Home > The Body Politic > Investing in someone elses’ future

Investing in someone elses’ future

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Mandates

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Firstly, let’s cut to the chase and address John Key’s assumption that he has a ‘mandate’ from the country to pursue many of his Party’s unpopular policies, including state asset sales.

No, he does not.

As Bryce Edwards said on Radio NZ last year,

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Full Story

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As reported in the NZ Herald,

Moreover, only an estimated 93.2 per cent of the 3,276,000 people who were eligible to vote were enrolled, so the 2,254,581 people who did cast their votes (including special votes) leaves just over 1 million who stayed at home. “

See: 1 million didn’t bother to vote

So doing a bit of simple arithmetic,

  1. 2,254,581 people voted
  2. 1,058,636 voted National
  3. The population of New Zealand is approximated 4,430,000
  4. 1,058,636 is about 24.5% of the entire population.
  5. John Key’s “mandate” is roughly one quarter of  the country’s population.

The Nats can dress that  up any which way they like, but that’s not a mandate. That is  a minority in drag, masquerading as a “majority”.

But still a minority.

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National Conference

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Let’s cut to the next ‘chase’.

The recent National Party Conference in Skycity had nothing to do with conferencing or  the Party’s internal workings. It was purely and simply a public relations exercise  to raise “troop” morale and present National in a positive light to the public.

It was about appearing decisive and on-message. It was about strong leadership and confidence, reminiscent of Rob Muldoon, and Dear Leader played his part perfectly as he gave the rallying cry to his fellow MPs and Ministers.

Key thundered,

Our policy of partial share sales is a win-win and I stand totally behind it.”

See: Labour, Greens hit out at asset share plans

After months of various scandals, resignations, disastrous flip-flops, and gaffes, the Party pulled out it’s “ace-in-the-hole” – John Key. “The Boss” laid down the law, and as Tracey Watkins from Fairfax said,

No more tip-toeing around. That is the clear message from National’s annual conference, where the Government’s economic programme has been invested with a new sense of urgency.”

See: Damp protest shows heat gone from asset sales fire

Ms Watkins tends to present political issues  from a position favourable to National  and her piece on 23 July was no exception. But she also had a valid point – National was fighting back. They were on a counter-offensive on several fronts.

But as the dust settled, and the “whizz-bang-gosh!” factor faded, the public’s  momentary distraction returned to the issues and problems currently confronting us as a nation.

As much as Dear Leader might wish it, those issues and problems will not go away.

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State Asset Sales

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National is desperate to sell this lemon to the public as a going concern. Indeed, the issue was presented as one of several issues on a leaflet/questionnaire that the Parliamentary wing of the Party mailed out,

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The Nats are sensitive to recent public protests and an ‘insider’ advises this blogger that Ministers are tracking correspondence; internal polling; and letters-to-editors on the subject.

In an effort to “sweeten” the deal and to assuage public opposition, National is offering,

  • preference to “mum and dad” investors
  • a three year loyalty share-bonus scheme
  • a minimum of $1,000 dollar share parcels
  • a guarantee of shares to New Zealand investors wanting parcels of up to $2,000
  • Treasury setting up a retail syndicate of share brokers and banks to help first time share investors potential investors.

See: Kiwis encouraged to take up SOE shares

National’s “carrot” is matched by it’s “stick”.  As Bill English threatened in June last year,

We are saying that New Zealanders are at the front of the queue, but if not enough of them show up, it won’t be 49 per cent. I wouldn’t want to exactly guarantee every share but we have got to look at how to make that happen.”

See: ‘Buy state-asset shares or foreigners will’

So the message is crystal-clear; ‘If  we don’t buy these assets (which we already  own),  John Key and Bill English will sell our companies to overseas interests’. It’s like watching a rather bad, cheaply-made, B-grade gangster movie from the 1940s.

But the ‘rort’ doesn’t end there.  Treasury estimates that any loyalty scheme will end up costing taxpayers up to half a billion dollars. That’s because giving away free shares as a “loyalty bonus” still incurs a cost – nothing is for free,

A “loyalty” scheme to sweeten state assets sales for investors could cost the taxpayer $500 million – more than $100 for every man, woman and child in New Zealand – according to Treasury numbers.

[abridged]

In a report to the Cabinet last year, the Treasury said incentives to encourage local investors to buy shares “typically range from 5 to 10 per cent of total value ($250 million to $500 million based on a $5 billion programme)”.

The Government says it expects to raise $5 billion to $7 billion via the sales programme.

