International Cat Speculators Since 2006


Some people are embarrassing themselves on this one.

Ms Stringer said selling the assets had been likened to selling the family silver.

But she said it was more akin to “selling off the family cow … or eating your last chicken”.

“You might get one or two meals, but no more daily eggs. What intelligent farmer would do that?” she asked the committee.

Outside of the fact that the government isn’t planning to sell the stake at a cut price, and isn’t selling the majority of anything, that makes perfect sense. That is to say, it makes no sense at all.

 The submissions heard so far today were all against the plan.

David Clark, Labour MP for Dunedin North, said: “I’ve certainly not heard a submitter who supports the bill.”

Apparently the people who support the sales are under the misguided impression that the election had some say in the matter.

Retired schoolteacher of economics and accounting Lindsay Carswell said the Government’s desire to push through the mixed ownership model was “ideologically driven.

He said it was not in the best interest of ordinary New Zealanders to sell the profitable companies, pointing to recent reports showing the four firms generating returns “well in excess” of what it costs the Government to own them.

In other words, they’re making a profit. Wow.

As for the “if they’re making a profit, don’t sell them”, someone better inform the NZX!

The Government has argued that ordinary “mums and dads” will be able to buy shares in the partly privatised power companies.

But Labour List member Clayton Cosgrove asked Mr Carswell if average Kiwi “mums and dads” would be in a position to “rush down to their share broker to buy shares they already own?”

He agreed that they wouldn’t be able to, adding: “Utilities are great companies to own because of the profit – the cash flows are enormous and the big wheeler dealers would snap them up very quickly and mums and dads will be pushed aside.”

Clayton Cosgrove appears to be missing the slightest hint of how markets work. He seems to think

enormous cash flows = more valuable = more expensive = only big boys can own

The reality is that

enormous cash flows  = more valuable = more shares issued for same price = more owners

Basically, most of the opposition to asset sales seems to be based on the assumption that the government will sell something valuable for a fraction of what it’s worth. That might have been the case historicially when government assets were badly managed. That bad management meant that work had to be put in to turn them to profitibility.

But by the submitters own admission, that is not the case here. There is no reason outside of ideological bias to believe that National is going to screw the government’s books to sell these assets cheaply.

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Comments on: "Is there any opposition to asset sales that relies on actual facts?" (4)

  1. Daniel Lang said:

    It’s not about people thinking that the Government is going to sell these assets cheaply; it’s about the fact that, by selling 49% of the shares in these companies, the Government is forgoing almost half of the revenue derived from these assets.

    There is also very little that “ordinary people” know about what is going to happen to the billions of dollars the Government will make out of the sales, beyond a vague verbal hint (verbal, not contractual, therefore likely to be broken) that it will go towards health and education.

    Then there is the rising cost of prescription medicines and the larger classroom sizes that we are expecting to have under this farce of a Government, which already seems to betray the PM’s verbal utterings about the money going to the health and education sectors.

    Last, but certainly not least, there is likely to be pressure by the shareholders on the Government to increase electricity prices in order to garner a better return. Thus, there will emerge a conflict of interest as the Government will be pressured by the other shareholders to raise prices and, at the same time, pressured by voters not to raise prices.

  2. It’s not about people thinking that the Government is going to sell these assets cheaply; it’s about the fact that, by selling 49% of the shares in these companies, the Government is forgoing almost half of the revenue derived from these assets.

    Do you even understand that this is a contradictory statement?

  3. Daniel Lang said:

    Do you understand that there is a difference between selling an asset cheaply and selling an asset at a relatively fair price but not allocating for the future any of the revenue derived from the sale of said asset?

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