZ Steel, Petrocorp, DFC, Postbank, Rural Bank, State Insurance, THC, Maui Gas and oh yeah Telecom.

And worse Phil Goff sold them with no mandate, while John Key is doing the opposite – going to the voters saying this is what we will do (and only do) if re-elected.

I have no doubt National will lose some popularity if it confirms a policy of allowing minority private investment in those SOEs. But I beleive it will be relatively modest compared to what it might be if Labour wasn’t led by someone who was an enthusiatic champion of asset sales in the past.

Also of note, the Herald editorial welcomes the policy, and the fact the PM is risking taking on a sacred cow:

Courage in politics is seldom recognised when it is successful. It takes courage to challenge a sacred cow, but a well-aimed challenge can render the cow sacred no longer. John Key’s announcement of public asset sales yesterday should be recognised as a decision both courageous and well directed.

Importantly, Key has built up trust by keeping to the no SOE sales in the first term policy, so that voters can be reassured that any policy for the second term will also be adhered to and not exceeded.

The Prime Minister has made a very good case for the decision to partly privatise the state’s three power companies and its coal company and reduce its stake in Air New Zealand. He says the sales are primarily to finance the construction of other public assets that will be needed over the next five years.

Yes, the state is not reducing its total number of assets – in fact it is growing them.

The partial floats of Meridian, Genesis, Mighty River Power and Solid Energy, will bring some much-needed new life to the stockmarket and begin to provide an alternative to property investment for superannuation funds and personal savers.

This privatisation programme will favour local share buyers over foreigners, much like the sale of power companies in the 1990s. Unlike then, the Government plans to retain a majority holding. Mr Key believes this makes for the “best of both worlds”. The company is subjected to the discipline, reporting requirements and oversight of the sharemarket and the bulk of its dividends go to the public purse.

It is a bold plan and a sensible one. Public asset sales alone will not sustain the sharemarket or breed a new investment culture in the population. But they are a start.

If we want people to borrow less, and save more, we need to have companies they can invest in.

I briefly tuned into talkback last night while driving and heard some people wondering how a relatively modest reduction in future spending can make an impact on when we return to surplus, and the $300 million a week of borrowing.

Labour increased spending by an average of $2.8b a year for its last five years in office.

National is now saying they are going to have an allowance of just $0.8b a year for future spending growth. That’s a $2b a year difference. Now in the first year it doesn’t make much impact on a $10b deficit.

But the spending growth is cumulative. Over five years spending growth at $0.8b a year will mean spending after four years is $4b higher. At $2.8b a year it would be $14b higher.

So over five years, the projected deficit drops by $10b. And that means you are borrowing $200m less a week.

Of course there are other factors such as the rate of economic growth and hence tax revenue growth, plus there are certain expenditure items that are contractural (benefits) and go up or down depending on how many people receive them.

The impact on debt is more pronounced Because the total amount of spending not undertaken is cumulative. In year 1 it is $2b, year 2 is $4b, then $6b, $8b and $10b. Over five years that reduction in future spending means you have $30b less debt that would otherwise have been the case.

Keeping future spending growth to $800m a year is not at all easy. Out of that you have to fund population growth demand on health and education and public sector wage rises before you even get into discretionary new initiatives.

Labour have managed to turn what should have been a minor story into a major story, stretching into three days and possibly more. Such incompetence is not unheard of, but fairly rare.

The aspiring Prime Minister suddenly deciding to start dying his hair would normally be a minor story at best. So what were the five mistakes Labour made, turning it into an ongoing saga:

1. Having the new hair colour appear the same day as the major economic speech of the year. I mean how dumb is that. A retarded POLS 101 student could tell you that the new hair colour would distract from the speech.
2. Not having a prepared line when journalists ask about the new hair colour. Instead Goff says he won’t answer any questions about itm unless they ask the Prime Minister also. Guarantees the issue becomes more high profile.
3. After the PM happily answers a question on the state of his hair, there is still no prepared line for Goff. So he looks surly and fake, in contrast to the PM’s humour and openness.
4. When finally a line is worked out, the line is one that both no-one believes, and makes him look well what the Governator would call a “girly-man”. He says it had nothing to do with being election year, and his wife got him to do it.
5. Finally in a brilliant move to keep the story alive, Trevor Mallard blogs about it, alleging that John key lied about not dying his hair, and revealing that David Cunliffe also dyes his hair. Trevor’s so called proof that John Key dyes his hair is ridiculed in his own comments section.

