Labour to buy back state assets

[nextbigthing]

So, Cunliffe says Labour 'probably will' buy back state assets.

http://www.stuff.co.nz/national/politics/9522093/Labour-may-buy-state-assets-back

Any guesses as to how this would likely proceed? Compulsory acquisition? On market buy back? Surely this is good news for holders? (Granted they have to get in first!)

Nextbigthing

[blackcap]

I dont think its going to happen. This is just an election gimmick. He has an out with the "probably". Then he will use the old "we didnt realise how badly National left the books... sorry we cant afford to buy them back"

[blobbles]

I don't think they would either. You can't come into government and reverse every decision made by the last government. It would make a mockery of democracy in my opinion. A demockery? Anyway, they were voted in, they did some stuff you might not have liked, but you have to move forwards, not try and fix what you believe were mistakes by the former government.

[JBmurc]

Well at the end of the last labour government in power they did buy the failing kiwi-rail ... I wouldn't put it past a lab-green party to go all out and pay top dollar to buy assets with even more debt/tax payer funds

[warthog]

I dont think its going to happen. This is just an election gimmick. He has an out with the "probably". Then he will use the old "we didnt realise how badly National left the books... sorry we cant afford to buy them back"

Use "National" and "Labour" interchangeably in this context. They all do it, and sometimes there is justification.

[nextbigthing]

I dont think its going to happen. This is just an election gimmick. He has an out with the "probably". Then he will use the old "we didnt realise how badly National left the books... sorry we cant afford to buy them back"

Surely if this is the case then Cun!liffe has just given John Key some great ammo to use in question time next year leading to the election, 'David will you confirm whether you are going to buy them back and what money will you use?' He can really put him on the spot.

The market seemingly didn't buy in to it today anyway!

[janner]

Surely if this is the case then Cun!liffe has just given John Key some great ammo to use in question time next year leading to the election, 'David will you confirm whether you are going to buy them back and what money will you use?' He can really put him on the spot.

The market seemingly didn't buy in to it today anyway!


Simple really.. He will use the money pwinted by the Gweenies..

[percy]

Simple really.. He will use the money pwinted by the Gweenies..

Surely you mean "Greenbacks".

[janner]

Surely you mean "Greenbacks".

For get the word " backs ".. They are Green in every sense of the word percy !!.

Liabour and the Gweenies..

[Harvey Specter]

Cunliffe explicitly said this morning "oh if we get in well see what order the books have been left in by National". theres the out right there. discussion over, dont waste anymore time thinking this will happen. problem is, people who dont understand the market (the vast majority of the population!) will fall for it hook line and sinker...
The books will look fine. It will be Labours other bribes that may blow the budget.

Treasury opens the books today so that will give a good indication.

[elZorro]

Cunliffe explicitly said this morning "oh if we get in well see what order the books have been left in by National". theres the out right there. discussion over, dont waste anymore time thinking this will happen. problem is, people who dont understand the market (the vast majority of the population!) will fall for it hook line and sinker...

I have gone to great lengths on the 2011 election thread to put up the stats, the books are in a lot worse shape than when National first got back into power. They are improving, but have not reached the point Labour got them to, in 2008. And we have a lot more debt again, and fewer jobs. A Labour govt could slowly buy back the assets on the market, that would be possible, and maybe cheaper.

[Whipmoney]

I have gone to great lengths on the 2011 election thread to put up the stats, the books are in a lot worse shape than when National first got back into power. They are improving, but have not reached the point Labour got them to, in 2008. And we have a lot more debt again, and fewer jobs. A Labour govt could slowly buy back the assets on the market, that would be possible, and maybe cheaper.

I don't think that's solely attributable to National. Much like the Obama administration they inherited an economy that wasn't in the best of shape. The problem with politics is I don't believe that a given parties economic policies actually take effect until 3-5 years after they first enact them.

[craic]

Would they buy back the ones they sold first or would they only buy back the ones National sold - and where would they get the money to buy back Telecom for instance?
I have gone to great lengths on the 2011 election thread to put up the stats, the books are in a lot worse shape than when National first got back into power. They are improving, but have not reached the point Labour got them to, in 2008. And we have a lot more debt again, and fewer jobs. A Labour govt could slowly buy back the assets on the market, that would be possible, and maybe cheaper.

[Harvey Specter]

I have gone to great lengths on the 2011 election thread to put up the stats, the books are in a lot worse shape than when National first got back into power. They are improving, but have not reached the point Labour got them to, in 2008. And we have a lot more debt again, and fewer jobs. A Labour govt could slowly buy back the assets on the market, that would be possible, and maybe cheaper.Agree with Whipmoney. Labour had the benefit of the last economic boom, so they had managed to pay down debt but they also had commited to lots of expense going forward.

