MRP float – success or failure?

Once you look past all the politicking I think it has to be seen as a moderate success, with a share price just below the range predicted. There’s been a good take up of shares from private buyers , New Zealand and international investors.

Labour and the Greens are trying to talk up various points of failure, but they ignore the reality – 49% of Mighty River has been sold at a reasonable price.

It may have been valued down by up to $200 milion due to the Labour-Green NZ Power announcement, which may also have scared off small and first time investors, but that doesn’t make the share float a failure.

I think that over a hundred thousand purchases is a reasonable number. About the only thing that would have been gained by more people investing would have been National bragging rights. It has made little or no difference to the sale price.

The success of the Mixed Ownership Model is another thing altogether. It will take years to see the real effect on Mighty River, on power generation and on power prices.

Solid Energy is a market casualty before it has had a chance to be floated, that’s just as well.

The success of MOM in National’s cuurrent term in Government will be determined as much by the next couple of floats.There has been a lot of interest in the first SOE part sale, that interest may or may not be maintained.

If Meridian goes on sale next and does at least as well then National could claim some substantial success rather than one-off success.

If the Meridian float doesn’t do so well then it would raise questions about how god an idea the MOM programme was.

Note: I have supported National’s right to progress their flagship policy but have had mixed views on the nature of the MOM programme. I would prefer it was based on more business-like decisions but election cycle syndrome means less than ideal decisions are made.

How Peter Dunne votes

Peter Dunne in a recent address to Petone Rotary:

Casting Vote

In the current Parliament, UnitedFuture’s position has had added prominence because my vote is periodically the casting vote.

I am sure you can imagine the consternation that has caused in certain circles!

Is it an act of just capricious judgement?

Is it just made up on the spot?

Or, am I playing out some act of political revenge on those who may have crossed me in the past?

Occasionally tempting, perhaps, but no, I do not play such games!

Well, actually, it is none of the above.

While I might be one man in Parliament, I am nevertheless a UnitedFuture Member of Parliament.

So the first port of call in determining a stance on a particular issue has to be to refer back to UnitedFuture policy.

Many who were so critical of the stand we took on the Mixed Ownership Model for state assets failed to do that, and were probably stunned to learn we even had policy on this and a range of other issues, because they never expected our vote to matter, and therefore had never bothered to check out our policy positions.

Likewise, my support for Labour’s paid parental leave policy arises from the fact that Labour’s current Bill is a step towards achieving our own overall policy goals for paid parental leave.

Second, if an issue is not clearly covered in our policy documents, the second port of call is whether it forms part of a confidence and supply agreement provision.

Again, with the Mixed Ownership Model, there was a specific confidence and supply agreement provision about having statutory minimum Crown ownership and maximum private ownership.

So, based on existing policy and our confidence and supply agreement, not only was it obvious that UnitedFuture would support the Mixed Ownership Model, but it was also utterly consistent for us to do so.

However, in the event that an issue is covered by neither existing policy, nor a confidence and supply agreement provision, the UnitedFuture Board and I will decide jointly what our stand should be, consistent with our previously stated party principles.

The proposed Mondayising of ANZAC and Waitangi Days comes into that category.

To those who say this is all poppycock and that I simply do what the National government wants, I say it is worth noting that, ironically, the Labour Party has so far been a greater beneficiary of UnitedFuture’s approach on these matters than has National!

Note: I’ve communicated with Peter (Dunne) a number of times on bill voting and he has always referred to and followed United Future policy and principles in making his decisions. And he is always willing to discuss, consider and explain policy positions. He is a major component of the party but he doesn’t fly solo. PG.

Honouring our ancestors, leading with our hearts

By Dr. Pita R Sharples

‘Intergenerational’ is a word you often hear roll from the lips of our tangata whenua leaders. We work hard to honour the labours of our ancestors, while also building on their vision for our future generations. Those of us here and now are a part of a bigger picture that spans many generations, and are working in what we view as a truly intergenerational whanau approach.

So when the Waitangi Tribunal came into focus this week, after comments made by the Prime Minister that seemed to dismiss the value of this institution, it hit a nerve. You see, the Waitangi Tribunal is more than a place where Maori can go to have their cases heard, it is a place where our people relive the mamae and pouritanga of the past, and ultimately seek to have that burden lifted from our shoulders.