All we now need is for Labout to send staff to Australia to try and dig up proof that the H-Fee was in fact the code name for John Key’s special hair dye.

Photo from The Press.

Over two days we’ve seen two dramatically different paths outlines for the Government. Yesterday Phil Goff promised more borrowing and more debt. Today John Key announced the opposite – that National would reduce future spending to reduce debt – and also flagged allowing the private sector to invest in four current SOEs (which will also reduce debt).

This is excellent – both the reduced spending cap, and the flagging of an election policy to allow minority shareholdings in some energy companies.

Some extracts from Key’s speech:

Growth over the last decade was built on all the wrong things – debt, consumption, and government spending.

People borrowed heavily to buy houses and farms, property prices soared and New Zealanders felt wealthier as a result. They spent a lot on consumer goods, which led to a bubble of economic activity.

 The Labour Government thought this bubble, and the tax revenue it generated, would go on forever and spent up large on permanent new spending programmes. The Government’s spending increased by more than 50 per cent in just six years.

Labour literally had to keep thinking up new ways to spend money, as their refusal to drop tax rates led to fiscal drag and large surpluses. Rather than have modest spending growth, and lower taxes, they did nothing except huge spending increases.

The internationally-competitive sectors of the economy actually went into recession in 2004, and experienced a 10 per cent drop in output over the next five years.

A five year recession for the competitive sector of the economy.

By the time the National-led Government came into office at the end of 2008 the economy was deep in recession, and inflation was the highest it had been in 18 years.

The Government’s books had been left in a mess, with Treasury projecting no end to budget deficits and government debt spiralling out of control.

This is worth remembering – the official forecasts were for deficits and debt to be so big, that we would never ever return to surplus.

As an incoming government, we moved quickly to steady the ship, help the economy through the recession and set a credible path back to surplus.

 Even so, when we tally up everything the Government is spending this year, we still need to borrow $300 million a week on average to pay the bills.

 In the worst of the recession, running a budget deficit was the right thing to do, as it gave much-needed support to the economy.

 Now, as the economy recovers, borrowing $300 million a week is unaffordable and is holding the economy back.

 It is crowding out our internationally-competitive sectors of the economy, keeping the exchange rate high, and tying up resources that could be better used elsewhere in the economy.

And this borrowing will, of course, have to be repaid in future years, with interest.

Annual interest payments on our debt will, in four years time, cost more than spending on the Police, defence and early childhood education combined.

Which is why we need policies to reduce the growth in debt and lead us back to surplus.

When we are borrowing $300 million a week, have an overvalued exchange rate, and face the prospect of a credit rating downgrade, the Government believes it should be spending less and therefore borrowing less.

I have therefore challenged my Ministers to balance the books more quickly.

Government spending will continue to increase each year in dollar terms, but at a slower pace than the rest of the economy.

As the first step in reducing spending growth, we will run a tighter Budget this year than was indicated in the Budget Policy Statement in December.

Currently we have a new spending allowance of $1.1 billion each year, compared to Labour’s average of $2.8 billion a year over its last five budgets.

Our plan is to reduce that new spending allowance in Budget 2011 even further, to around $800 to $900 million.

Nonetheless, this year’s Budget will continue to prioritise new spending to health and education in particular, and to initiatives that promote economic growth.

 This would be a good time for the PPTA to reconsider the wisdom of ongoing strike action for their 4% pay claim.

