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Is John Key ‘losing the plot’?!

18 September 2012 3 comments

Lifted from the media today,

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Full story

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When the Leader of the pro-capitalist National Party starts talking about “nationalising elements such as water and wind”  – whilst at the same time instigating a programme to partially privatise Genesis Energy, Mighty River Power, and Meridian – the question has to be asked; has John Key flipped his lid?!?!

Regardless of whatever atmosphere they are breathing on the Ninth Floor, there must be some severe oxygen depletion at work to have affected Key’s mental processes so badly.

New Zealanders from both ends of the spectrum, Left and Right, as well as the general populace, must be wondering what is going on in the land of Planet National.

Right wing National supporters must’ve wondered if they had heard their Dear Leader correctly when he uttered the taboo “N” word (“nationalisation – not “n—-r”).

The Left would have been rolling their eyes and shaking their heads in dismay, and wondering, “How much more of this clown will the public take? Does he have to decapitate and eat a kitten before his popularity takes a nose-dive and drops lower than John Banks’ credibility?”

Nationalisation of water and air…

Whilst selling of our state assets at the same time…

The breath-taking audacity of the man.

In reality, what he is saying is that  the government is toying with the idea  of making a grab for certain natural resources – before selling them to private investors.

His comment is as ludicrous as his statement on TVNZ’s Q+A on 16 September when he dumbly blurted out,

… So if you accept that viewpoint, then I think you have to accept that elements like water and wind and the sun and air and fire and all these things, and the sea, along with natural resources like oil and gas, are there for the national interest of everyone. They’re there for the benefit of all New Zealanders, not one particular group over another. “

See: TVNZ Q+A Interview with Prime Minister John Key

Yeah, right, Dear Leader. I’m sure that came as a bit of a surprise to the private oil and gas companies currently exploiting our gas and oil fields.

John Key – always a laugh a minute with his incredibly outrageous remarks. Unfortunately, his clownish behaviour is ultimately at our expense.

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water rights state asset sales waitangi tribunal Maori King SOEs John Key

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A lesson in Energy Economics

17 September 2012 Leave a comment

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This is the Treaty of Waitangi, signed by most tribes in New Zealand, and by the Representative of Her Majesty, Lieutenant-Governor, William Hobson,

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The full English text can be read here: Treaty of Waitangi.

The relevant part to the treaty, guaranteeing rights to land, forests, water, mountain, etc, is this bit, Article 2,

Article the second [Article 2]

Her Majesty the Queen of England confirms and guarantees to the Chiefs and Tribes of New Zealand and to the respective families and individuals thereof the full exclusive and undisturbed possession of their Lands and Estates Forests Fisheries and other properties which they may collectively or individually possess so long as it is their wish and desire to retain the same in their possession; but the Chiefs of the United Tribes and the individual Chiefs yield to Her Majesty the exclusive right of Preemption over such lands as the proprietors thereof may be disposed to alienate at such prices as may be agreed upon between the respective Proprietors and persons appointed by Her Majesty to treat with them in that behalf.

Seems fairly clear; what’s theirs is theirs and no nicking each others’ stuff.

Now, unfortunately, I have fellow New Zealanders who hold to the belief that the Treaty of Waitangi is “no longer relevant” or is “outdated”.

Interesting idea that; “no longer relevant”.

Firstly, the Treaty has no “expiry date” or “statute of limitations”. Nothing in the  small print  states that the Treaty is valid for only X number of years.

Secondly, imagine trying to tell our American cuzzies that their Declaration of Independence – signed in 1776AD, and therefore some 64 years older than our own Treaty – is “no longer relevant” or  “outdated”? They’d have half their US Marines camped outside your front door – and not in a happy way, either.

And of course, there is the Magna Carta, signed in 1215AD, and which is the basis of much of our modern law.  If the Magna Carta is “no longer relevant” or  “outdated” then we are in serious trouble, as the state would have arbitrary powers of detention and imprisonment without right of trial, and we would lose other legal protections from State abuse.

