Brian Edwards Media

Why Labour is both right and wrong about asset sales. (And how I’ll be voting on 26 November – as if you didn’t know!)

I’m against selling our state assets. I’m impressed by Labour’s argument that you can only sell an asset once, and that, as soon as you’ve sold it, you’ve lost the revenue stream forever. Forever is probably the key word. You have to calculate the dividend loss for an indefinite period that ends – never.

And I’m not impressed by the Government’s intention to use the money from asset sales to fund hospitals and schools. Funding for hospitals and schools shouldn’t come from  selling the family silver, it should come from general taxation. If it doesn’t, where are you going to find the cash to fund health and education next year, and the year after that, and the year after that,  when the assets are gone?

I’m familiar with the Government’s answer: ‘We aren’t selling off the lot; we’re keeping a controlling 51% share and we’ll still have the dividends from that.’ Well, 51% of the dividends! And I hope you won’t think me unkind, but I wouldn’t trust you as far as I could throw you on this. When you run short of dough, and you will run short of dough, you’re going to sell the rest. Of course you are. You’re philosophically opposed to the idea of governments owning and running businesses. That’s the private sector’s job.

And this is where you’re out of touch with the essentially chauvinistic view of a majority of Kiwis: ‘Hey, this is our bank; it’s got our name on it – Kiwi Bank; this is our airline, it’s got our name on it – Air New Zealand; this is our power station – we built the bloody thing! This stuff is all ours and you want to flog it off to foreigners.’ Ours and foreigners are probably the key (but not Key) words in this debate.  

So it’s pretty clear what side I’m on – ‘Get your grubby hands off our assets.’ The polls seem to suggest that that’s the majority view among voters. But is it enough to win Labour the election? Those same polls would seem to suggest that it isn’t. Why?

Well perhaps I can use myself as an example. I’m against the sale of state assets. I think selling them can’t be justified on economic grounds; and I share the nationalistic sentiments of so many Kiwis that they’re ours and we should keep ownership and control of them here.

But my objections are essentially intellectual rather than visceral. I think we shouldn’t sell Kiwi Bank, Air New Zealand, our power companies and the rest, but it isn’t a gut issue for me. My gut issues are to do with poverty, child abuse, unemployment, a decent wage, access to education and health care, the protection of the weak and disadvantaged, an enlightened justice system not founded in punishment and revenge… These are just some of the issues that, to answer the question put to Goff and Key on the first TV debate, I would march on the streets for. But to stop asset sales? Probably not.

What I’m trying to say is that Labour is right to oppose the sale of state assets, but it has placed too much reliance on the fact that most Kiwis oppose those sales, and too little reliance on the actual depth of feeling behind that opposition.

The same may well be true of its policies on a capital gains tax, compulsory superannuation, raising the retirement age and so on. These are sensible and courageous proposals. But their appeal is to the intellect and not to the gut. For most ordinary people, they are not vote-changing issues. And where they are vote-changing issues, the change will disadvantage rather than favour Labour.

I’ll be voting Labour on the 26th of November, not out of habit, but because my gut tells me that this government seeks to retain office by rewarding the rich and not merely neglecting but blaming and punishing the poor. That, rather than asset sales, should, I believe, be Labour’s core message in the remaining two weeks of the campaign.  

And of course, whether you want a show-pony or a man of quiet integrity to run the country.

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67 Comments:

  1. “I’m against selling our state assets. I’m impressed by Labour’s argument that you can only sell an asset once, and that, as soon as you’ve sold it, you’ve lost the revenue stream forever. Forever is probably the key word”.

    I’d tactfully suggest you are incorrect in that assessment, Brian. You do still get a revenue stream from (partial or completely) privatised assets – in the form of the taxes the new owners pay on profits earned (which generally, but not invariably are better under private compared to state ownership), and also overall increased economic efficiency.

    However, beyond my own personal opinions, you are on to something over Kiwis failure to make this a “gut issue”. Twenty years ago – yes. Asset sales are still (according to opinion polls) unpopular. However, we are seeing the rise of a generation that has grown up without the experienced reality of the benefits (particularly employment)and short-comings (appalling economic inefficiency) of government running assets like the Railways.

    I am still surprised that Labour hasn’t got more traction on the issue. Possibly their overall policy framework is inconsistent, so it smacks of desperation. Plus, with all due respect to the genuinely good and capable guy Goff is, he is the wrong person (courtesy of his late-1980s track record) to deliver the message.

    And finally, yes – Goff is a man of quiet integrity. However, within the framework of his own political and personal philosophy, so too is Key. Until such time as you start recognising those real qualities, and cease blaming the electorate for its stupidity, I suggest you fail to comprehend the source of Key’s popularity.

    But that’s just my opinion. However, don’t let me detract from the genuine satisfaction you should savour of casting your vote on November 26 in good conscience. If everyone took the time to weigh the issues as you have, we would be a much better country.

  2. Just a couple of quibbles. You certainly can justify selling these assets on economic grounds. Calculating the net present value of the future dividend stream is not rocket surgery. My judgement after reading fairly widely is that the majority of expert economic opinion favours the asset sales.

    Just as rational economic analysis favours Labour’s intention to raise the age of superannunation entitlement.

    And I think your last point is a cheap and unjustified shot. I think both leaders are good men. It may be my imagination but I’m pretty sure the apparent need to actively dislike the people on the “other side” is much more prevalent on the left in NZ. I find it an unfortunate thing to observe.

  3. @ Bill Forster

    “You certainly can justify selling these assets on economic grounds”.

