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Posts Tagged ‘National’

National’s fund-raising at Antoine’s – was GST paid?

17 March 2014 5 comments

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Key not talking about fundraising dinner

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On TV3’s The Nation, Key steadfastly refused to make public  the names of donors to various fund-raising events (or pay back) at Antoine’s restaurant in Parnell, Auckland.

Instead of using a Trust, where the names of donors are kept hidden, in this case Antoine’s Restaurant – whose owner is a well-known National Party supporter, Tony Astle – was the “bag man” who took the money; banked it; and then passed it on to the National Party as a donation. These donations were recorded with the Electoral Commission for 2010*and 2011*.

However – and here’s an interesting questing question that few (if any) have asked; was GST paid  by Mr Astle on any of the monies ($60,000 and $105,000) received in payment for the meals?

A donation made directly to a political Party does not incur GST. But  Inland Revenue (IRD) is quite clear of what constitutes a donation;

A donation is an unconditional gift only if the giver receives nothing in return.

But these monies were received from people attending the dinner and who paid for their meals accordingly. They received a ‘goods’ and ‘service’ in return for payment.

It is no longer an “unconditional gift”.

So those meals should have incurred GST.

(What Mr Astle then does with those monies, excluding GST,  is his business, and he subsequently gifted it to the National Party as a donation.)

Accordingly, I have made an inquiry with Inland Revenue on this matter;

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Inland Revenue - Te Tari Taake.

Information about a business

Business or trade name: Antoine’s Restaurant
Business IRD/GST number: Not provided
Address – business: Street: 333 Parnell Road
Suburb, city or town: Parnell, Auckland
Phone number: (09) 379 8756
Mobile number: Not provided
Description of the business: restaurant
Provide your detailed information:

Kia ora Mr Taxman, It has recently been revealed in the media that Antoine’s Restaurant in Parnell, Auckland, hosted a series of fund-raising dinners on behalf of the National Party.

One dinner event, in 2010, was attended by 21 people, where each person paid $5,000 to participate in the meal. The restaurant collected $105,000 from attendees.

Another event, in 2010, a sum of $60,000 was paid to the restaurant for a similar event. Considering that the monies paid was for a meal; paid to Antoine’s directly; this appears to have been a good and service provided to paying members of the public.

Was GST paid on these transactions?

Regards,

-Frank Macskasy

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You’ve successfully submitted your information.

Your information was received on Sunday, 9 March 2014 2:24:30 PM NZDT. This form is now completed.

Your reference number is: 208194.

It remains to be seen if Mr Astle paid GST on payments received for those meals. If 21 people paid $5,000 each, that comes to $105,000.

GST on that sum (in 2010), at 12.5%, would have amounted to $13,125.

Yet, the Donations Return for 2010 clearly shows that the full amount of $105,000 was transferred from Antoine’s/Astle to the National Party. No deduction has been made for GST.

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* Interesting Note:

The 2011 Party Donations Return for National also includes two payment by Oravida;

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Antoines Oravida donations 2011

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This is the same Oravida that National Minister, Judith Collins, recently visited in China – and of which her husband is a Director. Other donors on this Return also have links to Oravida.

The 2010 National_Party_donations Return also included a donation by one, Susan Chou, who is also connected to Oravida,

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Susan Chou donation 2010

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When it comes to ‘tricky’ – National excels with undisputed mastery of Big Time Tricky.

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References

TV3: Key not talking about fundraising dinner

NBR:  Key under fire for Antoine’s donations

Electoral Commission:  New Zealand National Party donations 2011.pdf

Electoral Commission: National_Party_donations_2010.pdf

IRD: Business income tax

TVNZ:  Judith Collins defiant amid claims of conflict of interest

Previous related blogposts

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Other blogs

No Right Turn:  “Out of the blue”

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John Key - merril lynch

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 10 March 2014.

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If this isn’t corrupt – what the f**k is?!

7 August 2013 3 comments

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Peters slams National's house buy

Source: Fairfax media – Peters slams National’s house buy

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The National Government selling a  state-owned property to itself?!