The hearings are a place to hear the stories of colonisation, and how they have impacted on our whanau, hapu and iwi. Some stories are so painful that they rarely escape the lips of our pakeke. You also hear about the brave endeavours of our tupuna and their hard work to seek a simple concept – true honouring of Te Tiriti o Waitangi.

When our tupuna have suffered you cannot help but be profoundly moved by the depth of the grief that lingers on. Their pain is our pain, their joy is our joy, so when you move through a process of grieving, of airing, and finally of lifting of the mamae – it is a powerful experience. So powerful that it can change the course of entire communities, and you need only look at post-settled iwi to see how that transformation occurs. What we seek in the hearings of the Tribunal is not about money, it is about relationships and respect, it is about acknowledgement of past wrongs, in the hope that we can move forward.

So when you diminish one of the primary mechanisms that allow our people to grieve and to heal, you are also diminishing the memory of our ancestors – and that hurts. That’s what being intergenerational means.

While much of the focus this week has been on the water claims, the sale of mixed ownership model companies and the Tribunal – the real question on my lips is ‘Why, after more than 150 years, are we still having to explain our connection to our lands, waters, language, culture and taonga?’

I think the problem here is much larger than this one case, in this one week. The issue is a wider misunderstanding of what tangata whenua are trying to achieve through Treaty claim processes. I also think that while we have come so far as a nation, there is still a lingering attitude towards Maori rights, consultation, and ultimately Te Tiriti o Waitangi.

This week has been hard on us, and the strength of emotion around our relationship to water, our right to have our grievances heard, and the legacy of our ancestors has put a heavy weight on our shoulders.

But we persevere because we know that we have a duty to the next generation to ensure that their load will be lighter than ours. Our focus should be on addressing the barriers that stand in the way of true partnership, meaningful relationships, and respect between our cultures.

That is why initiatives such as the constitutional review, cultural competency training and Whanau Ora are of critical importance. It is about an investment into building a better future for our next generation. It is also an investment into bridging relationships across Treaty partners. If there is anything that I hope that we can take away from this week, it is the knowledge that tangata whenua do have a deep connection with the taonga around us, that we do value the processes which allows us to grieve and to heal and, ultimately, that we are prepared to stand up for what sits in our heart.

Those of us in the Maori Party cannot divorce ourselves from our identity as tangata whenua. It is an intrinsic part of who we are and it will always be our hearts that guide our work and our voice in parliament.

Dr. Pita R Sharples is Co-Leader of the Maori Party and MP for Tamaki Makaurau

Sourced from: http://www.radiolive.co.nz/Default.aspx?TabId=721&articleID=29304

Remarkable change in asset (MOM) bill coverage

After months of strident opposition to ‘asset sales” and the Mixed Ownership Model bill, and complaints that National haven’t presented their side of ther argument well, this weekend saw a significant change in media coverage.

The MOM bill completed it’s passage through parliament this week.

Today TV1’s Q+A had an interview with Bill English that covered MOM issues, and there was a separate interview:

With Mighty River Power about to go on the block we talk to Mark Lister, Head of Private Wealth Research at Craigs Investment Partners.

This looked quite favourably at the propsoects of investing in Mighty River Power, and the potential advantages for New Zealand’s capital markets.

And yesterday (and repeated this morning) on The Nation Rachel Smalley had a realistic and informative discussion on the proposed share floats, especially of Mighty River Power – but curiously this doesn’t feature on The Nation website.

(As at 11.00am Sunday 1 July)

Is the Dotcom item really the lead item from The Nation? Have asset part sales faded from publicn interest this quickly?

 

Now the asset bill has passed…

…National will continue flogging off part of the power companies.

…Labour/Greens will continue to flog a dead horse petition?

…Peter Dunne will continue working quietly on closing tax loopholes and on health issues.

…and we might hear something of the other parties. Remember Act? Maori Party? Mana?

National have been promoting their MOModel for eighteen months, they fought an election campaign on it, and have progressed it into law. They have been steadfats and kept to their word, apart from one attempt to loosen the 51% ownership cap. They were pulled back to honour commitments by United Future on this – Politicians, journalists and bloggers fix MOM Bill.

Labour bet the election on opposing asset sales and lost support. They have continued to campaign against the sales, including playing a part in the anti asset sales petition and protests and marches. They have put more resources into opposing this than anything else. And they have currently failed.

And it looks like Labour are going to continue the battle, going by David Shearer’s speech on the final reading of the bill yesterday, and their promotion of a gimmicky poster: Labour caucus or Labour circus?