    Yep. And just to complete the circle, unless you have economic efficiency, how else are you going to consistently pay for what Brian (and the vast majority of Kiwis including me, and presumably you) consider of utmost importance?: solutions to “poverty, child abuse, unemployment, a decent wage, access to education and health care, the protection of the weak and disadvantaged…”

  4. Well Bill. “…..the apparent need to actively dislike the people on the “other side” is much more prevalent on the left…”
    Really? How about the bile poured out on Winston?
    How about the 3 years of bile and criticism poured out on Phil Goff? Or on Helen Clark?
    And now you say lets play nicely and be kind to each other and protect our PM. What a cheek!
    It would be important for John Key to front up for a few interviews to be questioned by some credible interviewers instead of prancing around being a busy little show-pony.

  5. A former minister in the Lange government, Mr Goff says he freely admits they got it wrong when his government sold state-owned assets in the 1980s.
    Surely the fundamental reason Labour can’t get any traction with their ‘Don’t Sell’ message is most NZer’s remember who first sold off the silver in the 80’s.
    It must be like walking on the hustings trying to ignore the P(r)ebble in your shoe.

  6. “My gut issues are to do with poverty, child abuse, unemployment, a decent wage, access to education and health care, the protection of the weak and disadvantaged, an enlightened justice system not founded in punishment and revenge…”

    You are right and the problem is that so far I have heard nothing from Goff or any other Labour politician that convinces me that hey have the will or ability to tackle these issues. They certainly want to spray plenty of money around but I would have thought we might have learned from the past that spraying money around indiscriminately does not solve any of these problems.

    As one example I see little from Labour that would help tackle the rheumatic fever epidemic in our poorest communities, but for middle NZ it is a case of out of sight and out of mind.

    Like you I shall vote for the labour Party, not because I entertain any real hope that they wil make much difference but only because the alternatives are generally too appalling to contemplate.

  7. Lets not forget what happened to our rail network when it was sold or the debacle of the BNZ sale.People cue up to buy shares in these as they are good investments,and we tend to undersell their value.Keeping a majority share is only a short step away from complete divestment.John Key has said that if National win this election it gives them a mandate to sell.Yea Right!

  8. Phil Goff is no more a man of quiet integrity than any other politician. He has changed his place on the left-right continuum so often he flaps like a recently hooked cod in the bottom of my boat.

    Key has subjected his plans for asset sales to the will of the electorate by announcing them well in advance of the election and flagging them as an election choice. That is integrity.

    The world is unravelling at a great rate of knots. A party that thinks that warrants extending working-for-families to beneficiaries is in cuckoo land. Labour won’t be getting my vote.

  9. Bill Forster says:
    And I think your last point is a cheap and unjustified shot. I think both leaders are good men.

    Why then did John Key’s former colleagues at Merril Lynch nickname him “the smiling assassin”?

  10. IanmacReally? How about the bile poured out on Winston?
    How about the 3 years of bile and criticism poured out on Phil Goff? Or on Helen Clark?
    And now you say lets play nicely and be kind to each other and protect our PM. What a cheek!

    Phil Goff has attracted bile ? I wouldn’t have thought so. Everyone seems to agree he is a good guy, who possibly got his spell as Labour leader at the wrong time. Helen Clark is an interesting case. I didn’t like her policies, but like most of her opponents I am still full of admiration and respect for her. Sure there are plenty of rabid anonymous idiots who would pour bile on her on the internet or talkback. But I don’t think respected commentators from the right were in the habit of casually smearing her in the unpleasant way BE did John Key in his post. If you think “what a cheek” is a valid reaction to my call to respect your political opponents, well I am speechless and don’t know what to say.

    Anne: Why then did John Key’s former colleagues at Merril Lynch nickname him “the smiling assassin”?
    I think you’ll find this is likely to be taken as a complement in a competitive masculine environment. A bit like the way a good fast bowler is invariably nicknamed “whispering death”.

  11. Look at that portly, motley lot of no-hopers in the picture. Not one of them has been in business, owned a business, or been self-employed. They’ve either been drawing a salary from the state or been on the benefit.

    Not one of them could be trusted to run a cake stall at a school fair, let alone, be in a position to make any determination on the merits of the state selling off the assets. Makes me want to weep.

  12. Merv the words pour and bile come to mind
    But no you are from the right arnt you?

  13. “Helen Clark is an interesting case. I didn’t like her policies, but like most of her opponents I am still full of admiration and respect for her”.

    Yep, even though I voted for her in 2008 (but will be voting Key/Nat in 2011 – first time ever!) I’ll endorse that.

    Gutsiest and most principled thing she ever did – take on the tobacco companies. When she became Minister of Health in the late-1980s, cigarette sponsorship of sport was as natural as rain.

    When she became PM in 1999, the right to smoke in pubs was assumed to be an obvious fact. Not everything the last Labour government did was meddling nanny-state. If it wasn’t for the state-subsidised nicotine patches of the time, I’d still be smoking 20 a day, and suffering both in terms of quality of life, and life expectancy.

    I’m grateful for the political guts she showed.

  14. Kimbo – how’s this for some simple arithmetic (according to your model)

    State owned – 100 percent of profit of every $100 retained.

    Partial sell off:
    State gets 51 pcnt of every 100 = $51
    30 pcnt of remaining $49 dollars = 14 (Max before all sorts of rorts to hide profits)
    Total revenue to NZ = $65 dollars in every 100, max.

    I think I would rather leave the management in its current state thanks very much.

  15. The assets being sold off are essentially monopolies. There is no prospect of economic efficiencies gained by privatizing these enterprises. In fact a private power company will have the public of NZ over a barrel. They will know that if things go bad the government can not allow them to fail. Guess who will pay when it all goes tits up. We’ve seen it so many times before, here and abroad. That alone is good enough reason to reject asset sales, and to reject the judgement of the people who are pushing them.

  16. National today announced that it is changing symbol to a CONDOM, because it more accurately reflects its political stance and policies. A condom allows for inflation, halts production, destroys the next generation, protects a bunch of dicks, and gives you a sense of security while you’re actually being screwed!
    Damn, it just doesn’t get more accurate than that.