National inherited a good balance sheet (I agree with you on this) but a bad P&L. Then the GFC hit, then an earthquake hit, then another earthquake hit. So while the balance sheet has gone backwards, this was caused by things outside Nationals control. If Labour had remained in power during this time, with their high social spending and falling tax take due to the economy, we would have looked a lot closer to the PIIGs than we do now.

Who ever wins the next election will inherit a average balance sheet but a very strong P&L (budget surpluses are forecast).

elZorro - while I agree with the result, I disagree with the cause. You seem to be blaming National for the economic consequences of the GFC and the earthquakes. I don't always read this thread but I don't think I have ever seen you admit this.

[Jay]

Usually pigs will fly before any government backtracks on legislation/aseets sales that a previous government introduced/sold etc.
There are vey few exceptions and both Nats and Labour have excuses up their sleeves or just don't mention it again once in power, saying things like we only said maybe/probably, the economy has changed now, we want to move forward, what's done is done or the such like.
Have to agree with Harvey above in the main as well
And again I say in the main the government of the day should not be in business

[Harvey Specter]

I cant believe Cun_liffe is using the buy back of Tranzrail as a great example of how they could buy back the power companies.

THat had to be the biggest stuff up ever. Toll when laughing all the way to the bank.

[nextbigthing]

Maybe Cun?liffe will buy CNU :D

[whatsup]

Yeh, GOOD/Great move Cunnicliff ( does that have a silent T ? ) buy at the top just to prove that you can waiste taxpayers $ers, look what silly Helen did with Rail, Toll couldnt believe the price they received for a run down rail system, from memory the govt paid 4/5 times its perceived market value and I think Toll gave their s/hers a repayment bonus !! HMM.

[Goldstein]

If a buy-back goes ahead (regardless of whether you support it) surely this is a big fail for the NZ politcal system.

The brokers have done well at the expense of the tax payer.

How do the government analysts model the outcome of policy change when enormous change is possible with a change of Govt. I believe the political parties are over stepping their brief. We want them to form stable Govts to collect taxes, provide infrastructre, make sure there is an adequate standard of living, etc. We don't want them to play high stakes poker. Just because an idea is clever and might get you some votes in election year, doesn't mean it is good for the country.

[fungus pudding]

If a buy-back goes ahead (regardless of whether you support it) surely this is a big fail for the NZ politcal system.

The brokers have done well at the expense of the tax payer.

How do the government analysts model the outcome of policy change when enormous change is possible with a change of Govt. I believe the political parties are over stepping their brief. We want them to form stable Govts to collect taxes, provide infrastructre, make sure there is an adequate standard of living, etc. We don't want them to play high stakes poker. Just because an idea is clever and might get you some votes in election year, doesn't mean it is good for the country.

So what's new?

[Stu]

Politically, the manifesto calls for:


Universal suffrage (http://en.wikipedia.org/wiki/Universal_suffrage) with a lowered voting age to 18 years, and voting and electoral office eligibility for all age 25 and more, including women;
Proportional representation (http://en.wikipedia.org/wiki/Proportional_representation) on a regional basis;
Voting for women (which was opposed by most other European nations);
Representation at government level of newly created national councils by economic sector;
The abolition of the Italian Senate (at the time, the senate, as the upper house of parliament, was by process elected by the wealthier citizens, but were in reality direct appointments by the king. It has been described as a sort of extended council of the crown);
The formation of a national council of experts for labor, for industry, for transportation, for the public health, for communications, etc. Selections to be made of professionals or of tradesmen with legislative powers, and elected directly to a general commission with ministerial powers.

In labour and social policy, the manifesto calls for:


The quick enactment of a law of the state that sanctions an eight-hour workday (http://en.wikipedia.org/wiki/Eight-hour_day) for all workers;
A minimum wage;
The participation of workers' representatives in the functions of industry commissions;
To show the same confidence in the labor unions (that prove to be technically and morally worthy) as is given to industry executives or public servants;
Reorganisation of the railways and the transport sector;
Revision of the draft law on invalidity insurance;
Reduction of the retirement age from 65 to 55.

In military affairs, the manifesto advocates:


Creation of a short-service national militia with specifically defensive responsibilities;
Armaments factories are to be nationalised;
A peaceful but competitive foreign policy.

In finance, the manifesto advocates:


A strong progressive tax on capital (envisaging a “partial expropriation” of concentrated wealth);
The seizure of all the possessions of the religious congregations and the abolition of all the bishoprics (http://en.wikipedia.org/wiki/Diocese), which constitute an enormous liability on the Nation and on the privileges of the poor;
Revision of all contracts for military provisions;
The revision of all military contracts and the seizure of 85 percent of the profits therein.

