OnPoint: AIA and Maori Seats
155 Responses
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Everyone seems to be ignoring the fact that Auckland Airport really *is* strategically vital infrastructure.
I agree, but what exactly is the risk posed by foreign investment here - that the Candians will rip the runways up and ship the whole airport home to Vancouver, or that they will simply bowl it and whack up townhouses instead? Cos at the moment, most objections I've seen appear long on nationalistic rhetoric but short on actual detail.
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e.g. Rather than build a terminal extension to increase capacity, they might choose to increase fees to price out less profitable flights to, I dunno, Chile or something. It doesn't have to be dramatic or malicious to have a big flow-on impact for the rest of the country.
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Does it? I'd kinda thought that reducing the current account deficit meant that *reducing* the country's reliance on foreign investment was imperative, especially given that the investment income deficit for the last recorded quarter (Sep 2007) was $3,255m – that's nearly 90% of the $3,628m current account deficit.
Killer point. It would be nice to see the Herald's editors respond to that. Unfortunately, they don't respond to anything.
I though Mark Weldon had a pretty good take on it on Morning Report today: as a policy move, it's very much in line with international trends, but the manner and timing of it are more ... unusual.
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but what exactly is the risk posed by foreign investment here
When it comes time to build the second runway to enable growth to be accommodated, a major foreign investor might say "I don't think we want to spend that money, eh! Its no rind off our bacon that the NZ economy suffers through not expanding vital infrastructure. "
A kiwi private investor might say the same thing I suppose, but one would hope they would be more inclined to "take one for the team" in the short term in order to enrich "New Zealand Inc." in the long term.
Look at what happened to infrastructure investment when we sold off the railways. Admittedly, I suppose 40% of AIA isn't a full controlling interest but it is a big chunk of shares to vote in one direction.
Anyway, with the coming reduction in global travel due to sky-high fuel prices and increasing carbon footprint awareness, won't airports become white elephants? We may want to buy shares in the Onedin Line instead... "Arrr, splice the main brace and furl the jib me hearties. Last one up the old sea-dog gets a lick o' the cat"
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Rather than build a terminal extension to increase capacity, they might choose to increase fees to price out less profitable flights to, I dunno, Chile or something. It doesn't have to be dramatic or malicious to have a big flow-on impact for the rest of the country.
Yes I accept that, however the profit-gouging you suggest appears to be a risk with private ownership full-stop, not limited only to foreign investors. If,say, Eric Watson wanted to buy 40% of AIA would that suddenly ok because he has a NZ passport? Your objection seems not to be so much about foreign investment, but private investment.
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We spend more than we earn. We need to borrow from foreigners to do that or we need to encourage foreign investment
What a shame there are only those two alternatives, eh? Because clearly we could never ever spend less than we earn.
Anyway, there's sleight of hand there. As I understand it, the Canadians were not proposing to provide new capital to fund growth in the business. They merely wish to own a chunk of the existing company and hence its income. That kind of investment does absolutely zip for us. All it does is direct a stream of income out of the country for good.
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I can't really agree with you about the Maorimander. Yes, it's not proportional, but the seats are still contestable - they're not guaranteed to the Maori party. If they win all 7, good on them. Any small party could try to do the same thing, win more than their national percentage by winning a bunch of electorates instead. Indeed, it's what Jim Anderton is likely to do. It's not like winning those Maori electorates is a turkey-shoot with no serious competition. They're up against Labour at least. They must be touting a message that appeals to people on the Maori roll better than Labour are.
Nor am I alarmed by Maori holding the balance of power. I generally disagree with most of what they say, but in a strange way I'm glad they have seized such a position after over a century of powerlessness. It is a young and inexperienced party, and perhaps the only way that the nation can grow is for the Maori to forge a coalition with National. If they could do that, and it could hold together without being a parochial shambles, I would be most impressed with both parties. I actually think the Maori party would be quite a good party to keep the more ideologically scary parts of National in check, since they are, if nothing else, all about keeping NZ in NZ (albeit preferably Maori) hands.