And then there are the Ten Commandments, several thousand years old, which state the most basic laws of a civilised society; no killing, no stealing, no false accusations, etc.

Few people would try to assert that these basic laws are “no longer relevant” or  “outdated”?

Time does not extinguish rights.

Those who object to the principles of the Treaty do so out of fear and misconceptions (and sometimes out of downright racist hostility) than any notions of fairness.

The Treaty is the basis upon which our ancestors agreed to live together and to respect each other. We should respect that agreement and use it in the spirit in which it was signed.

Otherwise we disrespect our forebears (on all sides) and do ourselves a dishonour in the  process.

Moving forward and onward…

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II

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In replying to Maori claims of water rights, Dear Leader John Key has stated earnestly that “no one owns the water”.

Until now,  Maori have made no claims over water in terms of this country’s energy production. With Meridian, Mighty River Power, and Genesis Energy under collective  state ownership, it could equally be said that “no one owned the power companies – they belonged to us all.

If, until now, we all benefitted from collective ownership of power companies, then, equally the source of that power was in collective ownership. Now National is attempting to privatise 49% of  Meridian, Mighty River Power, and Genesis Energy – effectively changing the rules.

The concept of private ownership is now contemplated for up-till-now collectively-owned assets. So what about the source of that power which will now benefit a small group who will own 49%?

Can the source of hydro power be owned, especially when it produces profits?

Let’s test that idea, shall we?

Simple question: who owns the following resources?

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Oil. Natural  gas. Coal. Uranium. None of this stuff  is free. Someone owns the ground or the process used to extract it.  There is a concept of private ownership  over these energy sources that can be quantified, measured, controlled,  priced, and sold.

Until Pakeha arrived on these fair shores as the second wave of  “boat people” – refugees from a class-stratified society – Maori had no concept of private ownership. Property was not owned by individuals. Iwi and hapu held collective kawanatanga over their lands, waters, forests, hills, seashores, etc.

Once Pakeha arrived, the notion of private ownership and Land Titles were introduced to Maori.

Some Pakeha might object – but water is sacred!

So is land. God knows enough of our young men have gone off to war to defend our nation; our people; our lands, from foreign domination, in two World Wars.

Some Pakeha would object – but water is ephemeral!

So are radio/television  frequencies. But that hasn’t stopped the government to leasing/selling those to private companies. (Try broadcasting on the same wavelength as TVNZ or TV3, and see what the reaction from those companies and the State would be.)

This is a hydro power station,

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Powered by this stuff,

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Water  generates the turbines which produces the power that is on-sold to consumers.

So how does water differ from oil, gas, coal, and uranium?

Private ownership?  It suited us Pakeha when it was used to our benefit to “acquire” land from Maori.

Maori learnt that lesson well and the shoe is now on the other foot.

If Pakeha are going to flog of 49% of  assets that, up till now, no one owned and collectively benefitted us all, then by the gods, Maori can – and should – apply precisely the same principle.

Welcome to the world of capitalism – our ‘gift’ to Maori

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III

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Pakeha schizophrenia over private ownership was nowhere better summed up than on TVNZ’s Q+A, on 16 September, when Shane Taurima interviewed Dear Leader John Key on this issue,

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In a stunning act of conversion to social democratic principles, John Key equated the collective ownership of water with oil and gas,

… So if you accept that viewpoint, then I think you have to accept that elements like water and wind and the sun and air and fire and all these things, and the sea, along with natural resources like oil and gas, are there for the national interest of everyone. They’re there for the benefit of all New Zealanders, not one particular group over another. “

See: TVNZ Q+A Interview with Prime Minister John Key

Really?!?!

JohnKey is telling us that, ” natural resources like oil and gas, are there for the national interest of everyone. They’re there for the benefit of all New Zealanders, not one particular group over another “?!?

Since when did National or Labour nationalise the oil and gas industry???

This little piece of news-trivia slipped by me, that’s for sure. (Must’ve been announced on the other TV channel when we wasted two minutes watching ‘The Ridges‘.)

