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392,000 New Zealanders send a clear message to John Key – Part Rua

12 March 2013 3 comments

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Continued from: 392,000 New Zealanders send a clear message to John Key – Part Tahi

NZ, Wellington, 12 March 2013 – Ms Maniapoto Jackson introduced the first speaker, Greypower’s President, Roy Reid,

“So please welcome up the man who initiated this historical moment for us – the biggest citizens initiated referendum in [New Zealand's] history!”

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Roy Reid

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“As President of Greypower, I wish to inform you  that Greypower has been opposed to the  sale of state owned assets  for a number of years. And this was reconfirmed at our annual general meeting two years ago. We advised all the political parties in this  House that we were opposed to them selling any of our assets.

Our generation worked hard. We paid the taxes, to build our existing assets. They’re not for sale. They belong to  all New Zealanders.

I sincerely thank all those who worked from one end of New Zealand to the other, to collect those 394,000 signatures just behind us.  It’s the biggest petition  ever presented to this House.
I pay tribute to our co-supporters, the New Zealand students association. For being involved with us, because it shows the country that we are united from the elderly to the younger generations…

…I’m sure that we’ve got enough valid signatures in those boxes to force the referendum. And [despite] no respect for what this government today says, the people of New Zealand will have their say.”

It as perhaps fitting that Mr Reid was given first opportunity to address the crowd.  It was indeed his generation, and others before him, who sacrificed so much to build what we have in New Zealand today. And which a few greedy, short-sighted number of our fellow New Zealanders seem unable to comprehend that these assets do, indeed, belong to us all.

Not just to those with the cash to buy shares.

Our elected representatives certainly did not hesitate to show their agreement with Mr Reid’s comments,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Ms Maniapoto Jackson then invited the next speaker; ex-Vice President of the Auckland Students Association and  Ngai Tahu; Arena Williams,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Arena Williams

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Ms Williams greeted the crowd in Te Reo and her following message was short, blunt, and to the point,

“There’s one message that the government needs to take home from such an over-whelming support of this petition, and that’s Stop the asset sales and give New Zealanders a chance to have a say on this really important issue!”

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The next invited guest-speaker was  economist, Peter Conway, from the Council of Trade Unions,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Peter Conway

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Mr Conway said,

“The Union movement is really proud to be here today  at this amazing event and I just want to say, fantastic effort. Well done everybody! It’s awesome.

Now it might have been a little bit easier if for me to have the backing of a one million dollar advertising campaign, and maybe if we we’d been able to do it all on line. But I actually think that the fact that we went out there into communities where people work, live, and play and debated the issues; talked to people about it and got such a fantastic response, is really a testament to our democracy…

… So this is part of our democracy. And what we’re saying to the government; respect democracy… Let’s get this referendum up,  and the Council of Trade Unions, on behalf of the union movement, is calling on the government to halt all asset sales and listen to the people.

Kia kaha, and thanks very much.”

Ms Maniapoto Jackson then welcomed the Leader of the Labour Party and MP for Mt Albert, David Shearer,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

David Shearer

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 After expressing his welcome,  Mr Shearer gave a brief thanks to the people, followed by a similarly brief message,

Look, I just wanted to start by saying ‘thank you’, ‘thank you’ for all of those people who went out day after day, weekend after weekend, who stood on cold corners in the middle of winter and got people to sign this petition. Thank you to the hundreds of thousands of New Zealanders who care about this country so much that they put their signature to this petition.

This is about the transfer of an asset that we all own into the hands of a very few. That’s what it’s about, it’s about fairness. It [asset sales]  is not fair.

This referendum will make the government listen to New Zealanders.

The fight will go on. It’s not finishing today. It will go on and we in the Labour Party will continue to fight this until 2014.

I wanted to say, as the boxes were being put up there, I was thinking that “Another Brick in the Wall” tune came into my mind, and I was thinking “We Don’t Want your Asset Sales Programme John Key”…

… Once again thank you for your effort, thank you for being here today. Kia Kaha,  let’s take  it to the government.”

Before Ms Maniapoto Jackson introduced the next speaker, Green Party co-leader Russell Norman, she briefly pointed out  that the Parties behind her were unified, “with only the odd absence, which was duly noted“.

Mr Norman then addressed the people,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Russell Norman

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Mr Norman then addressed the people,

“Today we stand here here on behalf  of the millions of New Zealanders who are opposed to the sale of their assets. Today we stand here on behalf of the hundreds of thousands von New Zealanders who have signed this petition, behind us. Today we stand here on behalf of future generations who are relying on us to stand up for our country.

And that is why we have done this massive piece of  work that you see behind us.

It has been incredibly hard work on behalf of thousands and thousands of people to go out and collect these signatures. It is despicable that the Prime Minister  then says that the people who signed this petition were children and tourists! Prime Minister you do not know New Zealanders!

If the Prime Minister of New Zealand thinks that the people who signed this petition, the 400,000 people who signed this petitition, are not real New Zealanders, then he is in the wrong country…

… Real New Zealanders are the ones who worked and laboured to build those assets up so that we could inherit them. Real New Zealanders are the ones who will look after them so that we can pass them on to those who come after us…

… We have a mandate to keep our assets. The Prime Minister has no mandate to sell them.”

Ms Maniapoto Jackson then introduced Mr Peters, saying  “if there’s anyone who can talk about justice and fairness, it’s Winston Peters“,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Winston Peters

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“…Mr Key does does not have a mandate to make these sales. We all know the last election result and he relies upon the vote of Peter Dunne, who you know, with your money, at the last election had TV adverts saying that he would not do that.  So there is no mandate.

We come now to the referendum, which  is a chance for Mr Key to see whether he’s got the public backing and he doesn’t have even have the backing of one third of the National Party vote by every survey that you and I have seen.

Ladies and gentlemen, it’s going to be difficult over the next few months on this issue, but I want to make something very, very,  clear. Unless we make it clear to everyone who’s buying, that after the next election, whenever they fly the white flag, we intend to take back those shares at no greater price than they bought it for, then we will not be making the message very clear for Mr Key who governs for the few and very few.

Now your problem is,  you don’t own a casino. Otherwise he’d be listening to you.

And you’re you’re not a Hobbit or some wide-boy from Hollywood, otherwise, he’d be listening to you.

No wonder he fell upon the defence of tourists, because that’s what Mr Key is; a CV Prime Minister, who will soon go, on issues like that…

… this is just the beginning. It is not the end.”

Next up, Ms Maniapoto Jackson introduced “the wonderful leader of the Mana Party, and MP for  Te Tai Tokerau, Hone Harawira“,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Hone Harawira

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Mr Harawira injected a note of humour into the afternoon, and the crowd enjoyed his off-beat way of giving a speech,

“Look I’m going to do most of my korero in Maori, so the best way for you to support it is, every time I stop to take a breath,  clap like crazy!”

The crowd obliged with enthusiasm, clapping and cheering each time he paused  during his korero.

Ending his speech in  Te Reo, he  added,

“Now just for a short chant, a short chant, eh? Because Moana get’s all the the recording rights for this little gig, so mine is going to be a short little chant. So just follow after me. You ready?

“Aotearoa is not for sale!”

The crowd responded, “Aotearoa is not for sale“.

“C’mon, c’mon, now you can do better than that,” he ‘admonished the crowd with a smile.He repeated, “Aotearoa is not for sale!”

The responded boomed back, AOTEAROA IS NOT FOR SALE!”

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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“Tell John Key to Go to hell!”

“TELL JOHN KEY TO GO TO HELL!”

And with that, Hone  Harawira finished with a cheerful “Kia ora tatou!”.

As far as political speeches went, it was one of the shortest and more entertaining that this blogger has heard for a while. He certainly injects a bit of fun into a political event.

As an intriguing aside, this blogger managed to capture this picture of two Davids and a Damian. Their body language seemed to belie any suggestion of tension or ‘struggle between Messrs Cunliffe and Shearer.

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

(L-R) David Shearer, David Cunliffe, Damien O’Connor

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Hmmmm… One has to wonder…

On a closing note, Ms Maniapoto Jackson ‘encouraged’ (dragged!)  Hone Harawira back to the microphone to sing a duet – an old song from their protest days together,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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And final posed-pics from Ms Maniapoto Jackson and  Hone Harawira, after their singing-duet finale,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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It’s interesting to compare the persona of Hone Harawira in the media, especially in his early days in Parliament – with the man who presents to the people, at public gatherings.  There is a warmth and sincerity to the man that is almost wholly lacking in his MSM appearances – but a warmth and humour that is obvious when seeing him in person.

