The Mixed Ownership Model Bill will complete it’s passage through parliament this week.
Would as many people have voted for National if they knew it would pass? It was clearly campaigned on by National and prominently opposed by Labour and voters should have been clear about the chances of it proceeding, so it would be odd if there are defections of support from National because the part asset sales are going ahead.
(Stuff) The Government’s plan to partially sell shares in four state-owned companies is set to overcome its final hurdle this week.
Legislation allowing for the sale of 49 per cent of the companies will get its third reading after fiery debate on the issue in Parliament last week.
Despite the continued unpopularity of the scheme, Cabinet minister Steven Joyce said the Government would not back down.
National took the issue to the country before the election and voters understood it was a government’s job to get the books into surplus and create opportunities, he told TV One’s Q+A show yesterday.
People could not say they wanted economic growth and jobs and then turn down policies that would achieve those things.
“You can’t buy a quarter of the package,” he said.
Reasons against asset sales have been extensively overstated. The case for the sales has often been shouted out by the hubris.
It’s fairly well known that National want to sell some assets to reduce how much Government needs to borrow. But Steven Joyce talked about a stronger ereason on Q+A yesterday.
“One of the most important things about it … is the strengthening of the capital markets by getting those shareholdings listed.”
New Zealand’s capital markets had performed relatively poorly over the past decade and the listing of four strong energy companies would strengthen them.
“We need to grow our capital markets because that’s how our companies get the opportunity for more capital, to grow further, to add more jobs.”
The importance of active and strong capital markets isn’t understood by many people – in fact some of the strongest opposition to asset sales comes from idealistic Green and Mana supporters, some of whom want to get rid of capitalism altogether. Some of the campaigning has been as much pro-socialism as it is anti-asset sales, because some see the tow as being the same thing.
But if voters going into the election should have been clear about the prospects of part sales going ahead, so National shouldn’t lose much support for sticking to their main election policy.
PROS AND CONS (STUFF)
Expected profits of $5b to $7b from the asset sales programme. A target of 85 to 90 per cent New Zealand ownership. Small share packets of about $1000 may be offered to maximise access for “mum and dad” investors. The Government has pledged to retain a majority 51 per cent stake.
The asset sales programme will not dent Crown debt, with no more dividends from assets. Foreign ownership of energy companies – higher power prices, dividends flowing overseas, and fewer jobs. Costs of the sales process – around $120m spent on fees for organising and marketing the floats. The tenuous state of the global economy means assets may not attract a high price.