Based on the Treasury’s $500 million upper estimate of the cost of a loyalty scheme, the forgone revenue works out to just under $113 for every man, woman and child here.

See: $112 a head for asset loyalty

Labour Leader, David Shearer summed it up thusly,

Effectively, the taxpayer will be paying for a loyalty scheme that a small number of New Zealanders who can afford to buy shares will be able to enjoy. It’s clear there’s some real winners here, and the losers are most New Zealanders. “

Based on the Queensland experience where Queensland Rail was privatised in 2010;  where  a share-bonus loyalty scheme of 1:15 shares was used; the cost to Queensland taxpayers would be $360 million, according to our  Parliamentary Finance & Expenditure committee. To which Key was reported as saying, that the figure was,

“… a possible number. I haven’t seen their workings so I wouldn’t want to agree with that at this point.”

Key’s comments were reported on the NZ Herald website at 5:30am, Tuesday 24 July, 2012.

By mid-day, on the 24th, he had changed his views from ” a possible number  “, to,

These numbers that the Labour Party are coming up with and the Greens are farcical.”

See: PM: Asset loyalty won’t cost hundreds of millions

First point: that report on the Herald’s website was posted at 12:18pm on the same day;  Tuesday 24 July, 2012.  Not quite seven hours had passed before National’s spin-doctors had noticed Key’s blunder, and Dear Leader changed his stance.

Second point: the figures were not from the Labour Party, nor The Greens. They were Treasury’s figures.

Was this a deliberate attempt to undermine the credibility of those figures by shifting it’s provenance from Treasury to opposition parties?

Key then made this extraordinary comment,

If you think about the entire float that could be in the order of $5 billion to $7 billion. Let’s argue that it’s $5 billion for a moment if you then turned around and said about 20 per cent of that could be for mum and dad, it could be more it could be less – but just for the purposes of maths that’s a billion. If you apply the Australian Queensland model that’s one in fifteen shares – that’s 6 per cent. Six per cent of a billion is $60 million for the entire programme.”

20 per cent “?!?!

What happened to the 49% that Key and English have allocated to “mum and dad” investors,

Counting the Government’s controlling shareholding, we’re confident 85-90 per cent of these companies will be owned by New Zealanders, who will be at the front of the queue for shares.”

See: Running up $5-$7b more debt not the answer

Was this an unintended slip from Key that National is counting on only 20% of shares going to New Zealanders?

And did he think that no one would notice?

Acknowledgement:  Cheer up Mr Key – Fairfax still love you

This is disengenuous of Dear Leader. On the one hand, National is claiming that 49% of shares will be allocated to local “mum and dad” investors – and on the other, they are calculating a bonus-share loyalty scheme on a figure of 20%. Key is shuffling figures around and quoting them to suit daily events.

This is not the first time Key and English have done this.

In January last year, when John Key announced National’s policy to part-privatise five state assets, he stated,

If we could do that with those five entities … if we can make some savings in terms of what were looking at in the budget and maybe a little on the upside you’re talking about somewhere in the order of $7 to $10 billion less borrowing that the Government could undertake.”

See: John Key reveals plan for asset sales

The figure of $7 billion to $10 billion proceeds from a partial asset-sale then shrank,

First, the Government gets to free up $5 billion to $7 billion – less than 3 per cent of its total assets – to invest in other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets.”

See: Running up $5-$7b more debt not the answer

And finally, English confessed all,

If we did get $6 billion, that would be a gain of sale [of $800 million] which is just a product of the accounting. I just want to emphasise that it is not our best guess; it’s just a guess. It’s just to put some numbers in that look like they might be roughly right for forecasting purposes...”

See: English admits his SOE figures just a guess

Key did precisely the same thing over the Skycity-convention centre-pokie machine contra-deal.

He advised the country that building a new convention centre (in return for changing the law to allow up to 500 additional pokie machines for Skycity), would result in up to 1,900 new jobs in Auckland,

It produces 1000 jobs to build a convention centre, about 900 jobs to run it, and overall the number of pokie machines will be falling although at a slightly lower rate.

See: Key defends casino pokie machine deal

Key’s figures turned out to be rubbish.  The true numbers were disclosed last month by Horwath Ltd director,  Stephen Hamilton,

Horwath director Stephen Hamilton said he was concerned over reports the convention centre would employ 800 staff – a fulltime-equivalent total of 500.

He said the feasibility study put the number of people who would be hired at between 318 and 479. “

See: Puzzle of Key’s extra casino jobs

Key  had either made them them up out of thin air, or else he has some very poor advisors.

