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Winston Peters recycles pledge to “buy back state assets” – where have we heard that before?

31 March 2014 5 comments

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Over the last two years (give or take), NZ First leader, Winston Peters, has stated on numerous occassions that buying back shares in the three energy SOEs (Meridian, Genesis, and Mighty River Power) will be a “bottom line” in any post-election coalition deal.

On 20 June 2012, NZ First posted this statement on their website,

New Zealand First will use its influence on the next coalition Government to buy back our state-owned power companies which are being flogged off by National.

Rt Hon Winston Peters says New Zealand First is committed to buying back the shares at no greater price than paid by the first purchaser.

“State-owned assets rightfully belong to all New Zealanders but National is intent on handing them over to rich foreign investors.

“It is simply lining the pockets of the wealthy by selling off well-performing assets that already provide the Government with extremely healthy dividends.”

Mr Peters says it is only fair to alert potential investors that New Zealand First’s intention to buy back the shares will be part of any coalition negotiations.

“As things stand now, the assets will end up in foreign ownership which is an outright attack on our sovereignty. We are committed to repelling that attack.”

The pledge was repeated on 29 November 2013;

New Zealand First is the only political party that has said since the beginning that if the Government did go ahead with this idiotic decision, then when we are in a position to influence the next Government, we would buy back the shares at a price no more than that initially paid for them.

On ‘The Nation‘, on 15/16 March, interviewed by Patrick Gower, Peters repeated NZ First policy that a share buy-back, at a cost no greater than the original purchase-price, was a bottom line policy for his Party;

Gower: So that means buying Genesis back?

Peters: That’s right. At no greater price than they paid for it.

Gower: And does that mean buying back the other power companies as well?

Peters: It means exactly that. That’s what our position has been for some time.

Gower: So that’s a priority for you in any negotiations?

Peters: It is a priority, and it also has the blessings in terms of economic calculations from Treasury.

Taken at face value, Peters’ committment to buy back shares in the powercos seems more comprehensive and radical than either the Greens or Labour. Neither have committed to buying back shares in Meridian, Genesis, and Mighty River Power until the government books allow it.

But, can Peters’ pledge be taken at face value?

Can he be trusted to make good on his word to (a) make a share buy-back a bottom-line in any coalition deal and (b) actually follow through?

His track record on such matters is not good.

On 27 September 1996,  the then-Bolger-led National government sold the Forestry Corporation of New Zealand Ltd cutting rights to a private  consortium (Fletcher Challenge Forests, 37.5%, Brierley Investments Ltd, 25%, and Chinese state-owned company,  Citifor Inc, 37.5%)

This became a major election issue in  the lead-up to the first MMP election in  1996, with the Alliance organising a CIR petition to halt the sale.

NZ First leader, Winston Peters, pledged to buy back the cutting rights, stating on several occasions that any government he was part of would “hand back the cheque“;

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The game plan - what we're all playing for - NZ First buy back forest corp

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During the election campaign, Peters stated unequivocally his intentions that the privatisation of Forestry Corp would not stand under any government he was part of;

“I want to tell the Chinese buyers and I want to tell Brierleys that they had better not make any long-range plans because the day after the election is over we will be sending them an emissary to them them exactly what is going to happen, that is, that we are going to keep out promise, they can give back the asset and we will give the money back.” – Winston Peters,  Otago Daily Times, 1 Feb 1997 (on pre-election statement/promise)

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http://fmacskasy2.files.wordpress.com/2013/07/otago-daily-times-1-february-1997-winston-peters-asset-sales-forestry-corp-buy-back-hand-back-the-cheque.jpg

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On 11 December 1996, Peters announced that he would be entering into a formal coalition arrangement with the National Party, to form the first MMP coalition government.

Subsequently, Peters’ pledge to “hand back the cheque” and buy back the forestry cutting rights, was ‘quietly’ dropped;

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NZ First ignored chance to implement own policy

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“… NZ First did not make any attempt to include  in the [Coalition] agreement its policy of placing a 24.9% limit on foreign ownership of strategic assets.

