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Monday, September 3, 2012

Roll-call of blunders marks asset sales agenda - Green Party Media Release

Green Party of Aotearoa NZ
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Roll-call of blunders marks asset sales agenda

National's flagship asset sale policy has been marked by mismanagement and crisis while the real economic problems facing our country have been neglected, Green Party Co-leader Russel Norman said today.

The Green Party today released a list outlining the economic and political mismanagement of the asset sales policy by the National Government and renewed its calls for the policy to be dropped.

"National's flagship asset sales programme is in crisis and needs to be scrapped," said Dr Norman.

"The asset sales programme has lurched from blunder to blunder while National has neglected the economy and failed to create jobs.

"Asset sales would create not one extra job for New Zealanders, yet they are the centrepiece of this government's economic agenda.

"Now that the Government's mismanagement of the water rights issue has caused a delay in the sale of Mighty River, it is the perfect time to drop asset sales altogether.

"New Zealanders don't want our assets sold. It is time for asset sales to go the same way as National's plans to increase class sizes and mine our most precious land - in the dustbin," said Dr Norman.

---------------------------------------------------------------------------------------------------------------------------------------------------------------

National's asset sales: a roll-call of blunders

 

From the start, National failed to come up with a good reason for the asset sales. Each reason they've offered has been comprehensively disproven:

 

Privatisation would lead to greater efficiency and better management

Treasury found "there is little evidence of systemic under- or over-performance in the SOE portfolio". Mighty River Power was recently awarded Energy Company of the Year at the Deloitte Energy Excellence Awards. The history of privatisation is that private mangers often under-invest and take big risks that have led to the Government needing to buy-back the companies (eg AirNZ, Kiwirail) or make the investments that the private owners have failed to make (eg Telecom).

Asset sales would allow the Government to reduce debt

The Budget shows that asset sales would make the deficit worse by about $100 million per year. This is because the Crown can borrow at under 4% while the companies return far more than that.

Privatisation would give the companies access to capital for growth

They can already raise capital on the bond market or by not paying out dividends Partial privatisation mean that the Crown would have to find money to participate in any new share floats by the companies to maintain its 51% share.

Asset sales would increase competition

Private power companies complain right now that competition with the SOEs is too strong and preventing them from raising prices. Public ownership allowed National to force Meridian and Genesis to swap some generating assets, in a move it claimed would increase competition. That power would be lost if the companies were privatised.

Asset sales would let "mum and dad" buy shares

50% of families have less than $1,700 in the bank. Only 17% of people polled say they would be interested in buying shares. And Treasury expects only 7% of the adult population would take part in a share offer. "Mum and dad" simply don't have thousands of dollars sitting around to buy shares in the companies that already belong to them.

Asset sales would cut power prices

The private power companies have higher prices than the SOEs. 12% higher on average. This was originally denied by the Government when they denigrated Green Party and Greypower research, but it was later revealed that Treasury had provided a paper to the Government confirming that the private power companies have higher prices. Adding more privatisation to our energy market would only increase prices as private shareholders demand higher returns to cover their higher cost of capital. Asset sales would increase power prices.

The mandate that wasn't there

As recently as this Monday, John Key has said that he received an "overwhelming majority" for asset sales in the 2011 election. Actually, the majority, 51.5%, of people who voted in 2011 voted for parties that oppose National's asset sales. The asset sales legislation passed by only one vote - and only because National rorted the system in Epsom and Ohariu to get its sidekicks into Parliament.

 


National has mismanaged every aspect of the sales process, and it's the taxpayer that is picking up the bill:

The share giveaway

Mr Key announced the so-called 'loyalty bonus' share giveaway to retail investors who hold on to their shares without costing the scheme and without the legislative authority required to give away potentially hundreds of millions of dollars' worth of public property. Later, he admitted that he may need Parliament's approval before he can give away our shares and he doesn't have it. The cost of the share giveaway is still unknown. The experience in Australia is that share giveaways don't stop people selling their shares, anyway.

The sham select committee

The select committee process was a shambles and a sham with submitters being given only five minute slots. National Maggie Barrie demanded that a submitter identify which party they voted for. Treasury submitted a draft report before the committee had heard all the submitters. The government moved to return a report early, before Treasury could submit a report requested as to whether private companies had higher prices, now we know why, because Treasury's report confirmed it.

No limits on foreign ownership

National says it is its "expectation" that 10-15% of the shares would end up in foreign hands (that's 20-30% of the shares sold) but there is no mechanism to prevent more of the shares than that going to overseas ownership. Contact Energy, for example, started off with 240,000 New Zealand investors but only 80,000 are left. The bulk of the shares are now owned overseas. National voted down amendments to the asset sales legislation designed to limit foreign ownership.

The water rights issue

The most obvious hurdle facing the asset sales is the ownership of the rights to the water used to power the generators. The issue was identified early on by iwi but was dismissed by National. The Crown's legal position in any potential court action was made much worse when Mr Key said he could ignore the Tribunal, even though by law he is required to give it due consideration. The uncertainty has undermined the potential sale price. By leaving the issue unresolved to the last minute, National has been forced to delay the sales by six months.