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Frustrated – Where to from here?

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And lastly, the sheer economics of the partial asset-sales cannot be  commercially sustained, as  BERL reported in May of this year,

The interim loss of earnings resulting from reduced dividends and the period of time before the new assets reap benefits is never recouped.

”Subsequently, the option of asset sales can only significantly improve the Government’s accounts if a set of assumptions are adopted that are at the extreme ends of plausibility.”

‘While the initial offering may be directed towards domestic purchasers, future private share transactions could increase the portion of shares [and earnings] in overseas investors hands.

”Such an outcome would lead to a further deterioration in the external deficit and external debt position.”

See: Asset sales will leave Govt worse off

Unbelievable.

Unbelievable that a number of New Zealanders still believe that National is a sound manager of the economy. These muppets couldn’t run a corner Dairy – they simply wouldn’t have a clue how much to charge for a packet of chippies.

No wonder Labour Leader David Shearer expressed his frustration at Dodgy John’s slippery numbers, when he said,

We absolutely have no idea how much this loyalty scheme is going to cost New Zealanders. He was happy to go out and announce the loyalty scheme at the National Party conference but he’s not prepared to come out with the numbers now.”

See: PM: Asset loyalty won’t cost hundreds of millions

Either way, National is keeping information on asset sales secret – or they have no idea what’s going on. Conspiracy or cock-up – neither option is particularly reassuring.

The ground keeps shifting, and this blogger believes it is a deliberate ploy to deny information to sales-critics and the public. Without solid information, it becomes harder to mount a sound critique of National’s plans – though BERL has done a fairly reasonable job of it.

Accordingly,  this blogger invites “mum and dad” investors to exercise caution as shares are made available to the public,

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Full story

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A Possible Solution?

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As BERL stated in their report, selling state assets will eventually impact on the government’s balance sheet. Quite simply, any short-term gain through sales proceeds will  eventually be whittled away by reduced dividends from half of these state assets sold into private ownership,

The interim loss of earnings resulting from reduced dividends and the period of time before the new assets reap benefits is never recouped. “

Plain english: we will  lose money on the deal.

Selling any of these State assets defies understanding.

As Treasury stated last year, the revenue stream is quite significant according to their own SOE Economic Analysis  that, “…on average, the SOEs have performed favourably when compared to the averages for the quartiles computed for the benchmark companies“.

See: Treasury SOE Economic Profit Analysis 25 November 2011

On average, Treasury show a 14.5% average shareholder (Government) return. Compare that to other investments, and it’s a fairly remarkable achievement for state enterprises which – according to free marketeers – are not supposed to operate more effectively than private enterprise.

See: Assets returning record dividends – Greens

In a further,  surprising turn of events, in February 2001, Finance Minister Bill English agreed, stating,

Generally the SOE model has been quite successful in that respect.”

And even  went so far as to complain that they were making excessive profits! (There’s no satisfying the National Party!? They sell under-performing state assets, explaining that the “market will improve their performance” – and then complain when state assets are making too much money! Then the Nats will flog them off to reduce returns and make them more “competitive”.)

See: State-owned power returns excessive, says English

By contrast, Contact Energy – an electricity corporation privatised in 1999, and now mostly Australian-owned – retails it’s electricity at a higher price than it’s competing, state-owned rivals.

See: 226,000 shop for power savings

National has stated several reason for wanting to sell 49% of Meridian, Genesis, Might River Power, Solid Energy, and further down-sell Air New Zealand – but their   main, carefully-worded, rationale has been to “reduce debt/invest in new assets/infrastructure”,  according to Bill English,

We are firmly focused on keeping the Government’s overall debt as low as possible and that is the most important consideration over the next few years.”

See: Govt says asset sales will cut debt

If  National is planning on extracting $6 to $7 billion from most New Zealanders’ pockets, then they are dreaming. A small minority (the 1%, as usual) might have the resources – but even they, I suspect would have to off-load their own assets to buy into the five offered SOEs.

It is more than likely that, like Contact Energy, the majority of new shareholders will be corporate and/or offshore  investors.  New Zealanders simply don’t have the savings to buy their own energy comnpanies and airline.

If National wants to realise $6 to $7 billion  from partial-privatisation and is serious in not wanting major foreign ownership, then it has only one other option: the NZ Superannuation Fund.

