How John Key can keep assets NZ owned

There’s a lot of discussion on how much of the 49% of private ownership will remain in New Zealand. As a result of last night’s interview with John Key on Campbell Live we get this headline:

Can’t stop asset shares being sold overseas – John Key

(The interview with Key on that link gives some insight into the pros of the asset sales).

Prime Minister John Key says there is no way to stop New Zealanders who buy shares in the partially privatised state power companies from later selling them overseas.

“You can’t and wouldn’t want to stop them – but the question you have to ask yourself is why would they go and do that?” he says.

“The question comes down to, why would a foreigner find an investment in Mighty River Power to be far more attractive on the long run than a retail investor sitting in Karori? And there’s no logic that they would,” says Mr Key

But there are a number of things Key can do to help retain wide New Zealand ownership:
  • Make the inital share sales as easy to access as possible for New Zealand buyers.
  • Ensure ACC, NZ Super and Kiwisaver funds can buy shares.
    (that will repesent ownership by many or all New Zealanders).
  • Buy up to 10% of the shares himself.
  • Give John Campbell (and the public) another lesson on financial literacy on Campbell Live…

…he asked Key how he could stop ordinary shareholders from selling their shares after three years “to make a profit”.

“Making a profit” shouldn’t be the main aim of buying shares in the likes of Mighty River Power. That sort of blue chip stock is usually bought for earnings over time, not for short term capital gain. The power companies are not growth orientated, they are seen as solid long term investments for earnings.

  • Encourage people to buy shares as an investment, not a get rich quick scheme.

Any more suggestions?

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