Neither did they raise the NZ First promise to buy-back Forestry Corp, which was sold earlier this year to a consortium including Fletcher Challenge.” – Otago Daily Times, 16 Dec 1996

As Treasurer and Deputy Prime Minister in the National-NZ First government, Peters had ample opportunity to implement his Party’s buy-back policy. It was a promise he could have kept. And should have kept.

Instead, NZ First opted to implement National’s policy of tax cuts on 1 July 1998. With even more tax cuts promised by then-Finance Minister, Bill Birch.

This was money that Peters could have allocated and spent of re-nationalising our forests – but was instead wasted on cutting taxes, thereby reducing the ability of the coalition government to implement a buy-back, as Winston Peters had promised.

If Peters holds the balance of power after 20 September, and if he forms a coalition with either bloc, he may well carry out his promise to buy back shares in our energy utilities.

Or then again, he might not.

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References

NZ First: NZ First Committed To Buying Back State-Owned Assets

NZ First: Our asset sales buyback promise – Radio Live Column

TV3: Winston Peters: Asset buy-back ‘a priority’

FAO.org:  Devolving Forest Ownership in New Zealand: Processes, Issues and Outcomes

Treasury: Income from State Asset Sales as at 30 September 1999

Wikipedia: CITIC Group [Citifor]

Wikipedia: Referendums in New Zealand

Otago Daily Times: Alliance quits quest for forestry petition

Otago Daily Times: NZ First ignored chance to implement own policy

Otago Daily Times: NZ First opts for National

Otago Daily Times: Further tax cuts unlikely before next century

NZPA: Birch pledges more tax cuts

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Be careful what you wish for - Key and Peters

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 16 March 2014.

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Letter to the Editor: what is a politician’s promise worth?

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old-paper-with-quill-pen-vector_34-14879

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FROM: 	"f.macskasy" 
SUBJECT: Letters to the Editor
DATE: 	 Sun, 16 Mar 2014 21:10:15 +1300
TO: 	"Sunday Star Times" letters@star-times.co.nz 

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The Editor
Sunday Star Times

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Winston Peters has pledged that his Party's bottom line is
the re-purchase of all shares in Meridian, Genesis, and
Mighty River Power at "a price no more than that initially
paid for them".

This is stated on NZ First's website, and Peter's reiterated
his pledge on TV3's 'The Nation' on 15/16 March.

I sincerely hope that Mr Peters' promise to buy back the
powerco SOEs fares better than his pledge in 1996, to buy
back Forestry Corp's timber cutting rights. Forestry Corp
was privatised by the Bolger-led National government for
around $1.6 billion to a consortium made up by Fletcher
Challenge Forests, Brierley Investments Ltd,  and Chinese
state-owned company,  Citifor Inc (now known as CITIC
Group).

Peters promised during the 1996 general election;

“I want to tell the Chinese buyers and I want to tell
Brierleys that they had better not make any long-range plans
because the day after the election is over we will be
sending them an emissary to them them exactly what is going
to happen, that is, that we are going to keep out promise,
they can give back the asset and we will give the money
back.”

The buy-back never happened, despite Mr Peters becoming
Treasurer and Deputy PM on 11 December 1996. His pledge
quietly disappeared.

Let's hope the same fate does not befall his pledge to buy
back the powerco shares.

-Frank Macskasy
(address  & phone number supplied)

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Related blogposts

Fool me Once, Shame on you

Winston Peters recycles pledge to “buy back state assets” – where have we heard that before?

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The Politics of Power and a Very Clear Choice – Part Wha

new zealand high electricity prices

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Continued from: The Politics of Power and a Very Clear Choice – Part Toru

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First NZ

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As Chris Trotter pointed out in his excellent blogpost just recently,

ONLY STEVEN JOYCE could offer up JB Were, Woodward Partners, Milford Asset Management, First NZ Capital,  and Forsyth Barr as credible critics of the Labour-Greens’ energy policy. As if these six financial institutions were ever likely to offer the Opposition parties their fulsome support!.”

Acknowledgement: The Daily Blog – No Dog In The Fight: Whatever happened To Academic Expertise?