Selling half of five state assets to the NZ Super Fund would achieve several desired goals,

  1. Keep state assets in New Zealand ownership
  2. Prevent an outflow of profits to offshore investors, which would worsen our current account deficit
  3. Satisfy Maori that water resources were not about to be privatised, and therefore any claims before the Waitangi Tribunal could be set aside
  4. Fulfill a government-ordered directive that the NZ Super Fund invest more heavily in New Zealand

In May 2009, Finance Minister Bill English wrote to the NZ Super Fund, instructing that,

The Government believes that is is in the national interest for the Fund to have significant interests in New Zealand. Consequently, persuant to section 64 of the New Zealand Superannuation and Retirement Income Act 2004 (the Act), I direct the Guardians to note that it is  the Government’s expectation, in relation to the Fund’s performance, that opportunities  that would enable the Guardians to increase  the allocation of New Zealand assets in the Fund should be appropriately identified and considered by the Guardians. “

See: Letter from Minister of Finance Regarding NZ Directive and Funding May 14 2009

How much does the NZ Super Fund have invested in overseas businesses?

Answer: NZ$6,459,938,145 – Nearly $6.5 billion. Possibly more  by now.

See: NZ Superannuation Fund: Full Final Equity List – 30 June 2011

How much was National expecting to gain from it’s privatisation programme? Between $6 and $7 billion dollars.

$6.5 billion happens to lie smack in-between $6 and $7 billion!

Considering that the NZ Super Fund is actually a state owned entity, selling five SOEs, whether partially or the whole damned lot, would not matter one iota. They would still be state-owned.

National has an opportunity here; they literally can have their SOE Cake, and eat it.

  • The state assets would remain state assets.
  • National would gain a guaranteed NZ$6.5 billion – no mucking around with messy share floats.
  • The revenue from the state assets would remain in New Zealand.
  • The Super Fund would have even more profitable investments in their portfolio.
  • The Super Fund will be investing in our future – not someone elses’, in another country.
  • Maori may well be satisfied that their taonga, water, was not being privatised.
  • Our current account would not be blown further into the red.
  • New Zealanders would be happy chappies, as the great majority oppose losing ownership of state assets.
  • Opposition from the Left would most likely evaporate – heck, we might even vote for you in 2014, Mr Key!!

Where is the down-side in this compromise?! Damned if I can see any.

And the strangest part in all this proposal? I may just  have saved John Key’s arse from being thrown out at the next election.

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= fs =

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  1. 5 August 2012 at 1:11 am

    Awesome, loved that one. Am thinking I’m gonna have to run it off in print and give it to some people who absolutely refuse to follow these things online… they’re still utterly, utterly convinced of the wisdom of selling, “Look, I’ve thought about the numbers, and I reckon it’s the best thing…”

    Er no my dear friends, that statement meant you categorically did NOT do the numbers….

  2. 5 August 2012 at 1:15 am

    Yup. I’ve checked the numbers and unless the NZ Super Fun’s investments have all crashed – it’s doable. And the Super Fund would probably make more money than with all their piddly little investments all over the world.

    Plus, here in NZ, it’s safer! (I left that bit out of my blogpost.)

    • Craig Coffee
      5 August 2012 at 1:15 am

      As usual Frank, a very well thought out and put together blog,…I like the idea of the super fund ‘buying’ into the SOE’s,….and if JK makes it happen, I still won’t vote for him because it’s your idea,…I’d vote for you instead. 😉

      • 5 August 2012 at 1:18 am

        Cheers for that, Craig…

        And nah, I wouldn’t be standing. My past is, as they say, is “rather colourful”…

  3. Craig Coffee
    5 August 2012 at 1:19 am

    Frank Macskasy :

    Cheers for that, Craig…

    And nah, I wouldn’t be standing. My past is, as they say, is “rather colourful”…

    And thats a good enough reason to stand,..more ‘real’ people need to be in government instead of these career politicians, who know virtually nothing about the real world.

  4. Ian Laughlin
    5 August 2012 at 1:20 am

    Thanks for the analysis. We expect that the alternatives are being forced upon the government, but we never want to see the likes of Key’s character in office again.

  5. Mick
    5 August 2012 at 1:31 am

    nice Frank …

    “So doing a bit of simple arithmetic,

    2,254,581 people voted
    1,058,636 voted National
    The population of New Zealand is approximated 4,430,000
    1,058,636 is about 24.5% of the entire population.
    John Key’s “mandate” is roughly one quarter of the country’s population.

    The Nats can dress that up any which way they like, but that’s not a mandate. That is a minority in drag, masquerading as a “majority”.