  17. I’m tired of listening to left leaning nonsense about how asset sales failed in the past. Our rail was being run into the ground, the service was second rate, and always late – remember those yards in Whanganui where the government subsidised all those fitter and turner/ welding/ engineering apprenticeships? New Zealand Forest Service kept a bunch of ne’er do well people employed – doing what? Planting trees! Processing timber? Nevermind all the other training grounds for skills we don’t need. Why should my taxes ( of which I pay plenty thanks very much Labour) pay for all those people to have jobs, and training, and careers in non profit making services?

  18. Interestingly Auckland Airports share float sold shares to people on monday and asked for payment on friday allowing those buyers to sell at a profit with no outlay.Its a rigged game .This really only benefits those wealthy enough to invest which obviously is a disadvantage to all others.

  19. @ SL 08:40

    Your lovely tongue-in-cheek comment says it all really. As you say, we had that constant stream of skills development through apprenticeships, a large section of the community with a sense of belonging and making a contribution. We owned the timber. We had very low crime rates. Oh and on the railways being run down – would be dreadful to think that decisions there may have been in connection with some largish road transport businesses.

  20. Well, Anne, no doubt that lot at Merril Lynch were paying Key a compliment in reference to the way in which he dealt with the opposition> “The smiling assassin” is a phrase usually delivered in awe.

    ANd BE’s last sentence might also be phrased “do you want a winner or a loser to run your country?” I don’t much care for Key’s selling of halves of the golden geese, or for Goff’s “quiet integrity” being so quiet it’s not even clear if there is any.

    If either of these two has the morals of a farmyard cat, I’ll be surprised.

  21. Oh Please Dr Edwards, When did the union bully boy become “A man of quiet intellect .. ” surely you nearly spewed coffee all over your screen on that one. I am opposed to asset sales also, after all it was our agrarian past that built most of them … in my view Labour keep falling back on there “Working Class” rhetorical roots. At the end of the day the big issue in NZ is that all the young people prepared to get of their arse and work have left for Australia or points far beyond. We are left with academic journalists and beneficiary dead wood’s by the thousands, all looking at one another and moaning about their slice of the pie.

    BE: I’d really decided to let this debate look after itself. But it’s difficult to remain silent in the face of this display of redneck prejudice. “All the young people prepared to get off their arse have left for Australia and points beyond.” All the young people? Even allowing for Key’s less than impressive record, that’s still only 100,000 in 3 years. That leaves a helluva lot of “young people prepared to get off their arse” still here. And are you totally unaware that there’s a chronic job shortage in Godzone and that thousands of people turn up for every job advertised by a supermarket? And then there are the ‘academic journalists” and “beneficiary dead woods by the thousands”. You’re clearly in the wrong country and the wrong age, sunshine. Germany in the thirties would have been much more to your taste. Or maybe China under Mao. He didn’t like academics either, as people who had the misfortune to wear glasses found out to their cost. To me the real problem is that mindless bigots like you are still here. Why not emigrate to Australia? Please.

  22. Oh by the way Darcy Warlock … I like the party logo for National. Can I suggest a suppository for the Labour party. Cause they can never get their shit right.

  23. @ logie97

    “State owned – 100 percent of profit of every $100 retained.

    Partial sell off:
    State gets 51 pcnt of every 100 = $51
    30 pcnt of remaining $49 dollars = 14 (Max before all sorts of rorts to hide profits)
    Total revenue to NZ = $65 dollars in every 100, max”.

    Yep. But what you over-look is the potential for lots more “$100″s from privatisation. If you have more of those, you can potentially make more tax revenue (and other efficiency benefits to NZ businesses), than if you retained 100% state ownership.

    In simple terms – retain the entire direct benefits of a smaller pie worth (your $100 million), or the potentially larger benefits of part of a much larger one, (say $200 million) courtesy of the capital, expertise, and business connections you get from the right private partners.

    In the scenario I’ve given above, if you retain 100% ownership, you make $100 million, whereas in the second scenario (based on your model) you make $130 million.

    However, divinity is in the detail. I’d agree with the Roger Douglas argument that (generally) governments are poor at running business, compared to private enterprise, because they lack the necessary skills, and single-minded focus. However, the logical weakness in his argument is that those same governments are probably also really bad at SELLING them as well, for the same reasons. The alleged “fire-sale” of the late 1980s may be a good example. Which means there is more than logic by which to assess it – there is also practical and historic examples.

    However, no matter how Key’s critics assess the man, surely we would all agree that he, more than any NZ Prime Minister in history (except for maybe Vogel) has the requisite skills to ensure NZ Inc gets a good deal?

  24. @ logie97

    “we had that constant stream of skills development through apprenticeships”

    Yes, we did. However, IF that is what you are running the Railways for, then taxpayers like SL were and are entitled to ask: –

    “why are we using a potentially profit-making, service delivering asset to do so”,

    and

    “if we want employment and social cohesion, is pumping it into economically unprofitable railway yards in W(h)anganui the best way to do it?”

    I also think you will find NZ’s “very low crime rates” had come to an end by the early 1970s – at the height of state ownership. I’d suggest there were other reasons, rather than economic, for that sea-change.

    But yes, you are undoubtedly correct that there was more of a “sense of belonging and making a contribution.” in that era. The question is whether it was economically sustainable.

    I’m sure the manual rope makers of the late 18th/early 19th century who made the Royal Navy what it was felt those same things, and lives, families, and towns around Portsmouth were built around that industry. However, events and technology determined there was inevitable change on the way…

  25. Why is it that people who have run a business feel so well qualified to run a country, two fundamentally different endeavors. The record is littered with business people who have entered politics and been abject failures. The reason may be because they are so far up themselves that they are unable to see any point of view but their own. But why should we be surprised at any of this after all most businesses are indeed failures.

