Hard News by Russell Brown

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Hard News: A week being a long time in politics

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  • Sacha,

    With our nation's future economic prospects becoming increasingly digital, selling off our energy system is pure vandalism. I guess we'll see shortly if a few weeks of opposition to that plan carries the day.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Rich Lock,

    Oh, come now, what could possibly go wrong with changing from a business model that's supposed to benefit citizens, to a business model that's entirely profit driven?

    Power companies have been accused of profiteering from the coldest winter for 30 years after a surge in corporate profits.

    ScottishPower, which has more than 5 million British customers, saw profits rise by 7.9% last year amid fears that many people could not afford to heat their homes during the bitter winter.

    Oh...

    back in the mother countr… • Since Feb 2007 • 2728 posts Report Reply

  • merc,

    John Key compares selling power company shares to selling TradeMe shares, yes John /Jedi mind trick on self/, these are the same shares you're talking about.
    BTW, if they sell all the power companies people are just going to keep lining up to buy their shares, yes they are #itshowitworkstofail
    A 10% cap on share holding, why these shares are going to be so hot you could warm your tea with them.
    Apparently Key is also going to sell shares in wastewater management, oh wait.

    Since Dec 2006 • 2471 posts Report Reply

  • Sacha, in reply to merc,

    these are the same shares you're talking about

    One of the economic commentators (Rod Oram?) pointed out some time ago that the TradeMe float would actually be competing for the same local investors, thus depressing the value of the SOE shares.

    Ak • Since May 2008 • 19688 posts Report Reply

  • merc,

    Energy shares are what got the world, especially NZ in this mess in the first place. 1973, the so called oil crises, that has been proven to not have been. Prior to that energy stocks were not traded as a commodity.
    http://en.wikipedia.org/wiki/1973_oil_crisis
    I remember the storylines in NZ as we reeled from being bounced out of the EEC as well. http://www.teara.govt.nz/en/overseas-trade-policy/4 see Luxembourg Agreement

    Shares are divided up in categories, our energy shares will be very valuable because we generate using hydro. The whole thing is so complex I am in awe how John has simplified it, stunned awe.
    Later,
    The projected sales proceeds would barely cover one year's capital expenditure by the Government.
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10767976

    Since Dec 2006 • 2471 posts Report Reply

  • Sacha, in reply to merc,

    I am in awe how John has simplified it

    Joyce is a very good campaign manager. If only Labour had taken that more seriously for the last few years. Hoping they can pull something off this week, but polls still suggest that's unlikely.

    Ak • Since May 2008 • 19688 posts Report Reply

  • merc, in reply to Sacha,

    Very true because a decent memory would serve to highlight the debacle that is AirNZ. Even I can tell you that it is anti-competitive, needs to periodically fork out large sums of cash for new planes, AKL council have large shareholdings and in the airport so shun any thoughts of a second airport (Whenuapai), also Helen ran very close to accidental insider trading on the 850m bailout (Govts don't do shares so well, too ethical), also Govt owns all the lines (destinations), no other airline can effectively compete, so it's like Telecom was, a dead sitter for certain people to have shares in a Govt. guaranteed monopoly...if our sharemarket was a real one, it would have been in court years ago, it is not a real one and it has very low (cowboy low) levels of regulation.
    Short story, Key is telling a very short story round a very Tolstoy length novel. We should be looking at how we even let these guys have this sort of discretionary power. Interesting Fay is back in the news too ay?

    Since Dec 2006 • 2471 posts Report Reply

  • Russell Brown, in reply to merc,

    so it’s like Telecom was, a dead sitter for certain people to have shares in a Govt. guaranteed monopoly…

    I still think selling Telecom was the correct thing to do. Telecommunications needed a market.

    The problem was National being played for complete and utter rubes by the people who did it. They allowed themselves to be convinced that a promise to be really nice and not abuse Telecom's overwhelming dominance precluded the need for regulation.

    Nek minnit ...

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • Sacha,

    When Key talked to Radio NZ's Kathryn Ryan (34 mins, listening options), he discussed the energy SOEs as "underperforming" economic investments rather than as strategic infrastructure.

    They're all regarded by analysts as well-managed so there won't actually be any improvement through private ownership. Except to the wealth of those who can afford shares.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sacha, in reply to Russell Brown,

    complete and utter rubes

    Good description of haplessly hands-off Maurice Williamson.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Bart Janssen, in reply to Russell Brown,

    I still think selling Telecom was the correct thing to do. Telecommunications needed a market.

    The problem was National being played for complete and utter rubes by the people who did it. They allowed themselves to be convinced that a promise to be really nice and not abuse Telecom’s overwhelming dominance precluded the need for regulation.

    This is something we do again and again in New Zealand. We repeat mistakes made elsewhere. There is nothing new about telecommunications companies needing regulation. The US experience alone should have been enough to inform anyone with a brain that left unregulated the company would act to maximise profit to the harm of NZ.

    Can we please stop making the same mistakes that have been made elsewhere?