    But still a minority.”

  6. Ian Laughlin
    5 August 2012 at 1:54 am

    These numbers point out just how critical voter enrolling is for next election, and the need for it to be in full operation now!

  7. Taura
    5 August 2012 at 2:21 am

    Wouldn’t worry Frank. The clown will be long gone. He has more chance of winning a rigged chook raffle at a pub in Otara.

    • SpaceMonkey
      5 August 2012 at 10:22 am

      Yeah… coz it has to be rigged before he can win. Lessons learned on Wall St and the City of London.

    • 5 August 2012 at 10:37 am

      Taura, the entire asset sale debacle is just like a rigged chook raffle at a pub in Otara…

  8. Glenn C
    5 August 2012 at 2:39 am

    hmmm..but we already own the assets, what you propose is that the government swipes our super savings to go into the general fund yet again, NO WAY!!!!

    • Craig Coffee
      5 August 2012 at 1:29 pm

      That is a good point Glenn,,,,,he’s right there Frank, we do already own them,..we would be buying our own assets……….catch 22.

      • 5 August 2012 at 3:30 pm

        ‎@ Glenn & Craig…

        Yup, that’s correct; we do already own it. No aregument there.

        My proposal is simply an alternative to privatisation. It’s better we own it through the NZ Super Fund (which still makes it state-owned), than by investors from Beijing, Berlin, or Boston.

        I doubt if the Nats will back down on this issue – but maybe this gives them an “out” – whilst still retaining these in our ownership.

        It’s a compromise, but unless we come up with something that the Nats will accept – the alternative is losing 49% of these assets. Like most compromises, both sides give a little.

  9. 5 August 2012 at 8:33 am

    I can’t escape the feeling that the SOE’s will end up being owned by the same international banks that majority sharehold “NZ Oil & Gas” a.k.a. HSBC Citibank ASB/ANZ et al

  10. Allan Nigh
    5 August 2012 at 8:37 am

    I don’t think we need more real people in government – I think we need fewer people in government. I like the idea of sacking all of them and the bankers and starting again

    • SpaceMonkey
      5 August 2012 at 10:20 am

      Sacking’s not enough… they’d still be at large. Jail time is needed. JK, especially, should be charged with treason.

      • 5 August 2012 at 10:39 am

        As in Iceland, Space Monkey?

      • 5 August 2012 at 10:40 am

        They’ve arrested and charged their last Prime Minister and one (?) of their bankers for malfeasance…

    • Craig Coffee
      5 August 2012 at 11:46 am

      Allan, you missed the point I was making.

  11. 5 August 2012 at 11:22 am

    when you do the math as you have Frank, it seems pretty obvious to me that the mandate to sell our assets is coming from OUTSIDE New Zealand…

  12. Mark H
    5 August 2012 at 11:40 am

    Frank Macskasy :

    Cheers for that, Craig…

    And nah, I wouldn’t be standing. My past is, as they say, is “rather colourful”…

    Colourful? Bwahahahaha!

  13. 5 August 2012 at 11:43 am

    There are a lot more problems to deal with than just asset sales, Frank. You won’t save the Key arse…

  14. 5 August 2012 at 12:23 pm

    This is brilliant Frank. It makes perfect sense. This is clearly a con, and they’ve known it all along. Their cynicism, and their slavish devotion to their neo-liberal elites has cauterised their consciences, and they are close to the stage where they no longer care to hide their intentions.

    These asset sales are part of a global program, to completely asset strip the world. Spain… Greece… New Zealand is just one more target, ripe for the taking. This is about impoverishing millions of people, just because you can.

    What do you give the man who has everything? POWER. And what do the rich and powerful always want? MORE.

    Which is why I fear your fantastic piece of analysis is really only for the benefit of the converted. I’m afraid as a people, it is getting harder and harder to shock the average person. What we need to do now is focus on the direct impacts on individuals of these sales. HOW MUCH, in other words, will it cost the average Kiwi after these assets are sold? In actual dollar terms – how much will our power bills increase per year? How much will airfares, phone calls, etc. go up? What is the actual, final figure?

    I fear the only thing that will shock anyone any more are direct and personal impacts. Even LIBOR elicits a yawn from most people. Something has happened to our capacity for outrage. We find it hard to think in societal terms that translate into action. Likewise, we seem unable to project our imaginations beyond two steps of causation, to perceive consequences that are not immediate. However, I still believe people we are capable of feeling pain; the pain of having to find an extra $500 p/a to pay dividends to rich shareholders for stuff we used to actually own. Perhaps then we can start to get somewhere politically.