The market situation

While the government has been going headlong for privatisation the potential value of the companies has been undermined by Rio Tinto threatening to close the Tiwai Point smelter, and the Kawerau pulp mill cutting demand for electricity, on top of already flat demand. The Government has had to admit that Solid Energy is in no position to be sold after coal prices collapsed.

The referendum

Over 250,000 New Zealanders have signed the petition calling for a referendum on asset sales. With the delay in the sale of Mighty River, there is no reason why the referendum can't be held before any sale takes place. National has refused to pay any attention to the calls for a petition so far but how will they be able to continue with sales after a referendum on their precise asset sales policy overwhelmingly rejects it?

The mounting costs

National has spent over $16 million so far on these asset sales that the vast majority of people don't want. The delay to the sale of Mighty River will cost another $10 million, according to the Prime Minister. There's a further $96 million budgeted for costs like PR spin doctors, lawyers, ads, and brokers' fees. On top of that, there's unbudgeted costs to the companies themselves, Waitangi Tribunal and Court costs, and hundreds of millions of dollars for the share giveaway. All for a policy that would carve a permanent $100 million a year hole in the Government's books.

Related links

Keep Our Assets
Download the petition to Keep Our Assets

Subject: Asset sales



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New Zealand
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National’s cosy relationship with Westpac needs to end - Green Party Media Release

Green Party of Aotearoa NZ
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National's cosy relationship with Westpac needs to end

 

The National Government continues to drag its heels on tendering the government master banking contract, the Green Party said today.

Parliamentary questions lodged by the Green Party show Finance Minister Bill English's expectation of a competitive tender of the master banking contract in the 2011/2012 financial year have now been delayed and face an uncertain future.

"The National Government is dragging its feet on tendering the government master banking contract - a contract held uncontested by Westpac for 23 years," said Green Party Co-leader Dr Russel Norman.

"A competitive tender will ensure the taxpayer is getting value for money from the Government's banker.

"It's time to open up this cosy, uncontested business relationship successive governments have had with the Westpac bank.

"Of course, Government ministers might have to give up on some of their corporate box seats and tickets to rock concerts provided courtesy of Westpac."

The Green Party has previously shown that senior National Government ministers and their staff were regularly accepting generous corporate hospitality from Westpac Bank.

"Ideally, our Government's banking should eventually be done by our New Zealand bank, Kiwibank," Dr Norman said.

"Australian-owned banks control 95 per cent of our banking industry and this Government has done nothing to stop the massive capital drain that results from these banks repatriating their record profits offshore each year.

"The inclusion of a national interest test in the tender process will ensure that New Zealand banks like Kiwibank can get at least some of the Government contract in the short term."

The two relevant Parliamentary questions:

06573 (August 2012) In light of his answer to QWA 7363(2011), does he now have a date for the tendering of the Government's master banking contract?

Hon Bill English: MBIE and Treasury are assessing the scope and potential funding requirements for a tender of the Government's master banking contract. The decision on a date for a tender will be made once these matters have been considered.

5047 (June 2011): What is the anticipated timeline for tendering the Government's master banking contract?

Hon Bill English (Minister of Finance) replied: The timeline for tendering the Government's master banking contract has not been determined yet as the project is currently being scoped. However, we envisage being able to go to market in the 2011/12 fiscal year.

Link to previous Westpac corporate treating story:
http://www.greens.org.nz/press-releases/westpac-s-gifts-ministers-potential-conflict-interest

Related links

Master banking contract unearthed
Government's banking contract with Westpac a closed shop for 21 years
Westpac's gifts to Ministers a potential conflict of interest
Russel Norman on Westpac's High Court conviction of half a billion dollars of illegal tax avoidance
Russel questions Key on Westpac's corporate hospitality

Subjects: Smart Economics, Economics, Foreign Ownership



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Delay gives Kiwis a chance to stop asset sales - Green Party Media Release

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Delay gives Kiwis a chance to stop asset sales

The delay in the sale of shares in Mighty River Power gives New Zealanders the chance to have their say in the citizens-initiated referendum and stop asset sales, Green Party Co-leader Dr Russel Norman said today.

Dr Norman was responding to the announcement by Prime Minister John Key today that the Government's asset sales agenda, which has descended into crisis in recent weeks, will be put on hold with the delay of the planned float of Mighty River until March 2013.

"Quarter of a million of New Zealanders have signed the petition for a referendum on asset sales; the Government has an obligation not to press ahead before the referendum is held," said Dr Norman.

"National's welcome decision to put its asset sales agenda on ice until next year allows time for the referendum to take place.

"National should really drop its asset sales agenda altogether; it has descended into crisis as costs rack up, companies are found unready for sale, the Waitangi Tribunal confirms iwi rights to water, and poll after poll shows that New Zealanders want to keep their assets.