  26. Well, Anne, no doubt that lot at Merril Lynch were paying Key a compliment in reference to the way in which he dealt with the opposition> “The smiling assassin”

    I think you have a selective memory Zinc.

    The former colleagues were not paying him a compliment. They gave him the title ‘smiling assassin’ because of his predilection to stab anyone in the back who got in the way of his desire for wealth and power. Sure, there are some who regard that kind of narcissistic behaviour (think Muldoon) with awe, but most reasoned and fair minded people view it with the contempt it deserves.

  27. Writing in yesterday’s Herald, Auckland financial adviser Brent Sheather states that according to Treasury reports the SOEs have returned 17.5 per cent a year during the past five years. http://goo.gl/UwvL7

    That’s a top return on any investment. Why would anyone in their right mind consider selling – half now, maybe more later? – any asset generating those sorts of profits in return for a one-off, short term $5bn gain?

  28. Whoops… try the full link instead.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10765463

  29. A few stats on public opinion regarding Asset Sales from recent polls:

    (1) Colmar Brunton 2nd November 2011

    “National is proposing to sell up to 49% of the four state-owned energy companies and Air New Zealand. Is this a policy you support ?”

    No 68%, Yes 26%, Don’t Know 6%

    (Highest % opposition: Green supporters (94%), Labour supporters (90%), Low Household Income (under $30,000)(77%), Low-Middle Household Income ($30,000-70,000)(76%))

    (Highest % support: National supporters (43%), High Household Income (over $100,000) (35%))

    (2) Fairfax Media-Research International September 2011

    Almost 60% of ALL voters rated National’s partial sell-off plan as important as a vote decider (80% of Greens).

    (3) Research New Zealand Late October 2011

    14% Support National’s policy to partially sell off state assets, 52% “Strongly Oppose”. (Note: this does suggest, then, that there is some depth to the opposition).

    (4) 3 News Reid Research Late August 2011

    53% prefer Labour’s Capital Gains Tax
    31% National’s Asset Sales

    (National Voters = 51% prefer Asset Sales, 32% prefer Capital Gains Tax)

  30. @Kimbo.

    “However, no matter how Key’s critics assess the man, surely we would all agree that he, more than any NZ Prime Minister in history (except for maybe Vogel) has the requisite skills to ensure NZ Inc gets a good deal?”

    Kimbo, I think we will all have to agree to disagree. The notion that Key, other than Vogel, is the only PM in history that has the necessary skills to broker a good deal for NZ Inc is based on what exactly, surely not just his skill in playing the currency markets, or being wealthy.

    I think you persistently inflate this mans credentials for some alterior reason lost on most of us.

    Could you enlighten everyone here as to these ‘requisite skills’ that you say Key possesses.

  31. @ Anne

    “The former colleagues were not paying him a compliment. They gave him the title ‘smiling assassin’ because of his predilection to stab anyone in the back who got in the way of his desire for wealth and power”.

    Actually, no. Not according to Key, anyway, who volunteered the information to Metro, as recorded in…ahem…the SST

    http://www.stuff.co.nz/sunday-star-times/news/249633

    “During Key’s brief spell for Merrill Lynch in Sydney in 2001, he helped fire 500 staff as part of savage worldwide retrenchment by the bank. In the past, Key has appeared proud of his ability to sack without feelings. He told Metro magazine: “They always called me the smiling assassin.””

    You may not like the emotionless manner in which he did his job, but “back-stabbing” wouldn’t be an accurate description. “Cold” and “heartless” (if you ignored economic necessity) – yes.

    But I disagree with you entirely on Muldoon being a narcissist. His biographer, Barry Gustafson suggests that if anything, Muldoon was unable to even comprehend or assess himself (and so make necessary stylistic changes to ‘soften’ his image), because he was so “outward” directed.

    Plus whatever criticisms you may have of his style, and his take-no-prisoners approach to opponents, he always had a genuine concern for the weak that dominated his approach. Hence his vehement refusal to undertake any economic restructuring that could cause the sort of social pain experienced with Douglas’ reforms.

    Speaking of the SST – hey, Brian – did anything ever come of the lawyer’s letter from them earlier this year? I also see Jonathan Marshall was mentioned in the Herald recently: –

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10762133

    “Whatever happened to Jonathan Marshall…the reporter…at the centre of a row between the (SST) and Mark Hotchin’s wife, Amanda?…Her allegations against the paper and Marshall were championed by media trainer and media commentator Brian Edwards, though the paper stoutly defended its reporter and its report.

    Marshall was also the author of a SST article that wrongly reported the circumstances of a teenager’s death, leading to an apology. Marshall subsequently resigned”.

    BE: Nothing happened. It was a gagging writ intended to shut me up. As you may remember I published the letter on this site and invited the SST’s lawyers to do their worst.

  32. @ Kat

    I didn’t say, “Key, other than Vogel, is the only PM in history that has the necessary skills to broker a good deal for NZ Inc”.

    What I said was, “he, more than any NZ Prime Minister in history (except for maybe Vogel) has the requisite skills to ensure NZ Inc gets a good deal”

    By slipping that word “only” in, you’ve given it a completely different meaning. Perhaps it is indicative of your ulterior (I think that is what you meant) motive.

    No doubt Holland, Holyoake, Bolger, and Shipley the farmers, Nash the store owner, Marshall and Lange the lawyers, Kirk the stationary train driver/ferry worker/mayor of Kaiapoi and builder of his own home, Muldoon the accountant, and Rowling, Palmer and Clark the academics, and Moore the lamb burger dreamer may have brought necessary business and political skills they picked up in the course of their lives and careers to the table to get a good deal (although I doubt any of the Labour PMs, Clark especially, would have contemplated the venture, but primarily for philosophical reasons).