And from the Green Party caucus, this lovely snapshot. They deserve thepride they were feeling in being part of a movement to collect nearly 400,000 signatures,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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In conclusion…

John Key’s casual dismissal of the petition, and the nearly 400,000 New Zealanders who signed it,  was not a “good look”. It spoke volumes of Key’s persona; his arrogance; and his pettiness.

He could just as easily have accepted the petition as part of the democratic process and congratulated New Zealanders for   participating. It would have made him look statesmanlike; stand above petty politics; and increased his mana.

Being derisive; suggesting that the signatures were from “children and tourists”;  was offensive.

It was unnecessary and uncalled for.

It was childish.

It publicly revealed John Key’s innermost insecurities – as he knows that the people are not with him on this issue. It must be a debilitating, depressing feeling, knowing that three million New Zealanders are angrily opposed to what Key and his cronies are up to.

“Where is the love”, he may well ask?

“Where is the respect”, we ask him.

An open message to John Key…

The Prime Minister insists he has a “mandate” to part-privatise our state assets.

I disagree. More people voted for Parties opposing state asset sales than voted for Parties endorsing said sales.

John Key has a one seat “majority”, due in part to manipulations during the 2011 election, and MMP rules that prevented some Parties from gaining representation in the House.  For example, the Conservative Party won twice as many votes as ACT – but gained no seats. (see: Mandates & Majorities)

That’s not a mandate, Mr Prime Minister – that’s an accident of circumstances.

Mr Key – if you truly insist that you have a mandate, then put it to the test. Hold off on the sharefloat for Mighty River Power. Let the people have their say in a referendum.

I, for one, will accept the verdict of a referendum, whatever the outcome. If the majority – even the slimmest margin over 50% – support your asset sale programme, you’ll not hear one more word from me on this issue ever again.

Are you willing to  put your “mandate” to the test, Mr Prime Minister?

Are you willing to listen to, and abide by, the will of the People?

I am.

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Additional

Radio NZ: Petitioners confident of asset sale referendum

Dominion Post: Government to ignore asset sales referendum

NZ Herald: Asset sales petition arrives at Parliament

TV3: PHOTOS: Asset sales petition presented

TVNZ: Petition against SOE sales delivered to Parliament

Newstalk ZB: Opposition MPs greet anti-asset sales petition

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  • Use must be for non-commercial purposes.
  • At all times, images must be used only in context, and not to denigrate individuals.
  • Acknowledgement of source is requested.

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392,000 New Zealanders send a clear message to John Key – Part Tahi

12 March 2013 3 comments

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NZ, Wellington, 12 March 2013 – Another beautiful sunny day with blue skies  (apologies to farmers) was a perfect setting this afternoon in Wellington, when a couple of hundred marchers arrived on Parliament’s grounds, bearing 68 boxes, containing 392,000 signatures.

The referendum requires 304,000 valid signatures to precipitate a nationwide referendum. The 392,000 signatures gives a 22% ‘buffer’ against invalid signatures; people not on the electoral roll; duplicate signatures; and malicious attempts to undermine the petition.

There was a small number of people on Parliament’s grounds  awaiting the march, amongst them tino rangatiratanga activists, Brenda and Fran,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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At about 1pm, marchers arrived, bearing the boxes that contained a priceless treasure – signatures of 392,000 New Zealanders. Media flocked around them. This was an historical event,

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12-march-2013-presentation-of-anti-asset-sales-petition-parliament-referendum

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They walked onto Parliament’s grounds to cheers and applause of those waiting,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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On the steps to Parliament, more media and elected representatives from Opposition Parties were waiting. (Curiously, none from National, ACT, or United Future were in attendance. Their ‘invites’ must’ve been lost in the post?)

Politicians clapped as the marchers approached. Men, women, young, old, Maori, Pakeha, these were New Zealanders who believed that the People’s Assets were not to be stripped and flogged off by a handful of politicians,

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12-march-2013-presentation-of-anti-asset-sales-petition-parliament-referendum

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Sixty eight marchers proudly carried a prized box each,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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The boxes were carefully passed over a security barricade, to be stacked on the Parliamentary forecourt,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Meanwwhile, the crowd watched, as the stacking of boxes progressed,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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The leadership of the Green and Labour Parties,  with Brendan Horan (far left, standing beside Metiria Turei); former AUSA President, Arena Williams (standing beside David Shearer); Grey Power National President, Mr Roy Reid; Annette King; and (far right – no slur intended, Mr Conway) CTU Economist and Director of Policy, Peter Conway .

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Mana Party leader, Hone Harawira, joined the Party leaders shortly afterward (NZ First lreader, Winston Peters was standing off-camera, to the left),

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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NZ First leader, Winston Peters, being interviewed by a MSM journalist,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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A panoramic view of part of the assembled crowd,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Green MP, Jan Logie; NZ First leader, Winston Peters, and NZ First MP, Andrew Williams, at the stacked petition boxes. At this point, the  invited guest-speakers were preparing themselves – and  their notes – to address the crowd and media,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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With a  unique style and flair she has become reknowned for, Moana Maniapoto Jackson welcomed people to today’s presentation of the petition,

“We are celebrating people power…”

Coaching the crowd, to chime in with “Ohhhh yeahhhh” as the chorus, Ms Maniapoto Jackson launched into a short protest-style song. Her powerful voice belted out the words, making her microphone and speakers practically redundant, as she filled Parliament with her lyrical sounds,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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“Hey, hey Mr John Key,

You say you’ve the mandate
We’re here to help,
it’s not too late,
People here are standing strong
a hundred thousand – can’t be wrong
We’re here to help you get back on track,
Let’s stop the sales,
Let’s pull it back.

Crowd’s chorus, Ohhhhh Yeahhhhh!

All together now!

OHHHHH YEAHHHH!”

Ms Maniapoto Jackson then welcomed the first of “a long line of luminaries, that are positively glowing with energy and excitement as we deliver to the government a very strong call from New Zealanders.”

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To be continued at: 392,000 New Zealanders send a clear message to John Key – Part Rua

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Additional

Radio NZ: Petitioners confident of asset sale referendum

Dominion Post: Government to ignore asset sales referendum

NZ Herald: Asset sales petition arrives at Parliament

TV3: PHOTOS: Asset sales petition presented

TVNZ: Petition against SOE sales delivered to Parliament

Newstalk ZB: Opposition MPs greet anti-asset sales petition

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  • Use must be for non-commercial purposes.
  • At all times, images must be used only in context, and not to denigrate individuals.
  • Acknowledgement of source is requested.

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= fs =

A Clear Warning to Investors in SOEs…

11 March 2013 12 comments

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soe powercos

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The recent financial crisis and near-collapse of Solid Energy – one of the five, state owned enterprises planned for partial-privatisation – should serve as a warning for those investor-vultures circling to buy shares in any of the SOEs.

In fact, recent history regarding Air New Zealand, Kiwiwail, and (non-privatised) BNZ in 1991,  are indicators that privatisation of state assets is not a guaranteed roadmap to wealth,

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The Air New Zealand crash

Source

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It is noteworthy that one of the cause of Air New Zealand’s collapse was it’s foolhardy buy-out of Australian airline, Ansett,

First, the decision by Air New Zealand to pay dividends and second, the decision to buy the second half of Ansett. Both moves turned out to be considerably more beneficial to the interests of Brierleys than those of Air New Zealand.

Take the Ansett purchase. In early 1999, Cushing announced that Air New Zealand was vetoing Singapore Airline’s bid to buy News Corp’s 50% of Ansett Holdings (Air New Zealand had held the other 50% of Ansett since September 1996). Instead, it decided to pay News Corp $A580 million and get 100% control.

It’s most likely true that Air New Zealand paid too much for the stake and that directors had too little information about Ansett’s financial and engineering state. These are well-aired opinions, but are secondary to the main question that should be asked: Why did Air New Zealand buy the second half of Ansett at all? It’s not just that it was hopelessly out of its depth buying an airline twice its size. It’s just hard to see any benefits – to Air New Zealand, that is.

Source: IBID

On top of that were big dividend demands from one of Air Zealand’s major shareholders, Brierley’s,

The at times cash-strapped investment company held between 30% and 47% of shares over the period so, based on the total dividend of $765 million, Brierley reaped an estimated $250 million to $380 million from the airline. And Air New Zealand’s decision to buy the second half of Ansett, cutting Singapore Airlines out of the deal, contributed to Brierleys being able to do its own deal with Singapore.

In April last year, two months after Air New Zealand bought Ansett, Brierleys sold Singapore Airlines all its Air New Zealand “B” shares for $285 million, or $3 a share. It was arguably the last exit option for Brierleys from these shares, and, apart from a spike at the end of last year, Air New Zealand shares have largely tracked downwards ever since – they were trading around 30 cents as Unlimited went to press.