This is the kind of practice  that is best synonymous with Third World or ex Soviet republics, where corruption is rampant.

Now we are witnessing  corruption by National ministers, Party officials, and their equally culpable apparatchiks.

Who would have thought that we would see this kind of thing here in New Zealand? And how do National Party members and supporters justify this kind of corrupt behaviour?

Perhaps it is time for Transparency International – the global corruption monitoring organisation – to reconsider our rating.

A message to Mr Peters;

Post the 2014 election, if you hold the balance of power, will you align yourself with a self-serving, discredited Party that has no compunction to act corruptly?

Will you cosy up to a Party that has engaged in unpopular legislation; ignoring public opinion; attacked critics; extended State surveillance power; and is now stealing public property for their own purposes?

Do you want yourself and your Party associated with this kind of corruption?

You have some deep thinking to do after next year’s election.  Choose wisely.

 

 

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Booze-ups, brain-fades, and bullying

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Apology over MP's flare-up in restaurant

Acknowledgment: Fairfax Media – Apology over MP’s flare-up in restaurant

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Hmmm, another brain-fade from a National MP?

As if a bit of booze-fuelled bullying wasn’t enough, Mr Gilmore seems to have been afflicted with the Key Brainfade Syndrome. If I was the Diplomatic Protection Squad, I’d be checking the water-jugs in National’s caucus room. There must be  something in their water-suppy.

I shared my views with Fairfax’s The Press, in Christchurch,

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from:     Frank M <fmacskasy@gmail.com>
to:     The Press <letters@press.co.nz>
date:     Thu, May 2, 2013 at 12:21 PM
subject:     Letter to The Editor

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The Editor
THE PRESS
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Aaron Gilmore’s booze-fueled bullying and subsequent brainfade at a Hanmer Springs hotel  is typical  National’s attitude  toward working people.

It’s not surprising Gilmore acted so atrociously – National’s culture of anti-worker disdain has been evident since 2008.

Current plans to undermine collective agreements by allowing employers to negotiate in bad faith, then walk away, is pure National policy. Returning to youth rates (which only displaces older workers) is another example.

None of this will increase wages, or create new jobs, as John Key promised;

“We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key,  8 February 2011

As Bill English admitted on TVNZ’s Q+A, National welcomes falling wages;

Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.” – 10 April 2011

Gilmore may’ve apologised for his crude behaviour, but National continues to bully and  abuse workers through it’s pro Big Business policies. Time for  Key to apologise and abandon it’s rightwing agenda.

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-Frank Macskasy

(phone number & address supplied)

Note to Mr Gilmore:  don’t ever call yourself a “man of the people”.

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Additional

Facebook: Helen Kelly – Discussion Thread

References

TVNZ: Q+A – Guyon Espiner interviews Bill English – transcript

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Doing ‘the business’ with John Key – Here’s How (Part # Rua)

25 April 2013 19 comments

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Continued from:  Doing ‘the business’ with John Key – Here’s How

Once upon a time, at the bottom of the world, there was a small country that prided itself on being a fair, open, and uncorrupted society.

I’m no longer sure about the last bit.

Last year, Transparency International ranked New Zealand as the #1 least corrupt nation on Earth. We ranked above Denmark (#2), Finland (#3), Sweden  (#4), Singapore (#5),  and  Norway (#6).

I’m no longer certain we deserve that top ranking, either.

The further that the Sky City/Convention Centre and Crafar farm deals are  scrutinised – the stronger the odour of something unpleasant fills our nostrils.

To recap, let’s start with the Crafar farms deal with Shanghai Pengxin.

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Tahi: Crafar Farms/Shanghai Pengxin/National Government

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The timetime of the Crafar deal runs something like this,

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd to buy Crafar Farms.

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

15 February 2012:  High Court delays sale of Crafar farms to Shanghai Pengxin.

20 April 2012:  Government ministers , Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman  approve the Overseas’ Investment Office’s (OIO) new recommendation to allow the sale of the 16 Crafar farms to Shanghai Pengxin.