It’s pure bullshit of course. John Key is spinning porkies when he’s suggesting that the oil and gas industry is ” there for the national interest of everyone “. These resources belong to various corporations – not ”  for the benefit of all New Zealanders “.

In fact, the last time New Zealand held any State ownership in any aspect of the oil and gas industry was  with Petrocorp and Maui gas – both  privatised, respectively, in 1988 and 1990.

See: Treasury – Income from State Asset Sales

John Key’s assertion that the oil and gas industry is ” there for the national interest of everyone ” is either delusional (spending too much time with John Banks?) or a clumsy fairytale to try to woo New Zealanders into a cosy, cotton-wool, fantasy world.

This blogger would welcome and support National nationalising all oil and gas production in this country, ”  for the benefit of all New Zealanders “.

The fact is that Dear Leader blew it.

Not only was his paradigm absurdly false – but it actually shored up the legitamacy of Maori claims over water rights.

If private ownership can be conferred over this country’s oil and gas resources, for the private benefit of shareholders, then John Key needs to explain – in far more truthful terms this time – why water is different.

This blogger  believes that so far he has made a complete hash of things.

More importantly, will a Court take a similar view?

My money is on Maori winning this one.

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IV

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An email sent to Dear Leader,

Date: Monday, 17 September 2012 12:11 AM
From: Frank Macskasy <fmacskasy@yahoo.com>
Reply-To: Frank Macskasy <fmacskasy@yahoo.com>
Subject: Nationalisation of oil and gas resources
To: John Key <john.key@parliament.govt.nz>
Cc: David Shearer <david.shearer@parliament.govt.nz>,
    Russel Norman <Russel.Norman@parliament.govt.nz>,
    Metiria Turei <metiria.turei@parliament.govt.nz>,
    Winston Peters <winston.peters@parliament.govt.nz>

Kia Ora Mr Key,
 
On 16 September, you stated on TVNZ’s Q+A the following statement,
” … So if you accept that viewpoint, then I think you have to accept that elements like water and wind and the sun and air and fire and all these things, and the sea, along with natural resources like oil and gas, are there for the national interest of everyone. They’re there for the benefit of all New Zealanders, not one particular group over another. “
 

Source:  http://tvnz.co.nz/q-and-a-news/interview-prime-minister-john-key-5085886

I missed the occassion when our oil and gas industries were nationalised, so that profits would remain in New Zealand,  “for the benefit of all New Zealanders, not one particular group over another”.

This is an excellent state of affairs and I welcome your government’s conversion to social democracy whereby  our ”  natural resources like oil and gas, are there for the national interest of everyone “.

I take it as a given then, that you have not only abandoned your asset sales programme, but will be re-nationalising Contact Energy.

In which case, it is a truism that “no one owns the oil and gas” in the ground, and subsequently these resources belong to all New Zealanders collectively.

I may have to reconsider my vote, come 2014, as I wish to support the newly discovered  social-democratic principles shown by your Party.

With regards,
-Frank Macskasy
Blogger

See: https://fmacskasy.wordpress.com/2012/09/17/a-lesson-in-energy-economics/

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Guest Author: Open Letter to the Prime Minister, by Hone Harawira

– Hone Harawira,
MP for Te Tai Tokerau
Leader, Mana Party

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Kia ora John

I’m down at Turangawaewae for the water hui, and I just wanted to clear up a few things before I go in.

You see John, there’s quite a bit of confusion about how Maori are being pushed to help you with your asset sales problem, but there doesn’t seem to be much of a push from your side to help Maori with any of our problems – like poverty, low wages, massive unemployment, poor housing, benefit cuts … you know the rest.

We know things are hard for your government right now, what with trying to sell off power companies when you don’t own the water that drives them – but really John, that’s something your officials should have sorted out a long time ago.

The consultation hui earlier this year showed clearly that Maori don’t support asset sales, there was that huge march on parliament against it, and there’s that petition on the street right now with 250,000 signatures and growing, opposing asset sales as well.

And you must have known John, that Maori would take action to protect their water rights under the Treaty of Waitangi.