Source: IBID

In other words, Air New Zealand had over-extended in unwise investments (as has Solid Energy), and was bled dry by rapacious demands for dividends (as did Faye Richwhite in NZ Rail in the early 1990s).

How does this relate to the upcoming partial-sale of Mighty River Power?

Recent revelations that Mighty River Power has shaky investments on Chile, should cause potential investors to pause for thought,

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Key struggles to push Chilean investments

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According to the TV3 story above, “Mighty River Power has spent $250 million at the geothermal plant in southern Chile, but has just written off $89 million as the investments struggle“.

To which Key responded casually,

There is always risk.”

Dear Leader  seems somewhat blase about investors’ risks? Of course he is. It’s not his money.

The Crown Ownership Monitoring Unit (COMU) reported,

Impairments

During the period, the Company recognised $91.4 million of impairments principally reflecting its investment in the GeoGlobal Partners I Fund (GGE Fund), and its greenfield explorations for potential developments in Chile and Germany.

This impairment followed higher than expected costs at the Tolhuaca project in Chile due to the worst winter in 40 years adversely affecting drilling performance and only one of the two wells having proven production capacity. The value of GGE’s investment at Weiheim in Germany, has been impacted by increased costs due to required changes in the drilling location following the 3D seismic surveys and delays from environmental court challenges which have been resolved post balance date.

The GGE Fund had not raised capital from other investors by the end of the 2012 and Mighty River Power made the decision not to invest further capital into the existing structure. Overall, the impairment charge of $88.9 million for the German and Tolhuaca assets and the management company of GGE LLC leaves a residual book value of $91.8 million.

Source: Mighty River Power LtdResults for Announcement to the Market

On top of  Mighty River Power’s dodgy investment in Chile, New Zealand is now experiencing what is being called the worst drought in seven decades  (see:  North Island’s worst drought in 70 years). As Climate scientist Jim Salinger said about New Zealand’s current weather patterns continuing, and becoming  similar to the Mediterranean,

What it means is that if it just doesn’t rain for at least four months of the year, it means you have to bring in your water from elsewhere.”

Source: IBID

As all investors should bear in mind; most of our power generation is generated from  hydro stations. Mighty River Power, especially, derives most of its electricity from eight  hydro-electric stations on the Waikato River.

Mighty River Power CEO, Doug Heffernan has given a clear warning,

Following the lower than average inflows into the Waikato catchment during the last quarter [to December 31], Mighty River ended the half year at just 69 per cent of historical average [hydro storage].”

And Equity analyst Phillip Anderson of Devon Funds stated,

The same period last year they got really strong inflows, and this is the exact opposite . . .

In the second half of this reporting year they’re going to have to buy a lot more electricity to feed their customers, either on the spot market at a lot higher cost or use their [Southdown] gas plant.

We expect the second half of this year is going to be a lot tougher for them, they should get their margins squeezed if that all plays out.”

Source: Parched Waikato could hit Mighty River Power

The equation is blindingly simple,

Less rain = less water = less electricity generation

The question that begs to be asked is; where does the risk of investing in SOEs fall – private investors, or the State?

The answer I submit to the reader is, that like Air New Zealand, it will be private investors who bear the brunt of all risk. The State will simply pick up the pieces,  buying up shares at bargain basement prices, should anything go wrong.

Electricity generators like Mighty River Power will simply never be allowed to fail. Had the Labour government in 2001 allowed Air New Zealand to collapse, the fall-out to the rest of the reconomy would have been too horrendous to contemplate, and flow-on effects to other businesses (eg; exporters and tourism) and the economy would have been worse than any bail-out.

But any bailout will involve a massive loss for investors, as their share-value plummets. Again, Air New Zealand was an example to us all.

As the impact of climate change creates more uncertainly for our state power companies, investors need to think carefully before committing one single dollar toward buying shares,

Do I really want to bear all the risk?

Those who lost out on their investments in Air New Zealand in the 1990s will probably answer,

No.

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References

The Air New Zealand crash (1 November 2001)

A history of bailouts (7 April 2011)

Foreigners important for SOE sell-downs: Treasury (30 June 2011)

No law stopping foreign investors (16 Dec 2011)

Parched Waikato could hit Mighty River Power (22 Feb 2013)

Mighty River Power shares float mid-May (4 March 2013)

Taking the plunge in Mighty River (9 March 2013)

Key struggles to push Chilean investments (9 March 2013)

North Island’s worst drought in 70 years (10 March 2013)

Other blogs

Seemorerocks: An Appeal for a New Zealand Risk Assessment

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How to sabotage the asset sales…

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Something I blogged on 25 June 2012, and now more appropriate than ever…

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On last weekends’ (23/24 June 2012) “The Nation“,  the issue of asset sales was discussed with   NZ First leader, Winston Peters; Green Party MP, Gareth Hughes; and Labour MP, Clayton Cosgrove,

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Source

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Whilst all three parties are staunchly opposed to state asset sales, NZ First leader, Winston Peters went one step further,  promising that his Party would buy back the assets.

Gareth Hughes and Clayton Cosgrove were luke-warm on the idea, quite rightly stating that there were simply too many variables involved in committing to a buy-back two and a half years out from the next election. (And Peters never followed through on his election pledge in 1996 to buy back NZ Forestry – “to hand back the envelope”, as he put it -  after National had privatised it.) There was simply no way of knowing what state National would leave the economy.

Considering National’s tragically incompetant economic mismanagement thus far, the outlook for New Zealand is not good. We can look forward to more of the usual,

  • More migration to Australia
  • More low growth
  • More high unemployment
  • More deficits
  • More skewed taxation/investment policies
  • Still more deficits
  • More cuts to state services
  • And did I mention more deficits?

By 2014, National will have frittered away most (if not all) of the proceeds from the sale of Meridian, Genesis, Mighty River Power, Solid Energy, and Air New Zealand.

In such an environment, it is difficult to sound plausible when promising to buy back multi-billion dollar corporations.

Not to be thwarted, Peters replied to a question by Rachel Smalley, stating adamantly,

The market needs to know that Winston Peters and a future government is going to take back  those assets. By that I mean pay no greater price than their first offering price. This is, if they transfer to seven or eight people, it doesn’t matter, we’ll pay the first price or less.

Bold words.

It remains to be seen if Peters will carry out that threat – especially if a number of his shareholders are retired Kiwi superannuitants?

When further questioned by Rachel Smalley, Peters offered specific  ideas how a buy-back might be funded,

Why can’t we borrow from the super fund, for example? And pay that back over time?  And why can’t we borrow from Kiwisaver  for example, and pay that back over time…”

The answer is that governments are sovereign and can make whatever laws they deem fit. That includes buying back assets at market value; at original sale price; or simple expropriation without  compensation. (The latter would probably be unacceptable to 99% of New Zealanders and would play havoc with our economy.)

Peters is correct; funding per se is not an issue. In fact, money could be borrowed from any number of sources, including overseas lenders. The gains from all five SOEs – especially the power companies – would outweigh the cost of any borrowings.

Eg,

  1. Cost of borrowing from overseas: 2% interest
  2. Returns from SOEs: 17%
  3. Profit to NZ: 15%

We make on the deal.

The question is, can an incoming Labour-Green-NZ First-Mana government accomplish such a plan?

Should such a  radical policy be presented to the public at an election, the National Party would go into Warp Drive with a mass  panic-attack.

But it’s not National that would be panicked.

It would be National going hard-out to panic the public.

National’s scare-campaign would promise the voters economic collapse;  investors deserting the country; a crashed share-market; cows drying up; a plague of locusts; the Waikato River turning to blood; hordes of zombie-dead rising up…

And as we all know, most low-information voters are highly susceptible to such fear-campaigns. The result would be predictable:

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But let’s try that again…

A more plausible scenario would have the leadership of Labour, NZ First, the Greens, and Mana, meeting at a secluded retreat for a high-level,  cross-party strategy conference.

At the conclusion of said conference, the Leaders emerge, with an “understanding”, of recognising each others’ differing policies,

  1. Winston Peters presents a plan to the public, promoting NZF policy to buy-back  the five SOEs. As per his  original proposals, all shares will be repurchased at original offer-price.
  2. The  Mana Party  buy-in  to NZ First’s plan and pledge their support.
  3. Labour and the Greens release the joint-Party declaration stating that  whilst they do not pledge support to NZ First/Mana’s proposal – neither do they discount it. At this point, say Labour and the Greens, all options are on the table.