    If I want a good media advisor, I go to someone who has done it well. So I go to Brian and Judy.

    If I want a persistent one-trick blogger, who can stay on message, through thick and thin, I go to Kat.

    If I want assets partially sold at a good price, and with the best possible business partners and arrangement, I go to a guy who successfully traded multi-million $ assets (be it currency, airlines, power companies, or whatever) for a living.

    Yes, Bidrom is right that, “Why is it that people who have run a business feel so well qualified to run a country, two fundamentally different endeavors. The record is littered with business people who have entered politics and been abject failures”.

    However, on the matter of partial asset sales, this isin large part a matter of big asset trading skills. So even if you disagree with Key’s approach to social and wider economic policy (and yes, Kat, we know you do!), once you have decided to sell, Key is the most qualified of all those I’ve mentioned to do so.

  33. I’m against selling power companies. But Phil Goff a man of integrity, yeah right. He was in cabinet when Labour stole $500,000 twice from the taxpayers for the pledge card.

  34. Merv – “Look at that portly, motley lot of no-hopers in the picture. Not one of them has been in business, owned a business, or been self-employed. They’ve either been drawing a salary from the state or been on the benefit.”

    You mean like Paula Bennet? And John Key’s family when he was a kid?

  35. Bill Forster – “My judgement after reading fairly widely is that the majority of expert economic opinion favours the asset sales.”

    Really?

    Bill Oram seems to view the idea with derision: http://www.youtube.com/watch?v=y_iIhfrPOj8&feature=share

    And I have to agree with him. It’s a crazy, short-term solution. It’s like a tradesmam selling his/her workvan to pay bills. Once the cash is gone, what has he got left? No more cash; no more van to earn an income; and more bills to come in.

    If government hasn’t enough money to pay for schools and hospitals upkeep, then that indicates (yet again) a revenue problem. Ie; not enough tax being paid to maintain the social services we expect as a First World nation.

  36. Anyone who still thinks selling assets is a good idea should read Rod Oram’s column in yesterday’s Sunday Star Times.

  37. I used to work for one of those assets. The market is not efficient and they tend to operate like a cartel, when not grabbing customers off one another, sometimes via questionable tactics.

    What people may not realise that those assets are aging, reaching their use-by, and heading towards the point of diminishing returns. That will require spending to upgrade. Where will that come from? Long suffering tax payers?

    The assets in question, I believe, are 3-4% of the total State asset base.

    If the numbers stack up, why not a partial sale and public/private ownership (that will bring more efficiencies) and free up capital to invest in other assets that have the potential to produce more sustainable returns for the long term? Otherwise, we could run the risk of standing still and not being able to address the issues in front of us right now – both human and economic. More tax is not the answer.

    I think the issue with partial asset sales is that National may not have explained the rationale and benefits fully enough.

  38. @ Frank

    What I was trying to say, was: if you could see the shoes of that “motley” placard-waving lot, you would notice that they all wear slip-ons. Because, they don’t know how to tie shoelaces. Their collective brain power would, hardly, cause a low-wattage kiddie’s comfort light to flicker. With or without, Goff. Adults protesting with placards, make for a very sorry sight. Rabble.

    Hark back — over 30 years — to Muldoon’s “Think Big” projects, and the number of very expensive white elephants, they spawned. Ethanol plant, anyone? And, more recently, Michael Cullen (our very own Alfred E. Neuman) and the price he got suckered into paying to buy back NZ Railways from Toll Australia. The Dumb Doctor overpaid by more than a factor of 3; others say it was more than that. We are talking hundreds-of-millions $s of taxpayer money. It was almost as if Cullen was hell-bent on a mission to trump the Brierley Idiots, for wanton stupidity, when they got lumbered with the turkey that wheezed and flapped by the name of Ansett. Once the ink dried, you could hear the hysterical laughter from Rupert Murdoch, weeks on end.

    And look at the price Hart paid to acquire the Government Printing Office? The govt. of the day sold it to him for the price of a blank song sheet and a club sandwich, helping to propel his wealth into the stratosphere of “Mega-Rich”.

    Why would you trust our govt. to run anything of a commercial nature, when they prove themselves to be irredeemably thick? Time and time, again.

  39. Anne: The former colleagues were not paying him a compliment. They gave him the title ‘smiling assassin’ because of his predilection to stab anyone in the back who got in the way of his desire for wealth and power. Sure, there are some who regard that kind of narcissistic behaviour (think Muldoon) with awe, but most reasoned and fair minded people view it with the contempt it deserves.

    I’d just like to admit I got that one wrong too, I thought it sounded like a compliment as well, as I said earlier. Now that i’ve googled it though, it sounds as if you haven’t got it entirely right either. It seems ‘smiling assassin’ was a sobriquet originating from Key remaining his normal cheerful self even when it became his job to fire hundreds after business went south. Hmmmm, I have mixed views on that. On the one hand it seems a little strange to me. On the other hand, it’s the nature of the business. He wasn’t kicking widows on to the street, he was firing bankers (something many of the left love in principle), who probably just moved on to the next gig anyway.

    The truth of the matter is, I can’t be sure either way whether John Key is a “good” man. If I got to spend time with him and really know him, would I find him kind, fair, tolerant, decent ? I get the impression that I would, and my policy is to give people the benefit of the doubt. And I feel exactly the way about Phil Goff, and most of the players on the political stage if it comes to that.

    Summary: I don’t see the need to dislike the man to dislike the policies and I’d encourage others, from all sides of the spectrum to adopt my worldview in that respect. It’s liberating I assure you.

  40. Just one more thing. Rod Oram’s column yesterday was outrageously partisan and completely unbalanced. Those who expected anything different haven’t been paying attention.

