Sometimes the left is just so patently ridiculous you wonder how they ever cope in power.
National’s big (hell, pretty much its only) policy platform this election was to sell our state-owned assets, stuff kiwis have worked a lifetime to build and which benefits all of us, to their rich mates for a song.
Curiously, pretty much none of those statements are true (for example, everyone on the left knows that JK also promised to publicity flog single mothers who refuse to find work).
But that’s beside the point.
On Saturday, Labour’s David Cunliffe put a stake in the ground on opposing that policy, by saying that they would simplybuy those assets back:
This has of course led to the usual claims that it would be a poor use of government money to buy those assets back at a premium. And it would. Which is why Labour needs to clarify now that it won’t be paying a premium for them, and that any buyers will get at most what they paid for them, less any dividends extracted in the meantime. There should be no windfall profits from receiving goods stolen from the New Zealand people.
(The aim here isn’t so much to buy assets back, but to discourage purchasers in the first place, by making it clear that they will lose money – undermining the policy by creating regulatory uncertainty. Its something oppositions should do more of. Climate change is another obvious target for this tactic, and the Greens and Labour need to be making noise that any investor who builds polluting industry on the basis of National’s subsidies is going to face a very different and far less profitable regulatory environment when there is a change of government)
I always think it was a shame that there wasn’t a royal commission into the government’s behaviour around the 2005 election, but I am mature enough to know why that never happened – such a commission would then be created by the Labour party and stacked with their supporters as an excuse to flog National.
But what’s being suggested here goes a lot further than that. What idiot is suggesting means that no goverment decision can be trusted.
Don’t like interest free loans? Legislate the interest to be paid in retrospect.
What about taxes? Think benefits are too high? Well…
National knows this. It cuts both ways.
The reality is that National’s plan activates neither of the underlying concerns that people are expressing when they oppose asset sales – the government will not lose control (as they are only selling minority stakes) and the price will not be lower than the market (as the companies are well run and the sort of investment in demand at this point in time).
Because of this, National’s plan is actually going to be a lot more popular than Labour is willing to admit. People will expect certain things, and the reality is that they will not happen. And in the meantime, mum and dad investors will have solid investments in their portfolio, investments that Labour will find politically toxic to confiscate.
So in reality, Labour isn’t going to purchase back the shares sold. During a good economy they may increase their shareholding as solid investments are less popular, but that will be the exception rather than the rule.