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Posts Tagged ‘Q + A’

Don – stop smoking that ‘Kronic’!!

21 August 2011 1 comment
Don Brash, Leader of ACT Party

Don Brash, on Q+A today (21 August),

“Nobody seriously believes that Governments run commercial business better than private owners do. There is no logic at all for Governments to continue to own them.”

Really, Don?

Let’s do a Fact Check on your claim that “nobody seriously believes that Governments run commercial business better than private owners do”.

Case # 1: Air New Zealand.

In April 1989 the airline was privatised by Roger Douglas with a sale to a consortium consisting of;  Brierley Investments Ltd(65%), Qantas (19.9%), Japan Air Lines Ltd (7.5%), and American Airlines Ltd (7.5%) .

The owners were a fairly high-powered, supposedly commercially-saavy, group of corporations.

Sources:

Treasury 1

Treasury 2

The sale went through, earning the State $660 million.

In 2000, Air New Zealand entered into a commercial deal to buy 100% Ansett Airlines, for  $A680 million, from Rupert Murdoch’s News Corporation Ltd. This deal went sour and Ansett Australia was placed into liquidation by September 2000.  Air New Zealand subsequently announced a $NZ1.425 billion operating loss .

By  October 2001, Air New Zealand was itself in imminent danger of collapsing and  was re-nationalised by the then Clark-led Labour government under a  NZ$885 million bail-out. The government ended up with a 76.5% stake.

So much for private ownership.

Case #2: NZ Rail

In September 1993, NZ Rail was privatised and sold for $400 million (less debt)  to a consortium consisting of Wisconsin Central (40%), Berkshire Partners III L.P. (20%), and Fay & Richwhite (40%). NZ rail then had a succession of owners, culminating in heavy losses, with a $346 million loss for the half-year ended December 2003.

In May 2008 the Labour Government agreed to buy Toll NZ Ltd (less its trucking and distribution operations) for $665 million.

This experiment in privatisation was also a spectacular failure. No private owner could make a profit, even with the government agreeing in  2003 to spend $200 million over the following five years, upgrading the track via the new SOE, Ontrack.

The rail network had been badly run down through lack of investment in new rolling stock and lack of basic maintenance. And one of it’s first private owners, David Richwhite were investigated late 2004, by the NZ Securities Commission, regarding alleged insider trading. In June 2007 Richwhite  agreed to pay NZ$20 million, but did not admit liability.

Another “Tui time” for private ownership of state assets.

Case #3: Finance Companies.

It might be worthwhile reminding Don that the recent chain of collapse of finance companies in this country cost investors  $6 – $8 billion dollars in losses . Many of these  are the real “Mums and Dads” investors that National speaks  lovingly when mooting asset sales.

So Don, spare us the rhetoric that “nobody seriously believes that Governments run commercial business better than private owners do”. Because as many will confirm – that’s bullshit.

The question I ask myself is; Don, do you really believe that fantasy or not. If you do, you are deluded. If you don’t, you are  deliberately mis-representing the truth.

Either way – not a good look, mate.

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Are we being milked? asks Minister…

7 August 2011 3 comments

So the Commerce Commission decided not to hold an inquiry into milk pricing in New Zealand?

But Minister of Agriculture, David Carter, still wants a Parliamentary inquiry to investigate the matter?

Hmmmm…  it’s not because the election is only three months away, and National is fearful that Labour and the Greens will be making this an election issue? Surely, politicians can’t be that cynical and manipulative?

Of course not.

What was I thinking.

Perhaps if I might be so bold, and offer Mr Carter a word of explanation as to milk pricing. The price of milk is determined by the free market. The same free market that National endorses, advocates, and embraces with all it’s manly  ‘love’.  The same free market that National has ordered TVNZ to pursue, by cancelling it’s Public Charter. The same free market it chases with the Trans Pacific Partnership free-trade negotiations.

Yes, National is the party of the Free Market. As John Key told our American cuzzies on 22 July,

“At the most basic level, we share a commitment to the democratic, capitalist system.”

So there you have it, folks.  In a nut-sell. Or milk bottle, if you prefer. We are a capitalist system,which means that the price of milk is determined by what you, the public, are willing to pay for it.

Something to consider of 26 November – Election Day.

As for Mr Carter’s call for a  Parliamentary Inquiry – my money is on nothing ever coming off it. Much like National’s much-vaunted Jobs Summit in February, 2009.

Remember that little farce?

Postscript #1;

On TVNZ’s Q + A,  David Carter was interviewed by Guyon Espiner, who asked the Minister if two supermarket chains offered enough competition at the retail end of milk distribution. Carter replied that there was competition and said,

“Well, if people want to buy the expensive brands, they can pay $4.80 up to $5.40. They can buy a cheaper brand at that supermarket for $3.30. They can go round the corner to a dairy, quite often, depending on where they live, and perhaps buy that for $2.90. What I’m saying is there’s a big variation on the retail price of milk.”

‘Scuse me?!?!

Milk is cheaper at corner dairy’s, and on sale for $2.90?!?!

Pray tell, Mr Carter – what colour is the sky on your planet? Because on our world, corner dairy-stores are the more expensive option to buy goods.

National members of parliament – out of touch with reality since 1936.

Full transcript of interview

Postscript #2;

Postscript #3;

*sighs* I didn’t have to be Ken Ring to know this was going to happen (though Ken would’ve been a month wrong in his predictions).  It’s Election Year. This is when politicians play silly buggers up to November 26th…