That scenario creates considerable  uncertainty and anxiety  in the minds of potential share-purchasers. Whilst they know that they will be recompensed in any buy-back scheme – they are effectively stymied in on-selling the shares for gain. Because no new investor  in their right mind would want to buy  shares that (a) probably no one else will want to buy and (b) once the buy-back begins, they would lose out.

Eg; Peter buys 1,000 shares at original offer price of $2 per share. Cost to Peter: $2,000.

Peter then on-sells shares to Paul at $2.50 per share.  Cost to Paul: $2,500. Profit to Peter: $500.

Paul then cannot on-sell his shares – no one else is buying. Once elected, a new centre-left government implements a buy back of shares at original offer-price @ $2 per share. Price paid to Paul: $2,000. Loss to Paul: $500.

Such a strategy is high-stakes politics at it’s riskiest.   Even if Labour and the Greens do not commit to a specific buy-back plan, and “left their options open” -  would the public wear it?

The certainty in any such grand strategy is that the asset sale would be effectively sabotaged. No individual or corporate buyer would want to become involved in this kind of uncertainty.

Of less certainty is how the public would perceive  a situation (even if Labour and the Greens remained staunchly adamant that they were not committed to any buy-back plan) of political Parties engaging in such a deliberate  scheme of de-stabilisation of a current government’s policies.

The asset sales programme would most likely fail, for sure.

But at what cost? Labour and the centre-left losing the next election?

We may well end up winning the war to save our SOEs – but end up a casualty of the battle.

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Related Blog posts

Peter Dunne says

Campaign: Flood the Beehive!

Additional

Asset sales remain unpopular for NZers

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Wellingtonians rally to send a message to the Beehive! (part toru)

17 February 2013 3 comments

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SOEs

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Continued from:

 

Wellingtonians rally to send a message to the Beehive! (part rua)

 

NZ, Wellington, 13 February 2013 – At this point, there was some light entertainment – firstly from this chap,

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“John Key” – first tried to convince the crowd that he’s really a “nice guy”.  The response from the crowd was anything but ‘understanding’.

“John Key” then sang his now-famous version of the New Zealand anthem, which he said was now “partially privatised” – so minus every third or fourth word. Thwe song made bugger-all sense – much like asset sales themselves.

The anthem was missing the last line, which he said, had been “sold in it’s entirety, including the word ‘New Zealand’.

After “John Key” was ‘helped’ off the stage with accompanying boos and cat-calls, Energy campaigner, Molly Melhuish took the microphone.

Ms Melhuish spoke for Greypower. Like Geoff Bertram, she is also deeply knowledgeable about all facets of the energy industry, including pricing systems used for residential, commercial, and industrial sectors.

As always, listeners leave a talk by Ms Melhuish with a greater knowledge and insights into the electricity industry in our country,

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Ms Melhuish first explained a bit of the background of the  “Keep our Assets” campaign,

“… Greypower was essentially asked to front this campaign, and we said at the first strategic meeting of the ‘Keep our Assets’ campaign that we wanted to co-front it with the youth, so we found a youth group, it was the University Students Association.

Because we believe this campaign is about those older people. Surprisingly many of our members were involved in building those assets. We said they’re ours, we want to keep them.

But we speak to our grand-children and our grand-children recognise… they just don’t want them sold. So the Greypower group board as a group, supported this ‘Keep our Assets’ campaign, all seven zones.

There are a small number of individuals in our meetings who really believed John Key when he said ‘we have to sell the assets so we can  re-pay the debts’. Geoff [Bertram] told you how wrong that is, but people are conservative,  want to be safe, and many, or most of the people who still say ‘we have to sell the asssets’ do so because they believed [John Key]. John Key is a show pony, he’s… telling the story told to him by others. He’s  a used car salesman. Would you buy a used car off that guy? I wouldn’t.”

“…Just yesterday afternoon, I spoke to Mana Tawa… The very very first question I asked was ‘Why can’t we have solar power on our houses? Our family in the U.K., you know, they got money to put photo-voltaics [on our roofs] and they were able to pay it off on our power bills. She said, ‘Why can’t we have that?”

We could, but we have to vote for it.

We won’t under this administration.

Another one  said, when I bought my place in a retuirement village in Porirua, we were promised lower bills. We are now paying more for our little retirement village than I paid for a four bedroom house.

So you get a captive consumer and they  can hike power bills not twice, but four times!

Greypower now has a policy that says energy leglislation must say [that] all household energy and especially electricity must be provided in a manner that’s fair, sustainable, efficient, and reliable. That was the law in 2001- Labour changed the law to make that. [But] National government took away “fair and sustainable” [from legislation]. That is wrong.

What to do about it? Change the government!

The only way you will get a change is to change the government! Vote for it! Peter Love told you that  in the first speech; vote for change. Greypower sez vote for change. That’s your job – We Greypower can support it but it is your job to vote for change.”

And she’s right. The only way we can effect change is by the ballot in the Voting Booth. Deciding not to vote because of some half-arsed cliche about “all politicians being the same”  is defeatist garbage. It is  craven surrender to forces who welcome people giving away their vote because vested interests have persuaded you that “change is not possible”.

Change is possible. But not when cynicism guides your decisions.

Molly Melhuish was followed by Aotearoa Not For Sale activist, Frances, who spoke of her own ‘journey’ to  set aside her apathy and become active. Despite English being a second language from Frances, her words were truly inspiring. A million New Zealanders like her, and no government would dare risk selling our treasures,

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Frances first described the desperate conditions that afflict the poor or unemployed in other countries, where social welfare services barely exist, or not at all. She referred to the shame of someone loosing their job, and killing themselves and their entire family by mass-suicide – because the provisions that we often take for granted (or that right-wingers complain about), do not exist in their society.

“…I saw this country as a country so beautiful and with a humanity and the government with a heart [?] to looking after the poor and the under-privileged and  the vulnerable groups. But throught the years I don’t know what has happened, I was too busy looking after kids, young children, and being someone who didn’t speak very good english. I sort of stayed low and keeped quiet and don’t want to say much about nothing against   government. Although I do complain a lot at home if I say something, I see the government doesn’t do something nice to people.

But then I accidently walked through a public meeting … beginning of last  year and then that was about state asset sale. And I was so shocked about what ‘s going to happen. And I thought, well,  for the last 15 years my shower time from … ten minutes down to three minutes, because we need to have a budget for our power because the power bill kept going up.And then I cut my hair short so I don’t have to spend so much time [in the shower]. So all these things, and  I decided maybe this year I will not harass my kids to have a showers if they don’t want to because it’s just getting more and more expensive.

There might be more stinky people around the city.

And hey, we are from middle income family, and during the winter time we fight often … argue with my husband about whether we should have the heater on. And I just never thought  will  come to this day!

And now they’re going to privatise these companies and  sell to all those rich, only going to benefit the very rich few. Especially some foreign companies. And I was like,  that’s not right, I can’t afford to pay even higher bills.”

And I thought, what happened? … From me not paying attention to politics. I actually don’t like politics. I  want to just appreciate art and literature, but then from me not doing anything for so many years, what has this country become? Because a lot of people are like like me, they don’t like politics. They don’t want to take action; “I often give them moral support, I’ll  give you some  dollars, but you do the work. You go against the government.”

But then this time I realised what example I was setting for my children…

… But I feel great because I work with so many dedicated people and so many beautiful people, and  selfless. And they are wonderful. We are all trying to make this country a better place for us, for others,  for our children.

And for middle income like us, we struggle, and I just hate to think how the low income, how the  beneficiary actually survive. And this government keep taking things away from the general  public, from the  weaker and from the vulnerable group. …

… Being a housewife, what can I do? I go out to collect signatures because that’s  easy thing for me to do. It takes a lot and time and a lot of effort, but I’m glad I can make  contribution. And I feel everybody here can make contribution…

… And being at home I can teach my kids, say, well don’t believe everything you heard from the media. And don’t just listen to what people say, you watch what they do. Especially our Prime Minister.

Frances finished with these thoughts,

“We can all make a difference… I saw so many people on the street. Some  are angry but most  of them are so depressed because they think government will never listen, and they think what we are doing going to be  in vain, just not going to change anything.  And I say to them, I say, if you don’t make any noise for this, what do you think government are going do to us next?

I want to set  example to my children to say, if you really believe, and you have to believe, you can make a difference, you can change something. You just take actions and do whatever you can….

… But  we have to still have to pressure the government, we want our referendum now, not later!

… One day when my kids ask me ‘mum have you done anything to protect us from being attacked by our government’ then I can say, I have done something. And I hope we can all say that, say  we have done something to protect you from bad government policies.”

Amen to that, Frances.

