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.

Is Peter Dunne breaking a promise on water assets?

Amongst the many accusations and targetted pressure swirling around Peter Dunne and asset sales a claims keep popping up aboutpromises on water assets.

Clayton Cosgrove recently posted  on the Labour website:

Time for Dunne to do what he promised

|  Tuesday, June 19, 2012

“Mr Dunne told voters before the election that he too wanted a New Zealand that retained control over water resources.

“This is when we discover whether Peter Dunne can be trusted, and whether his promises are worth the election brochure paper they are printed on,” Clayton Cosgrove said.

And David Clark has referred to this on Red Alert:

1 –Absent conscience when it comes to keeping his election promise never to sell off our water assets.

Cosgrove claimed:

“On at least three occasions before the election Peter Dunne promised United Future would never be a part of selling Kiwibank, Radio New Zealand or our water resources,” Clayton Cosgrove said.

And Cosgrove quotes some examples, then states a conclusion:

“Clearly Genesis Power, Meridian Energy, Mighty River Power and Solid Energy New Zealand hold significant interests in water resources, and if Mr Dunne stays true to his hand-on-heart promise to voters, he will support Labour’s amendment to the Mixed Ownership Model Bill that prohibits the sale of such companies.

But Cosgrove is cherry picking quotes and ignoring context. United Future policy (and Peter Dunne statements) were strong against selling “the supply of the water”:

Asset Sales

Water. UnitedFuture does not intend to wait until it is on the asset sales agenda. New Zealanders would never – or should never – accept a sell-off of the supply of the water, or any of the aspects around it.

But it was also made clear that United Future would support the right of National to promote one of it’s major policies which specified the four energy companies:

UnitedFuture on Asset Sales

As a party we had therefore ruled out ever supporting any sales – partial or whole – of Kiwibank, Radio New Zealand or our water supplies.

We further said (on 1 November 2011) that in the case of the four energy companies and Air New Zealand, which National was proposing to sell a portion of, that we believed the Government should retain a minimum of 51% control, and that there should be limits on the holdings able to be purchased by individuals or entities, and that New Zealand household investors be given preferential purchase rights at time of issue. (See www.united.future.org.nz/asset-sales-1/).

UnitedFuture’s confidence and supply agreement, negotiated with National after the election, confirms all these points and is therefore consistent in every regard with our pre-election policy. That is why UnitedFuture will support the Government’s plans to introduce a mixed-ownership model for the four energy companies and Air New Zealand.

So a clear differentiation has been made between energy companies and supply of water.

What has been a bit vague is what the references to various water rights means. So I asked Peter Dunne for some clarification:

What we were essentially referring to was privatisation of high country rivers, lakes etc that would lead to restrictions on public access.

We were not talking about hydro dams, for example, so Labour’s attempts to hook this into the MOMs debate is at best specious, at worst dishonest. If one looks at our overall approach to preserving public access, the overall policy fits into place neatly.

A distinction between power companies and water rights was obvious, this makes it clearer.

Political claims of broken promises are common, but rarely stack up with facts.

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.

Mixed Ownership Model Bill – 51% ownership amendments

In a Supplementary Order Paper No 42 – proposed amendments change 51% voting rights to 51% ownership.

Hon Tony Ryall, in Committee, to move the following amendments:

Explanatory note

The Bill currently contains 2 ownership limits for mixed ownership model companies: a 51% Crown control requirement and a 10% ownership cap for non-Crown persons. These ownership limits currently apply to voting rights attaching to shares and other securities of the company. This Supplementary Order Paper extends these 2 ownership limits so that they apply to shares of the company (including non-voting shares), as well as to the voting rights. The effect of doing so is that—

  • the Crown must hold 51% of every class of shares in the company, as well as 51% of every class of the voting securities (which are voting shares and other securities with voting rights); and
  • no person (other than the Crown) will be able to have relevant interests in more than 10% of any class of shares in the company or more than 10% of any class of the voting securities of the company; and
  • if a person has relevant interests in shares or voting securities that exceed the 10% limit, as well as the person not being entitled to exercise voting rights attaching to the shares or voting securities in excess of the 10% limit, no dividend or other distribution may be paid in relation to them. So as to enable the company to act with certainty (eg, to deal with complicated shareholding situations), the company may determine which are the excess securities, in accordance with the constitution, in implementing the consequences of exceeding the 10% limit.

In addition, it is clarified that the current prohibition on sales of shares by Ministers that would result in the Crown ceasing to have 51% control applies also to other types of voting securities that the Ministers may acquire.

I’m more than just pleased about this. 51% total ownership was something I and United Future campaigned on, and it was agreed to in the United Future/National Confidence and Supply agreement, so this holds fast to that stand.

It also shows that United Future can act as a moderator on National.

Regulatory Impact Statement

Providing for greater controls over Mixed Ownership Model companies, by including non-voting shares in the 51% floor and the 10% cap Agency Disclosure Statement

This Regulatory Impact Statement has been prepared by The Treasury.

This RIS provides an analysis of options to ensure that the Mixed Ownership Model Bill (MOM Bill) includes economic interests in the 51% floor and 10% cap, to ensure consistency with the Confidence and Supply Agreement dated 5 December 2011 between the New Zealand National Party and United Future New Zealand (UFNZ) (the Confidence and Supply Agreement), specifically around introducing “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.”

This RIS has been informed by discussions between the Office of the Minister for State Owned Enterprises and the Office of the Leader of UFNZ. Those discussions have prescribed the nature of the regulatory response, particularly in the context of the MOM Bill.

Full Regulatory Impact Statement PDF

(A few people) power and Ohariu

A group of people, some from the Ohariu electorate, have been campaigning against asset sales. Amongst other things they’ve been trying to pressure Peter Dunne to reverse his election commitments on mixed ownership.

They’ve been doing various things to attract attention. There latest effort may offend many people:

Protesters scale war memorial to erect banner

Early this morning a small group of protesters scaled scaffolding on Wellington’s National War Memorial carillon to hang a massive “No Asset Sales” banner.

The protesters are part of a coalition of Wellington groups opposing the Government’s plan to sell up to 49% of four state-owned energy companies and further reduce its shareholding in Air New Zealand.

Spokesman Richard McIntosh said the coalition was made up of People Power Ohariu, the Mana Party, the Ohariu Citizens Select Committee and others.

Is this a major protest movement? Not according to Dunne, who posted on Facebook yesterday:

The so-called Ohariu people’s select committee on state asset share floats is a joke.

First they said I had gone against my pre-election policy on share floats – now they concede I have not, but say they did not realise what UnitedFuture’s policy was.

  • Then they said they had 700 submissions from local people opposing my stance;
  • then it was 600;
  • now they say that at least all the self-appointed committee members of grumpy old unionsts are Ohariu voters
  • and that just 269 of the submissions are from local people.
  • Their first protest at Parliament attracted 9 people;
  • their last protest at my electorate office on a day when it was closed had just 5 people attend.

There are a lot of people not particularly happy about Nationals Mixed Ownership asset sales proposals, and quite a few are protesting and expressing their opinions. That’s fair enough in a democracy.

But desecrating a War Memorial is a step too far. I find this very offensive.

Amongst other things by association a few misguided zealots will discredit legitimate protest of many.

So much offence by so few to so many.

People Power Ohariu:

Scoop: Hikoi to join Ohariu residents in protest at Peter Dunne’s Johnsonville office

Kiwiblog: People Power Ohariu

The Standard: Citizens’ select committee taking submissions

Keeping Stock: People Power or Sneaky Power