Greens had a much more successful election strategy, concentrating on promoting their own policy priorities. This resulted in a record number of Green MPs. There’s a lesson there.

But Green’s have climbed on the anti-asset sale bandwagon to the extent that they are betting some of their parliamentary funds, a lot of MP, staff and travel resource, on trying to use a publicy funded referendum to lead into the 2014 election campaign. This has already received critical attention: Green abuse of CIR.

Labour/Green’s risk

The Labour/Green strategies are risky.

  • If the petition gets enough signatures – they have about a third of the signatures required after two months, and have another eleven months to get the rest.
  • If the resulting referendum gets a good voter turnout – this would be some time next year.
  • If the referendum gets a resounding result against asset sales.
  • If the voters care after that when the Government is expected to ignore the results.
  • If the share floats are not very successful…

…then Labour/Greens may benefit. Whether the benefits turn out to be sufficient to win them the 2014 election – two and a half years away – is anyone’s guess.

It will be difficult to keep generating enthusiasm for the peition now the MOM bill has passed. And then to regenerate enthusiasm for what may be a dead duck referendum – One and possible several of the asset floats will have already happened by then.

National’s challenge

It’s not all over for National. Their challenge now is to not stuff up the implementation of the Mighty River float, and to hope the market embraces the opportunity to invest in what should be blue chip shares.

The first float could be the making or breaking of this policy. And that could be the maintaining or breaking of a National Government post-2014.

There’s a touch of the bizarre in that so much is potentially at stake for the three largest parties over what is generally regarded as a fairly cautious, soft approach to part privitisation of a handful of assets.

Asset sales may be a major part of the next election. Or maybe Labour will have finally woken up to the reality that to be seen as a viable lead party in Government they have to be seen as leaders, not as non-stop negative. So maybe Labour will stop clinging to the past and start to look to the future, and set about a decent rebuilding and refreshing of what is currently looking like a tired old party.

Would they have voted National if they knew this?

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.

Asset sales set to pass last hurdle this week

(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)

FOR

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.

AGAINST

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.

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.

National on 51% ownership

The Mixed Ownership Model Bill was debated in parliament yesterday. National prominently promoted the fact that there would be “51 percent full Government ownership“.

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.

Hon TONY RYALL (Minister for State Owned Enterprises):

This part of the Mixed Ownership Model Bill puts in the law a number of the very important features of the mixed-ownership model, particularly the 51 percent legislated guarantee that the Government will retain 51 percent of all shares in these State-owned enterprises, together with the 10 percent cap on any other shareholder.

Under this legislation, we are maintaining 51 percent New Zealand control, as a minimum owned by the Government, and a 10 percent cap on any other shareholder.

Hon TONY RYALL (Minister for State Owned Enterprises):

When the Prime Minister announced in January 2011 that we would have a 51 percent minimum shareholding for the Government and a 10 percent cap on any other shareholder…

TODD McCLAY (National—Rotorua):

Why is that important? It is because Part 2 of this piece of legislation says that it places limits on ownership of companies named in schedule 5. Those limits are 51 percent ownership held by the Crown. It is written into the piece of legislation. It cannot change.

I’m very pleased to see this emphasis, it’s something I think is very important.

But what about credit where it’s due?

Until yesterday, there was no provision for 51% ownership in the bill. National had originally proposed 51% ownership (in January 2011 as mentioned above). But when they introduced the MOM bill that had been changed to:

The Bill prohibits a shareholding Minister in a mixed ownership model company from disposing of any shares in the Minister’s name or permitting an issue of shares or securities (or a mixed ownership model company from issuing, acquiring, or redeeming its shares or securities) if doing so would result in the Crown holding less than 51% of the voting rights in the company…

This was reported on in 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.

The Government has pledged to retain 51 per cent of the four energy companies it has put on the block, starting with Mighty River Power later this year.

But 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.

The Cabinet has agreed “the 10 per cent and 51 per cent restrictions should be calculated on the basis of voting rights rather than the total percentage of all securities held (including those with non-voting rights)”.

But this loophole has now been closed. Supplementary order paper 42 introduced yesterday changed this from 51% voting rights to 51% ownership, as blogged here.

This small but significant change was due to the instigation and insistence of United Future, to ensure their party campaign and Confidence & Supply commitments were met.

