Citizens Referendum (Government Share Offers)

[born2invest]

What did you all vote?

Since we are all share investors would be interesting to see if we agree on them being sold.

I voted yes, I'm happy for them to be sold.

[Jay]

Yes happy for the partial sale - Govt should not be in Businees as a general rule

[Harvey Specter]

While the economic rational may be a bit off, I am in support. As Jay states, Govt shouldn't be in business, it's job is to provide social services.

The exception might be monopolies, espcially given the cluster F the ComCom is making of listed monopolies at the moment. The power companies are not monoplies so this doesn't apply.

[MAC]

Agree, the government generally should not be in the business of owning businesses unless a national crisis is anticipated. Capital markets have been proven to do a much better job over and again.

[Mista_Trix]

I'm a lefty, and a Greeny. I voted yes.

I had some really misinformed conversations in the weekend with some of my peers, it was embarrassing for them. They replied" No of course not", but then when we got talking they didn't really know why, just rolled out the same old lines they've been fed.

I argued that from a Green perspective, if you think about this as the governments investment portfolio, why on earth would a Greeny want all their investments in Electricity companies, does it not make more sense for them to diversify into companies that you (as either a lefty or a Greeny - whom I was talking to) have less moral objection against??

... not to mention airlines and barriers to entry blah blah blah.

[Merc]

Agreed to sale. But added mental note to NEVER, EVER buy them myself!

If com com regard Internet prices as an essential service that should be priced too low resulting in zero returns and capital loss to the shareholders, what on earth would they do with power prices?

[born2invest]

I'm interested to see if anyone on Share Trader is opposed to them being sold.

It looks like a landslide victory so far!

[silu]

I'm a lefty greenie capitalist libertarian communist and I decided not to take part.

[Bobcat.]

I voted 'Yes'. Unless national security is at risk (e.g. monopolies creaming us), Government should not meddle in Business. When there was a single generator (i.e. ECNZ) that was different, but it's since split into several 'baby-ECNZ's' which has granted us an opportunity to privatise generation.

I would however vote No to privatising Transpower, Department of Corrections, Depatment of Conservation, the Ministry of Defence, Ministry of Justice, Police, etc. The social costs and security risks in doing so would in these cases outweigh the economic and other benefits.

I'm all for small government. As greater minds than mine have attested, Government does have an important but limited role:

"A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labour the bread it has earned - this is the sum of good government" Thomas Jefferson

"For forms of Government let fools contest; Whate'er is best adminstered is best" Pope

"Government is just a device to protect man so that he may earn his bread in the sweat of his labour" Hugh S Johnson

"Error alone needs the support of Government - truth can stand by itself" Thomas Jefferson

"Government even in its best state is a necessary evil; in its worst state, an intolerable one" Thomas Paine

"The teaching of politics is that the Government, which was set for the protection and comfort of all good citizens, becomes the principal obstruction and nuisance with which we have to contend...the cheat, bully and malefactor we meet everywhere is the Government" R.W. Emerson

"He that would govern others first should be the master of himself" Philip Massinger

"What Government is best? That which teaches us to govern ourselves" Goethe

BC

[artemis]

I voted yes, but as a libertarian (small 'l') should really have voted no as. like others above, would rather have voted for government to completely divest themselves of these assets.

[blackcap]

I voted yes, but as a libertarian (small 'l') should really have voted no as. like others above, would rather have voted for government to completely divest themselves of these assets.

Voted yes. No need for the govt to own and run these companies.

[peat]

I suppose I better voice the opposing view.
I voted No, my view is that the returns to the government were greater than the cost of capital so it made sense to retain them for the good of all.
While I don't generally believe the govt should be in business the infrastructural elements of the power industry and the fact that the nation had already created these assets for the good of the nation, allows this view.

That said if I had considered them a good investment for me I still would have bought them (but I didn't).

[jpg]

Yes. I don't trust the government to run the country let alone some of our largest companies. Professional shareholders will hold management accountable for their promises, the government hasn't for years.