At least, that is the version for public consumption.

Recent revelations indicate that much more was taking place behind the scenes. If we take that timeline and add the revelations that have come out in the last few months, the picture takes on a murkiness and a hint on something decidedly shady,

5 October 2009: Crafar Farms placed into receivership, owing $216 million to creditors.

2 December 2009: KIWI DAIRY CORPORATION LIMITED registered. (Then changes to ORAVIE LIMITED, 20 December 2010. Then changes to ORAVIDA LTD, 20 January 2011. Then changes to ORAVIDA NZ LIMITED, 13 May 2011. ) Shareholders: Jing Huang, Julia Jiyan Xu, and Deyi Shi.  (Source)

11 June 2010:  National Party receives $50,000.00 donation from Susan Chou. (Source)

30 July 2010:  National Party receives $150,000 donation from Susan Chou. (Source)

18 November 2010: MILK NEW ZEALAND CORPORATION LIMITED* registered. Directors: Terry Lee and Jiang Zhaobai. (Source)

22 December 2010: Government  blocks  bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.

27 January 2011: KordaMentha accepts offer from Shanghai Pengxin International Group Ltd  to buy Crafar Farms.

31 May 2011: National Party receives $100,000 donation from Susan Chou. (Source)

22 July 2011:  ORAVIDA LTD registered. Shareholders: Jing Huang, Julia Jiyan Xu, and Deyi Shi. (Source)

27 July 2011:  ORAVIDA PROPERTY LTD changes name to  KIWI DAIRY INDUSTRY LTD.  Shareholder: Deyi Shi (Source)

13 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.

26 September 2011: Crafar farms receiver KordaMentha  rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.

22 November 2011: National Party receives $50,0000 donation from Citi Financial Group. Shareholders: Yan Yang and Qiang Wei. (Source) (Source)

22 November 2011: National Party receives $1,600 from Oravida NZ. (Source) (Source)

26 November 2011:  NZ General Election

30 November 2011: National Party receives further $55,000 donation  from Oravida NZ. (Source) (Source)

27 January 2012: Government ministers approve Shanghai Pengxin’s application to purchase 16 Crafar farms.

15 February 2012:  High Court delays sale of Crafar farms to Shanghai Pengxin.

20 April 2012:  Government ministers , Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman  approve the Overseas’ Investment Office’s (OIO) new recommendation to allow the sale of the 16 Crafar farms to Shanghai Pengxin.

*   “Milk New Zealand Holding Limited”  is the official applicant and purchaser of the 16 Crafar farms. It is supposedly a subsidiary of Shanghai Pengxin,

” Applicant

3. The Applicant is Milk New Zealand Holding Limited (“the Applicant”), a Hong Kong incorporated company which is an overseas person under the Act.

4. The Applicant will register as an overseas company under the New Zealand Companies Act 1993 prior to acquiring the Investment. The Applicant does not have any current interests in New Zealand as at the date of this Application.1

1 The 99% ultimate owner of the Applicant, Zhaobai Jiang, has a [redacted]% interest in a company ([redacted*])that has applied for consent to acquire development land at [redacted] . No decision has yet been made on this application.” – Source

(*Note: Despite OIO redacting the second company, this blogger has  found that it is actually “NATURE PURE LIMITED“.  Terry Lee and Zhaobai Jiang are both listed as Directors.)

Despite numerous company name changes; newly registered companies; and a lengthy trail of shareholders, the one link that does stand out between Shanghai Pengxin and financial donations to the National Party is Terry Lee.

Mr Lee, along with Deyi Shi and  Xing Hong, registered KIWI DAIRY CORPORATION LIMITED on 2 December 2009, which, after several name changes, ended up as ORAVIDA NZ LIMITED  on 13 May 2011. Xing Hong was also a one time Director of ORAVIDA NZ LIMITED and ORAVIDA PROPERTY LIMITED.

Deyi Shi is still a current Director of both  ORAVIDA NZ LIMITED and ORAVIDA PROPERTY LIMITED.