United Future made a commitment to keep National moderate, and have clearly done so here.

How strong is asset sale opposition?

There’s little doubt there’s a lot of opposition to the proposed asset sales (Mixed Ownership Model). How strong is the opposition?

A recent 3 News Reid Research poll shows New Zealanders remain opposed to the Government’s planned asset sales.

The poll asked 1000 voters whether they agreed with the partial privatisations.

  • 62% disagreed
  • 35% agreed
  • 3.5% unsure

What is not apparent is how strong that opposition is. Obviously it wasn’t strong enough to reduce National’s vote at the last election (numbers increased slightly, the % was the highest recorded under MMP).

Labour used anti asset sales as it’s main election plank, and that wasn’t successful for them.

The Green Party has been against them too (they are anti a lot of things) but had then sense to concentrate their election campaign on more positive things, more jobs, reducing poverty and cleaning up water.

The Mana Party are strongly against, they were  involved in organising the recent hikoi against asset sales – but this was only modestly supported and lacked focus with many other things being included in the protest.

Long time commentator for the left Chris Trotter thought that the hikoi was not only unsuccessful, but it could be counter-productive:

A “Pessimistic Reformist” Considers The “Aotearoa Is Not For Sale” Demonstration.

Unfortunately, my own cold, hard analysis of the facts of last Saturday’s Aotearoa Is Not For Sale demonstration has led me to the very upsetting (and no doubt highly unpopular) conclusion that, if it was intended to demonstrate to the Government that its “partial” privatisation plans have generated the same level of public opposition as its earlier proposals to permit mining on New Zealand’s conservation estate, then it failed.

Many of the people I spoke to on the anti-privatisation march realised that there were “not enough” people to give the National-led Government pause, but added cheerily “still, it’s better than nothing”. Not necessarily. I would argue that Saturday’s march was, in fact, worse than nothing. By providing the Government with a vivid glimpse of its most vociferous opponents, and revealing just how few of them there really are (even in the country’s most populous city) the organisers of the anti-privatisation march have told the Government that it can now proceed without serious political risk.

It’s easy to see where the parties stand on MOM, but what do the wider public really think? Outside political forums there doesn’t seem to be a lot of protest, does that mean most of the opposition is quite mild?

Facebook is hardly brimming with opposition:

Someone has tried an online petition without much success:

Here’s another one:

I found these when trying to find the main petition, maybe it’s a bit too soon to find that easily. The wording has just been approved by the clerk of the house:

The agreed wording isDo 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 guess we’ll hear more about this, but I think they have made a serious mistake with the wording, if you sign that you are agreeing with asset sales?

I’ve talked to someone who has always voted left and has always been against asset sales generally, but who just said:

But we’ve got to do something to get the country out of the shit!

They would poll against asset sales but with reservations.

So how strong is MOM opposition outside the political parties?

Submissions against asset sales

Over the last few weeks the the Finance and Expenditure Committee has been hearing many submissions on the Mixed Ownership Model Bill. Most if not all have been against the bill and are against asset sales. There have been a lot of curious reasons against the sales.

Labour led from early on with the overworn “selling the family silver” cliche. My family has some silver we won’t consider selling, but I am currently selling some family assets, the proceeds of which will go towards reducing our mortgage.

Yesterday’s submissions saw one of the most bizarre metaphors – asset sales are like eating your last hen. Here’s a compiled list (as tweeted by Labour MP for Dunedin North, @davidclarknz)

  • #assetsales like eating your last egg-laying hen. Satisfying for a couple of meals, but stupid long-term
  • Submitter points to risks of privatisation of public goods. Cites overseas #assetsales EGs of profit maximisation and resulting civil unrest
  • Grey Power submits that there is no doubt people will die from cold because of this bill #assetsales
  • Selling coffee machine to pay mortgage on cafe #assetsales #engineroomofeconomy
  • Partial-privatisation is like partial-pregnancy #assetsales
  • Submitter: #assetsales is like selling your kidneys to get a blood transfusion
  • Submitter suggests govts #assetsales plan is akin to selling the roof to pay to fix a leak
  • @DavidClarkNZ – Maybe we need to get Maui to pull up some new land for a new country? : (

There havebeen others in the past, I’ll add more as I see there

Another tweet from yesterday:

@edmuzik
Every time someone retweets @DavidClarkNZ into my time line, I see his profile pic and assume its a paid tweet from KFC’s Colonel