We can add to the above list; AMP Capital, Morningstar Research, BusinessNZ, and Federated Farmers – all of which appear to be the front-line foot-mercenary-soldiers in National’s counter-attack to the Labour-Green’s NZ Power.

Minister of the Known Universe, Steven Joyce’s actual comment was,

Financial analysts including JB Were, Woodward Partners, Milford Asset Management, First NZ Capital, Devon Funds Management and Forsyth Barr are unanimous in their condemnation. One has labelled it a ‘hand grenade’ to the New Zealand economy, while others have said it will cut the value of every New Zealanders’ KiwiSaver account and lead to rolling blackouts. ”

Acknowledgement: Scoop –  Labour-Greens Power ‘Plan’ Economic Sabotage

Rolling blackouts“?!

He left out a plague of locusts and rivers turning into blood (though with farm run-offs, these days it’s more like Rivers of  Excrement).

We’ve had power black-outs in the past, due to dry weather; equipment failure; shut-downs for maintenance; human error; etc. And we will continue to have unavoidable power cuts, in the future;

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Damaging gales forecast for north 5.5.2013

Acknowledgement: NZ Radio – Damaging gales forecast for north

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Joyce added,

Kiwis are deeply suspicious about the Labour-Greens announcement and its timing. It’s simply economic sabotage. ”

Hmmm, considering the high value of the New Zealand dollar’s destructive effects on our manufacturing/export sector and the 40,000 jobs that’s been lost in the last four years – if I were Joyce, I would not be too keen to bandy about charges of “economic sabotage”. National’s policies in the last few years have been more than effective in that regard,

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Exporters tell inquiry of threat from high dollar

Acknowledgement: Radio NZ – Exporters tell inquiry of threat from high dollar

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It’s hardly surprising that most of the negative response has been from the financial markets and commercial firms. They are the ones with the naked vested interests.

To date, the following fear-threats have been thrown at the New Zealand public – because make no mistake, these  doomsday scenarios are directed at voters, and not Labour or the Greens.

Perhaps the most outrageous claims – or outright lies – came from share broking company, First NZ,

“Despite the alleged “excessive price increase in the 13 years since 2000 we are not convinced the system is broken. If it isn’t, then it doesn’t need fixing.

Since 2008, the “real” rate of increase (net of line charges) has slowed even further to 0.5 per cent per annum. Your writer knows for a fact he is paying less for electricity today than three years ago.

Our modelling assumes 11.6 per cent residential tariff increases over the next four years, however net of line charges this reduces to 3.2 per cent over four years.

We believe the Opposition’s desire for a 10 per cent reduction in power prices can mostly be achieved through the current market without the need for a complex and costly change of market structure.”

Acknowledgement:  NZ Herald –  Power price cuts coming anyway, says First NZ

In another document, First NZ made the extraordinary claim,

“Despite the alleged “excessive” price increases in the 13 years since 2000 we are not convinced the system is broken. We estimate that, net of line charges and after allowing for inflation, residential electricity prices have risen 2.6% since 2000.

Acknowledgement:  First NZ – Contact Energy – If it ain’t broke don’t fix it

Hold on.

Is First NZ is really telling the public that power prices have only risen 2.6% since  2000?!?! Well, they do qualify that with “net of line charges and after allowing for inflation”. Though why they would omit line charges seems pointless; the public are still paying at the end.  “Clipping the ticket” seems the norm and impacts on the end-consumer regardless of how it is done.

Which also raises a question in my mind;  why is First NZ making this assertion only now? Why did they not make the effort to rebut National’s claims when Dear Leader issued public statements like this, on 27 January, 2011,

“In the nine years Labour was in government, power prices went up 72 per cent and the Government owned 100 per cent of the assets.”

Acknowledgement:  NZ Herald – Power price fears if Govt stakes go

Why did First NZ not issue public statements ‘correcting’ National’s “misrepresentations” at the time?

Why have they left it only till now, to counter the assertion that “power prices went up 72%”?

Why is a single-buyer desk for electricity sending brokerage firms into a panic? Especially, considering, that we already have single buyer-desk’s in the form of Fonterra, Zespri, PHARMAC, etc.