Key says that Treasury project this reduction in future spending will see NZ get back into surplus in 2014/15 instead of 2015/16. This of course will only occur if the 2011 – 2014 Government has tight fiscal discipline.

Now onto the capital side:

The Investment Statement shows that the government, on behalf of taxpayers, owns $220 billion of assets across a whole range of social, financial and commercial investments – everything from hospitals, roads, prisons, schools and Police stations to the Super Fund, electricity companies and coal mining operations.

We also expect to acquire $33 billion of net new assets over the next five years, including new schools, operating theatres, ultra-fast broadband and major investments in our state highways and other transport infrastructure. That is a considerable spend by any reckoning.

At the margin there are two ways we can acquire new assets – either we can borrow more or we can change the mix of assets we own.

Indeed, and it is stupidity to insist that our current mix of assets is perfect, and in no way can any existing asset be sold or even sold down.

The greatest scope to change the mix of assets lies with the government’s portfolio of commercial assets.

In particular, the sort of mixed-ownership model under which Air New Zealand operates – where the government owns most of the company but there is a minority of outside equity – gives the best of both worlds.

Under this model, the government has a controlling stake in what is a crucial piece of transport infrastructure and guarantees that it will be majority New Zealand owned. But by not owning 100 percent of the airline, the government also has capital free to invest in other assets.

This model could be extended to more of the government’s commercial assets.

As well as freeing up capital, there are three other potential benefits of a mixed ownership model.

The first is that it broadens the pool of investments for New Zealand savers, either directly themselves, or through investment funds such as KiwiSaver.

New, quality listings on the stock exchange would give “mum and dad” investors the option of putting their savings into large and proven companies, rather than relying, as is so often the case, on property investments.

The second is that the company reaps the benefits of sharper commercial disciplines, more transparency and greater external oversight.

Under the mixed ownership model Air New Zealand has been a creative and innovative company and a model corporate citizen. It has also offered some very competitive prices for air travel.

I am convinced that Air New Zealand would not be run as well, nor provide as good a service to customers, if it was owned 100 percent by the government.

And the third potential benefit is the opportunity for the companies involved to obtain more capital to grow further, without depending entirely on a cash-strapped government to support them.

Having some SOEs able to access capital, without the taxpayers having to borrow more will be good for them, and allow them to grow.

And NZ investors would love having some solid companies to be able to invest in – which will help boost savings.

For all these reasons, the Government has asked Treasury for advice on the merits and viability of extending the mixed ownership model to four other state-owned companies – Mighty River Power, Meridian, Genesis and Solid Energy.

In each case, the government would retain majority ownership and control, and the freed-up capital would be used to purchase other public assets, thereby reducing the government’s need to borrow.

The Government has also asked Treasury for advice on the merits and viability of reducing the government’s shareholding in Air New Zealand, again while retaining a majority stake.

Only the companies I have just mentioned will be considered for a mixed ownership model.

For all these reasons, the Government has asked Treasury for advice on the merits and viability of extending the mixed ownership model to four other state-owned companies – Mighty River Power, Meridian, Genesis and Solid Energy.

In each case, the government would retain majority ownership and control, and the freed-up capital would be used to purchase other public assets, thereby reducing the government’s need to borrow.

The Government has also asked Treasury for advice on the merits and viability of reducing the government’s shareholding in Air New Zealand, again while retaining a majority stake.

Only the companies I have just mentioned will be considered for a mixed ownership model.

Yay. We are currently the only country in the OECD that has a policy based on pure ideology of banning any private sector investment in current state assets. This probable policy is a step in the right direction.

It is subject to finalisation and approval from voters at the 2011 election. It will maintain Government control of the five companies, but allow for Kiwi mums and dads to invest in those companies, providing the companies with capital, and the investors with good returns.

Kiwis will have some clear choices for the 2011 election – policies which boost savings, reduce future spending and reduce debt vs policies to tax rich pricks more and borrow more.