$112 per head may be the price we all pay for economic nationalism in the asset sales policy. Or, rather, it is the price for we all pay to placate wavering National voters concerned about foreign ownership. The actual figure for the ‘kiwi-first’ component of asset sales is unknown – $112 is based on Treasury’s $500 million upper estimate (see Adam Bennett’s $112 a head for asset loyalty), but opposition parties are claiming it could be over $1 billion. John Key calls that a ‘crazy number’ and says Parliament's finance and expenditure committee estimate of $360 million was a ‘possible number’ – see: Vernon Small’s Key denies $1b taxpayer 'sting'. Key has also suggested today that the ‘kiwi-first’ policy is likely to cost between $60 and $80 million. That’s a big variation in estimates, but a significant cost under any scenario, particularly for a government that has argued foreign investment in New Zealand should be viewed positively and flew in the face of public opinion to allow the Crafar farms to be sold offshore. [Read more below]
Rod Oram says there is evidence that long term shareholding will be increased (listen to Oram on RNZ’s Nine to Noon this morning: Retail incentives for the SOEs sales), but the timing lends itself to a cynical view of the motivations according to Labour’s Clayton Cosgrove: ‘The next election is two-and-a-half years away and the bonus shares will be triggered after about three years…. This is a con, and the only reason for it is John Key wants to go to the country and say “look, all these Kiwis are holding onto their shares” in the run-up to the next election’ – see Share loyalty scheme is a con, Labour says. The Government has largely failed to convince most voters that the sales are a good deal for the taxpayer, and the added costs of the loyalty scheme won’t help. Nor will the recent 29% increase in Mighty River Power’s sales – see James Weir’s Sales jump for Mighty River Power.
The focus has clearly shifted to the wider benefits that having hundreds of thousands of new investors will bring, echoing Margaret Thatcher’s vision of a ‘property owning democracy’. It was a politically powerful stuff – so much so that British ‘new’ Labour embraced much of the same language. Home ownership was the main focus then, but as home ownership in New Zealand has been on the decline for some time, blue-chip utility shares are the next best thing. The actual numbers of new share owners is politically less important than having middle ground voters feeling they could be included in the benefits and that this isn’t just about large foreign corporations. On the left these are traditionally labeled ‘two bob tories’ – middle and low-income individuals who vote against their actual economic interests because they believe it enhances their social status by association.
In fact, Paul Buchanan labels the ‘kiwi-first’ purchase option, Market-oriented social engineering. He points to John Key’s statement that it’s being done to ‘change the investment psychology’ of New Zealanders, and Buchanan ponders ‘how is that different from campaigns to get people to stop smoking, not drink and drive, use public transport, practice safe sex, license and desex their pets or stop littering?’
This is alarming some investment advisers who are worried that novice buyers may think the shares are ‘money for jam’ without even knowing how much they will cost (see Newswire’s Share float plan gets tick from fund managers), and without considering other more profitable options such as paying down mortgage debt – see RNZ’s Get advice, newbie investors in state assets told. Stephen Franks points out that there are no sure bets when buying a slice of a business – see: “Should I invest in that power company?”. Of course, if the government actually wanted to maximise the number of local investors directly benefiting from the shares it would prioritise Kiwisaver funds rather than individuals.
In all, however, the Government will be pleased with the media coverage of their conference and the policy announcements. Richard Long (Why the Nats are smiling) sees the sunshine emerging for the Government after quite a few months of stormy weather, as does Mark Blackham (The word of the week is: determined), although he warns the buzzwords could degenerate in to a self-deluding feedback loop. That is pretty much the view of one conference delegate who thinks the party is failing to face up to the realities of the next election – see Cameron Slater’s National Party conference debrief.
Using the number of protestors who turned up to SkyCity on a rainy winter’s day as a barometer of the Government’s prospects may be a little shallow and inconsistent writes Gordon Campbell – see: On the media’s sales job on asset sales.
Other important or interesting political items today include:
• The latest example of political parties blatantly using parliamentary funds for campaigning and market research is explained by Vernon Small in Key uses taxpayer cash to poll voters. As usual, sending out such letters to voters and eliciting political information from them is probably well within the rules. The point, of course, is that these rules about using taxpayer resources have been designed by the politicians themselves to suit themselves.
• Is the Government going to be scared off by tobacco company threats of legal action? The Prime Minister isn’t sure (see Isaac Davison’s Plain-pack ciggies no slam-dunk says Key, and David Shearer has endorsed his position – see: John Hartevelt’s Leader doesn't back MP's 'wimp' call. But one of Key’s ministers is holding a firm line – see Lloyd Burr’s 'We will protect our people' – Turia on tobacco. Meanwhile, the Manawatu Standard wonders if ‘perhaps it is time that we left smokers alone’ – see: Little more to gain from hitting smoker.
• There are a lot of ‘ifs and buts’ to any serious legal challenge to the sale of Mighty River Power writes Pattrick Smellie – see: Threat to asset sales not as strong as it seems.
• A ‘cursory look’ should be enough to establish if there is anything untoward in a minister’s decision to grant funding, which officials had previously declined, to a friend’s project – see: Kate Shuttleworth’s PM to look into Nick Smith payments. The funding included Restaurant and bar charges of $5,495 for three meetings which David Kennedy thinks would be a better place to start reducing taxpayer spending on food than Paula's Food Parcel Proposal. He raises concern that supermarket provided food parcels may help supermarket profits more than the nutritional needs of beneficiaries.