  41. “Rod Oram’s column yesterday was outrageously partisan and completely unbalanced”
    None the less Bill it was an article where his points were backed up with reasoning. Exactly the type of which we need more of.(pro & con) So far I havent seen any compelling arguments in favour of asset sales, other than those which ouline the need for these sales to fund spending.

  42. “That will require spending to upgrade. Where will that come from? Long suffering tax payers?”

    But Kayaker, the government will retain majority ownership, so the government will be required to spend to upgrade the assets. And your comment about the assets being only 3-4% of the asset base misses the point that the government has indicated that it may sell off further assets in the future. Furthermore, if future governments find themsleves with financial problems, why would you think that they won’t consider a complete sell-off of some assets?

    You say that more tax is not the answer. The government has cut taxes – has that proven to be the answer?

  43. @ Kimbo.

    I stand corrected, my slip of the finger, ulterior is the word.

    I suppose, as you say, if a straight answer to a reasonable question is not required but general insults and long winded ranting are, go to Kimbo.

  44. I have decided to pick up the thread about business.
    Having been part of a successful manufacturing business in past years, these are the things I know.

    1. Between 80 and 90% of new business fail within the first 2 years, which is probably because most should not be in business.

    2. The majority of businesses, including manufacturing and retailing do better under a Labour Gvt.

    3. It is possible to run a successful business and pay decent wages to staff. You just make a little less money for yourself. And if you can’t afford to pay decent wages, you should invest in a business that can.

    4. John Key has never run a business, he was a money trader and there is a big difference.

    5. I am voting Labour because I do not want my grandchildren to grow up in a society where some are very rich and many cannot afford to put food on the table. I want a fair society with lots of opportunities for all and if that means some of us pay more tax, that is fine with me.

    PS And selling our assets is a dumb idea. These are the jewels of NZ using our resources combined with innovative research and technology. I do not want to see th in the hands of overseas companies, which they will be once “mum and dad” investors are offered huge profits for their shares. It’s a bit like burning your clothes to stay warm.

  45. @ Kimbo. “once you have decided to sell, Key is the most qualified of all those I’ve mentioned to do so.”
    Possibly so but it seems a bit over the top to give him the PMs job because he’s the best to sell assets.

  46. @ Bill Forster
    “…I can’t be sure either way whether John Key is a “good” man. If I got to spend time with him and really know him, would I find him kind, fair, tolerant, decent? …I get the impression that I would…”
    I have spend some time with him as have others I know and trust. Yes he is “nice” but after an hour talking with him I was no further ahead in knowing anything about the man, or having any sense of what drives him, what his edges are.

    The whole marketing exercise is created exactly to give you the impression that IF you got to know him, he would be “kind, fair, tolerant, decent” that’s the point – and it worked!

    While I prefer transparency I can accept that in some cases, the person behind the public mask may never be known. I just don’t like being manipulated into thinking I do (or could) know him.

  47. Bill you said “I don’t see the need to dislike the man to dislike the policies and I’d encourage others, from all sides of the spectrum to adopt my worldview in that respect. It’s liberating I assure you.”

    I am not targeting you here Bill. It’s just that you have highlighted the “policy or person” issue so well.

    Yes in theory we should be judging the merits based on policies offered by leaders, not the person.

    But my dilemma is – policies are thoughts and words of the moment and an election moment at that. Can we really be assured these policies won’t change? More importantly what about new policies needed post-election to deal with, I don’t know, an earthquake? We have no clue what shape these new polices will take other than the character of the people in leadership and power at the time.

    Disliking the person because of their policies is unhelpful yes but I think underneath that is an age old desire to assess the quality of the persons articulating the policy, i.e. leadership and its advisers.

  48. Richard I find it weird that you’d expect to learn much about what drives someone by meeting with them for an hour (presumably for some other purpose that to talk about what drives them). I find it disappointing of you to casually assume that I am a feckless sheep whose opinions are shaped entirely by the manipulations of others.

    I have a much simpler, less cynical take on things. My theory is as follows;

    Politicians are just ordinary people doing a job, and for the most part doing the best they can. They are in the public eye, and so the public get to weigh them up as people. Their personalities are pretty much apparent. No “marketing exercise” is ever going to turn a pig’s ear into a silk purse. John Key (also Phil Goff don’t forget) appears to be a nice man because he actually is a nice man. A lot of people not only don’t accept this, they won’t even consider it as a plausible possibility. Which I think is sad.

  49. Dear commentators:

    Your thoughts and opinions – and even your prejudices and raging – are welcomed. However, we strongly discourage personal attacks – to the extent of deleting them if they go too far.

    Please debate the issue, not the assumed character or peculiarities of other commentators.

  50. Sorry I withdraw the accusation…

    JC: Thank you, Bill. Upstrand comment amended as requested.

  51. @ Kat

    “I suppose, as you say, if a straight answer to a reasonable question is not required but general insults and long winded ranting are, go to Kimbo”.

    Kat, you asked a question, “Could you enlighten everyone here as to these ‘requisite skills’ that you say Key possesses.”.

    I pointed out that the premise upon which you framed your question was invalid, because you hadn’t quoted me accurately. If my explanation was “long-winded” it was to close off the possibility of you distorting my words, and altering my meaning. Kindly don’t misquote me again, and I’ll try to desist from having to over-qualify to make very clear what I mean.

    You requested an explanation. I gave you one – and despite my word count, I think any reasonable person would find my answer “straight”, whether they agreed with it or not. I stuffed it full of as many relevant facts and illustrations as I could think of (none of which you have taken me to task over), and I’d suggest my answer has logic in ots presentation (which you have not bothered to even try to disprove).

