Editorial: Still not convinced

Last updated 05:00 10/03/2012

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Sometimes, politicians believe they know what's best, even if most people don't agree with them.

Sometimes, even, they are right. And we thank them for it later.

This must be the philosophy John Key and Bill English are applying to state asset sales. They believe they know best, because the sales are a way of lessening our debt, and right now we're borrowing too much.

But there must be another way.

Nothing has emerged in recent months to convince me asset sales are a good thing.

Plenty has emerged that suggests the opposite.

Mum and dad New Zealanders aren't guaranteed a shareholding. In fact, the Government wouldn't want Kiwis to pick up the shares. That's just moving debt around. But it wouldn't be palatable for the Government to say overseas investors are the priority, so it doesn't. Yet ideally that's what the Government needs to happen.

But even if mums and dads could buy shares, wouldn't it be odd that they are buying something they already own?

And if you are selling the family silver, wouldn't you want to know you are going to get top dollar for it?

There are signs this won't be the case, with threats of legal action over the sales, Mana's Hone Harawira writing to possible investors warning them off, and a Government seemingly hell-bent on a sale no matter what.

It was disconcerting, to say the least, to hear the finance minister say the Government's estimate of $6 billion for 49 per cent of four power companies and part of an airline was "not our best guess, it's just a guess".

An advantage for an investor is that power is an essential commodity, and there's an increasing demand for it. But that means further investment, when all you want is a return on your original investment. And you can't get too greedy around that, especially as your customers have endured price rises averaging 6.6 per cent a year for the past 10 years.

And how will that marry together anyway ... a Government wanting a secure, efficient, affordable power supply against an investor wanting a competitive return?

When I read that the loss in revenue the Government will get from the assets is more than the savings to be made in debt servicing, I really wonder why we're going down this track. Surely it's not to make the books look good short term?

If that's the driver, stop now. Taxpayers are more patient than that.

Once the assets are gone, even partially, it will be mighty hard to get them back.

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- The Timaru Herald

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