[elZorro]

Agree with Whipmoney. Labour had the benefit of the last economic boom, so they had managed to pay down debt but they also had commited to lots of expense going forward.

National inherited a good balance sheet (I agree with you on this) but a bad P&L. Then the GFC hit, then an earthquake hit, then another earthquake hit. So while the balance sheet has gone backwards, this was caused by things outside Nationals control. If Labour had remained in power during this time, with their high social spending and falling tax take due to the economy, we would have looked a lot closer to the PIIGs than we do now.

Who ever wins the next election will inherit a average balance sheet but a very strong P&L (budget surpluses are forecast).

elZorro - while I agree with the result, I disagree with the cause. You seem to be blaming National for the economic consequences of the GFC and the earthquakes. I don't always read this thread but I don't think I have ever seen you admit this.

Harvey, I know the GFC and earthquakes had a big effect on a lot of us, but I still feel that the National govt led the way with cutbacks, which then encouraged the private sector to do the same. The size of the economy shrunk more than it might have done, and it's now recovering. The difference between the tradeables and non-tradeables sector has worsened since 2004, something I've yet to learn more about. The rebalancing of the economy has not occurred under National, they have stopped mentioning it as a cause.

https://www.greens.org.nz/blog/government-2-2-russel-normans-budget-2013-speech


Quote from Russel Norman: And today National crows about the projected potential budget surplus. Only in an Orwellian world would the party that did everything to undermine the Government's accounts get the credit for any potential return to surplus.

[Billy Boy]

I have gone to great lengths on the 2011 election thread to put up the stats, the books are in a lot worse shape than when National first got back into power. They are improving, but have not reached the point Labour got them to, in 2008. And we have a lot more debt again, and fewer jobs. A Labour govt could slowly buy back the assets on the market, that would be possible, and maybe cheaper.
.
We should all club together and buy 11%
BB ;)

[craic]

"Controlling Officers" in Govt. departments and businesses have an ethnic quota on staff and this is a most common way of gaining brownie points. They also have a gender balance formula that is another source of brownie points. Effectiveness in the job is third or fourth on the list. I watched this first hand for a good part of my working life in NZ and the problems it caused were monumental in some areas. A close relative who moved with TEL to the private sector in a very senior position expressed his great relief at being able to to pick the best person for the job without the constraints of social engineering. For the last few years of my career I had to spend a lot of my time dodging heaps of crap left here and the by people who should nt have been 'selected' in the first place. If I had my way everything would be passed into the hands of private enterprise. As to the rubbish about the Country losing control of its assets, We have a parliment that is able to pass laws to restrict, control or remove any undesirable acts by private companies. That is their job - not running commercial enterprises that they know nothing about.

[Goldstein]

" We have a parliment that is able to pass laws to restrict, control or remove any undesirable acts by private companies. That is their job - not running commercial enterprises that they know nothing about.

But Transpower (which is an SOE) went ahead with the Wachovia deal. The Government censured them afterwards, not before.

Also, it takes expertise to run these utilites and I don't want that expertise all tied up in the commercial sector away from the Govt.

Consider the Pike River tragedy.
The Govt used to have a coal mining department - I think it was called State Coal. It then became an SOE in the late 80s.
In the early 90s the Department of Labour no longer sees the point of running an expensive mining inspectorate in NZ as it should be wrapped up in the SOE as that's where the expertise is.

With a proper independent mining inspectorate in place, the PRC may not even have gone ahead. It certainly wouldn't have been as 'viable' anyway.

I agree with some of what you say Craic, but I don't agree with the idealism that everything should be run by the private sector.

[Bobcat.]

As to the rubbish about the Country losing control of its assets, We have a parliment that is able to pass laws to restrict, control or remove any undesirable acts by private companies. That is their job - not running commercial enterprises that they know nothing about.

I agree. Political power plays, hidden agendas, arse-covering, double speak (half lies) and promotions beyond a manager's level of competence are just some of what I've had to contend with when working in Government. Fortunately, I was a self employed contractor for most of it, and so was only exposed to its slimy and toxic effects for between 6 months and 12 months per Government department (depending on my contract). In a nutshell, meddling, inefficient Government departments stifle productivity, truthfulness, teaming, employee job satisfaction and client satisfaction.

The past 15 years of my career was spent about 60% in public sector and 40% in the private sector, and although several private companies I worked for still had their share of dysfunction, the resolving of that dysfunction and related issues was so much easier, quicker, more honestly approached and generally producing outcomes that were more satisfying and longer lasting for those involved.

I'm all for privatising unless there is a VERY good reason not to (national security, etc).