• It may be Maori language week but there is much to be pessimistic about its survival writes Paul Moon Te reo becoming lost in translation.
• TV channels that can’t support themselves with advertising are not worthy of public funding, but apparently the need for a publicly funded national orchestra is not up for debate – see: Kate Chapman’s Minister rules out axing NZSO.
• Stephen Joyce clearly signaled National’s determination to push ahead with mining and drilling over the weekend and yesterday the Te Whanau a Apanui iwi clearly signaled their continued opposition to it – see: Jamie Morton’s Protesters join forces on drilling.
• If the worthy and wholesome marketing of organic food doesn’t bring a tear to your eye then the prices will says Giovanni Tiso in The Good Earth.
• The threat of legislated oblivion is motivating a number of Pokie trusts to up their game reports David Fisher in MP keeps heat on pokie trusts.
• Chris Trotter imagines what life might be like under the ‘Social Obligations and Responsibilities Act (2015)’ – see: The repercussions of a nanny state.
• Finally, this may well turn out to be the most socially liberal Parliament in our history, especially on some controversial issues with marriage and adoption equality and now euthanasia potentially on its agenda – see: Katie Bradford-Crozier’s Euthanasia may again test our politicians.
Asset sales and National
Adam Bennett (Herald): $112 a head for asset loyalty
Vernon Small (Stuff): Key denies $1b taxpayer 'sting'
Kate Chapman (Stuff): $60m - $80m price for asset sale bonus scheme
James Weir (Stuff): Buying shares won't zap bills
James Weir: Sales jump for Mighty River Power
Tova O’Brien (TV3): Loyalty shares for investors could cost $1b
Paul Buchanan (Kiwipolitico): Market-oriented social engineering.
Gordon Campbell (Scoop): On the media’s sales job on asset sales
Stephen Franks: “Should I invest in that power company?”
Pattrick Smellie (Stuff): Threat to asset sales not as strong as it seems
Mark Blackham (Political Business): The word of the week is: determined
Rob Hosking (NBR): Nats winning generational culture war
Richard Long (Dom Post): Why the Nats are smiling
Cameron Slater (Whaleoil): National Party conference debrief
Martyn Bradbury (Tumeke): John Key & media embark upon a second honeymoon
Cigarettes and alcohol
Isaac Davison (Herald): Plain-pack ciggies no slam-dunk says Key
John Hartevelt (Stuff): Plain-packaged tobacco no sure thing
Lloyd Burr (TV3); 'We will protect our people' - Turia on tobacco
John Hartevelt (Stuff): Leader doesn't back MP's 'wimp' call
TV3: Plain packets hurt competition - Philip Morris
Herald: Editorial – Govt should stick to guns on 'alcopops'
Warick Rasmussen (Manawatu Standard): Little more to gain from hitting smoker
Nick Smith and ‘Money for mates’
Kate Shuttleworth (Herald): PM to look into Nick Smith payments
Maori Language week
Paul Moon (Herald): Te reo becoming lost in translation
Jonathan Carson (Stuff): Maori language must be 'sexy'
Kate Chapman (Stuff): Minister rules out axing NZSO
Stuff: NZSO could be axed
Jamie Morton (Herald): Protesters join forces on drilling
Vernon Small (Stuff): Key uses taxpayer cash to poll voters
Caleb Allison (NBR): POLL: NBR subscribers split on National/Maori Party coalition
Giovanni Tiso (Bat Bean Beam): The Good Earth
Danya Levy (Stuff): Further immigration outsourcing considered
David Kennedy (Local Bodies): Paula's Food Parcel Proposal
Katie Bradford-Crozier (Newstalk ZB): Euthanasia may again test our politicians
No Right Turn: The End of Life Choice Bill
David Farrar (Kiwiblog): The End of Life Choice Bill
Jock Anderson (NBR): Water-claim Geiringer wants a bigger serve of legal-aid gravy
David Fisher (Herald): MP keeps heat on pokie trusts
Chris Trotter (Press): The repercussions of a nanny state
Kate Chapman (Stuff): Government to oppose Mondayising holidays
Dene Mackenzie (ODT): MP confident about 'Monday-ise' bill
Jacqui Stanford (Newstalk ZB): Greens happy with action over tax credits
Newstalk ZB: Paid parental leave debate continues
Kate Shuttleworth (Herald): Student loan repayment hikes to kick in next year
Claire Trevett (Herald): Key open to Zimbabwe sanction review
Paloma Migone (Stuff): Govt to give $2m for Fijian elections
Blair Cunningham (NBR): Wellington super city not needed – local govt wonk
Taranaki Daily News: Editorial: Council 's reaction to reform unsurprising
Hank Schouten (Stuff): Govt agencies to share space in savings blitz
Andrea Vance (Stuff): Amy not afraid to speak her mind
Ollie Neas and Asher Emanuel (Salient): 10 Questions With Grant
Yvonne Tahana (Herald): Professor bows out on a high note
Stuff: Today in politics: Tuesday, July 24