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • merc, in reply to Russell Brown,

    I don't disagree, I am always careful with my wording, especially round Telecom whom I enjoyed a very good business relationship with. It was however an incredibly badly handled float and subsequent investment in infrastructure avoided while they played in the fields of the lord regarding investing in other areas (Telstra)...also culminating in their then departing CEO stating on record,
    Yes we used deception to market our products.
    Our SOE's are performing well according to Treasury, if Mr Key wants to ignore the (very expensive) advice of Treasury and simply wing it and gamble...I say we need laws to stop this radical shifting of successive Govt's policy (as noted in the child poverty doco last night).
    We have way too much swinging from our Govt. I think the reason the worm loved Goff the other night was because he was finally mentioning the people, or as one commenter to the Herald put it, a society is not just about the economy, the economy is a facet of our society, but it must work for the totality of the people.
    I cannot for the life of me understand how so self evident a message is so easily subverted.
    We need the power stations to keep our most vulnerable warm, simple.

    Since Dec 2006 • 2471 posts Report Reply

  • Martin Lindberg, in reply to merc,

    We need the power stations to keep our most vulnerable warm, simple.

    Not that I'm defending asset sales, but I don't think they are planning on actually shipping the power stations overseas.

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • Sacha, in reply to Bart Janssen,

    Can we please stop making the same mistakes that have been made elsewhere?

    you and your fancy evidence-based policy

    Ak • Since May 2008 • 19688 posts Report Reply

  • Kumara Republic,

    And while John & Phil bicker over asset sales, our would-be Sam Morgans typically have to beg for overseas capital because local investors won’t back them, with 1987 still fresh on their minds – again, Baker vs Straker is a case in point. And nothing replaced DFC after its fatally ill-conceived foray into property speculation. Those are the real reasons why the local sharemarket is flat, not state ownership of critical infrastructure.

    This is something we do again and again in New Zealand. We repeat mistakes made elsewhere.

    Such malaise surrounding privatisation and infrastructure can be traced back to one common thread – cargo cultism. In this case, the cargo cult just happens to be a cross between (Berlin) Wall Street and Fountain Lakes. David Harris - of Pegasus Mail fame - was right.

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • Russell Brown, in reply to merc,

    I don’t disagree, I am always careful with my wording, especially round Telecom whom I enjoyed a very good business relationship with. It was however an incredibly badly handled float and subsequent investment in infrastructure avoided while they played in the fields of the lord regarding investing in other areas

    Oh I know, I know.

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • Kumara Republic, in reply to Martin Lindberg,

    Not that I’m defending asset sales, but I don’t think they are planning on actually shipping the power stations overseas.

    It would be rather difficult to do so. But they can still gather dust, as happened with Telecom when Ameritech & Bell Atlantic owned it.

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • merc, in reply to Martin Lindberg,

    Martin the price of power will go up a lot, of that fact I have no doubt. Oh and to scaremonger, the supply is sketchy at present (outages) I don't foresee that changing with private owners needing healthy profits before healthy lines.

    Since Dec 2006 • 2471 posts Report Reply

  • Martin Lindberg, in reply to Kumara Republic,

    But they can still gather dust

    so long as it's not coal dust...

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • Sacha, in reply to Kumara Republic,

    the real reasons why the local sharemarket is flat

    it's the opposite of ambitious that local investors need corporate welfare to provide a safe investment, but proper market governance is not something any politician is offering.

    Ak • Since May 2008 • 19688 posts Report Reply

  • merc, in reply to Martin Lindberg,

    Good point, what will be the incentives for power company owners to diversify, invest in alternate power. This is where the competitive, leave it to the market ideology fails, because you know, profit doesn't need to invent it own demise.
    Govt. must take the lead in incentivising innovation, specifically energy generation, hell we all do. The share market model is also broken, just saying.
    Sacha you are right, governance is the need, not being players. Radically I don't like the tax system we have that rewards depreciating assets, just one of my things.

    Since Dec 2006 • 2471 posts Report Reply

  • Kumara Republic, in reply to Sacha,

    it’s the opposite of ambitious that local investors need corporate welfare to provide a safe investment, but proper market governance is not something any politician is offering.

    In other words, cargo cultism as I mentioned above.

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • hamishm,

    Now with the just -made-up-this-hour policy from Key that they will limit overseas shareholders to 10%, I have to ask. What is the point of flogging them off?
    It must be purely ideological.

    Since Nov 2006 • 357 posts Report Reply

  • merc, in reply to Kumara Republic,

    Cargo cultism in part yes, but the fact remains successive Govts chop and change their policy focus like the wind and I would like to see us having more ability to keep them steady. The political switch and bait show is way too costly both economically and socially for our leaders to constantly play at...making it new!
    Hamish, I have darker thoughts.

    Since Dec 2006 • 2471 posts Report Reply

  • hamishm,

    Now with the just -made-up-this-hour policy from Key that they will limit overseas shareholders to 10%, I have to ask. What is the point of flogging them off?
    It must be purely ideological.

    Since Nov 2006 • 357 posts Report Reply

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