That’s why Maori were so upset when you ridiculed the idea of a claim to the Waitangi Tribunal, then belittled the New Zealand Maori Council for daring to take the claim in the first place, and then said that the Tribunal wasn’t worth listening to anyway.

You see John, the Tribunal is one of the only avenues we have to present our claims in our own way. In fact it’s the only place where what our kaumatua and kuia have to say has any meaning. It’s deeply flawed of course, but it has a special place as the nation’s only specialist judicial body on Treaty issues.

That’s why when the Tribunal said that “government would be in breach of the Treaty if it proceeded with its asset sales programme before Maori water rights had been settled”, we really hoped that you might do the right thing and step back, take a deep breath, and let the judicial process run its course.

So when you decided to simply defer the sale, and engage in behind-closed-door deals with selected iwi leaders, you can imagine how … upset … we got.

Because this is an important issue John, to all of us.

This is about water, and in particular Maori interests in that water.

And water really is a taonga to us John, a treasure. It’s hard to explain in English but water is something to cherish, to care for, to respect and to protect for future generations. Moana Jackson says “every tribe has a river” and the people of Whanganui have a saying “I am the river and the river is me”. Water is part of who we are.

And Maori water rights need to be understood in that context John. Not as a tradeable commodity, but as part and parcel of our very existence. Even Pakeha people get that; I think that might be why so many of them oppose your asset sales too.

The Tribunal has confirmed those rights (with the support I might add, of a number of your own Crown witnesses), and the Council has quite rightly asked the Tribunal to consider the extent of those rights and how best to recognise them in stage two of the hearings.

That’s not to deny hapu and iwi their rightful claims to waterways in their territories, but the issue of Maori water rights calls for a nationwide discussion and commitment to standards and expectations far greater than what can be achieved by small groups meeting behind closed doors.

John, this is one of the biggest decisions Maori will ever make, and 5 weeks just isn’t enough time to do it justice.

So where do we go from here?

Well … if I were the Prime Minister John, I think I’d:

§ Set aside the asset sales programme for a while;

§ Give the Tribunal time to complete stage two of the hearings;

§ Give Maori time to go back and share all that information with our kaumatua and our kuia, our cousins, our kids, and yes even our mokos as well, because the decisions we make today will affect them and their mokos too. And time too for hapu and iwi to consider the wider implications for them as well;

§ Give the rest of the country time to give their views too; because on this issue, every New Zealander should have a say;

§ And then I’d call everyone back to the table in 12 months, and see if we could come up with a solution that works for all.

Anyway, gimme a bell some time and let’s have a cup of tea and a chat.

Yours sincerely,
Hone Harawira

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A delay to asset sales – thank gods for Te Tiriti!

3 September 2012 2 comments

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John Key has said that “no one owns water”.  The inference being that water is collectively the property of all New Zealanders.

That’s a very socialist principle.

In which case, we should be asking  him; does the same apply to state owned enterprises? Maori certainly want to know the answer to this question.

The Waitangi Tribunal’s interim recommendation to National was to delay asset sales until the issue of water rights, share allocations, etc,  could be addressed, and good-faith negotiations undertaken.

Today was D-Day for National and it’s planned asset sales agenda,

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Full Story

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Basically, it had three options available to it;

  1. Ignore the Waitangi Tribunal’s recommendations to delay asset sales,  and Maori would head straight to Court for litigation. A High Court would most likely injunct National from proceeding with the sale.
  2. Voluntarily postpone asset sales and engage in good-faith negotiation with Maori,
  3. Legislate away any potential Maori water-rights – and the consequence would be a political upheaval similar to what Labour experienced over the Foreshore & Seabeds issue.

Option # 1 would mean little difference to Option #2; both would result in an inevitable delay.

At least Option #2 allowed a measure of good-faith bargaining and maintaining a reasonably relationship with the Maori Party.

Issue #3 was unthinkable. Aside from resulting in mass angry protest from Maori and losing it’s  Maori Party coalition partner,  the resultant social  instability would make the next two and half years a political nightmare for any government.