Frances struggled at times with the English language  – but the message she gave was as clear and meaningful as words could possibly convey.

This blogger found her to be truly inspirational.

As clouds darkened the evening sky, and the southerly ‘breeze’ gave a ‘bite’ to the assembled crowd, there was final entertainment from Steve and  John,

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And finally, a rousing applause given to Richard, who shouldered much of the responsibility in organising the event,

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Meanwhile, further down the waterfront, others were more comfortable with their boutique beers and frothy lattes,

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Want to help?

Make a donation (any size) to: BNZ, 02-0560-0158770-00

Volunteer by contacting: saynotoassetsales@gmail.com

Go to: any of the Relevant orgs listed below.

Additional

TV3: Asset sales referendum likely (6 Feb 2013)

TV3: Govt under fire over Contact redundancies (14 Feb 2013)

NBR: Supreme Court to ignore govt deadline on water rights decision (15 Feb 2013)

Youtube: Say No to Asset sales in Aotearoa NZ.mov

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  •     Use must be for non-commercial purposes.
  •     At all times, images must be used only in context, and not to denigrate individuals.
  •     Acknowledgement of source is requested.

Relevant orgs

It’s Our Future

Keep our Assets

Aotearoa is not for Sale

Aotearoa is Not for Sale | Facebook

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Wellingtonians rally to send a message to the Beehive! (part rua)

17 February 2013 6 comments

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Continued from:

 

Wellingtonians rally to send a message to the Beehive! (part tahi)

 

NZ, Wellington, 13 February 2013 – The first speaker was Peter Love; Te Atiawa, and Board Member of the Wellington Tenths Trust,

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Peter Love spoke of having to buy a bottle of water from the dairy – and yet Maori were castigated for trying to assert their own water rights. Holding up a plastic bottle of water, he said it’s not about “Maori owning the water”,

We have to make sure you don’t have to go into a dairy to buy this!

He spoke of countries such as China sending their workers into Pacific Island nations to build infra-structure and buildings for the locals, but for a price.  Peter Love spoke of powerful interests  seeking valuable resources  such as the fish in Cook Islands territorial waters.

He said asset sales would be a magnet for overseas investors,

They’re after our assets!”

Which is why“, he said, “we’re all here this evening challenging the government.”

Peter Love finished with a humorous touch,

My wife said, ‘hullo – don’t get arrested Peter...”

He encouraged the crowd,

“…Don’t forget, keep it up. Sign the petition against it. And we may have to call you again to go to Parliament.”

The next speaker was Peter Love’s mokopuna (grandchild), Kaira Ranginui-Love, of Te Atiawa, who spoke directly to the many young people in the crowd,

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Ms Ranginui-Love spoke with deep passion about her feelings for this country, and how others wanted a piece of our paradise,

I love Aotearoa! I don’t know about you but I absolutely love this country. I believe Aotearoa is Heaven on Earth…

… For many of you, Aotearoa has been a home for you and your families since the time of the settlers, and for others.”
 
“… But regardless of how we all got here and what we’re all doing here, I think we can all agree  what connects us is our love for Aotearoa.”

“We are very lucky to live here. We have the oceans, the rivers, the forests, the lands,  and all that dwell therein. So we must look after our country, and be the caretakers, for now and for the future generations to come. We need to be wary that we don’t allow our country to be exploited by those in a position of power. The National government, the National Party, they have an immoral agenda based on monetary gain only…”

“…Is this government listening to our views?”

“I think this govermnment blatantly  ignores it’s people and what they want. What we all want. No thought has gone into the rippling effect that this will have on our futures.”

“…We’ll have no say, and we’ll  have no rights. This referendum will help to stop the government from making a terrible mistake. Remember, everybody wants a slice of our country, our paradise. So it is time to stand up. It is time to fight for this generation and the generations to come….”

“…The time to act is now, before it’s too late.”

Next, the Mayor of Wellington, Celia Wade-Brown – a veteran campaigner against the privatisation of Wellington’s former “Capital Power” company in the 1990s – spoke of her thoughts on selling strategic assets that belong to the people,

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Mayor Wade-Brown welcomed people to the rally and acknowledged the hard work by organisors to set up the rally,

Let’s give the organisors a big round of applause!”

This week there’ve been a number of really important issues raised that resonate with all of us; leadership; jobs; a fair go; and a clean environment; public ownership of strategic assets. Those aren’t alternatives to each other, they go hand in hand.”

The Mayor spoke of Deborah Littman visiting Wellington and talking to Council (see: Mayor pushes to give hundreds a pay increase ) about how a living wage has in helped  many aspects of society in Vancouver and London, by raising incomes,

Low pay doesn’t help the local economy; low pay doesn’t educational failure, and low pay doesn’t help poor health. So the living wage is an idea to inspire us, it’s a journey, not an overnight transformation… … a living wage is good for the local economy.”

Mr Wade Brown referred to a Greenpeace economic report which outlined ambitious ideas for new jobs, new prosperity, and a clean economy. She outlined Greenpeace’s ideas for how huge wealth could be created for New Zealand by building an economy based on 100% renewable energy,  energy efficiency, and sustainable transport.

The mayor went on to describe one of her earliest actions soon after being elected to the City Council in 1994,

I voted in one of the earliest political decisions when I was elected on Council against the sale of Capital Power. And now the energy retail and lines businesses have been split up and sold and sold again  and it’s really impossible to assess what they would  be worth now.

But it could’ve been a huge help to the capital city as a basis for a smart grid, for electricity demand management, and for more manageble bills for people on low incomes. So I understand your concerns about selling of power generation companies.

More successfully, Wellington City Council voted against the sale of our Airport shares. Although one third does not give us control. But it does keep us in the loop and it gives us a considerable dividend that keeps your rates down.

And in the ’90s there were really truly mutterings -  I saw Cr Stephanie Cook here earlier and she’ll back this up – there were muttering about selling of our council social housing. It never did get to a vote, thank goodness... “

Social housing for vulnerable tenants was a social partnership, she said.

Mayor Wade-Brown then described Wellington’s water supply and categorically stated,

The basic public infrastructure should remain in public ownership and the charging policies and the conservation policies should be set democratically.”

She took a good natured ‘dig’ at Peter Love with the remark,

And I would like to add that you don’t need to buy in bottles because there are free water fountains along the waterfront.

Ms Wade-Brown told the audience that Council, in partnership with local Iwi, was bringing back alienated land to return to the Town Belt.

The Mayor added,

So local government faces the same financial pressures as households do, as you do,  as business does, and as central government does. But we’re not going to face those pressures by selling of our strategic assets. We won’t sell social housing, we won’t sell water infrastructure, we won’t sell the reserves that make this capital city so special.”

The mayor implored people to sign the petition – but not ten times,

It doesn’t help to sign it ten times, ok guys? If you’ve signed it, you’ve signed it…
… And tonight people are tweeting, blogging, using Youtube, and everything else to have your say. And that’s my main message; stand up and have your say, in the capital city!

Kia kaha.”

Next up – perhaps the country’s sanest, most common-sense economist – Ganesh Nana, rose to tell it from an economist’s  perspective.

Perhaps surprisingly, he wasn’t tied up and thrown into the harbour. Economists in the last thirty years have had a bad rep – perhaps only second to certain policians.

But Ganesh Nana is a rare breed of economist. He sees through the neo-liberal fantasy world of ideology and tells us that the dogma of the New Right simply does not work as ‘the label on the can’ promised,

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Ganesh Nana started by saying,

I’m an economist, ok, so I promise not to say anything about ‘The Phoenix’ or anything about cats…”

That elicited a laugh from the crowd and then he launched straight into the issue of asset sales and started by asking,

You might ask why would you at all be interested in hearing from an economist, and I ask the same thing; “why is anybody  interested in hearing from an economist given whate total mess we’ve made of the economy to date, but never mind… You guys should really be asking for an apology from the economists given the mess we’ve made...”

“… But I will apologise on my own behalf for not not actually shouting out a lot louder evertime we’ve made a wrong turn. So today here I am shouting out just a bit louder for making a wrong turn yet again.”

The audience warmed quickly to Ganesh Nana’s self-deprecating comments and clapped at his remarks. Only a lone heckler, yelling out comments he must’ve thought were very hilariously witty (mistakenly),  stood apart from the crowd.

Ganesh Nana continued,

From a business perspective; a business person’s perspective;  this is a very, very, very,  simple problem facing us, or a simple question; why would you sell an asset?

I ask you that question and from my own academic perspective or background, when faced with that question  I go to a dictionary and look up the definition of an asset.