    Could you work up something like that? We would all be very grateful to you!

  15. 5 August 2012 at 3:01 pm

    It is pretty poor logic to invoke those who didn’t vote into your numbers, Franky-babe.

    • 5 August 2012 at 4:00 pm

      Not at all “Contrarian”. There are many many who also could not vote (as well as deciding to stay home on the day), and yet this issue affects them all.

      • 5 August 2012 at 4:08 pm

        You have no idea how any of those people would have voted. They could have all voted National, or Green, or Conservative. Therefore they cannot be included in any numeric comparison of the vote and it is extremely poor logic to try and do so.

  16. Murray O
    5 August 2012 at 3:26 pm

    I’ll be voting Mana, because I see them as closer to having some of the answers than any of the others.

  17. Strawberry Paddocks
    5 August 2012 at 4:42 pm

    “”You have no idea how any of those people would have voted””

    Funny neither do you.

    “”They could have all voted National, or Green, or Conservative.””

    Or they might not.

    “”Therefore they cannot be included in any numeric comparison of the vote and it is extremely poor logic to try and do so.””

    Actually I think he’s made a good point. This government is making decisions that affect those who can’t vote yet. It’s a shame you’re not as focused on that as you are on trivial point scoring games.

    Here’s a question for you: Do you know how many angels can dance on the head of a pin?

  18. 5 August 2012 at 5:01 pm

    “”You have no idea how any of those people would have voted””
    ‘Funny neither do you.’

    Exactly, therefore those people cannot be included in any consideration of Nationals mandate.

  19. 5 August 2012 at 6:33 pm

    TheContrarian :

    You have no idea how any of those people would have voted. They could have all voted National, or Green, or Conservative. Therefore they cannot be included in any numeric comparison of the vote and it is extremely poor logic to try and do so.

    It’s a shame that your slavishness to literal interpretations blinds you to the bigger picture, Contrarian. It most certainly is not “poor logic” on my part and perhaps if these issues had been considered in their fuller context in the late 1980s, history might’ve been a little different.

    By the way, my consideration of those who could-not/did-not vote was not a statement which way non-voters would’ve cast their votes. It was simply a statement that Key could not assume a mandate with only 24% of the population voting for him.

    Once upon a time, only landed males could vote. Those men without land, and women, could not vote.

    Would you suggest that the government of that era had a “mandate”? In your narrow, all-to-literal world-view, you might say “yes”. The rest of us would take issue with any such notion.

    In short, you are nit-picking and avoiding the issue at hand.

  20. Craig Coffee
    5 August 2012 at 6:52 pm

    Frank Macskasy :

    ‎@ Glenn & Craig…

    Yup, that’s correct; we do already own it. No aregument there.

    My proposal is simply an alternative to privatisation. It’s better we own it through the NZ Super Fund (which still makes it state-owned), than by investors from Beijing, Berlin, or Boston.

    I doubt if the Nats will back down on this issue – but maybe this gives them an “out” – whilst still retaining these in our ownership.

    It’s a compromise, but unless we come up with something that the Nats will accept – the alternative is losing 49% of these assets. Like most compromises, both sides give a little.

    I understand what your saying Frank, and it is probably the better of two evils,…

    • 5 August 2012 at 7:58 pm

      Indeed, Craig. My first preference is for no asset sales, full stop. End of story.

      But unless 50,000+ people march on Parliament in the next few weeks, the Nats are not going to be swayed. Not this time.

      And even if they do want to dump asset sales, they need some sort of face-saving device. I’m thinking my proposition could be just the ticket…

      • Craig Coffee
        5 August 2012 at 8:00 pm

        LOL,..we are not ever going to get 50000 march on anything,..we are all so preoccupied with our own insignificant lives,….only when we have the jackboot stomping on our heads will we think,..’shit maybe I should have done something’…….

  21. 5 August 2012 at 7:15 pm

    “Key could not assume a mandate with only 24% of the population voting for him.”

    So, hypothetically, if Labour had managed to pull together a win last year by cobbling together the left parties into a coalition would you also believe they couldn’t assume a mandate either? It isn’t my “slavishness to literal interpretations”. It is poor logic to include those who didn’t vote into your equation. Plain and simple.

    Mathematically and statistically it isn’t valid.

    Try harder, Frankie Love. Kisses.

