Politicians, journalists and bloggers fix MOM Bill

Politicians (obviously) and journalists have long been essential contributors to a healthy democracy. But a recent example shows that bloggers (and ordinary people) can also play an important part in media and politics.

It’s well known that in January last year National introduced a policy idea of partial asset sales. Their Mixed Ownership Model policy was a major part of their election campaign (and Labour’s anti-asset sales stance dominated their campaign).

A significant component of National’s proposed policy was:

The Government will maintain a majority shareholding stake by owning more than 51 per cent of each company.

As we know, National slightly increased their vote in the election, and Labour lost votes, enabling National to form a government, which with coalition commitments gave them the opportunity to progress their partial asset sales policy.

On April 13 Vernon Small wrote an article which is still online on Stuff:

Loophole allows sale of over 49pc

A loophole in the law covering partially privatised state assets will allow much more than 49 per cent of the value of the companies to be privatised, providing the extra shares do not carry voting rights.

… a “minor policy decision” by ministers, revealed in a Cabinet paper released last week, shows that the 51 per cent limit, as well as the 10 per cent cap on individual shareholdings, will apply only to voting shares.

Small had noticed a significant change in National’s intent. This was picked up by Anthony Robins and he blogged the next day at The Standard:

Another asset sale lie

It isn’t a “loophole”, it’s simple a lie. The distinction between voting and non-voting shares is just a smokescreen. National clearly promised to retain 51% of the income from these public assets.

I’m sure there are many other sources – all the promises were about retaining 51% of ownership and income.

The “lie” claim isn often overused but Robins was right about the change from what had previously been said. This resulted in some discussion that I became involved in. I noticed the change seemed to be in breach of the National/United Future confidence and supply agreement.

Confidence and Supply Agreement

The National-led government has agreed during this term of Parliament to adopt and implement the following broad principles, policies and priorities advanced by United Future:

  • Introduce statutory limits on the sale of public assets to no more than 49% of shareholding to private interests including limits on the extent of single entity ownership

I blogged on this:

Asset sales 49% ownership at risk?

If this Cabinet decision carries through into the Bill and there is no statutory limits on the sale of public assets to no more than 49% of shareholding to private interests including limits on the extent of single entity ownership then National would appear to be breaching the C&S agreement with UnitedFuture.

If this Cabinet “loophole” is allowed to carry through I’ll be seriously questioning the honest intent of National.

And if United Future just lets this happen, disregarding what we all campaigned on and what was written in the C&S, that will be a major problem for me, and I would have to decide how to deal with it. It’s not something I could just leave and forget, I think it involves a major principle, of why I campaigned for and supported United Future, both during the election and since.

At the same time I raised the issue directly with Peter Dunne. I was later advised this was being addressed.

On Monday Supplementary Order Paper No 42 was tabled proposing amendments that changed 51% voting rights to 51% ownership.

In Tuesday’s debate on the MOM bill National prominently used this return to their original ownership commitments:

Hon TONY RYALL (Minister for State Owned Enterprises):

It legislates 51 percent New Zealand Government control, full stop, for all time—51 percent full Government ownership for all time, full stop—and it puts a limit of 10 percent on any one shareholder. There will be 51 percent Government control, and 10 percent limit on any shareholder, and that is important, and that is what is being enshrined in this legislation.

And Vernon Small reported again on what he had started:

Govt closes asset sale loophole

Fairfax Media highlighted the loophole in April  and it is understood that sparked a backlash from United Future leader Peter Dunne. It is understood the Government U-turned  after Dunne dug in his toes, arguing the wording in the Mixed Ownership Model Bill would breach his party’s support deal with National.

SOE Minister Tony Ryall last night moved the amendment to the Bill, which changed the requirement on the Government from retaining 51 per cent of the shares with voting rights to 51 per cent of all shares.

The change would also apply to the 10 per cent cap on individual ownership.

So from the vigilance of a journalist, the actions of ordinary people in blogs and politicians doing the right thing a part of the MOM legislation has been tidied up – a win/win/win, including for National who have rectified a problem and then used the solution as a positive factor promoting their legislation.

Apart from the satisfaction of seeing something I (and others) saw as wrong put right, this to me is a great example of how a multi-media multi-party co-operative approach can positively contribute to the functioning of our democracy. And anyone who chooses can play a part.

Leave a comment

5 Comments

  1. Does anybody in the world think?

    Politicians never contribute anything good. What is a journalist? Is that someone that provides entertainment and/or propaganda?

    Censorship is evil.

    Reply
  2. I am a bit confused about ownership and voting rights (?), admitting here that I am not a Rocket Scientist when it comes to things dealing with numbers. BUT please check what I say here and see if I am right or wrong: There was no voting power in the 51% ownership??? Having 51% ownership can be done without have voting rights?

    I smell a very bad smell and my smelling a very bad smell makes me a bit annoyed. Am I right there?

    It’s one of the reasons why I have put my journalism skills back into action and blogging is a way of contributing.

    Well Done Pete and Peter Dunne. We have however, other issues to grapple with and I look forward to that.

    Reply
    • It would have meant they could have sold up to 49% normal voting shares – and also sold any number of non-voting shares on top of that. Theoretically they could have sold twice as many shares, just half with voting rights, but all dividend paying so it would dilute the divident pool. The Crown would have had to retain 51% voting shares.

      Reply
  3. That’s an awesome post Pete. Have now blogged myself, was waiting to read yours until after I’d gone to other sources, and drawn my own conclusions.
    Future share dilution is a real issue for any company when bank lending is the first port of call, so there must be a reason to enable this in any original agreement. Good to see share and profit dilution ruled out.

    Reply
  1. Two Dunedin bloggers play part in moderating asset bill | Your Dunedin

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