Message to asset sale foes: buy the shares

Last updated 12:57 04/07/2012

Plan B for opponents of asset sales? Get out the cheque book.

Okay, the law has passed and while from a taxpayers' point of view it was a flawed idea to sell part of the state-owned energy companies, it is time to accept they are going ... and move on to Plan B.

Flawed, because as a co-owners we had the right to baulk at selling assets at anything less than top dollar if they are earning a decent margin over the cost of borrowing.

Yes there are other aspects the Government needed to take into account; adding new opportunitiites for investors in the New Zealand equities market and - maybe the most compelling one from the national viewpoint - giving the capital-raising markets a shot in the arm to help other businesses with ideas a more receptive market.

Treasury, who otherwise are keen sellers, fairly pointed out in the February Budget Policy Statement that the taxpayer would be worse off by around $100 million a year in lost earnings from the full asset sales programme - though there could be wider benefits to the economy.

But that is all water under the bridge.and through the turbines now.

At least one SOE, Mighty River Power, will be sold down and will probably hit the sharemarket in late October.

So what's Plan B for opponents of the sale?

For those who can afford the spare cash, surely logic dictates that rather than stand on principle and boycott the sale, they buy as many shares as possible - or at least as many as would be needed to preserve their citizen's share of the asset and keep as much as possible in NZ hands?

If the float raises $1.8 billion for 49 per cent of Mighty River Power then on average each New Zealander - either in person or through savings vehicles - would need to stump up $500 to preserve full NZ ownership.

Of course it won't happen, because some shares - maybe as many as 20-30 per cent of those on offer - will be set aside for foreign institutional investors.

But wouldn't it be a scream (and a political curate's egg for the Government) if Kiwis lined up to buy shares in such numbers that they were not only "at the front of the queue" but also offered to push others out of the line?

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96 comments
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dan   #1   01:02 pm Jul 04 2012

I'm assuming this isn't sarcastic but this is just idiotic.

I'm not even going to waste my energy and point out why, but there is a very big fundemental lack of understanding in this blog post.

LindaC   #2   01:04 pm Jul 04 2012

Nice idea, but most of us don't have spare cash lying around after paying our already outrageously high power bills.

Jen   #3   01:04 pm Jul 04 2012

Well, once the Nat's have gone, we can compulsorily buy the assets back, for what the purchasers paid for them, then the Nats will try and sell them again, then we'll buy them back again, then no-one will want to buy them. All we need are for Labour and others to grow some backbone and say they will do this... will scare off the scalpers and greedy b*'s who want to buy the assets I ALREADY OWN....

The people in this country are thick, if they can't see that privatising these assets will mean prices are bound to go up. This is theft, nothing more, nothing less. Privatising didn't work in the 80's and 90's, and it won't work now.

high roller   #4   01:08 pm Jul 04 2012

why didn't I think of that; I'll just call my broker and liquidate some of my massive portfolio....lol; teh opponents don't have any money to buy back their own assets, thats why they are oppossed.

buy shares? maybe in overpaid columist land.

herpyderp   #5   01:10 pm Jul 04 2012

Currently the assets belong to everyone, every single person in the whole country. So now people that are well-to-do can buy some shares and be even more well-to-do. And no don't give me that "you just want free-handouts for welfare nonsense". What about the people working hard living paycheque to paycheque, families whose power bills rack up a big cost for them and can't afford to be paying more, let alone put money into shares.

Plus the rest of us out there that are well-to-do have money tangled up in investments already, taking my money out of my current investments and moving it into this won't make any difference, the only beneficiaries out of this will be the people at the top that are rediculously-well-to-do, who will buy big percentage chunks of it.

Buying them once they're sold won't do any good for anyone with less then a few spare million.

asset foe   #6   01:14 pm Jul 04 2012

Are you ignorant?

Or have you just got enough money sitting around to pile into any investment you feel.

Think about that for a moment and then realise you're an exception, a lot of people who can't.

JamesARobins   #7   01:25 pm Jul 04 2012

Utterly fantastic - thanks for this Mr Small. Apparently whispers are starting to float about preferential sell-offs: http://amberrestorative.blogspot.co.nz/2012/07/break-from-disaster.html (see footnote)

Good to see someone sitting comfortable on the middle ground!

Peter   #8   01:29 pm Jul 04 2012

Sounds like he's been talked into this by the National Government. Buy the shares now and when the Government does its compulsory buy back, they will do so via a lowball offer, which of course they will legislate for. Sorry, I don't trust this Government and frankly they have no credibility. I'll keep quiet for now about the 500 Roulette and Blackjack tables I have imported so that I can do business with them should the fine people of this country be fooled into voting National in again. I'm sure by then Mr Key and co. will have got bored and will want a change of currency from Pokie machines....

Alan_Wilkinson   #9   01:30 pm Jul 04 2012

I see. The people who have no money to invest never paid for the assets as taxpayers either - yet they squeal and moan as if they had and had every right to own them.

They are just a bad joke but have no sense of humour either so they can't see it..

Phil   #10   01:32 pm Jul 04 2012

Borrow! Take out a second mortgage! What could possibly go wrong?


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