"It is clear that National is only delaying the sale because its plan is unravelling so badly

"National has wasted over $16 million so far on asset sales and that figure will balloon into the hundreds of millions if asset sales go ahead.

"There is no point in continuing to throw good money after bad for a policy that nobody wants.

"National should take the time to resolve the water rights dispute and listen to New Zealanders' views on asset sales. It is not too late to do the sensible thing and drop this crisis-ridden, economically-unsound policy," said Dr Norman.

Subject: Asset sales



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Govt needs to begin PRT withdrawal now - Green Party Media Release

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Govt needs to begin PRT withdrawal now

The Government should be looking at ways to withdraw our forces in Afghanistan, as soon as possible, rather than concentrating on an arbitrary date, Green Party defence spokesperson Kennedy Graham said today.

Defence Minister Jonathan Coleman today set the date of April 2013 for the withdrawal of New Zealand's provincial reconstruction team from Bamiyan province in Afghanistan. The announcement follows the death of five members of the provincial reconstruction team in two separate incidents during August 2012.

"We owe it to those currently serving in Afghanistan to look at all the ways we can get them home safely and as soon as possible," said Dr Graham.

"New Zealand has made a significant commitment to Afghanistan and the people of Bamiyan.

"However the provincial reconstruction team was never intended to be a combat unit.

"Sadly, the role of those serving in the provincial reconstruction team now appears to be focused more and more on patrolling a dangerous part of Bamiyan province, where our troops are being drawn into counter insurgency operations.

"Becoming bogged down in a counter insurgency in Bamiyan is not in New Zealand or our soldiers' interests.

"The end of New Zealand's provincial reconstruction team's commitment to Afghanistan should coincide with looking for ways to assist Afghanistan in aid and development.

"The focus of the Key Government on continuing to provide military training to Afghanistan, following the provincial reconstruction team's withdrawal, is therefore of concern to the Green Party.

"There are many ways of assisting Afghanistan in a non-military capacity," Dr Graham said.

Subject: Peace and Conflict



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Sunday, September 2, 2012

Skycity deal needs full analysis on NZ Gamblefree day - Green Party Media Release

Green Party of Aotearoa NZ
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Skycity deal needs full analysis on NZ Gamblefree day

The Key Government needs to initiate a study into the problem gambling harm their deal with SkyCity will cause, Green Party gambling spokesperson Denise Roche said today.

Today is Gamblefree day. This event aims to raise awareness of problem gambling with activities planned throughout New Zealand.

"Gamblefree day is the perfect day to highlight the dangers of the Government's deal with SkyCity," said Ms Roche.

"Increasing the number of pokie machines at SkyCity will inevitably lead to more problem gambling.

"It is critical that the full economic and social consequences of the deal are examined so the public has the full picture.

"The Government talks a lot about the economic benefits of the deal, but has never addressed the economic and social downsides of increased problem gambling that the deal will cause.

"The Green Party complaint to the Auditor General about the SkyCity deal raises the issue of the lack of analysis in the bidding process on the negative economic and social consequences of this deal.

"It is time for the Government to come clean on the problem gambling harm this deal will do.

"The Government's own harm minimisation plans for gambling are at odds with the SkyCity deal.

"A Ministry of Health consultation document released earlier this month accepts that increasing the pokie machines at SkyCity will result in greater revenue through gambling.

"The Government needs to therefore commission a study into the potential harm that will result from lifting the number of pokie machines at SkyCity.

"The Key Government has sold the SkyCity deal as a win-win without looking into the potential harm to the wider community," Ms Roche said.

Related links

Gamblefree day activities
SkyCity deal will harm wider community
SkyCity deal should go on hold during Auditor General inquiry
SkyCity profits from proceeds of crime

Subjects: Gambling, Economics, Parliament and Politics



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Referendum can be held before assets sold - Green Party Media Release

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Referendum can be held before assets sold

A public referendum on asset sales could be held early next year before any of the power companies are sold, the Green Party said today.

The Keep Our Assets coalition, which the Green Party is a member of, launched their Spring Collection drive today which aims to get the required number of signatures to force a referendum by the end of the month.

"The Government's asset sales programme is in crisis and the referendum campaign is on a roll," said Green Party Co-leader Dr Russel Norman.

"A referendum early next year is a real possibility. If we have the required number of signatures by the end of September, parliament's Clerk of the House can validate the petition by the end of November.

"A referendum should be held as soon as possible once the signatures are collected.

"If the Government delays the holding of a referendum then they are playing politics with the issue against the will of New Zealanders.

"It is only fair that a referendum is held as soon as possible to give the overwhelming majority of New Zealanders who oppose asset sales the chance to cast a vote against them.

"The Government needs to delay their asset sales agenda. The Waitangi Tribunal report, the state of the companies themselves, and the referendum are just three reasons why it would be foolish for the Government to press ahead.

"If the Government delays the asset sales programme, which they should, then a referendum should be held before any assets are sold.

"That is a real possibility if the sale of Mighty River Power is pushed back to March 2013."

Subject: Asset sales



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