BC

[westerly]

"Controlling Officers" in Govt. departments and businesses have an ethnic quota on staff and this is a most common way of gaining brownie points. They also have a gender balance formula that is another source of brownie points. Effectiveness in the job is third or fourth on the list. I watched this first hand for a good part of my working life in NZ and the problems it caused were monumental in some areas. A close relative who moved with TEL to the private sector in a very senior position expressed his great relief at being able to to pick the best person for the job without the constraints of social engineering. For the last few years of my career I had to spend a lot of my time dodging heaps of crap left here and the by people who should nt have been 'selected' in the first place. If I had my way everything would be passed into the hands of private enterprise. As to the rubbish about the Country losing control of its assets, We have a parliment that is able to pass laws to restrict, control or remove any undesirable acts by private companies. That is their job - not running commercial enterprises that they know nothing about.

Once upon a time before both major parties moved many degrees to the right ( one shows signs of moving back) we had Govts. who cared more about people rather than " let the markets take charge" Consequently Govt. Depts were required to soak up unemployment, { better for the governing party
if unemployment was low, Ministers who (as is still the case) dabbled in the running of their Depts. and looked after their electorates. Govt Depts were not efficient the politicians would not let them be. Maybe in those simpler times it was not as effective but things got done properly. No MOW designed buildings failed in the Ch Ch earthquakes to my knowledge. NZ as a small country would not have been developed to the extent it is now if private enterprise was left to provide the infrastructure.financed by the taxpayer. Off course in Craigs world private enterprise does not fail- no Feltex ,no Pike River Coal, no South Canty. Finance, and of course Chorus, needing a helping hand from guess who ?
Westerly

[slimwin]

So you want to go back to the 60's westerly?

I really hope there is no political will to live in the past.

We're in the real world now.

[janner]

So you want to go back to the 60's westerly?

I really hope there is no political will to live in the past.

We're in the real world now.

Really ??

How many countries are passing out free money to all and sundry

[slimwin]

How many economies can do that? Not our small islands on the other side the planet from the real driver economies. NZ needs to get a grip sometimes.
Oh, hang on Russ thinks it's a good Idea. He has lots of good ideas...

[janner]

Oh, hang on Russ thinks it's a good Idea. He has lots of good ideas...

Russ !!!.. ??..

Should that not be Wuss ??.. The Woose !!.. that Wan away Fwom Aussie.. Bwecause they only worry about the Gold and not the Gween.. Ooh !!.. they are so Macho !.. So I am led to undwerswtand !.:-)

[fungus pudding]

Once upon a time before both major parties moved many degrees to the right ( one shows signs of moving back) we had Govts. who cared more about people rather than " let the markets take charge" Consequently Govt. Depts were required to soak up unemployment, { better for the governing party
if unemployment was low, Ministers who (as is still the case) dabbled in the running of their Depts. and looked after their electorates. Govt Depts were not efficient the politicians would not let them be. Maybe in those simpler times it was not as effective but things got done properly. No MOW designed buildings failed in the Ch Ch earthquakes to my knowledge. NZ as a small country would not have been developed to the extent it is now if private enterprise was left to provide the infrastructure.financed by the taxpayer. Off course in Craigs world private enterprise does not fail- no Feltex ,no Pike River Coal, no South Canty. Finance, and of course Chorus, needing a helping hand from guess who ?
Westerly


Of course it sometimes fails, and so it should. The free market is forever self-correcting. The problems start when govt. businesses and interventionist policies do not allow 'failure'. There is always a day of reckoning.

[JAYAY]

awesome link steve, thanks. sure puts the boot into NO voters!

Trouble is the NO voters will only see the figure of $20m and won't be able to figure out that that is just pathetic.

[blackcap]

So these assets make $20m and they think they are worth $45 billion. Haha think again, they are definitely not worth $45b. That may be their book value but that is about it. What a failure.

[Goldstein]

awesome link steve, thanks. sure puts the boot into NO voters!

Did you read the article Moosie_900?

The $45b did not include Meridian or Mighty River.

Meridian alone paid a dividend of 252M to the Govt last year.

[Goldstein]

Fair enough.

As to whether the Govt should/should not be running businesses, as soon as they make an entity an SOE they no longer run that business. They are the shareholders, who initially appoint an independent board.

The partial sales affect (i) the dividend stream & (ii) the voting power.

It is arguable that given they have retained 50%, then the voting power is unchanged..

[Cuzzie]

Yeah, good news but where are they going to get the money from? Will WINS will be the biggest looses, nope the looses will be you and I, they look after special needs as a priority. Plenty of votes there. The next question is will they be buying back the asserts they sold first or just the National ones to drive home some kind of point? Will they be buying back all asserts or maybe just one or two? Maybe no bribes for University students then? But how will they get their votes? Many questions and like normal ... no answers .... ever. Good luck to them and even if they received plenty of good luck ... it will never get past the planing stage.