When Maori Council Co-chair, Maanu Paul, said,

This issue is such a big issue for Maoridom that we had to go all the way in terms of seeking redress and if that means going to the Supreme Court, that’s where we’ll end up.”

… he wasn’t making idle chit-chat. Maori are playing hard-ball on this issue and are not about to fold their hand. They have too many aces, and have little hesitation in playing them.

As it was, National blinked first,

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Full Story

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We now have breathing space until June next year.

In that time, opposition to asset sales will harden even further and come up with new strategies to fight National’s agenda.

National will have found that, bereft of allies, it’s privatisation agenda will not have become any easier. In fact, it may well face new challenges and barriers to it’s very unpopular policy.

One such  challenge is that it still has only a one-seat majority in the House.

John Key must be praying every night before going to bed that he wakes up the next day with the same number of MPs that he had the previous day.

All it would take is  a scandal; a resignation; and a by-election…

Or a heart attack…

Or a road crash…

A lot can happen in nine months.

Addendum 1

AOTEAROA IS NOT FOR SALE CELEBRATES DELAY IN ASSET SALES

– Monday 3  September

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Aotearoa Is Not For Sale is delighted that the Waitangi Tribunal has been successful in its recommendation to the Government that the sale of Mighty River power shares be delayed until iwi claims over water rights and guardianship are negotiated.

This delay is a victory for all those who have worked tirelessly in the campaign against the Government’s policies to sell our state-owned assets under the mixed ownership model, and ANFS will continue to support Tangata Whenua in their struggle to have their rights and responsibilities as kaitiaki recognized and upheld. Respect for te Tiriti o Waitangi is a reminder of the need for the government to protect the rights of Maori and all other New Zealanders, who built these assets together, and who together assert that the government cannot sell them.“When Maori and the agreement they entered into with the Crown in 1840 is undermined, all New Zealanders are undermined. The decision today can therefore be celebrated by everyone,” says Miriam Pierard, ANFS spokesperson. “The Government is clearly reluctant to back down completely on its very unpopular policy, so although we can take heart today, we must remember that we still have a battle ahead of us.”Aotearoa Is Not For Sale will continue to build a national, direct action movement against asset sales, while supporting Maori in their principled negotiation for recognition of water rights as an issue in it’s own right. We will also continue to boycott Mercury Energy as a subsidiary of Mighty River Power and promote the Keep Our Assets petition for a public referendum on the issue.

Aotearoa Is Not For Sale stands for the retention of all SOEs by all New Zealanders. No special deals. No special shares. No special payments. No asset sales means no asset sales at all, to anyone.

We will not be divided like our assets. We will be united, we will not be silenced, we will resist this together.

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ANFS Spokesperson
Miriam Pierard
aotearoaisnotforsale@gmail.com
http://aotearoaisnotforsale.com/

Addendum 2

Winston Peters was “on form” today (3 September) on Radio New Zealand’s “Morning Report“, when he make the pertinent observation that,

“...I think this has now beome a bloody minded push for an ideological outcome, that  has got a number of people behind the National Party arguing for it, against the national interest.”

Listen: Radio NZ – Morning Report interview with Winston Peters

Peters is correct. This has indeed become little more than an exercise in bloody-mindedness.  With public opposition; conflict with Maori; questions as to how much a share float will raise; a loss in revenue for the State; and other questionable aspects to National’s agenda, there seems very little benefit to the country for asset sales.

Even the majority of business-people oppose asset sales on the basis that it would have been cheaper to borrow money from offshore, rather than losing revenue  from fully-owned SOEs.

See: Selling state assets: it’s a crappy commercial decision – The Voice of Business

Key’s final argument for asset sales is that his Party won a mandate at last year’s election.

Once the petition is submitted to the Clerk of the House and a Referendum is held, even that proposition will vanish.

What will Key do when a referendum delivers an over-whelming “No” vote?

What can he do?

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Additional

Sale of Mighty River Power delayed

Government delays SOE sale

Mighty River sale on hold

Government delays Mighty River Power share float

Mighty River sale to be delayed

RNZ:  Listen to Donna Hall on Morning Report

Scoop/Q+A: Q+A – Shane Taurima Interviews Tony Ryall

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Asset Sales: all down?

