For those who have not seen the Herald today, Emmerson’s take on asset sales.
Archive for January, 2011
Sell the Donkey
January 27th, 2011Mums, Dads and other spin
January 27th, 2011Its always interesting the morning after a big announcement to look at the spin and lines that get trotted out. National pay a lot of attention to this stuff, and Crosby Textor and Mr Joyce have been working hard to get their lines and their “independent” commentators out there. Let’s just look at a few examples:
“Selling assets will give Mum and Dad investors a chance to get a stake”. Well, to start with Kiwi Mums and Dads already have a stake in them, since along with the rest of us Kiwis they already own them. For a large number of Mums and Dads they are worried about paying the power bill, not owning the company.
As an aside I find the omnipresence of Mark Weldon talking about how good this will be is hilarious. Mark is the CE of the NZ Stock Exchange, I kind of expect he might like the idea. Its in the same vein as bank economists being put up as the commentators on interest rates. Just a slight vested interested there.
“This will not increase power prices” So, what exactly will the new investors in these companies be looking for? A warm feeling of social responsibility? No, presumably a profit, which won’t exactly be helped by lowering power prices. There is a discussion to be had about how we best leverage our collective ownership of these assets, and whether the dividend policy needs to change to help address power prices, but I am damn sure that wont happen by selling them off.
“We have to sell assets and further slash government expenditure because we have a huge debt problem” Where to start? Perhaps where John Key said “we don’t have a debt problem, we have a growth problem.” Of course any government needs to be a prudent manager of the economy, but the truth is that our debt is quite different from the PIGS. Their problem is soaring government debt. In New Zealand the National Party inherited zero net government debt. It has increased under National’s watch, but even still not to the point of being anything like the PIGS.
If we are in such a parlous state, perhaps its time for John Key to look in the mirror, Two Budgets with tax cuts targeted at the wealthy and no economic recovery plan. Time for National to take some responsibility.
“Which schools and hospitals would you not build if we did not do this” Utter nonsense. This is pure spin developed to meet the polling results that New Zealanders want to see better investment in education and health. Investing in schools and hospitals is a priority totally seperate from the ownership of SOEs.
But my favourite piece of spin comes directly from the PMs speech
I am convinced that Air New Zealand would not be run as well, nor provide as good a service to customers if it was owned 100% by the government
Let’s remember Air New Zealand was bailed out by the 5th Labour Government after it was driven into the ground by its private owners. A bailout incidentally opposed by National at the time. For New Zealand a functioning airline is essential, and it was highly at risk without government involvement. As it happens I think one of the reasons Air New Zealand has been innovative is that it has had the security of government ownership.
There is more, and feel free to contribute any other myths and spin in the comments.
A clear dividing line
January 26th, 2011From time to time someone will ask me if there is any real difference between Labour and National. For me the answer has been, and is, obvious. But the last two days should leave no one in any doubt.
From Phil, on behalf of Labour we saw yesterday a vision for an economy where we all pay our fair share, combined with a plan to actually grow the economy through a focus on R and D, skills, savings and protecting our assets and where government works as a partner with businesses.
Today from John Key we have seen a retro 90s style recipe of asset sales and slashing government spending. As my colleague Moana Mackey said if a definition of madness is doing the same thing over again but expecting different results, then John Key and National are positively bonkers. As another colleague Charles Chauvel said this morning, there is no plan for increasing Kiwi wealth, just for selling off what we already own.
It was interesting today another leader gave his State of the Union Address. There were lots of interesting lines in the Obama speech. His call to respect the teaching profession being one. But I was also struck by this
Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.
To extend the metaphor further than it probably should be, John Key’s plan is to remove the engine and sell off a wing and half the seats and hope that the plane keeps going, ours is to fix the engine, make the plane fly higher and faster and make sure there are seats on it for everyone. That’s the difference.
The test is how the public will view these different visions. Interesting to see that as at early this afternoon the (obviously highly unscientific) Herald and Stuff on-line polls which do not tend to favour Labour were 2/3rds against asset sales and 2/3 for first $5000 being tax free respectively. It’s sure going to be an interesting year.
Phil Goff’s State of the Nation Speech
January 25th, 2011Phil is doing his State of the Nation speech at 1pm today. We will post the full speech as soon as possible, but you can watch it live. Follow the link here.
UPDATE: Watch Phil’s speech on YouTube here.
Ratana and Labour
January 25th, 2011Yesterday was my fourth, and wettest, trip to Ratana Pa for the celebrations of Tahupotiki Wiremu Ratana’s birthday (which is actually today). It was, as has been reported, a very warm reception for the Labour team, summed up by the Ratana Spokesperson’s comments
What you saw on the marae today was a strengthening of that relationship of Ratana and the Labour Party.
I have been asked often what is the reason for the relationship between Ratana and Labour. The Ratana Church came about in the 1920s as people flocked to follow T.W. Ratana who became regarded as a prophet and mangai (mouthpiece) of the Holy Spirit. The Church itself became a political force as well through the 1920s and 30s, with T.W. Ratana outspoken on the subject of the Treaty of Waitangi and land confiscation.
Labour had already worked closely with Ratana in the early 1930s on policy, and the first Ratana MP (and grandfather of current Labour Te Tai Tonga candidate Rino Tirikatene) Eruera Tirikatene was aligned with the Labour Party. But the relationship was solidified in 1936 by a famous meeting between T.W. Ratana and then PM Michael Joseph Savage. It is described on NZ History On-Line in this way
At the 1936 meeting Ratana presented Savage with four symbolic gifts. Three huia feathers, representing Maori, protruded from a potato, which symbolised the land taken from Maori, leaving them unable to grow the staple crop. A pounamu hei tiki represented Maori mana, which had also been lost. A broken gold watch handed down to Ratana by his grandfather represented the broken promises of the Crown. A pin with a star and crescent moon was the symbol of the Ratana church, Tahu o te Maramatanga. It is said that these items had a profound impact on Savage to the extent that when he died in 1940 they were buried with him.
Labour’s partnership with Ratana was based on a commitment to work together to return land, restore mana and lift the success of Maori. There have of course been ups and downs in the relationship, and there are a wide range of political views held by Ratana followers now, but as I sat and listened to the speeches, and talked with the morehu (followers) yesterday it was clear those strong bonds are not forgotten. They responded particularly well to Phil’s messages yesterday about coming together to address inequality and to focus on the education and health and well being of children.
Its become the case that all major political parties now head to Ratana to pay their respects. That’s a good thing, but from a Labour point of view the annual visit is an opportunity to re-affirm a relationship that is grounded in the early days of both of our histories.