Asset sales a gift for opposition parties

  • 15/12/2011

The Government calls it the mixed-ownership model. Everyone else calls it state-owned asset sales.

The proposal to sell 49 percent of four state-owned power stations was the most contentious issue of the election campaign and it's going to be the most fiercely fought parliamentary debate of 2012.

Opposition parties know they've got public opinion on their side and they're already contesting the high ground.

The Government has to pass legislation before shares can be floated and it has a one vote majority. The count on the bill will be 61-60.

That's because the Maori Party, which has given the government three confidence votes, insisted in its support agreement that it would be free to oppose asset sales.

So the legislation can't be put in the budget, which is a confidence vote, and has to be a stand-alone bill.

Labour, the Greens, New Zealand First and the Mana Party couldn't ask for more.

They're in the rare and glorious position of going into a fight with an overwhelming majority of voters on their side, proved by surveys during the campaign.

And the MP who holds that single deciding vote is Peter Dunne, who says that "in principle" he opposes asset sales.

He's already under the gun and he's going to face some seriously heavy ammo when the bill is debated.

Dunne saw it coming and tried to cover himself by asking for a clause in his support agreement which says the government has to pass a law saying it can't sell more than 49 per cent of the power stations and won't sell Kiwibank.

He got what he wanted. It was Government policy anyway.

Dunne is explaining he opposes the total sale of assets but when the government retains 51 percent ownership, that's OK.

His position doesn't seem to have been crystal clear to his Ohariu constituents.

"He did not campaign in Ohariu on the sale of state assets, he has no mandate to support the policy of the National government," one said in a letter to The Dominion Post.

Despite Prime Minister John Key's repeated assurances that control of the power stations won't fall into foreign hands and most shares will be held by Kiwis, opposition parties aren't buying that.

They say it's the thin end of the total privatisation wedge and it will be impossible to stop the "mum and dad investors" the Government keeps talking about from selling their shares to foreign companies.

Finance Minister Bill English says he doesn't expect more than 15 percent of the shares to go overseas but he admits there's no way the government can guard against any or all of them being onsold offshore.

Victoria University foreign relations lecturer Jason Young says it can't be done because New Zealand's international agreements - including its CER with Australia - forbid it.

All the opposition parties are warning that power prices will go up when profit-greedy foreign investors get their hands on shares.

"All the share speculators and gamblers, National's friends, will be at the front of the queue," says NZ First leader Winston Peters.

"The shares will be sold into overseas hands in a matter of months."

Labour's Clayton Cosgrove says the power stations already operate at close to maximum efficiency.

"The only way to make profits will be through higher power prices," he says.

"And that will affect every single one of us."

If he's right, in three years' time the Government could be wondering whether it was worth losing an election for $7 billion.


source: newshub archive