    • 5 August 2012 at 7:50 pm

      “So, hypothetically, if Labour had managed to pull together a win last year by cobbling together the left parties into a coalition would you also believe they couldn’t assume a mandate either”

      Indeed so. The repeal of Section 59 could be deemed to be precisely just such an example. Even though it was the right thing to do, it could be argued that Labour had no mandate from the 85% who opposed the law change.

      I prefer a manly handshake. A hug at most.

      Kisses can come later on our second blog-date…

      And I don’t need to “try harder”. I just do it.

  22. Chris G
    5 August 2012 at 8:09 pm

    The problem is that it won’t happen or even work. Firstly the Super Fund is separate from Government and they have no influence over investment. Also by law they have to diversify their investments – including limiting the amount invested
    in company shares, in NZ and the percentage ownership of companies. Another point is that the aim of the Super Fund is to invest in companies to make a profit and grow the Fund. In this sense any decision on investing into a company must be made on a profit basis and as such would require that that company maximise profits.

    • Theodore
      6 August 2012 at 12:08 am

      If the Super Fund is separate from government but is still a state owned enterprise, then that’s even better!! It means that the politicians won’t be able to get their mitts on our state owned companies. Seems a good deal to me.

    • 6 August 2012 at 12:43 pm

      Having had a bit of a think a about this, Chris, here are some points I’ve come up with;

      “Firstly the Super Fund is separate from Government and they have no influence over investment.”

      Not quite true. The NZ Superannuation Fund (NZSF) is a government body, albeit at some arms’ length;

      “The New Zealand Superannuation Fund is governed by a separate Crown entity called the Guardians of New Zealand Superannuation. This entity is overseen by a Board selected by the Minister of Finance for their skills and experience. ”

      Source: http://www.nzsuperfund.co.nz/index.asp?pageID=2145879223


      “Also by law they have to diversify their investments – including limiting the amount invested
      in company shares, in NZ and the percentage ownership of companies. “

      Hmmm, not according to the NZSF’s own statement here,

      ” Mandate

      Our mandate is set out in the Act. It states that the Guardians must invest the Fund on a prudent, commercial basis and, in doing so, must manage and administer the Fund in a manner consistent with:

      (a) Best-practice portfolio management;
      (b) Maximising return without undue risk to the Fund as a whole; and
      (c) Avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.

      The legislation does not provide any guidance as to what the three terms mean – that is left to the Guardians to decide.”

      Source: http://www.nzsuperfund.co.nz/index.asp?pageID=2145879269

      They go on to state,

      “Each of these factors provides important context for us in deciding how to structure the Fund. However, none of the facts specify what the Fund must be invested in or how it should be allocated between different sorts of investments (e.g. equities, timber, bonds, etc). ”

      Source: http://www.nzsuperfund.co.nz/index.asp?pageID=2145879234

      “In this sense any decision on investing into a company must be made on a profit basis and as such would require that that company maximise profits.”

      That should be no problem. The energy companies already make a 14% profit – a fairly good return by anyone’s standards.

      If I have missed out anything, feel free to let me know, Chris (along with relevant links) so I can build on this issue…

      • Chris G
        6 August 2012 at 2:17 pm

        Hi Frank,

        Yes these two points are key:
        (a) Best-practice portfolio management;
        (b) Maximising return without undue risk to the Fund as a whole

        This is where diversification of investments comes in.

        Also I believe that the profit margin you are refering to is the averaged EBIT value for the companies that are up for sale. Basically this is the operating profit and not profit as a percentage of company value. In other words even with an EBIT of 14% you would not expect 14% as a return on investment.

  23. Janya L
    5 August 2012 at 8:44 pm

    Absoulutely the sort of ‘safe’ investment for the NZ Super fund. If they don’t get out of Nth hemishphere investment sooner thn later they will not have the funds to invest. Their debt buble has not yet burst – more quantitive easing by Bernacke only grows it.

  24. 5 August 2012 at 10:22 pm

    So using this logic no government has a mandate to do anything since 1996. You must be livid.
    The broader point though is that including non-voters in your calculation doesn’t make mathematical or statistical sense.

    Kisses come now, sweet heart. Fuck Colin Craig – we are consenting adults.

    • 6 August 2012 at 7:36 am

      Oh dear, now you’re being repetitive. Repetitive is boring. Be warned that I have a low tolerance threshold for tedious trolls. Bore me, and you’ll be consigned back to that dead website you call your ‘blog’.