Should there be no Maori seats? I suggest that if there were not then the gerrymander would be even worse. The Maori party would win no electorates, and would probably be below the threshold and get no representation at all. That may suit everyone who is not Maori, but it would hurt Maori representation seriously. I don't like the idea of stripping 7 seats off Maori just because they might hold the balance of power.
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On those pesky Maori seats and that overhang
This is why I hate MMP. Should have been STV.
Look at the totally disproprtionate, distorting and dangerous (3Ds!) influence wielded by the extremist religious parties in Israel, another MMP country.It's getting that representational balance right, but not letting*cue cliche* tail wag the dog...
Kill MMP: STV and an Upper House please.
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I don't see any reason at all why an Eric Watson or whoever would be any more or less likely to invest appropriately than a Canadian pension fund.
It's a monopoly. It needs regulation, whoever owns it. Suggesting that a Kiwi investor would be more inclined to run it in the public interest than a foreigner is wishful thinking at best and racism at worst.
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Hang on. Aren't the Westies wanting to build their own airport? So how strategic is this Manukau site? Perhaps it is only strategic because the govt is now effecitvely legislating it to be one. WHat chances of a north shore airport now that the Govt has 'invested' so much in Manukau?
Bangkok and Hong Kong had strategic airports and they built another one to replace each of them.
Ben
While I actually agree with your argument about disenfranchising the Maori party (which is an important issue to consider), you can't have it both ways when in the same post you say they are contestible.
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I don't see any reason at all why an Eric Watson or whoever would be any more or less likely to invest appropriately than a Canadian pension fund.
It's a monopoly. It needs regulation, whoever owns it. Suggesting that a Kiwi investor would be more inclined to run it in the public interest than a foreigner is wishful thinking at best and racism at worst.
Precisely. Once an asset is privately owned, that elusive "rational" investor is going to do the same thing regardless of nationality.
And let's not forget - 40% of AIA is already owned offshore, mainly by hedge-funds who were on the whole looking to sell into this, i.e at worst we would have transferred ownership from short-term focussed foreign hedge funds, to a long-term focussed foreign pension fund.
Way for the save there =| -
The situation with the Maori seats would be exactly the same if there was a successful "South Island party" or "Wellington party" that scooped the general seats in a particular locality.
Maori seats are simply an alternate way of grouping people into an electorate. The Epsom electorate is "people who live in Epsom", the Tamaki Makaurau electorate is "people who identify as Maori and live in Auckland".
The Maori seats are, in any case, a taonga and not for us whiteys to take away. If Maori want to get rid of them, they will.
(It would be possible to implement a system where any organised group of people, like students or farmers, could choose to have their own electorate. I doubt any would, but it would remove the (groundless) accusation of racial preference).
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Kill MMP: STV and an Upper House please.
No and NO! STV is funky code for FPP. Just look at Ozzie. Upper House? Why?
While I actually agree with your argument about disenfranchising the Maori party (which is an important issue to consider), you can't have it both ways when in the same post you say they are contestible.
I think you may have mistaken me. Removing the Maori seats would kill the party. But that doesn't mean the existence of the seats makes the party. They had to make the party themselves, and win those seats. They actually used to be guaranteed Labour seats, and that was not the point of them at all.
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Ben
I'd add that you are happy with MP having the overhang because of the way they are behaving. What if that behaviour changed? Would you be so comfortable? That is a better test of the issue.
I'm with Keith that the seats need to be addressed, and the pressure will increase if the MP uses that to put in govt a party that did not gain the largest number of votes. Also the number of Maori seats will likely increase as it is based on census population of those identifyign as Maori (as opposed to Maori seat enrolments) making the overhang potentially worse. I'm not sure if it is healthy in the long term to potentially give such a minority vote party the balance of power.
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BTW, the "us whiteys" wasn't to say that everyone here is white, or that white/Chinese/Native American people aren't entitled to an opinion on the Maori seat issue.
