Why I voted against asset sales

Last updated 05:00 01/12/2013
asset sales
ASSET SALES: The government's vastly broader outlook is at odds with a purely financial return sought by other shareholders.

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Every single person, household, business and charity in New Zealand is dependent on electricity. Whether you measure quality of life, profit, productivity or just about any other activity, they all rely on access to electricity.

Above or below the poverty line, electricity is a necessary part of every Kiwi's life. Whether your gauge on the nation is defined by the daily business section, real estate or sports section, nothing would be the same without it.

Shareholders in publicly listed companies are very much concerned with financial returns alone, be it in the short or long term.

Shareholders' increased returns come with no negative consequence if our access to electricity is compromised by price increases or infrastructure neglect, unless of course that shareholder also happens to be our government.

The government, by its very nature, is not just interested in profit and there would be very real consequences if they were.

Regardless of the colour of your politics, we can all agree the government is there to do more than make a financial return on investment in the electricity sector. Take a glance at the news and see the vast range of issues they are held publicly accountable for navigating.

The government's broader outlook is at odds with the purely financial return sought by other shareholders.

The biggest warning given to every business owner who entertains selling part of their business, be it private partnership, public listing or anything in between, is the inevitable loss of control.

Many business owners operate their businesses to suit their lifestyle, consciously or otherwise.

It's not always about growth and profit.

You might target a few high-paying customers only, compromising growth but freeing up time for golf on Wednesdays and weekends with the family. If you sell part of your business to someone who is only interested in profit your reason for running the business the way you do is compromised.

The pressure is now on to expand your customer base, put in the hours, grow production, or whatever it is you do, to meet someone else's needs for a return.

There goes golf and Sunday dinner!

In the case of state asset sales, there goes firstly the poor having warm homes, then not so transparently perhaps, quality health care, education, employment, productivity, trade, the tax take etc.

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"Regulation" I hear you shouting at every paragraph above.

"Government ownership" I shout back.

Why bother with the tension between shareholder and government regulator?

You simply cannot meet the needs of the shareholder to increase return while meeting the needs of every New Zealander to have accessible and reliable electricity.

These two things are in direct conflict.

If the government owns the power companies, like golf on Wednesdays and Sunday dinner, they are at will to ensure our best interests as New Zealanders are met.

Which, in a broad sense, is what the government is there to do, are they not? 

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