24 August 2012 10 comments

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Continued from: Asset Sales: two down, three to go!

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As predicted, the Waitangi Tribunal has issued a report endorsing a delay to asset sales until the issue of water rights can be resolved,

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Full story

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Specifically, the report recommends,

  • Maori have long established property rights over water bodies
  • Ownership precedents date back to 1929 when Nga Puhi was granted ownership of Lake Omapere
  • Maori culture and rights should not be relegated and ignored.
  • The claim is not opportunistic
  • Offering shares in the companies to Maori is not a remedy
  • Shares in conjunction with enhanced power on the boards of these companies could provide meaningful recognition
  • It is impossible for the Tribunal to recognise all Maori water rights across the whole country
  • It is possible to devise an appropriate scheme for Maori affected by the sale of the assets but more time is needed

Source

If, as Dear Leader John Key stated on 10 July, that National could decide to  ignore the Tribunal’s findings (because they are non-binding), then the matter will head to the High Court.

Either way, the asset sale process has been stalled.

The Tribunal’s decision is yet another nail in the coffin of this wretched privatisation agenda.

As pointed out in a previous blogpiece ( Asset Sales: two down, three to go! ), the process has been hampered by corporate interests; low shares prices (Air New Zealand); poor international commodity prices (Solid Energy’s coal); and lower than anticipated revenue from certain electricity companies.

This blogger sez; thank god for the Treaty of Waitangi. We may yet save our state assets from being stolen from us, the people.

Who would have thought that the Treaty – designed in 1840 to protect Maori assets from ruthless activity by colonials – would 172 years later protect the assets owned by ALL New Zealanders.

National and it’s redneck supporters may object with shrill hysteria.

Tough.

These assets belong to all of us. Not just those with the money to buy them.

And it’s a bit rich for National politicians and their sycophantic supporters and fellow travellers to now be insisting that “no one owns the water”.

Especially since the concept of private ownership for land, trees, fishing quota, airwaves, etc, etc, etc, was inytroduced by Pakeha to New Zealand.

Now the architects of the capitalist notion of private ownership are screaming for collective ownership over water?

Get real, you rednecks.

Vocal right wingers and anonymous commentators on various internet fora are simply livid that Maori are exercising the same rights that Pakeha themselves have used for their own benefit and wealth-accumulation for the last two hundred years.

National may well begin to comprehend that it is on a hiding to nowhere on this issue.  It is time for John Key to comprehend,

  • The majority of New Zealanders do not want state assets privatised
  • Maori have a legitimate intrerest in water rights if states assets are privatised
  • Privatisation is opening a can of worms with corporate vultures circling overhead, looking for cheaper power deals
  • The State will not earn anything near the $5 to $7 billion that Bill Enlish has been anticipating

John Key, it is time to knock asset sales on the head.

You’ve lost.

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Additional

Asset sales in Air New Zealand also doubful this term

Solid Energy revenue slump could delay sale by years

Tribunal finds SOE share sales a breach, but offers solution

Energy float may turn into a s(t)inker

Other blogs

No where to go on Maori water rights

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Investing in someone elses’ future

5 August 2012 54 comments

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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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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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A temporary victory for common sense?!

2 August 2012 2 comments

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Full story

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Whoda thunk it – Maori saving New Zealand from the worst excesses of neo-liberalism.

And who would have thought that the Treaty of Waitangi – a 172 year old document – would be used  to preserve our state assets from being flogged of  by a Party that barely achieved 47.3% of the Party vote last year. National scored 1,058,636 votes out of a population of 4.4 million – not exactly a cast-iron mandate, but there you have it.

For some free marketeers, 1,058,636 trumps 4.4 million. No wonder so many finance companies went bust – they can’t count.

Most mind-numbingly depressing is that evidently many New Zealanders who voted for John Key and the National Party did so despite their opposition to asset sales.

Which really, when you think about it, is like going to a supermarket wanting  to buy a can of peaches; picking a can of Watties Beans instead; taking it home; opening it – and then expressing disappointment that the can doesn’t contain peaches.