The answer, I submit, is fairly obvious. First NZ’s fanciful statements and assertions are part of an orchestrated litany of bullshit to scare Joe & Jane Public to run back into the cold, dead arms of Nanny Neoliberal.

The Financial Money Men, with their Federated Farmers allies, are propping up their neo-liberal stooges in Parliament. The rats are out of the woodwork, and we can see who is lined up against the best interests of the public.

Because, in the final analysis, this all boils down to money – who makes it and who gets to keep it. And because so much money is at stake, we are told that rising power bills is the price for living in a “free” market.

We’re also promised that power prices will drop. Sometime. In the future.

We just have to be patient.

Maybe another thirty years?

It will be interesting if people buy into this propaganda BS.  Will voters believe the fear-mongering campaign from the money-pushers?

Or will they realise that share brokers and merchant bankers are  interested only in seeing that power prices remain at stratospheric levels, to provide maximum returns for their shareholders?

Because one thing is as certain as the sun rising tomorrow; these firms are not remotely interested in our welfare. Nor in the welfare of Kiwi families being gouged with higher and higher power bills.

I’m struck senseless that so many National supporters believe  that siding with the likes of JB Were, Woodward Partners, Milford Asset Management, First NZ Capital, Devon Funds Management,  Forsyth Barr, Business NZ, Federated Farmers, et al, will somehow gain them some kind of  ‘benefit’. Are National supporters so masochistic and blinded by their faith in the “free market” that they are willing to tolerate  paying higher and higher prices for electricity?

I hope they realise that JB Were, Woodward Partners, Milford Asset Management, First NZ Capital, Devon Funds Management,  Forsyth Barr, Business NZ, Federated Farmers, et al, will not pay the power bills for National supporters.

Good luck with that!

The Labour-Green coalition should welcome these attacks as an opportunity. Every time one of these money-pushing firms launches a critical attack on NZ Power – the Labour-Greens should counter with press conferences where facts, stats,   and more details are presented for the public and nice, big, colourful  graphic-charts presented.

Like this one, from the Ministry of Economic Development/Business, Innovation, and Employment;

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Ministry of Economic Development - Power Prices 1974 - 2011

Acknowledgement: Ministry of Economic Development/Business, Innovation, and Employment – Power Prices

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(Note price drop around 1999. Whilst Industrial and Commercial prices fell, residential prices continued to rise. There is more to explain the 1998/99 price fall here;  Statistic NZ –  Electricity consumption. It had little to do with Bradford’s reforms, and more to do with competing retailers changing their  methods of calculation for the CPI electricity price index and building extra generation capacity. The cost of the latter had shifted from the State and onto domestic consumers.)

Where possible, David Parker and Russell Norman should  speak at engagements around the country at public meetings. (Community newspapers and other local media should be engaged, as they love anything that happens within their community.)

Invite others such as  the Salvation Army, and experts such as energy-sector expert, Molly Melhuish, and Victoria University researcher Geoff Bertram, should be invited to address media events.

Invite members of the public; families, etc,  to present their power bills as evidence of skyrocketing prices.

Build a Broad Front of support. Show the country that there is support for NZ Power.

People want reassurance. We need to give it to them. And we need to show them why the National and the  finance sector are working in cahoots.

Because ain’t it funny that no community organisation has come out, demanding that the electricity sector remain unregulated and welcoming higher and higher prices?

And if the media aren’t presenting the full story, use progressive blogs to publish the information. We, too, can be  “foot soldiers” in this struggle. (Because surprise, surprise,  we too, use electricity.)

This is a war between the Neo Liberal Establishment and Progressive forces fighting to roll back thirty years of  a failed experiment.

That war began on 18 April.

There is no reason on Earth why we should not win.

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NZ First

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I find it hard to trust  NZ First. Or, to be more precise; I find it hard to trust it’s leader, Winston Peters.

His parliamentary colleagues; party members; and supporters – I have no problem with. They are people who, generally, want the best for this country and dislike the false religion of neo-liberalism as deeply as those on the Left do.

