For the Alliance Party the Mixed Ownership Bill is a case of ground-hog day. The Alliance was formed to fight the privatization agenda of the 1980’s and 1990’s. “We find it profoundly depressing that this government is determined to repeat the failures of the past,” said Co Leader Kay Murray.
Previous asset sales cost taxpayers billions when we had to buy the assets back for much more than we sold them for and spend vast sums restoring them to their former state. KiwiRail and Air New Zealand are cases in point.
Why then are we going back down this path by selling shares in our electricity companies and Air New Zealand, again? Do governments get some sort of perverse pleasure from throwing good money after bad?
The government just has the numbers to pass this bill. However investors should take note that this is far from a done deal. New Zealand is still a democracy. These asset sales can be reversed after the next election should voters demand it.
And this time around New Zealanders might not be so generous as to buy them back at an inflated rate, allowing shareholders to make a profit at the taxpayers expense.
Depending on the mood of the people and the courage of the political parties assets could be bought back for the cost of shares at the time of sale or even nationalized, with no return to shareholders.
If power prices rise as predicted and New Zealanders are left unable to afford to have electricity in their homes, such drastic measures may be required.