      Now. One chance left to either entertain or enlighten me. Make it good. 😎

  25. SpaceMonkey
    5 August 2012 at 10:41 pm

    Frank Macskasy :
    They’ve arrested and charged their last Prime Minister and one (?) of their bankers for malfeasance…

    Would be a start! Problem is, we need a Governor General able to say when enough is enough.

  26. Theodore
    5 August 2012 at 11:58 pm

    TheContrarian :

    So using this logic no government has a mandate to do anything since 1996. You must be livid.
    The broader point though is that including non-voters in your calculation doesn’t make mathematical or statistical sense.

    Kisses come now, sweet heart. Fuck Colin Craig – we are consenting adults.

    Makes perfect sense to me.

    You on the other hand need to get psych-tested.

  27. 6 August 2012 at 1:51 am

    Try the neck Frank…get my drift…lol

  28. 6 August 2012 at 1:54 am

    When you get a hold of it…give it a kick from the whole of NZ…please! Yea!!!!!!

  29. 6 August 2012 at 9:06 am

    So, Frank responds with vague threats to ban and an underhand insult regarding my lack of recent blogging as if such a thing would upset me. How disappointing, Ban away, snookums.

    • Priss
      6 August 2012 at 12:24 pm

      Once you’re through hosing the floor with testosterone, Contriboy, how about addressing the issues rather than showing us how smart you are? Frank has dealt with trolls before so don’t think your anything special. Snookums. (I’d offer you kisses but I don’t know where you’ve been)

  30. Strawberry Paddocks
    6 August 2012 at 9:40 am

    TheContrarian :

    So, Frank responds with vague threats to ban and an underhand insult regarding my lack of recent blogging as if such a thing would upset me. How disappointing, Ban away, snookums.

    A bit sensitive there, Contrarian? You can dish it out but can’t take it? Oh you poor wee thing. LOL!

  31. 6 August 2012 at 10:06 am

    Frank loved your article & some really great counter points & solutions to offer which is why am Contrarian so eager to step in divert & distract from them
    .
    .. Just the other angle angle on the well worn mandate from the ‘people’ issue. Lets side step Contrarian’s point on those who did not vote,who for, and why many of them do not trust any politicians or did not bother because they still believe the spin from lamestream media.

    National alone have 59 MPs out of a possible 121. Dunne & Banks pivotal . Without Banks Asset sales vote tied 60/60.. The liability that he has now become obvious evn as key looks like he had a bad smell under his nose too ( certainly not over yet) as well as the massive fiscal lies that Key & English are still spouting regarding Asset sales figures, is beginning to squirm & stink like the massive can of worms it is to the ordinary man or woman in the street if you can engage them….And of course it is all linked as you have shown here and others are elsewhere..Follow those banking slime trails…
    We may not get 50,000 on the streets again Craig but we need to get closer to the 40,000 who deserted Contact Energy’s customer base & make Mighty River Power’s float SINK & quickly with the very helpful Iwi led delays..please can you help?

    Contrarian by the way you really are such a silly Shill , Snookums? Good grief?

  32. 6 August 2012 at 11:46 am

    Indeed, Jacquelyne. An interesting point regarding mandates is this chart of votes; https://fmacskasy.wordpress.com/mandates-majorities/

    National/ACT/United Future: 1,095,968 votes

    Labour, Greens, Mana, NZ first, Conservative Party, Maori Party: 1,125,240 votes

    It’s the Conservative Party that make the big difference.

    Why did I include their votes? After all, the Conservative Party have no seats in Parliament.

    Because the CP won 59,237 votes. But no seats.

    ACT won 23,889. They got one seat.

    The reason ACT has representation and CP doesn’t is because of the One Electoral Seat threshold, where a Party might not pass the 5% Party Vote Threshold, but if they win an ELECTORAL seat, that 5% barrier is dispensed with.

    The same happened to NZ First in 2008: NZ First got more votes than ACT – but only ACT got representation, because Rodnet Hide won Epsom.. NZ First missed the 5% threshold plus did not win any seats.

    (The Electoral Commission is looking into this One Seat Electoral Threshold, and hopefullt will recommend to Parliament that it be stricken from MMP’s rules. It is a bizarre situation.)

    So looking at the votes, National still doesn’t have a true mandate. ACT is only in Parliament by a quirk of MMP’s rules.

  33. 12 August 2012 at 7:04 pm

    I like the idea, Frank. But what’s to stop the Super Fund from on-selling shares in SOEs? It seems to me that once they own these shares, they can divest themselves and sell to whoever they want?

    There would have to be some way to control any such process. Maybe a caveat, saying that the government would have first right of refusal?

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