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1458 posts

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# 98260 28-Feb-2012 11:19
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Given that its too late to vote National out to avoid them flogging off various power companies at bargain basement prices, is it a feasible plan to persuade people to vote with their feet and transfer to power companies that aren't on the auction block? Make the assets a less desirable purchase, maybe they won't sell.

Why aren't the companies that aren't for sale doing a Kiwibank and advertising the fact that they aren't being sold off to investors that will want a return on their money? Considering Genesis have just told me my power price is going up significantly, I'll be checking to see who can give me a better deal, and their asset sale status will be a factor in my calculations. 

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  # 587766 28-Feb-2012 11:40
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I have no problem with asset sales. Government is there to govern, not provide all the services we use in our daily lives.




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  # 587769 28-Feb-2012 11:48
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BlueShift: Given that its too late to vote National out to avoid them flogging off various power companies  
  It's too late to change the result, but you can't get around the fact that NZ'rs had their chance to vote against this political party and they opted not to.  So whilst some, maybe even most, may be against this, no one did anything about it at election time.

 
 
 
 


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  # 587772 28-Feb-2012 11:49
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Zeon: I have no problem with asset sales. Government is there to govern, not provide all the services we use in our daily lives.


You don't mind paying more for those services then?

Further more, the income from the sale of these assets is less than the income which would be achieved through keeping said assets (which of course stands to reason, otherwise, who would buy them).

The sale of these assets benefits those who buy the assets, it does not in any way benefit the country as a whole, let alone the customers of those assets.




---
James Sleeman
I sell lots of stuff for electronic enthusiasts...




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  # 587784 28-Feb-2012 12:01
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sleemanj:Further more, the income from the sale of these assets is less than the income which would be achieved through keeping said assets (which of course stands to reason, otherwise, who would buy them).

The sale of these assets benefits those who buy the assets, it does not in any way benefit the country as a whole, let alone the customers of those assets.



Apparently the assets in question are currently returning about 15% to the govt, who are now planning to sell them so they can retire debt that they are paying about 4% for. 

Isn't that like becoming mortgage free by paying it off with your Visa?    



Which is why I quite like the idea of ceasing to be a customer of one of those assets.   

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  # 587787 28-Feb-2012 12:13
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BlueShift:
sleemanj:Further more, the income from the sale of these assets is less than the income which would be achieved through keeping said assets (which of course stands to reason, otherwise, who would buy them).

The sale of these assets benefits those who buy the assets, it does not in any way benefit the country as a whole, let alone the customers of those assets.



Apparently the assets in question are currently returning about 15% to the govt, who are now planning to sell them so they can retire debt that they are paying about 4% for. 

Isn't that like becoming mortgage free by paying it off with your Visa?    



Which is why I quite like the idea of ceasing to be a customer of one of those assets.   


With all due respect (don't you love that Wink) I think its a little more complex than that.  Personally, I'm in favour of partial sales if it stacks up - including whether the price is right , which it patently was not in the case of a number of the 1980's sell-offs.

While I usually take economists' views with a grain or two of salt, the following gives a precis of some of the relevant issues around sales (including figures on returns and opportunity costs etc).  There are obviously lots more analyses around but this one is short and comprehensible!!
http://www.infometrics.co.nz/article.asp?id=5701

Edit: forgot link!! 





"It is useless to attempt to reason a man out of what he was never reasoned into."
— most commonly attributed to Jonathan Swift, author/theologian

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  # 587788 28-Feb-2012 12:16
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I have no issue with part Asset sales either, I voted the blue team in and happy with my decision

k14

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  # 587803 28-Feb-2012 12:43
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BlueShift: Given that its too late to vote National out to avoid them flogging off various power companies at bargain basement prices, is it a feasible plan to persuade people to vote with their feet and transfer to power companies that aren't on the auction block? Make the assets a less desirable purchase, maybe they won't sell.

Why aren't the companies that aren't for sale doing a Kiwibank and advertising the fact that they aren't being sold off to investors that will want a return on their money? Considering Genesis have just told me my power price is going up significantly, I'll be checking to see who can give me a better deal, and their asset sale status will be a factor in my calculations. 

You do know that the two power companies of any substance in NZ that aren't owned by the government are majority owned by Australian companies? So all you would do is send more money overseas than currently? At least with the SOE's 50%+ of the profits will stay in NZ (assuming the government doesn't decide to sell the remaining 50% in 3 years time).