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Once an asset is privately owned, that elusive "rational" investor is going to do the same thing regardless of nationality.
Surely though a New Zealand based investor has more of a stake in the continuing economic prosperity of NZ as a whole, which can be affected by how the airport is run.
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The Maori seats are, in any case, a taonga and not for us whiteys to take away. If Maori want to get rid of them, they will.
Some time ago, a commenter on Kiwiblog whined that since there was a Maori Party, there should be a Rich White Guy Party.
It was pointed out that he & his ilk were free to vote for ACT - but this comment has just convinced me that few want them.
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A NZ-based investor at the least is more likely to keep some of the dividend stream here.
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Killer point. It would be nice to see the Herald's editors respond to that. Unfortunately, they don't respond to anything.
Well, the Government has responded. It's called the Cullen Fund and Kiwisaver. As a result of these two initiatives there *will* be more investment overseas which in turn will see more returns to NZ from those investments.
Private companies need to be encouraged to do their bit as well, both in the import substitution game and getting overseas.
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If Maori seats are such a Taonga why do only about half Maori voters enrol in them and they have some of the lowest turnouts in elections?
"Surely though a New Zealand based investor has more of a stake in the continuing economic prosperity of NZ as a whole, which can be affected by how the airport is run."Really? Got any evidence? Frankly I think that is a huge assumption. Did Fay Richwhite have such concern over rail? What about Alan Gibbs and Telecom?
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If all Labour party voters chose Progressive for their electorate vote a Labour/Progressive government would be almost gauranteed. Splitting a vote that way can give a 60% increase in the value of the vote over someone who votes for the same party & electorate. The fact that the Maori seats do this shows these are the smartest electorates in New Zealand.
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A NZ-based investor at the least is more likely to keep some of the dividend stream here.
If said NZ investor (say Auckland City Council, or the Cullen fund) instead put their money into an overseas investment, they'd get a stream of dividends from overseas.
It makes sense for any large investor to have a globally diversified spread of investments, ensuring that risk is spread. That's why the Cullen fund invests overseas and why the Canadians do the same.
If the Cullen fund put all it's money in NZ, then a downturn in the agricultural sector (just for instance) would impact it's ability to pay out super - right at a time when the Governments current revenues were being impacted by the same situation.
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its not it's. And it should be "our"
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I'd add that you are happy with MP having the overhang because of the way they are behaving. What if that behaviour changed? Would you be so comfortable? That is a better test of the issue.
You so didn't get me, but I get that a lot so it's not your fault. I'm not happy with the Maori party because of the way they are behaving. But I accept the overhang as a uniquely Maori privilege acknowledging their unique position in NZ. Their right to have seats they can enrol to vote in, which are numerous in proportion to Maori numbers in the population, is a very important and hard-won political right. That most Maori don't choose to use it doesn't mean they shouldn't have it.
I'm also not terrified of them holding the balance of power for 2 reasons:
1. As a partner for National, they are likely to temper National's more destructive elements, particularly towards Maori, who are certainly amongst the most likely to be disadvantaged by a swing to the right.
2. I don't believe the whole 'balance of power', 'tail wags the dog' argument anyway. Every single MP is a tail, and they all wag. ACT could break away from National. Greens could break away from Labour. Individual MPs could tear away from their party (like Turia did in the first place). There is even the seldom discussed, but actually quite sensible, possibility of a Grand Coalition, since Labour and National are just nicking each other's policies these days anyway. I don't think it's unfair in a room of 11 people, if 5 think one way and 5 think the other, that the remaining person holds the 'balance of power'. Whichever way they swing is still the majority, and everyone in that majority can opt out at any time, so they all hold the 'balance of power'. -
It's unfortunate that for every Lloyd Morrison, there are maybe 10 Fay Richwhites. The real culprits of the whole issue are the Dancing Cossacks.
The last time we had an upper house (the Legislative Council), it had become little more than a rubber stamp for the House of Reps by the time it was dissolved in 1951.
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