[robbo24]

Yes - what a master stroke for the govt to sell an asset that it still gets to keep 28% of the profits through company tax (minus shareholders with tax rates less than 28% who get a partial rebate); to sell on high at an arbitrary price just prior to the realization that the assets could dwindle in returns; to provide liquidity to the market which now crown entities and government owned/controlled investment funds can pick up at a bargain.

All of this "our assets" mumbo jumbo is just a catch phrase for beneficiaries.

[whatsup]

Im betting that Belg would say " NO WAY--NO SALE " leftie to the bitter end, but a capatilist when it comes to making money, runs with the hares and hunts with the hounds. !!

[jonu]

I suppose I better voice the opposing view.
I voted No, my view is that the returns to the government were greater than the cost of capital so it made sense to retain them for the good of all.
While I don't generally believe the govt should be in business the infrastructural elements of the power industry and the fact that the nation had already created these assets for the good of the nation, allows this view.

That said if I had considered them a good investment for me I still would have bought them (but I didn't).

This sums up my postion also.

[MAC]

I suppose I better voice the opposing view.
I voted No, my view is that the returns to the government were greater than the cost of capital so it made sense to retain them for the good of all.
While I don't generally believe the govt should be in business the infrastructural elements of the power industry and the fact that the nation had already created these assets for the good of the nation, allows this view.

That said if I had considered them a good investment for me I still would have bought them (but I didn't).

Respect you're honesty and bravery Peat, posting 'no' here.

I tend to look at it this way. The govt built power stations between 1950 and 1985 to release a cap on GDP and to avoid an economic stall, the real returns from them having intervened is not the dividends being paid now, it was the economic benefits to NZ'ers realised from an averted economic crisis.

But, electricity demand growth has since just been a couple of percent for over 20 years, capital markets can run the industry more efficiently for the consumer now, lower prices through capital market efficiencies.

[see weed]

I suppose I better voice the opposing view.
I voted No, my view is that the returns to the government were greater than the cost of capital so it made sense to retain them for the good of all.
While I don't generally believe the govt should be in business the infrastructural elements of the power industry and the fact that the nation had already created these assets for the good of the nation, allows this view.

That said if I had considered them a good investment for me I still would have bought them (but I didn't).

I agree with you. Having a close conection with power stations, doing an apprenticeship in a number of different stations around NZ in the 1970's. But still did not buy any shares with them. The govt. still has controlling shares, but was no benifit to me with my power price going up every year. Probably makes good money to pay lay- abouts on benifits. So i voted yes , sell them after they were sold.

[blobbles]

I am a greeny, a leftie, but also a capitalist :)

I would have voted to sell up to 51% if I was in the country, most likely. But beyond this I think the answer for me is NO!

In a bigger country, I would ask why we are invested in an airline at all. But in NZ, so few airlines operate or want to operate here, I think the govt having a stake in Air NZ is a virtual necessity. I believe that the government retaining control over vital infrastructure (both on the supply and sales side) is necessary, hence trains/planes/airports/telecoms etc I think should have government control (local or central) from an investment side, with the higher necessity requiring higher oversight (i.e. power is a higher necessity than telecoms, hence I don't mind them not owning telecom, would like them to 51% own chorus though, but would like them to own 51% of all power retailers and 100% of transpower). BUT I also believe they should act as a pretty much silent investor when they own 51%, letting the market make most of the decisions and only intervening when it looks like sh*t is about to hit the fan or when investors are essentially ripping off the general public through ridiculous profits. Otherwise they will not operate intelligently as so often happens with all other parts of government. This should allow them to reap the solid/low profits of infrastructure mostly under private control (hence much better managed), while still having appropriate control in an emergency. I think the last Air NZ crisis and the idiocy of selling our train set to Toll simply highlights what happens when the govt has no control/loses control over key infrastructure assets.

In addition to this though, I believe that the profit the government makes from the infrastructure assets should be shelved into a different set of accounts and used for future upgrades. They should NOT be used for general public funds which represents simply another form of taxation.

[BDL]

I agree with Peat. I don't think they should have been sold... or given away.