 
 
 
 


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  # 587836 28-Feb-2012 14:12
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Zeon: I have no problem with asset sales. Government is there to govern, not provide all the services we use in our daily lives.


Really? I thought they were there to also make sure that NZers access to these services at affordable levels. Whether in order to do that, they need to own them or not.

The problem with selling them off, and private ownership, is that often the company is stripped of it's assets and leveraged with debt, and then they hike the prices. Then the profits are sent offshore. Then the gov has to buy them back to stop them going out of business, and probably well overpaid for them too.

Look at how many people want the government to step in when we have poor broadband, expensive petrol, expensive milk etc..

Do many people disagree that NZers are better off having kiwibank, with other banks dropping fees and providing better services since kiwibank started to take a larger share of the market.

That said, I am not against asset sales, but they should go to NZ shareholders, so the profits stay in NZ.

NZs power companies are largely private now, and we have are now paying more for power than other countries. WHen not that long ago we used to have the cheapest power (when it was not privatised). I do remember that they said that privatization would bring down the cost of power.

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  # 587843 28-Feb-2012 14:23
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mattwnz:
Zeon: I have no problem with asset sales. Government is there to govern, not provide all the services we use in our daily lives.


Really? I thought they were there to also make sure that NZers access to these services at affordable levels. Whether in order to do that, they need to own them or not.

The problem with selling them off, and private ownership, is that often the company is stripped of it's assets and leveraged with debt, and then they hike the prices. Then the profits are sent offshore. Then the gov has to buy them back to stop them going out of business, and probably well overpaid for them too.

Look at how many people want the government to step in when we have poor broadband, expensive petrol, expensive milk etc..

Do many people disagree that NZers are better off having kiwibank, with other banks dropping fees and providing better services since kiwibank started to take a larger share of the market.

That said, I am not against asset sales, but they should go to NZ shareholders, so the profits stay in NZ.

NZs power companies are largely private now, and we have are now paying more for power than other countries. WHen not that long ago we used to have the cheapest power (when it was not privatised). I do remember that they said that privatization would bring down the cost of power.


The only way the Govt can make sure NZers have access to affordable services (of any kind) is to regulate or subsidise.
A truely competitive market may bring / keep prices down, but not much, as is evident by current electricity prices.




Michael Skyrme - Instrumentation & Controls

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  # 587850 28-Feb-2012 14:40
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So everyone complains about power prices while the owner of the power generators is paying (quoted from above) 15% return for the government's coffers.... Sounds legit.




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  # 587852 28-Feb-2012 14:47
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Zeon: So everyone complains about power prices while the owner of the power generators is paying (quoted from above) 15% return for the government's coffers.... Sounds legit.


Yup, you pay GST on your power bill, then the SOE pays a dividend to their shareholder (ie the govt). Not to mention any ETS taxes built into the price of power. Triple dip tax?

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  # 587853 28-Feb-2012 14:50
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MikeSkyrme:A truely competitive market may bring / keep prices down, but not much, as is evident by current electricity prices.


That is right, but regulation is never really good for a open market, and it doesn't encourage investment. Government ownership in a way is subsidising, but in a small country like NZ, some types of businesses are not sustainable businesses, unless the price is a lot higher, or it is subsidised. If it isn't subsidised, then we end up with some of the most expensive prices in NZ. NZ is already a very expensive place to live, and that is a comment from people coming into NZ from europe.

The problem with the current asset sales, is that they aren't really going to achieve all that much money, especially once fees are taken out. Also not a good time to sell.

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  # 587861 28-Feb-2012 14:58
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I too am all for asset sales, but only because I see it as a way to get us out of this financial mess. If we were debt free I may be against it. So far National is the only party that seems to have a half decent solution to get us out of this financial mess. Labour just wants to buy more debt, and the greens want to increase welfare etc.. What other options are there?



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  # 587864 28-Feb-2012 15:02
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BraaiGuy:greens want to increase welfare


And take over ships

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  # 587865 28-Feb-2012 15:04
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BraaiGuy: I too am all for asset sales, but only because I see it as a way to get us out of this financial mess.


That is just it, it won't get NZ out of any financial mess. They don't actually know how much it will make, but some estimates are around the 4 billion. That is not going to go very far, and once you have sold it, you can't sell it again. They are only selling 49% too, so will retain most of ownership.

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