On 22 and 30 November, 2011, the National Government received donations totalling $56,600 from Oravida NZ Ltd.

A further $300,000 was donated to National by Auckland businesswoman, Susan Chou, who, through her husband Zhaowu Shen, had a connection with Jack Chen and NZ Natural Dairy Ltd – the first unsuccessful attempt by Chinese investors to gain control of the Crafar farms.

Two months later, on 27 January 2012, National approved the sale of 16 Crafar farms to Shanghai Pengxin subsidiary, Milk New Zealand Holding Limited.

Readers are invited to draw their own conclusions from the facts presented.

Continued at:   Doing ‘the business’ with John Key – Here’s How (Part # Toru)

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Sources & References

OIO:  Decision required under the Overseas Investment Act 2005: Milk New Zealand
Holding Limited

CAFCA:  December 2010 decisions

NZ Companies Office

Elections NZ: Returns of party donations exceeding $30,000

Elections NZ: Returns of party donations exceeding $20,000

Interest.co.nz: Govt Ministers rubber stamp Overseas Investment Office approval of Shanghai Pengxin’s Crafar farms bid

Acknowledgements

Adam Bennett, NZ Herald: Chinese cash flows to Nats

Adam Bennett, NZ Herald: China link to Nats’ $200,000

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First blogged 28 April 2012

When is ‘Nanny State’ not a ‘Nanny State’?

6 April 2013 4 comments

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… when National does it.

From one day ago,

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Young people banned from sunbeds

Acknowledgement: Dominion Post – Young people banned from sunbeds

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But when the previous Labour government attempted to improve the health of our children, National condemned it as,

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'Nanny state' fears on health bill

Acknowledgement: Dominion Post – ‘Nanny state’ fears on health bill

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When the previous Labour government tried to conserve energy use, National condemned it as,

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Showers latest target of Labour’s nanny state

Acknowledgement: Scoop – Showers latest target of Labour’s nanny state

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Evidently it’s ok for National to pass laws controlling a legal (if somewhat unhealthy and dangerous) activity. The Nats are attempting to ban a group of young people from engaging in activity that  older New Zealanders are still allowed to do.

But not for the previous Labour government when they wanted to replace unhealthy food with healthy food in school cafetarias/tuck shops.

In fact, when National took office in November 2008, they reversed the healthy foods policy in schools,

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Schools' healthy food rule scrapped

Acknowledgement: Fairfax Media – Schools’ healthy food rule scrapped

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According to Ms Tolley – National’s Education Minister at the time – it was “up to parents and students to make decisions about healthy food”.

The Nats couldn’t wait to allow fatty, sugary, salty, artery-clogging, diabetes-inducing, garbage back into schools for our young children to consume. And shorten their life-spans by several decades, no doubt.

That was ok. No “nanny state” here, folks – junk food was given the Big Tory Tick.

But not sun beds.

Apparently, Associate Health Minister Jo Goodhew and her National colleague, MP Paul Hutchison, don’t mind putting on a “Nanny” frock and instructing under-18s that cooking themselves with UV radiation has been banned by Big Government.

I wonder if when this Bill comes before the House for it’s three readings, that Labour and Green  MPs sitting opposite Ms Goodhew and Mr Hutchison will be quieting chanting…

“Nanny state… nanny state… nanny state… nanny state… nanny state… nanny state… nanny state… nanny state… “

Gowan. Do it.

You know you want to.

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Two polls, two governments

21 March 2013 6 comments

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polls_ist2_141437_arrow_graph_down_rev_2249_704752_poll_xlarge

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Two  polls out recently give completely different outcomes if an election had been held over the last week or so.