It’s really quite simple… … you’ll find some words around something that is valuable and of use. And then I started to think as a business person or as an ordinary person why would I get rid of something that is valuable and of  use?”

He then asked,

“…These assets that the Crown have, [that] the government on our behalf, [as] taxpayers, are holding. Do they continue to be valuable and useful?

And if so why are we getting rid of them?”

… From a business perspective the only reason I’d get of an asset is if it suddenly became a liability.

That is, it required a lot of upkeep and it wasn’t paying it’s way, so it wasn’t really an asset. And then, yes,  you get rid of it fast.

But is anybody seriously trying to tell me that those electricity generation stations, and all the infra-structure around it,  is something that we, as a nation, ‘ain’t gonna’ need for the next 20, 30, 40, 50 years?

Because if the answer to that is ‘yes’, then let’s get rid of it, because we don’t need it. But if we do need them, we need to hold onto them. It’s really quite that simple.”

Ganesh Nana was also adamant that not all economists follow the neo-liberal, monetarist line,

“…People who think that businesses or economists totally agree with getting rid of assets or following the market path, and there are lots of other reasons we could go into which are far too technical to go into tonight, about following the market and about how government shouldn’t be involved in assets; and shouldn’t be involved in the economy – those are smokescreens.

There are quite surprisingly some economists, myself included, who don’t follow that [ideology], and actually go back to the textbook… If it’s an asset, and it’s going to earn something over the future, you hold onto it for dear life. Because that’s what your future relies on!”

Ganesh Nana’s speech was well-received by the crowd. One could sense  that it was a relief for many who were listening,  that not all economists were wide-eyed free-marketeers demanding the dismantling of the State.

Ganesh Nana was followed by Geoff Bertram, Senior Economics lecturer at  Wellington’s Victoria University, and one who had been closely studying the energy sector. Mr Bertram understands the mechanisms by which our energy companies are valued and re-valued – and his simple explanations quickly reveal these valuations as clever, malevolent, rorts.

The same rorts used to drive up power prices on an almost annual basis,

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Now, the government’s aiming to sell off nearly half of some state-owned companies worth about ten billion [dollars], so it’s hoping to get a bit about under half… perhaps $4.5 billion from the sales from anybody prepared to buy the shares that they’re going to issue.

I’m going to talk tonight really about the motivation  that might lie behind those sales, and I personally think it boils down to two things.

The first is the desire of  the Treasury to get the money and run before certain things become very apparent about the way that electricity prices have been set over the last two decades.

And the second reason I think is to close off policy options that might remain open to future governments if the assets remain in full public ownership. Because while the assets are in full public ownership, it is possible to change the way they are managed and change the way that  electricity is supplied…”

Geoff Bertram then made an explosive accusation against the government which, if true, revealed a shocking reason why National is so hell-bent on privatisation of certain state assets,

“… It’s my view that probably the  most important political consequence of the part-privatisation of SOEs is to place private investors in those enterprises  and thereby immunise them against possible future policy that might reduce their value.

And since  I think an important part of an improved government policy would indeed reduce their value, I am opposed to the asset sales…

…The companies have a very high valuation. The reason why they have a very high valuation  is that they have successfully participated in a long-running rort to extract cash from residential electricity consumers by the inexorable driving up of prices of electricity.

That rort, has been possible, because government policy has allowed and has indeed supported the emergeance of a cartel of five, large, vertically-integrated, generator-retailers – three of whom are SOEs  – which have been able to operate without any effective regulation, at the expense of  consumers who were too vulnerable to protect their interests against price hikes.

And if you looked at the tracks of electricity prices over the last 20, 30 years you will have noticed that large industry has protected itself very successfully; commercial electricity buyers have done fine; residential who are the dis-organised, unrepresented, undefended, captive group of customers have seen their prices go up in real terms 100% since 1986.

And the main consequence of the electricity reforms has indeed been that doubling of the cost of electricity to ordinary  households. 

That’s a major cause of energy poverty; it’s been an important part in the growing  inequality of income and wealth in this country; and it’s something that a socially responsible government would,  in my view,  be taking serious action to reverse.”

The audience broke into heavy applause as the implications of Geoff Bertram’s comments sank in.

It is simply extraordinary that none of the media present at the rally that day has reported Geoff Bertram’s amazing – and disturbing – analysis of the energy sector and electricity pricing in New Zealand. Is what he’s saying boring?! Too complicated?! Risking opening a can of worms?!

This should be a prime-time story on TV3′s “Campbell Live” and Radio New Zealand.

Geoff Bertram continued,

“Just to put that doubling of the residential price in context. New Zealand’s pretty much on it’s own in the OECD and if you look at  the figures for other countries around the OECD, from 1986 to the present, the price of electricity to residential consumers  in OECD Europe, in Australia, and in the United Kingdom, is still the same as it was in 1986. In the United States, Japan, and France, prices are down 25% , compared to where they were in 1986, in real terms.  In South Korea they’re down 50%, compared to where they were in 1986.

New Zealand is the only only OECD country that has gone out there and driven up electricity prices 50%. We’re also pretty much the only country that doesn’t have a regulator in place, and where government doesn’t have any particular social policy relating to the pricing of essential services to the public.”

Geoff Bertram then explained what he called “the re-valuation game”, as it applied to electricity pricing in New Zealand,

And here’s how it works.

You take a bunch of assets with a given value, and you look at the existing price, to consumers of the product, and you say “well look, we can get the price up”; so you project  that higher price; you capitalise that; and then if you can get the price up the asset will be worth more; so then you re-value the asset; and then you go and use the higher value of the asset to justify raising the prices, and then you repeat.

And this is the circular process which has been going on in New Zealand now, in electricity, for more than a decade. It is completely legal under New Zealand law.

It is not illegal to profiteer or  to gauge captive customers in this country. [In] very few countries is that true.

And it’s consistant with New Zealand’s generally accepted accounting practice which basically tells you that there’s a rotteness at the core of accounting practices in this country.”

Geoff Betram further described how the ECNZ had sold power stations to the newly formed Mighty River Power, in 1999, at a considerable mark-up. In effect  government sold these power stations to itself and in the process pocketed a huge profit. To pay for those power stations, prices were raised, forcing captive residential consumers to pay more and more for their electricity. He added that we have been,

“…living under a government which for two decades has  become effectively  a corporate predator, in this sector, where once it used to be a social provider.

The applause that followed that statement was louder than before. People were ‘getting’ what Geoff Bertram was telling them. He continued,

Here’s the problem. Electricity was once an essential service provided to households at the lowest price, consistent with covering the industry’s costs. 

Since 1986 the sector has been corporatised and part-privatised, and it’s pricing has been driven by the quest for profit by giant companies that have the market power to gouge their consumers.

As the owner of three of those companies, the New Zealand government has therefore become a predator. And now the Treasury wants to cash in on that rort by selling out half the government’s stake.

What that means in terms of the options for the future for government to turn around and come back from the predator model and return to a social service approach  for energy supply, is being closed off.”

Geoff Bertram suggested that every household in New Zealand could be allocated 300kwh [kilowatt hours] of free power every month, and pay market rates for anything over and over used. He added,

But if you want to deal with energy poverty and get kids out of hospitals with asthma and other respiratory diseases and so on, one of the really good  things that you can do is get cheap energy into New Zealand households and that would be sustainable on the basis of the current government owned assets.

About 300 kwh free. [But if] you sell Mighty River and what’s feasible comes down to 200 [kwh]. You sell Genesis and what’s feasible comes down to 100 [kwh]. You sell Meridian and it’s gone…

What I’m saying is the contract  that supplies the Rio Tinto smelter down at Bluff, the old Comalco contract, is the contract New  Zealand households should have had from the start.

And it still could be done.”

Imagine, every household in the country, receiving a dividend of 300 kwh, each month. The positive benefits for low-income families, in damp, drafty houses, would be incalculable. Coupled with providing free meals in schools for children, it would be a major blow against child poverty in New Zealand.

But not if National get’s it’s way.

A new Labour-Green-NZ First-Mana coalition government must listen to people like Geoff Bertram, Ganesh Nana, et al, if we are to progress forward.

After Geoff Bertram, the crowd was entertained by Maarama Te Kira and Lucky Ngatuere,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Following on from the entertainment, Jane Kelsey, Law Professor from Auckland University, addressed the Rally. Professor Kelsey is also one of the country’s acknowledged experts on globalisation, and a staunch critic of the TPPA (Trans Pacific Partnership Agreement), which is being negotiated in secrecy and condemned worldwide.

Professor Kelsey has also been the target of some fairly vindictive statements from the NZ Herald (see: Gordon Campbell on the NZ Herald’s attack on Jane Kelsey).

