26 January, 2011

Let's get some privatisation up in this place!

So, John Key has announced that he's going to sell off some state assets, namely our energy companies, to cover some of this debt we seem to enjoy so much. There's a couple of things I don't like about this, and they cover both practical and ideological fronts.

Key, in his State of the Nation speech, said that National would sell off 49% of the state-owned energy companies to pay for rising national debt, retaining controlling interest for the government.

On the practical side, I understand that energy companies earned the government around $700 million last year. This goes into the state coffers where it's used to help pay for things like healthcare and education. If the government sells off half of the shares in the companies, that would slash the revenue that the government can take. That will mean we'd have to find more money from other sources to pay for important things that we're already not providing enough funding for.

Selling the assets would mean a one off cash boost to the government, but after a few years, the reduced income would negate that.

We were in debt a couple of years ago, and John Key cut tax for the rich, claiming it would help boost the economy, apparently still believing that the trickle down theory actually has merit. That, or he was lying through his insidious smile. Either way, fit for leadership that does not one make.

Yoda-esque sentences aside, the cuts were supposed to be balanced out by the increase in GST. It's incredibly naïve to think that a tax on consumption would work in a time when consumption is low.

So we ended up in more debt, of Key and Bill English's construction, which they claim will be solved with a quick state-asset sale.

On the ideological side of my argument, energy companies are part of our core infrastructure. They belong to all of us. Key said that "mum and dad" investors (I abhor that term on so many levels) would be better off if they could buy shares in the companies. When CLive pointed out that "mum and dad" already own shares with them being state owned (as do the rest of us non "mum and dad"s), Key merrily said, "Yes, and now thay can buy their own shares in it! ^_^" *

"Mum and dad" investors are not going to be better off - wealthy, private interests are. Foreign investors are going to go for their slice of the pie too (even though they have to stand at the back of the queue, NZ investors would be given first dibs).

Electricity companies are fundamentally important to the running of our nation. Power generation should belong to all the people and not be subjected to the whims of private owners. Just because the government holds controlling interest, giving them the power of veto in certain decisions, it doesn't mean that the other 49% don't have any sway. They have a lot of sway.

I shouldn't keep saying that these companies are owned by the government, that makes people miss the point. These companies are owned by us - the citizens of New Zealand. We should be the ones who control them. A small group of politicians should keep their grubby paws off them.

* I'm paraphrasing a little.

1 comment:

  1. IMHO John Key is a disingenuous prick.

    Analysis from Keith Ng and Bernard Hickey demonstrates how the partial sale would be financially irresponsible, actually weakening New Zealand's debt position. Privatisation is clearly an ideological move - which, as much as I disagree, is fine in and of itself - but Key should be presenting it as such rather than using loose and untruthful reasoning to support his cause.

    As with the first round of tax cuts and the changes to GST, National is actively worsening New Zealand's financial position; hurting constituents in the short-term and doing major damage to our economy in the medium- to long-run.

    Key's background in currency speculation has clearly failed to equip him with any sense of altruism or integrity.