?!?!

In all my life, I can’t say I’ve ever done that. Buying peaches and expecting beans…

When this blogger started passing the CIR petition to call for a referendum on the issue, the second and third signatories were two tradesmen. Both burly blokes who had voted National.

They almost grabbed at my pen to sign.

Guilt, I guess.

The Maori Council’s appeal to the Waitangi Tribunal has resulted in the Tribunal making a recommendation to postpone any and all asset sales, until water rights for Maori are resolved. This is no small matter.

Up till now, with water being used by state-owned enterprises, for the benefit of the entire country – Maori were content  to leave that precious  resource under State control/ownership.

It is only when National raised the ugly spectre of SOE privatisation that matters changed. All of a sudden – despite the water flowing through hydro-dams not being directly owned by the power companies – that resource was to be used to general private profit for private investors.

Screw that, thought Tangata Whenua and many fair-minded Tau Iwi.

And rightly so.

There is precedence here,

During the Second World War, the New Zealand Government took land from indigenous Māori owners by acquisition for the purpose of a military airfield. Instead of these being handed back to its former owners (the Tainui Awhiro peoples) when no longer required for defence purposes, part of the land, a 62-acre (250,000 m2) block was turned into a public Raglan golf course in 1969. “

Source

13 February 1988 is a day of thanksgiving and celebration for the return of Māori land. 25 hectares by the Raglan harbour was taken by the Crown for defence purposes during the Second World War. Later it became the Raglan golf course. Now it’s back in the hands of Tainui Awhiro people.

In 1978, seventeen Māori protesters were arrested on the golf course for trespass. Their court appearance set off a chain of events which trailed through the courts amidst bitter argument at local and national level, but finally led to the return of the land to local Māori people. The golf course has been re-sited in the hills overlooking Raglan.

In 1988, more than a thousand people gather to remember those who fought for what they considered a triumph over injustice. “

Source

Whilst the land was used in the defence of the nation, Maori were prepared to tolerate the State “acquiring” (ie, confiscating) it.

But once the war was over,  Maori had a reasonable expectation that it be returned to them. Instead, the pakeha state gave it to the Raglan Golf Club, and Maori had to fight through the Courts to have was was rightfully theirs, returned to them.

I doubt if any redneck pakeha would tolerate his or her house been confiscated by the State, without compensation, and later on-sold to developers.

The same can be said of water. Maori were prepared to share this resource with all of New Zealand.

But once National decided to sell four power companies, this changed the entire management/benefits dynamics. As our American cuzzies put it;  “it’s a whole new ball game, Jethro!”.

There are, unfortunately, a sizeable number of pakeha who say that “no one owns the water”.

Really?

Have a look at your local body rates bill. Notice how much you’re paying for water “no one owns”?

And isn’t it funny that until Pakeha rocked up onto the shores of the Land of The Long White Cloud, Maori had no concept of private ownership? An Iwi or hapu had sovereignty over an area of land and waterways – but no one  person owned anything. It was all communal.

Enter boatloads of pakeha and their alien notion of “private property”.

Suddenly, land was owned by individuals.

Maori were expected to get used to this alien concept. In fact, they had little choice, and to their credit they adapted well to the Pakeha system. They also realised the power of the Courts and the legal system – another pakeha construct.

Maori are now using the Courts (a pakeha system) to gain ownership (a pakeha notion) over waterways. The Treaty (a pakeha instrument) is their contract with the Crown (a pakeha hierarchical institution) that guarantees Maori undisturbed possession of their “treasures” (assets).

And all of a sudden, pakeha are claiming collective ownership of water?!

Talk about trying to change the rules half-way through the game!

Once this issue hits the Court system, expect delays as the case drags through the High Court, then Court of Appeal, then Supreme Court. It could be a very, very drawn out process.

In which case, Maori and a 172 year old document may have stymied the theft of our State assets. Just as the Treaty was designed to stop the theft of Maori assets.

Funny, how things turn out for the good.

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