Professor Kelsey started by welcoming old friends to the rally,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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“…It was great to see lots of familiar faces from battles of the past, but it was also great to see so many young people here, because these battles are your battles for the future…

… I congratulate not only the organisor here, but  those who have been running the campaign  in Wellington gainst the asset sales, because it’s been a real inspiration across the country, and I know it’s being watched by people outside the country as well.

Some of those who are here will remember those battles we had in the mid 1980s when we were told that state-owned enterprises were simply a way of creating more efficient ways of keeping assets in  our hands. And we said at the time that it was a lie. And we knew it was a lie and they knew it was a lie. And we proved it was a lie and then they sold them off and then we had to buy them back.

Because as we predicted would happen, when you have private owners, especially private foreign owners, who have no stakes in our future, they will strip the assets. And thats what Bell-Atlantic and Ameritech did with Telecom and that’s what Wisconson Railways  did with the railways, and that’s what the [foreign ]banks that still own our banks, did with the Post Office Savings Bank and the BNZ and the Rural Bank, and so on, and we’ve been there and done that and we know what it means.”

At this point, Professor Kelsey held up a metre-square white board with heavy black lettering on it; ‘SAY NO’. It was a take on Winston Peter’s ‘NO’ sign from the Owen Glenn Donations affair in 2008. (see: Peters denies latest Owen Glenn allegations)  The placard provoked laughter from the crowd who obviously recalled the significance of it.

” They also know that the problem [for the neo-liberals] was that we were able to reverse some of those failed privatisations, and other things that failed. Like when they tried to privatise ACC. Like when they tried to de-regulate the electricity market. … So what they have is a new strategy designed to lock-in and make potentially irreversible the kinds of policies that they want to see rule in the interests of their cronies for the indefinite future.
These particularly  toxic legal products are known as Free Trade and Investment Agreements but they have nothing to do with trade, they’re actually investment protection agreements that make it almost almost impossible for us to be able to do the kinds of reversals of failed privatisations we’ve done in the past. We have a number of those agreements already.

And they are potentially causing some problems.
Some of you will have followed what’s happening with the tobacco companies, and their threats to sue over the introduction of plain-packaging tobacco. What we have now now is a particularly virulent strand of this this toxic disease. It’s known as the Trans Pacific Partnership Agreement, or the TPPA. We have other ways of describing the TPPA – Taking People’s Power Away. Toxic Profiteers Plundering Aotearoa.
What it’s designed to do, in particular in relation to investment, is to say ‘You have to open your doors without restrictions to the rights of foreign investors to be able to buy any of the assets within Aotearoa’.
Now, we already have an open door,  and they’ve already signed away the ability to reverse some of that.

But now they want to raise the thresholds even further, so that our ability to vet foreign owners is effectively taken out of our hands. But worse than that, once the foreign investors own the assets, these agreements give special guarantees to those foreign companies. They give guarantees that we will  not alter our future laws and policies in ways that significantly affect the value or the profitability of their investments.
So once we have – or they have – given away our assets, our ability to do anything to recover them is not only constrained by the kinds of threats that we’ve seen in the past and concerns about ‘crisis’ and ‘investor confidence’ and all of that other bullshit – we have threats from foreign investors under an agreement like the Trans Pacific Partnership Agreement, that they will sue our government not only for the loss of the value of their assets but the for the loss of future profits from those assets.
…It will not be a case that will be brought in our domestic Court. It is a case that will be brought in a secret, off-shore tribunal, where there will be three Arbitrators who would sit on the Hearing who last week were acting for an investor, and this week are acting as a judge in the cases brought before them by an investor. There is no system of  precedent, there is no openess so we can see the documents, or even sit in on the Hearings. There may not even be a publication of their judgement at the end of it!
These kinds of secret offshore tribunals are  so discredited now that many  governments are saying  they won’t agree to deals that allow foreign investors to have those powers.  And the Australians have said in the Trans Pacific Partnership Agreement that they won’t agree to foreign investors having those powers.

Our government – when John Key was first asked about this – said, “Oh, well if the Australians don’t think it’s a good thing, it sounds a little bit off-beam to me, so I suppose we’d go where Australia goes”.

Then his officials officials briefed him and said, “Well, actually Prime Miniter, no, we’re going to agree  to foreign investors having these powers”.
So this Trans Pacific Partnership Agreement is currently being negotiated. They want to try to close off the negotiations in October this year. The negotiations are all taking place in secret. We don’t get to see the final agreement until it’s signed off by the eleven countries negotiating it, which includes the US where the big foreign investors are based.
So, effectively the government is negotiating a Bill of Rights for foreign investors not only to enter and buy up this country, but to be able to threaten us in the future if we try to take back control of what is ours.”

Professor Kelsey invited the crowd to join in the campaign to oppose the TPPA, and pointed out information that was freely available on nearby tables. She warned the crowd,

“Join us in the campaign against the Trans Pacific Partnership Agreement, because so many of the things that we care about – We will not be able to effectively regulate in the future; we will not be be able to take back control of our future; if this agreement is passed. Parliament doesn’t get  an effective say on it. This is an agreement negotiated by the  Cabinet, it can be ratified by the Cabinet; and we have no say until it is a done deal.
We know that the Prime Minister is very good at secret done deals. We know that the Prime Minister is happy to do deals on behalf of his cronies. We know that the Prime Minister is prepared to sell out democracy, sovereignty, and tino rangatiratanga. And if we’re going to take back control of our futures then this agreement is a priority to stop this year, along with the asset sales.”

Professor Keley thanked the audience, who in turn cheered and clapped for her.

Meanwhile, Shane and Ariana (?) held aloft the anti-TPPA banner,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Next up, Bishop Justin Duckworth – the Anglican Bishop of Wellington. He had some very personal but salient anecdotes to share with us,

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Bishop Duckworth greeted the crowd and started with this story from his own family,

” I was sitting out before and listening to the speakers, who were awesome, and I was suddenly talking to a new friend, I met a new friend, and he was telling me he was a father like I was a father, and we were discussing our children, and I suddenly remember a story that happened between my wife and my teenage boy. Classic conversation went down about domestic chores. And my beautiful wife, Jenny was saying to my boy, “it’s your turn to do the dishes”.

And he sort of said, “No, I did the dishes last night”.

And then she said, “I vacuumed the floor.”

And then he said, “Well, I watered the garden.”

And then she said, “Well, I dropped you to school.”

And it was escalating. Until my wife finally busted what I thought was the argument to end all arguments. And she said this; “I gave birth to you.”

I thought;  that’s it. Argument stopped. How could you argue with that?

My teenage boy had this comeback, “And your generation destroyed the environment for us.”

Good line, eh?

And it’s true isn’t? It’s true that our generation not only did we destroy the global environment, but  we have also instigated the global recession as well. And I think that the issues that we are talking about today about asset sales; the reason why that this issue in particular hits our public so strongly, and we have such a good turnout to this rally, is that because I think it’s at the core of a whole lot of other issues.

And so, as a man of faith, as a follower of Jesus, I just want to tell you what concerns me. And these are questions I have, I haven’t got the answers, but these are just questions.

Around asset sales I have questions  around the lack of regulation already  in place in the assets that we own…

… I heard Geoff speak, and I also read his articles, the reports about his papers a couple of weeks ago.  I am concerned that that it is simply not fair, and not just …”

“If we were to sell our assets how less a control do we have? If we already have such limited control at the moment on the regulation of them, how much more limited will it be in the future?”

My second question I would have is this. Recognising… that the Kai Tiaki of New Zealand is Tangata Whenua’s Maori people, and the wairua of this country, the spirit of this country is held by that Kai Tiaki, by the Maori people. I would have questions around what happens if we start selling our assets overseas, what does that mean for the Kai Tiaki here?

“… Third question would follow on from the Greenpeace speaker [Bunny McDiarmid – no recording of her speech made; blogger’s stuff-up], and that woud be this; What happens to the environment longer term if we lose responsibility and control of our power companies? What guarantees do we have whether actually our environment and our global climate change issues will actually be positively addressed by our country? I think there are huge issues there if we choose to sell our assets.”

Bishop Duckworth then concluded with this sobering anecdote – something personal, yet with global implications in how we treat each other,

“…Those of you who don’t know, my father was born in Burma – in Myanmar. A few years ago I went back with him; never visited before, me and my brother went back to Burma. Took my dad, visited a whole lot of wider family.

Once we were on a temple tour, as you do on these sort of trips. We were touring around these temples, and me and my brother, having a lot of sibling rivalry, we’d constantly compete to see who could get the best bargain for the little knick-knacks. You know that I mean? Those little things you buy constantly. So me and my brother were constantly competing for who could get the best deal  on knick-knacks.