[Whipmoney]

Would vote 'NO' along similar lines as Peat given the government can borrow at ridicously low rates and reap returns in excess of these.

The other real dilemma I have with governments selling off assets is that where does this money go? National will either look to reduce debt or somehow give it back to the tax payer (generally through tax cuts to the wealthy/corporates).

What would really irk me is if they sell off a profitable asset to repay debt only to have Labour come in and re-lever up the country in order to fund some bullsh*t social scheme.

[Zaphod]

Voted yes, with the rationale being that there are things such as debt reduction, heathcare, schools etc. that would deliver better returns to society. If this exercise had left the Government with less than a majority shareholding, then I might have voted differently.

[In4a$]

Voted yes, with the rationale being that there are things such as debt reduction, heathcare, schools etc. that would deliver better returns to society. If this exercise had left the Government with less than a majority shareholding, then I might have voted differently.
Voted yes on same basis as Zaphod. 51% holding is enough, can always buy again if shares drop to a silly price or Govt has surplus cash.

[RTM]

Wow...I'm surprised by how many voted yes. Maybe JK will get back in again.
I voted NO. Have we not learnt anything ?

[Cool Bear]

It is a NO from me. As a share investor, it is of course good for the sharemarket to have more listings and attract more investors/punters. If that was one of the reason, JK was not upfront enough to put it forward. Instead the reasons (which kept changing) were not strong enough financially.

The assets to be sold are all making higher returns than the cost of debts. So the govt and the country (as the owner) lose by selling. Thus as a citizen, I oppose. I am also a small business owner. I would certainly not sell my best performing business assets to pay off low cost debts. That is just stupid and would be the surest way of going broke!!

[slimwin]

Another yes. Although I do fear the money will be wasted with new election bribes in Lab/Green get in.

If you count the money as being to build new schools etc, then it's an investment in the workforce and that's always a good thing.

[PennyPicker]

For the same reason as Jay and Mac I voted Yes.

Disc, would have to take a strong blow to the head to consider buying into them though.

[peat]

A big yes here.

Sell MRP @ $2.50 & buy em back cheaper.

Mum & Dad will know better for the next sure thing.

This matches Key's skill set perfectly , but its just too cynical and predatory to be good politics. Even though 'making a profit' is generally considered a good thing its not what government should be primarily attending to - their purpose is mostly about determining how to spend money. The govt is not a corporation - its objectives are much broader than mere profit.

[Harvey Specter]

Another reason I voted yes (though not the main reason) is I feel this referendum is an abuse of the process.

Assets sales were a National election promise and Labour specifically campaigned against them. They were only able to get enough votes to initiate the referendum as Greens used parliamentary money.

So I voted yes to a different question - did National have the right to sell them.

If Colin Craigs 'binding' referendum ever got a look in, it would need a serious rewrite. For example, this question should have been re-written along the following lines:

- Do you support the sale of government SOE's
- Do you support the sale of government SOE's provided they maintain 50%
- Should the government continue to hold 100% of SOE where they are strategic assets
- Are power companies strategic assets
- Should the government continue to hold 100% of at least one power company
- Should Colin Craig be banned from parliament

(note: the last questions shows just how stupid binding referendum are as they could easily get 10% to sign that)

[In4a$]

I would have thought the Govts primary objective would be to ballance the books. Spending money is fine but running up huge debt is not. Also there is no on going guarantee that these SOE's will always pay a dividend, so reducing ownership and reinvesting or redistributing the funds I think is a good idea. I also voted yes because of the Greens. What an irresponsible waste of money this referendum is, National had the mandate to proceed from the last elections. Labour cost all of us NZ'rs money by trying to stall the process, for some silly political grandstanding.

[iceman]

Voted yes, with the rationale being that there are things such as debt reduction, heathcare, schools etc. that would deliver better returns to society. If this exercise had left the Government with less than a majority shareholding, then I might have voted differently.