    Courtesy would dictate that because you wanted an answer, you should have engaged with it. Instead, you play the injured party, and hurl insults. The comment I made about you, “If I want a persistent one-trick blogger, who can stay on message, through thick and thin, I go to Kat” was actually meant as a compliment – as per a recent thread when I came to your defence when Merv attacked your supposed lack of intelligence. No Kat, you are a lot of thinks but unintelligent is not one of them.

    So, Kat, if you either don’t like the answer I gave, and you can’t be bothered interacting with it maturely, kindly don’t bother asking for another again.

    Might one reasonably surmise that your failure to do so is because there is not much else in your intended rhetorical repertoire other than “Key is a crook” or variants thereof? Which would rather prove my assessment of your blogging aims – which are valid and permissible in a free country. Or is that question to be interpreted as an “insult” as well?

  52. @ Richard Aston

    “…it seems a bit over the top to give him the PMs job because he’s the best to sell assets”.

    Wasn’t suggesting that. Other way around. Because he IS the PM, and his policy is to sell, we get benefits of his skills and expertise to do so.

  53. Look Kimbo, I am not about wasting time dissecting comments as tediously as you do. The reality is that what you post is lawful prey to anybody who wishes to take a differing opinion. I am not compelled to justify myself to you or reply in the way you demand. Your constant preaching achieves little. You have put a lot of words in my mouth, some I don’t like and don’t agree with. You say I am a ‘one trick blogger’ and that, in your opinion, is a compliment. Well it isn’t. However, I do believe I get under your skin because you realise that the opinions I espouse on National and John Key have merit.

    On Key. I would agree with you that Vogel and Key have much in common. Both of Jewish extraction, both into gambling and speculation. Vogel however borrowed to build infrastructure not to give tax cuts to the wealthy.
    I have always felt something not quite kosher about Key. His story of having risen above his State Housing background to become a multi-millionaire currency trader and his rapid rise through the National Party ranks to the position of Prime Minister is on the face of it inspirational. But what of his heritage when he leads a Government intent on punitive restructuring of welfare while at the same time increasing unemployment. I am suspect of the pragmatism of a man used to making speculative decisions being let loose with state assets. Key gives every impression of a man who is ticking off his bucket list and after the economic and social dust settles will just leave someone else to clean up the mess. Key is who he appears to be, a professional front-man for a political party that, since Muldoon, has been generally bereft of personality or quality leadership.

  54. “John Key appears to be a nice man because he actually is a nice man. A lot of people not only don’t accept this, they won’t even consider it as a plausible possibility.”

    I consider it plausilbe but then Key does something that puts the lie to that. For example, he stands up in Parliament after someone with mental health problems tries to harm himself. Key then proceeds to blame Labour for the man’s predicament. That doesn’t strike me as particularly nice. Key also tells Parliament that Standards and Poors has talked about a credit downgrade under Labour when S&P has said no such thing. A blatant lie and again, not something which a nice person would do IMO. More recently, Key demands a please explain from the Human Rights Commission. The HRC had the temerity to suggest it was bringing proceedings against Paula Bennett for her breach of the Privacy Act. It appears that Key is trying to bully an independent person from doing his job. Instead he should be telling Bennett to apologise for her disgraceful behaviour.

  55. @ Tony
    “Key has subjected his plans for asset sales to the will of the electorate by announcing them well in advance of the election and flagging them as an election choice. That is integrity.”

    The reason for the sale is to pay down debt. No, got that wrong. It is pay for some hospitals and schools. No. Got that wrong. it is to re-invest in water infrastructure.

    Integrity? Someone else in this thread talks about a cod flip-flopping in the bottom of their boat.

  56. I funamentally agree with JC2 but “I do not want my grandchildren to grow up in a society where some are very rich and many cannot afford to put food on the table. I want a fair society with lots of opportunities for all” is Fairyland.

    There will ALWAYS be some very rich and much more very poor people in our society (and in all societies) and no amount of taxing the former will help the underclass – that fast-breeding, ever-expanding mass of people who haven’t got jobs, don’t want jobs and don’t care if their kids ever get one – those from the neighbourhoods where everyone has a Sky dish, a car and a dog but no money and no drive or ambition to accumulate any.

    In New Zealand the playing field of opportnity is pretty much level: education and health is there for those who wish to accept it, but the poor sods born into those families as described have an uphill struggle – first to merely be made aware of what they could become, and secondly to get the family support to make such a mission possible. No amount of taxpayer money thrown in that direction will make a jot of difference: the best increased benefits can offer is a bigger TV screen, more beer and a new clutch.

    There’s no fix that can be thrust upon them by Labour or National, or Bill Gates or the Pope himself – and I, like you, know something must be done but have no idea what can be done to help.

  57. Zinc

    You are overly pessimistic.

    When in government, Phil Goff said that in a previous era the Prime Minister knew the names of each person who was unemployed. In 1959, he said, there were 21 unemployed and the following year there were 22. What does that say? What is says to me is that the vast majority of people want to work. Welfare may have led some to take an alternative path but I still believe that most want to work. Finding work is another matter. Bear in mind that tens of thousands of NZers have left for Australia…if they had remained here, the number of unemployed could be much higher.

    You’re right in saying that there’s no easy fix. One of the problems, however, is that successive governments have tolerated high levels of unemployment. One reason is that it contributes to lower wages (and lower inflation). Full employment is not seen as a credible position, so unemployment is tolerated. The pessimistic position that you describe will only be changed when jobs are seen to be more important than other economic indicators such as lower inflation.

  58. Accumulating Wealth isnt one of the great achievements in life .Im sure Mother Theresa didnt see her priorities that way.Ross is right, society has created this financial and employment imbalance, and needs to take steps to correct it.

  59. @ Kat

    Thanks, Kat. Some interesteing thoughts.