One, the Roy Morgan poll would result in a change of government – whilst the Herald Digi Poll would (without overhangs) allow National to almost govern on it’s own. The results,

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Roy Morgan Poll

Herald Digi-poll

National

43.5% (-4%)

48.5% (+1%)

Labour

32.5% (+2%)

36.4% (+4.4%)

Greens

13.5% (+1%)

9% (-1.7%)

NZ First

5% (+2%)

2.5% (-3%)

ACT

0.5% (n/c)

0.1% (-0.1%)

Mana

0.0% (-0.5%)

0.5% (+0.2%)

Maori Party

2% (-0.5%)

1.1% (-0.4%)

United Future

0.5% (n/c)

0.0% (-0.3%)

Conservative Party

2% (n/c)

1.3% (-0.1%)

Undecideds/Wouldn’t Say

5%

11%

(n/c = No Change)

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Two polls, two outcomes, two governments. So which is more accurate?

In a previous blogpost (see:  Three recent polls), a comparison was made between Roy Morgan, Colmar Brunton, and Ipson Poll. Of the three, Roy Morgan was closest to actual election day results in 2011.

So let’s compare Roy Morgan; the DigiPoll, and Election Day results,

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Roy Morgan

24 Nov 2011

Digi Poll

25 Nov 2011

2011

Election results

Closest Polling result

Right bloc:

National

49.5%

50.9%

47.31%

Roy Morgan

Maori Party

1%

0.4%

1.43%

Roy Morgan

ACT NZ

1.5%

1.08%

1.07%

Digi Poll

United Future

0.5%

0.0%

0.6%

Roy Morgan

Left bloc:

Labour

23.5%

28%

27.48%

Digi Poll

Greens

14.5%

11.8%

11.06%

Digi Poll

Mana Party

0.5%

0.3%

1.08%

Roy Morgan
Other:

NZ First

6.5%

5.2%

6.59%

Roy Morgan

Conservative Party

n/r

1.3%

2.65%

Digi Poll

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Roy Morgan was slightly more accurate than the Heral Digi Poll.

Interestingly, Roy Morgan seems to be the most accurate pollster when it comes to National, beating Herald DigiPoll, Colmar Brunton, and Ipsos.

Equally important to  Roy Morgan’s polling for preferred Party, is  polling for Satisfaction/Dissatisfaction for the government of the day – in this case, National.

Roy Morgan asks respondants,

“Generally speaking, do you feel that things in New Zealand are heading in the right direction or would you say things are seriously heading in the wrong direction?”

The results seem to back up National’s fall in preferred Party stats,

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New Zealand Roy Morgan Government Confidence Rating (Government of John Key): Interviewing Dates
 

Jan 30-Feb 12,

2012

(post election)

Jan 2-13,

2013

Jan 14-27,

2013

Jan 28-Feb 10,

2013

Feb 11-24,

2013

Feb 25-Mar 10,
2013

Right direction

57%

53.5%

57%

55%

54%

51.5%

Wrong direction

30 %

33.5%

30.5%

30.5%

32.5%

37.5%

Roy Morgan GCR#

127

120

126.5

124.5

121.5

114

Can’t say

13%

13%

12.5%

14.5%

13.5%

11%

TOTAL

100%

100%

100%

100%

100%

100%

#Roy Morgan GCR = Roy Morgan Government Confidence Rating (The Roy Morgan GCR is 100 plus the difference between the percentage of New Zealanders who say the country is “heading in the right direction” and the percentage who say the country is “seriously heading in the wrong direction”).

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Acknowledgement: Roy Morgan Poll

Soon after the 2011 election, National rated highly with respondants, with 57% approval. Since then, except for a ‘blip’ at the beginning of the year, National’s approval rating has dropped from 57% to 51.5%.

Conversely, those expressing a view that National was headed in the wrong direction, rose from 30% soon after the 2011 election to 37.5%.

Those who Couldn’t/Wouldn’t say have dropped from 13% to 11% – meaning that people’s views on National are  firming up – and becoming more pissed off.

Once Mighty River Power is part-privatised, expect to see National’s support  plummet even further.

As this blogger has been predicting consistently; we will see a change of government in 2014 (if not earlier).

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Previous related blogpost

Census, Surveys, and Cellphones

Three recent polls

References

Final poll: Nats win looks certain, Winston over 5% (25 Nov 2011)

Roy Morgan Poll  (18 March 2013)

Labour rises at expense of allies  (21 March 2013)

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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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