One night we were just finishing another temple tour and this guy sidled up to me and was selling me hand-painted pictures of Burmese countryside. Now I’ve been around long enought to know what you can normally get these pictures for.

Normally you pick these pictures up for about three US dollars.
But I was militant that night. And I thought I’m going to prove once and for all that I can run the biggest, best bargain in the world. So I drilled that fellow down to get the best  bargain I could. And in the end I managed to get four pictures for five US dollars!

…We were getting a lift home, and I was showing the pictures to my brother and saying, “Look, I’ve got the best bargain ever!”

And the driver of our horse and cart leant over and asked, “Hey, um, what’d you pay for those?”

I said, “I paid five US dollars for the four of them”.

He sez, “Ohhh, it must’ve been a bad day.”

I go, “What do you mean?”

“The man musn’t have been able to sell anything that day, so he had to sell his goods at cost price, at least at cost-price,  just to buy rice for his family.”

And suddenly I realised what was just some crazy game, ideological game, for me, was actually  life and death for other people.

And my big questions I have around this issue is this; is this some crazy ideological issue that we’ve been driven  here, or is it actually about everyday people who are struggling, who need jobs, who need security, who need a future, and who need decent power.

And that’s my question.”

Ariana then troduced Maanu Paul, Chairman of the Maori Council, and  who was currently taking the Government to the Supreme Court over water rights. Maanu Paul had some interesting observations, and made a call to action,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Maanu Paul offered a greeting to the people at the rally, and then began with,

“When I was asked to come and speak, at this,  I asked, “who makes money out of this lot [asset sales] ‘?

And the answer was, we need to raise the consciousness of our nation in respect of our opposition to the sale of assets. The New Zealand Maori Council has had a long history of opposing the sale of our assets, beginning in 1986, when we established Section 9 of the State Owned Enterprises Act, which we said, “nothing in this Act shall be contrary to the Treaty of Waitangi”.

And then we had the lands case in 1987 when we stopped the sale of state owned land. And then we had a negotiation with the Crown over the sale of the biggest man-made forest in the southern hemisphere – the Kaingaroa Forest. And then they sold the spectra. And  we had an argument with the Crown over who owned the spectra. It’s about the same argumwent as who owns the water.

And the government of the day said, ‘Maori did not know anything about the spectra’. And I shot back to them, ‘Neither did they. An Italian  fellow named Marconi knew about it, and the Poms didn’t know anything about it at all’.

The upshot is that they allocated us a portion of the spectra and now we’re a part of Two Degrees.

Finally we come to the sale of the dams and the capacity to generate power. The whakapapa so far tells us that the constant that is present in all this is that the Maori Council has ensured that state owned assets stay in this country.”

There was strong applause at this point, and with a smile, Maanu Paul continued,

“Thank you. Because I’m going to ask you to put your hands in your pockets, because you owe us.”

More good natured laughter, and Maanu Paul’s smile widened, as the audience understood the nature of his remarks. He explained,

“You owe us because if we didn’t take this government to the Tribunal, to the High Court, and the Supreme Court, our assets would’ve been gone, would’ve been sold by now.

That is the reality of what we’re facing. And so the Council is dedicated to ensuring that we leave the world a better place for our mokopunas. We leave the world a better place that wehen we were born to it. And the world we were born to was, as far as I was concerned, I had the right to go and fish in my foreshore in my foreshore and seabed… heh heh heh…

I had the right to swim in my rivers and my lakes and call them my own. I had the right to do what I wanted with my land without having it confiscated.

And all of these tell me right now, that those rights have been eroded. Those rights have been eroded because this government, and previous governments, have failed to properly honour the Treaty of Waitangi.”

At this point, Maanu Paul called for direct action of a sort that up until now had not been considered. His comments have been reported in the media, and this is what he said, verbatim,

“And so my  message today, to us, is quite simply, is that we need to do more than sign a petition. We need to do more than gather in Frank Kitts Park, and what we need to do is to sit outside of Parliament and demand that we maintain the control of our assets.

What I’m suggesting – and I don’t know whether my Council’s going to agree with me about  this – but what I’m suggesting  is that we have a Noho Kainga [sitting] on Parliament grounds!

And we sit there until a fellow called Winston Peters might have put a Bill in Parliament that says ‘we are wishing to maintain ownership of the assets that we paid for in the taxes that’ve been levied upon us in the name of the public good’.

The audience resoponded enthusiastically to this suggestion, and the feeling was strong that many would’ve upped and left for Parliament’s ground at that very moment.

Maanu Paul continued,

“And the reason I’m saying this to you is that simply because there is no protection of your assets paid for by your taxes, which were levied upon you in the first place, in the name of the public good.

And we are the public and we should have a Nono Kainga to protect to protect our public good.”

Maanu Paul then sang a new “public anthem” to the crowd. This blogger can report that  his singing is something to behold – Maanu Paul has an awesome singing voice. Firstly his song was rendered in Maori, and then for the benefit of those who don’t yet know the language (including this blogger), in English,

‘I am the water, the water is me,

Cascading down,

from Ranginui,

Enveloping all,

The environment,

I am the water,

the water is me.’

Ariana asked the crowd,  “Yes, yes, yes! A sit down at Parliament – who’s up for it?

The response was shouted from the crowd loud and in affirmation.

A new people’s action may be in the offing… Stay tuned, folks. This ain’t over – not by a long shot. Or by John Key’s lamentable imagination.

A new chapter is unfolding.

Continued and concluded at:

Wellingtonians rally to send a message to the Beehive! (part toru)

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Additional

TV3: Asset sales referendum likely (6 Feb 2013)

TV3: Govt under fire over Contact redundancies (14 Feb 2013)

NBR: Supreme Court to ignore govt deadline on water rights decision (15 Feb 2013)

Youtube: Say No to Asset sales in Aotearoa NZ.mov

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  •     Use must be for non-commercial purposes.
  •     At all times, images must be used only in context, and not to denigrate individuals.
  •     Acknowledgement of source is requested.

Relevant orgs

It’s Our Future

Keep our Assets

Aotearoa is not for Sale

Aotearoa is Not for Sale | Facebook

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= fs =

Wellingtonians rally to send a message to the Beehive! (part tahi)

17 February 2013 6 comments

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SOEs

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NZ, Wellington, 13 February 2013 – Set against an overcast early evening sky, and a chilly southerly, several hundred Wellingtonians of all ages, races, political affiliations, and backgrounds came together at Frank Kitts Park, on Wellington’s waterfront,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Their common unity of purpose was to oppose the partial sale of state-owned assets,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Electricity-dustry expert, Molly Melhuish, with others from DEUN (Domestic Electricity Users Network). Ms Melhuish (center, holding white clipboard)  is  intimately familiar with the working of the electricity industry in this country and was a key member in   campaigns to oppose electricity privatisation in the 1990s – including Wellington’s Capital Power.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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The messages were simple, and to the point. From Labour,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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… to the Mana Party,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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The message for National  was clear – what’s ours is ours,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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This Wellingtonian understood the folly and false-economy of selling state assets which are money-making cash-cows. Right wing politicians know this – but their zealous obedience to neo-liberal dogma seems to over-ride any semblance of common-sense,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Many in the crowd were of an age to recall the sale of Telecom – something that was resisted by 93% of New Zealanders,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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Interestingly, at least one right-wing politician has belatedly realised that selling state assets was a mistake – see: Bolger: Telecom sale a mistake

Dedicated ANFS activist, Frances, had a very simple question for Dear Leader,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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ANFS activist, Athena, handing out leaflets to people in the crowd and discussing issues with them,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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With media filming the event, ANFS co-convenor, Ariana, opened the Rally with a welcome to the crowd and  an introduction of the speakers who had been invited to address the rally, with their thoughts on the sale of state assets,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

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The speakers came from a variety of backgrounds, and each gave their perspective on the issue of selling the people’s assets.

To be continued:

Wellingtonians rally to send a message to the Beehive! (part rua)

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Additional

TV3: Asset sales referendum likely (6 Feb 2013)

TV3: Govt under fire over Contact redundancies (14 Feb 2013)

NBR: Supreme Court to ignore govt deadline on water rights decision (15 Feb 2013)

Youtube: Say No to Asset sales in Aotearoa NZ.mov

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  •     Use must be for non-commercial purposes.
  •     At all times, images must be used only in context, and not to denigrate individuals.
  •     Acknowledgement of source is requested.

Relevant orgs

It’s Our Future

Keep our Assets

Aotearoa is not for Sale

Aotearoa is Not for Sale | Facebook

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= fs =

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