    I’ll take a charitable, and choose to assume that you didn’t intend the anti-Semitic flavour that your post adopted when you wrote: –

    “I would agree with you that Vogel and Key have much in common. Both of Jewish extraction, both into gambling and speculation…I have always felt something not quite kosher about Key”.

    However, unintentional though it was, I’d suggest you chose your words better.

    Kat, I’ll agree I shared many of those same suspicions that Key was, “intent on punitive restructuring of welfare while at the same time increasing unemployment”. Which is why I didn’t vote for him in 2008.

    But his track-record since – retain the essential structure of WFF as promised, retain no-interest on student loans as promised (and despite my own student loan, I disagree!), no asset sales unless the electorate has had the opportunity to vote as promised, retain National Super at 65 as promised – have persuaded me otherwise. He is not Douglas and Richardson revisited. Which is why, if you listen to his hard-right critics like Brash, and Fran O’Sullivan, they are highly critical of his failure to cut welfare spending.

    Yes, unemployment has risen, as in many parts of the world – we have had the worst financial crisis since the Great Depression. We’ve also had 2 earthquakes. I’m prepared to cut the guy some slack, and give him credit for maintaining national morale when it could have crumbled.

    Yes, as a result of the above he did raise GST (contrary to his promise – but compensated low-income earners), and yes, much to the chagrin of Labour voters he did institute tax cuts as promised (as Labour also promised to do at the 2008 election).

    You may be right on his “speculative”. If you like your PM to be “doing something” (even if it is the wrong thing in the long-term to create sustainable employment), rather than “positioning yourself to take advantage when others overseas do something”, then Key is not your man.

    However, the way I see it, we have always been dependent on overseas export earnings – it was favourable terms of trade from 1935 onwards that funded all the “make work” schemes and welfare state of the first Labour government. And despite Muldoon’s best efforts, by 50 years later it was becoming increasingly difficult to maintain in that form.

    I think that unless Key can position us right for a recovery, no one else can, because it ain’t coming, and we, along with the rest of the western world, is economically stuffed. However, I’m not yet prepared to draw the curtain on capitalism, supplemented by a liberal concern for the betterment of fellow human beings, by means of a welfare system that should function to assist them to assist themselves.

    Thanks for the discussion…

  60. Bill – I did not intend to describe you as “a feckless sheep whose opinions are shaped entirely by the manipulations of others” though it is a lovely line.
    In my experience I have noticed my own perceptions being changed by external influences that I later find out are deliberately trying to do just that ie are manipulative. I think we live in a sea of manipulative messages, from straight advertising to products placements to celebratory endorsements.
    Politics is not above this – Have a look at “The Hollowmen” doco or chat with some spindoctors some time.
    “Politicians are just ordinary people doing a job” – no they are not! They are not your plumber or the person who mows your lawns. They are ambitious clever people with agendas and yes most have positive ideals and they all work long and hard, but I don’t think we can assume all politicians are as they appear in public or that they are independent free agents.
    I can accept you think it “weird that you’d expect to learn much about what drives someone by meeting with them for an hour”
    But for me that’s a big part of my job and yes in my experience a lot can be learned in an hour especially what is not revealed.

  61. “fast-breeding, ever-expanding mass of people who haven’t got jobs, don’t want jobs and don’t care if their kids ever get one – those from the neighbourhoods where everyone has a Sky dish, a car and a dog but no money and no drive or ambition to accumulate any. ”

    Fantastic line ! You write well Zinc.

    I’d love to meet some of this uber underclass just to hear what drives them ( it will only take me an hour).

    In my work I encounter quite a few beneficiaries and they just don’t fit this picture at all – sky is a rarity as sometimes are phone lines. I have met much courage, hope for a better life and especially strong aspirations for their children.
    Maybe I should get out more.

  62. “…much to the chagrin of Labour voters he did institute tax cuts as promised”

    Ah no, he didn’t do what he promised to do. Key and National promised, prior to the 2008 election and shortly after, significant tax cuts for the low paid but failed to deliver on those cuts, while giving tax cuts to the wealthy.

  63. Richard I think quite a few plumbers are probably clever people with agendas too. I think we are just going to have to agree to disagree. But that’s okay, we are all just people with opinions. I could be completely wrong, I admit it.

    I kind of regret my contribution to this thread in a way. It has been off-topic. BE thinks Labour is both right and wrong about asset sales. I think Labour is both wrong and right. Wrong in terms of principled policy. Right in terms of populist appeal. Oooooh we mustn’t sell the family silver! cry the masses. Maybe you (Richard) are right and they’re manipulated sheep :- )

  64. Ross: In 1959, he said, there were 21 unemployed and the following year there were 22. What does that say?

    What that says, Ross, is that 50 years ago, when the dole was (probably) a pittance, and there was no Sky, XBox, Wii, Knect or internet, when dope was almost unheard of (and not grown on the windowsill of a state house toilet, or farmed by the hectare) and beer (probably) five times the price in relative terms, a life on the dole wasn’t an attractive option. When you can pack enough people into a state house to collect weekly benefits well into four figures, what’s the point of stressing over a job?

    I was a mere toddler at the time, so please forgive any exaggerated simplicity or fiscal inaccuracy in my assumptions.

  65. Richard: thank you for your kind words.

    I fear you may well be rolling your wheels along the wrong boulevards. Show me your beneficiaries and I’ll show you mine.

  66. Zinc, good point. I was a toddler too.

    However, back in the day, I remember my Dad talking about The Post & Telegraph and NZ Railways being a place where everyone could get a job, or were placed there, and no-one would be unemployed. Basically, those organisations kept people off the dole (or whatever it was called then).

  67. The P & T up to 1980, and the NZR to 1985 were keeping many low out-put “workers” in a steady routine. Unfortunately, those made redundant in the late 1980s had neither the psychological strength, vocational skills, personal motivation, or vision to improve their lot.