If the asset sales referendum was held today…

Greens and Labour MPs are having another push to try and get enough signatures to have a referendum to tell themselves in the House of Representatives that they are members of what they have been promoting for the last year.

What would such a referendum tell the country? What would I do if the referendum was held today? The proposed question:

Do you support the Government selling up to 49 per cent of Meridian Energy, Mighty River Power, Genesis Power, Solid Energy and Air New Zealand?

I would consider a number of options:

  1. Not vote in protest  – unlikely
  2. Spoil my voting paper in protest – very tempting
  3. Answer Yes – possible because I’ve sort of supported the MOM share float programme on principle as it was National’s major election policy.

But if I was to honestly answer the question?

  • Right now I’d answer No – for a start market conditions make a Solid Energy float very unwise.

If the referendum is held some time next year I’d have to reconsider my response for a number of reasons, including:

  1. One or two SOEs may have already had their share floats so the whole question is meaingless
  2. The world economic situation may have tanked, making share floats difficult to justify
  3. The New Zealand economy might be resurgent making likely share prices very tempting

And there are many other considerations and factors.

This shows how unsuitable a simple referendum is for a complex political and economic policy.

 

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