But Peters…

Peters has ‘form’. He has changed direction  on numerous occassions, and I find it hard to take him at his word.

Some examples…

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In 1996, Winston Peters campaigned to defeat the National Government and remove it from power. His campaign statements at that time seemed unequivocal;

Jim Anderton: Is the member going into a coalition with National?

Winston Peters: Oh no we are not.” – Parliamentary Hansards, P14147, 20 August 1996

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There is only one party that can beat National in this election that that is New Zealand First.” – Winston Peters, 69 & 85 minutes into First Holmes Leaders Debate, TVNZ, 10 September 1996

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Of course I am not keen on National. Who is?

… This is a government bereft of economic and social performance  [so] that they are now arguing for stability.” – Winston Peters, Evening Post, 25 June 1996

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The prospects are that National will not win this election, that they will not form part of any post-election coalition.” – Winston Peters, The Dominion, 5 October 1996

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It is clear that this National government will use every means at its disposal to secure power… Come October 12…  Two months ago I warned that the National Party would use every trick and device at their command to to retain their Treasury seats.” – Winston Peters speech to Invercargill Grey Power, 26 August 1996

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The Prime Minister [Jim Bolger] is not fit for the job and come 12 October he will be out. He should not get on his phone and call me like he did last time, because we are not interested in political, quisling  behaviour. We are not into State treachery.” – Winston Peters, Parliamentary Hansards, P14146, 20 August 1996

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We believe the kind of politician depicted by Bolger, Birch, and Shipley is not to be promoted into Cabinet. As a consequence we will not have any truck with these three people.” – Winston Peters, NZ Herald, 22 July 1996

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We are a party that says what we mean and mean what we say, regardless of the political consequences.” – Winston Peters, Speech to public meeting, 9 October 1996

Despite Peters’ assurances,  on  11 December 1996  the public woke up to this nightmare,

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2.

In 1996, one of the biggest election issues was the sale of  Forestry Corporation of New Zealand Ltd (cutting rights only,  not the land). In 1996, the then Bolger-led National government had announced it’s intention to privatise the SOE,

In 1996, the Minister of Finance announced the government’s intention to sell its shares in the Forestry Corporation of New Zealand (formerly Timberlands Bay of Plenty). The corporation’s assets were Crown Forestry Licences to planted forests, which had expanded to 188 000 ha in the central region of North Island, processing plants in various locations, a nursery and a seed orchard.

A handful of large forestry companies and consortia submitted bids. The sole criterion was price. However, as the strength of the bids was not as great as hoped, bidders were asked to resubmit their bids. In August 1996, it was announced that the Forestry Corporation of New Zealand had been sold to a consortium led by Fletcher Challenge in a deal that valued the assets at $NZ 2 026 million.

Acknowledgement:  Devolving forest ownership through privatization in New Zealand

The sale went ahead and the  final sale-price was $1,600,000, to a consortium made up of  Fletcher Challenge Forests (37.5%), Brierley Investments Ltd (25%) and Citifor Inc (37.5%).

Acknowledgement:  Treasury – Income from State Asset Sales as at 30 September 1999

Throughout 1996, Winston Peters engaged in an election campaign to “hand back the cheque” should he and his Party be elected into a position of power,

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Forests Buy back signalled - Evening Post - 13 August 1996

Acknowledgement: (hard copy only): Evening Post, 13 August 1996

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the Game plan - what we're all playing for - Eveni ng Post - 2 October 1996

Acknowledgement: (hard copy only): Evening Post, 2 October 1996

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To quote  Peters, who said on 13 August 1996,

I ask both the Labour and Alliance parties – putting politics aside for  this one day – to join New Zealand First in it’s post-election pledge to reverse the sales process“.

As many who lived through the times will recall, Peters pledged to “hand back the cheque”. It was a powerful message.

But it never happened.

Peters joined in coalition with National  (consigning Labour and The Alliance into Opposition) and the pledge to buy back the forests was dropped – much to the disgust of people at the time..