Exactly the same here

[Jay]

I would have thought the Govts primary objective would be to ballance the books. Spending money is fine but running up huge debt is not. Also there is no on going guarantee that these SOE's will always pay a dividend, so reducing ownership and reinvesting or redistributing the funds I think is a good idea. I also voted yes because of the Greens. What an irresponsible waste of money this referendum is, National had the mandate to proceed from the last elections. Labour cost all of us NZ'rs money by trying to stall the process, for some silly political grandstanding.

Have to agree in the main, no matter who you support, National stated what it was going to do, waste of money the referendum

[blobbles]

I'm sorry but this simplistic idea that they have a "mandate" to sell them because they "won" is completely wrong. And it shows that you don't understand MMP which relies on no party winning and a mix of ideas between the leading party and deals with smaller ones to create a majority.

I support the green party because I believe that we need the majority of their ideas to have a larger representation in parliament. Does this mean I want them in control of the economy? NO. But they poll at 10% and at that rate they are highly unlikely to get their hands on many economic levers.

Remember National only got 47% or so of the vote and many said that they voted for them in spite of the asset sales, meaning a lot of National supporters didn't want them sold. That is not a mandate if you believe in democracy.

[Harvey Specter]

Blobbles - the problem with MMP is that the tail does often wag the dog (refer Winstone in previous governments). National in the past two terms has done very well to keep control but hand out a few policys to the minor parties eg. whanau ora to the Maori party and home insulation to the Greens. I suspect that if Labour/Greens get across the line at the next election, the Ozzie guy will pull far more weight than his 10-15% vote allows.

And without a referendum system like Calafornia and Switserland(?), winning the election is a mandate as we vote in a bundle of policies that are on average, better than the other sides.

[Snoopy]

It is a NO from me. As a share investor, it is of course good for the sharemarket to have more listings and attract more investors/punters. If that was one of the reason, JK was not upfront enough to put it forward. Instead the reasons (which kept changing) were not strong enough financially.

The assets to be sold are all making higher returns than the cost of debts. So the govt and the country (as the owner) lose by selling. Thus as a citizen, I oppose. I am also a small business owner. I would certainly not sell my best performing business assets to pay off low cost debts. That is just stupid and would be the surest way of going broke!!


I am in the NO camp. Why sell shares in these power companies and get a much lower return building roads of national significance? And why target overseas investors? I would accept overseas investors on the share registers of our power generators if they had some intellectual capital to bring to the table. But I see no sign of that yet. What I do see is an increase in dividend flows going offshore, something that will do NZs balance of payments no good at all.

SNOOPY

[MAC]

I didn’t agree with the bias of the question but voted yes, capital markets are proven over and again to provide better efficiencies to both the investors and consumers, was never fond of communism either.

A result of 67.2% on a turn out of 43.9% is not unnoticeable, many would have just voted against change, but for whatever the reasons any government should at least acknowledge a referendum, we live in a democracy after all.

A fair political solution now may simply be to leave Genesis government owned.

Aside from the Tekapo assets recently allocated to Genesis and the e3p CCGT unit, the other assets are not exactly the ‘jewels in the crown’ so to speak, Huntly (legacy issues), Tokaanu (peaker with too much installed overhead), Tuai Scheme (small and high maintenance), who would really want to invest in them.

[Jay]

I think that in a lot of situations like this where the result does not mean much, the "no;s" tend to vote and the "yes's" don't IMHO!

Approx 28% of eligle voters said No 14.4% said yes and 57.6% did not say:confused:

[Goldstein]

Voted against sale.

I've been thinking of late that the real change is the step from govt entity to SOE. We're concerned about ownership here, but remember Transpower's deal with Wachovia
http://www.stuff.co.nz/the-press/news/national/2964884/Transpower-buys-its-way-out-of-controversial-deal-with-US-firm

From Transpower's perspective the selling of the South Island grid to Wachovia and then leasing it back was a reasonable gamble, however from the Govt's perspective the risk was unacceptable for the sake of $45M.

I see a lot of people trotting out the line that Govt should not be in business. I say that infrastructure should not really be business, it should be there to support lives, livelihoods and economic growth. If the Govt is forced to run these things then it has to retain expertise as well. I don't want to see the only infrastructure expertise tied up in these companies and these same companies then able to hoodwink the Govt.