Yesterday, there were a number of successful protests around the country against Nationals asset sales. Well done to all those who attended.
In my opinion, these protests shouldn't be required. This is because National should have already put a halt to their privatisation plans, not just because of the referendum, but because the government can no longer hope to attain a good price.
In June last year, the Minister for State Owned Enterprises Tony Ryall said:
So will the government still get a good price after Labour and the Greens announced policy that will regulate the electricity market to ensure consumers aren't being ripped off? If you read some of the right wings reaction to NZ Power, you'd think that the economy was about to crash.
However NZ Power will only cause a potential 3 to 4.5% reduction in the value of dividends going to private shareholders from the five main power companies, and that's before you even factor in increased revenue. In 2012, they made nearly $10 billion, which is an increase of 18.6% on the previous year. That means there will be very little adverse affect on these hugely profitable companies.
It appears that National is simply blaming Labour and the Greens for their own financial mismanagement, because the price they hoped to attain was never good in the first place.
Despite National saying they wanted Kiwi mum and dad investors to buy shares, getting a good price is entirely dependent on large amounts of foreign investment. In fact with the profit margins already tight, National moved to increase foreign investment by doubling the commission on Mighty River Power shares sold to foreigners. They did this because so-called mum and dad investors in New Zealand don't actually have a lot of money to invest, all thanks to neoliberalism in the first place.
Clearly attaining enough foreign investment to make the float worthwhile is entirely dependent on how well foreign economies are performing. However most of our main trading partners have gone back into recession this year, meaning that there will be reduced investment. The success of the asset sales was dependent on these markets not declining. They have, therefore Nationals asset sales will not be financially successful.
That's the main reason why National should bite the bullet and put a halt to their asset sales... They can no longer hope to get a good price. Now is the best time for them to back down, because they can effectively spin the blame onto Labour and the Greens while claiming to be listening to public opinion. Over time the effectiveness of their propaganda against NZ Power will diminish and in my opinion, National should take this opportunity while it's available.
If they don’t accept that the asset sales agenda is a financial failure, National risks taking all the fallout for mismanaging the partial privatisation into a financial mess... Their business backers won't be pleased, especially when Labour and the Greens clean up in 2014 with most of the asset sales agenda still sitting in the to do box.
In my opinion, these protests shouldn't be required. This is because National should have already put a halt to their privatisation plans, not just because of the referendum, but because the government can no longer hope to attain a good price.
In June last year, the Minister for State Owned Enterprises Tony Ryall said:
Let me be quite clear here. If the government doesn’t get a good price, the government isn’t going to sell.
So will the government still get a good price after Labour and the Greens announced policy that will regulate the electricity market to ensure consumers aren't being ripped off? If you read some of the right wings reaction to NZ Power, you'd think that the economy was about to crash.
However NZ Power will only cause a potential 3 to 4.5% reduction in the value of dividends going to private shareholders from the five main power companies, and that's before you even factor in increased revenue. In 2012, they made nearly $10 billion, which is an increase of 18.6% on the previous year. That means there will be very little adverse affect on these hugely profitable companies.
It appears that National is simply blaming Labour and the Greens for their own financial mismanagement, because the price they hoped to attain was never good in the first place.
Despite National saying they wanted Kiwi mum and dad investors to buy shares, getting a good price is entirely dependent on large amounts of foreign investment. In fact with the profit margins already tight, National moved to increase foreign investment by doubling the commission on Mighty River Power shares sold to foreigners. They did this because so-called mum and dad investors in New Zealand don't actually have a lot of money to invest, all thanks to neoliberalism in the first place.
Clearly attaining enough foreign investment to make the float worthwhile is entirely dependent on how well foreign economies are performing. However most of our main trading partners have gone back into recession this year, meaning that there will be reduced investment. The success of the asset sales was dependent on these markets not declining. They have, therefore Nationals asset sales will not be financially successful.
That's the main reason why National should bite the bullet and put a halt to their asset sales... They can no longer hope to get a good price. Now is the best time for them to back down, because they can effectively spin the blame onto Labour and the Greens while claiming to be listening to public opinion. Over time the effectiveness of their propaganda against NZ Power will diminish and in my opinion, National should take this opportunity while it's available.
If they don’t accept that the asset sales agenda is a financial failure, National risks taking all the fallout for mismanaging the partial privatisation into a financial mess... Their business backers won't be pleased, especially when Labour and the Greens clean up in 2014 with most of the asset sales agenda still sitting in the to do box.