Sixteen years later, and Peters has made the same promise all over again.  On TV3′s The Nation, on 24 June 2012,  Winston Peters stated,

 “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. ”

Acknowledgement: TV 3 – The Nation

On 4 March this year (2013), Peters announced,

New Zealand First will use its influence on the next coalition Government to buy back our state-owned power companies which are being flogged off by National and we are committed to buying back the shares at no greater price than paid by the first purchaser.”

Acknowledgement: Scoop – One More Quisling Moment from Key

Another quote from Winston Peters, who  said in a speech to the NZ First Conference,  in 1999,

All the policies and manifestos in the world are meaningless when you cannot trust the leadership. That is what leadership is about – trust. Nobody expects leadership to be infallible. But you have a right to expect it to be trustworthy.”

Acknowledgement: (hard copy only):  Speech by Rt Hon Winston Peters to the New Zealand First Conference, 18 July 1999, at the Eden Park Conference Centre

Indeed; “All the policies and manifestos in the world are meaningless when you cannot trust the leadership.”

If Peters and NZ First hold the balance of power in 2014 and choose to enter into a coalition arrangement with National – will he carry out his pledge this time?

Or will that promise be dropped and buried for political expediency and some babbled, weak excuse?

It’s happened once, before. And not too long ago.

Can he be trusted for a second time?

I am of  the belief that folks can learn from their mistakes. God knows I’m made a few in my early adulthood.

Has Winston Peters learned to honour his electoral pledges and not to treat the voting public as fools? Has he learned that he betrays voters at his peril? I hope so.

Because the public exacted a fitting response to his behaviour in 2008, as he and his Party were punished and spent three years in the political wilderness (see;  New Zealand general election, 2008).

More than ever, the future of this country – and the power –  is in our hands,

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NZ Power Shearer Norman

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Residents Vote In Mana By-Election

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Don’t screw up this time, Mr Peters.

This blogpost was first published on The Daily Blog on 6 May 2013.

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Previous Related Blogposts

History Lesson – Tahi – Electricity Sector “reforms”  (4 March 2012)

John Key: Man of Many Principles (28 Sept 2012)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity! (10 March 2013)

Additional Sources

Statistics New Zealand: The history of electricity reform

Ministry of Economic Development: Electricity Prices

NZ History Online:  Dancing Cossacks political TV ad

The Treasury: Income from State Asset Sales as at 30 September 1999

References

NZPA: Splitting up ECNZ expected to cut wholesale power price (16 Dec 1998)

NZPA:  Reforms aimed at business – Luxton (21 April 1999)

Otago Daily Times: Power Prices Set To Soar (12 May 1999)

Otago Daily Times: No case for regulation (24 May 1999)

Otago Daily Times: Lower power prices coming says Bradford (3 June 1999)

Otago Daily Times: Power prices to rise by up to 15.1% (29 June 1999)

Otago Daily Times:  Reforms blamed for hike (13 July 1999)

Scoop: Alliance to hold Winston Peters accountable (8 Oct 1999)

NZ Herald: Peters ‘forgets’ NZ First support for power reforms (13 Aug 2008)

Fairfax: Government to seek inquiry into power price rise  (30 September 2008)

NZ Herald:  Put prices on hold, Brownlee tells power companies (21  May 2009)

NZ Herald: Mighty River directors’ 73pc pay rise realistic – Key (5 April 2013)

Scoop:  Labour-Greens to rip up the book on electricity pricing (18 April 2013)

NZ Herald:  Labour-Greens plan could work, says Vector CEO (19 April 2013)

NZ Herald:  National gobsmacked at Labour idea (19 April 2013)

NZ Herald: Power plan likened to Soviet era (19 April 2013)

NZ Herald: MRP chief slams socialist’ plan (21 April 2013)

TVNZ:  Q+A – Transcript of Steven Joyce interview (21 April 2013)

NZ Herald:  Bernard Hickey: Power barons fail to fool the public this time around (21 April 2013)

Radio NZ: Power prices nearly double since 2000 (21 April 2013)

Other blogs

Kiwiblog: Electricity Prices

Tumeke: MANA threaten overseas investors not to buy assets – Bloomberg pick up on the story

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