And so the sell-off begins.
Cartoon thanks to Tremain, from a year or two ago – and how apt it is turning out to be. John Key, the used car salesman who could sell a sombrero to a Mexican, and the fellow accolytes of market sell-offs, are starting once again to dismember the corpse of New Zealand. Targets for sell off this time included Mighty River Power (which, seeing as the Tainui people have been given back possession of the river bed of the Waikato, would seem to have a greater claim of ownership to its assets than the Key government..), and Solid Energy. As in, yes, the one that has just gone bankrupt, morally and physically, if not completely financially… Damn. If Key could only have got in early and flicked that one off, then he would have been able to blame the collapse on the new owners. Which would be us…
But how have the sell offs been doing in the past? In the 80s we had just about everything sold off that wasn’t nailed down, and even quite a few that were. Telecom was once New Zealand owned, and I guess that has been a moderate success, although Gattung presided over a massive loss in shareholders funds. Contact Energy has been so-so. Lots of people lost loads of money there as well. KiwiRail of course has been a disaster, run down so much by the former crooked owners that just asset stripped it and then scarpered. So the Government had to buy it back. Air New Zealand as well – a basket case really at one stage, even if it is all happily hobbited and furry friendly these days.
I’m at a loss to understand this Government’s attitude to sell offs. Not only are they going to be missing out on any further revenue stream (assuming that it rains again one day, which we have to presume it will, eventually), but they are selling assets at the worst possible time – who has any money to buy them? Not just people, but countries as well – we’re all broke.
Can someone explain the logic to me?
The logic is quite compelling, and goes like this – let’s use Mighty River Power as an example.
Mighty River is currently owned by the government on behalf of all New Zealanders. For argument’s stake, let’s say there are 4 million of us. However not all of those 4 million people voted for the National Party, so in electoral terms a great many of these non-National Party voting persons are the equivalent of electoral dead weight: they contribute nothing to keeping John Key and Gerry Brownlee and Steven Joyce and Paula Bennett in power. And to add insult to injury, some of these non-National Party voters want things from the government that it doesn’t want to provide – like jobs, a living wage and democracy in Canterbury.
However almost all of these people need electricity in order to go about their daily business. They are therefore a captive market that can be better exploited (sorry, I meant serviced) by the private sector. Their power prices will rise as a result of the float of Mighty River and the other power companies, but that’s a small price to pay for the economic efficiency that we’re told will result. Let’s call these people “net losers” in the Mighty River privatisation.
As can be seen from the recent flurry of activity around the Mighty River float, about 100,000 New Zealanders have sufficient wealth to be able to afford shares in the power company, as they’ve registered their interest. A great many of these people are National Party voters, who think that it’s only fair that they should see some decent investment returns from their money. They will benefit from the increased power prices that will be applied to the “net losers” in the form of a steady dividend flow, and some tax-free capital gains. Let’s call these people “net winners”. Most of these people will commend John Key and Gerry Brownlee and Steven Joyce and Paula Bennett for their good economic management and their ability to make the hard decisions that are necessary to keep NZ growing, and will vote National again.
A very much smaller group of people will stand to make a very large amount of money in consulting fees, underwriting fees and all the other esoteric but somehow essential services that will vacuum hundreds of millions of dollars off the bottom line for the government for no apparent purpose – which is probably the reason that their name rhymes with wanker. Let’s call these people “National Party donors”. These people will commend John Key and Gerry Brownlee and Steven Joyce and Paula Bennett for their good economic management and their ability to make the hard decisions that are necessary to keep NZ growing, and will make large contributions to the National Party coffers through anonymous trusts again.
So while the Mighty River float makes no economic sense, it makes perfect political sense. The National Party gets to enrich its core constituency (the “net winners”) and ensure a steady flow of money into the Party for winning elections (from the “National Party donors”). The rest of us are merely a means to an end – schmucks who, through higher power bills, will generate the cashflows necessary to enrich the people whom, to be frank, the National Party cares about a lot more than us.
It reminds me a bit of the sell off of Car Parking buildings by Wellington City Council. WCC had built them, with our ratepayers money, and for years was running them at a loss (certainly for the last years, if not the first). I seem to recall that the WCC were quite keen to “flick them on” as you say, because they were just a “drain on resources”.
Of course, once “flicked” on, they have proved to be an absolute money-spinner for the various car-park companies who bought them at the knock-down price they were sold for. Money in the bank, as they say. I think that Wilsons or whoever just immediately sacked the parking attendants who just sat in fume filled boxes, put in machines that people had to go to and pay money to themselves, ramped the parking prices up, started charging for Saturday parking, and – Bob’s your Uncle – a couple of zillion in your back pocket. And no more worries for the WCC – but no more money coming in either.
Central Government does seem to be as inept now as the WCC were then. The new owners will, as Kent Duston says, presumably quite quickly adjust the prices for electricity upwards, and more money will arrive in their laps. My question is, what is to stop them running everything into the ground as Fay / Rich White etc did with NZ Rail. Unlikely as it may seem, I agree, but then no one forecast what was going to happen to NZ Rail either…
But Max, it’ll make New Zealander’s rich!
And now a drought. Hoy. Watch now as farmers momentarily become aware of the effects of climate change which they and their party have denied for decades.
And Wellington is down to 20 days of water, apparently, somehow. What will the fish do. I wonder if this will be used in the next couple of years as an excuse to put water meters on everyone’s house — you know, rather than obviously we need more storage so lets build another bloody dam.
It would be interesting if the whole region ran out of water – what would we do? If no water at all was coming into the pipes – and everybody drank their own supplies dry – what then? Lake Horowhenua is polluted, so can’t drink that. Lake Taupo is 400m deep, and 70km wide, so lots of water there, but how do we get it out to pump to Wellington?
We’ll have to start drinking bottled water and bathing in the sea. We need Aqueducts of National Significance. Or to build some think big desalinization plants that can sit unused for two decades.
Wellington needs another dam. The site is already picked out I believe.
Doesn’t help having one of the storage lakes out of action for upgrading.
The remaining (upgraded) lake is 98% full at the moment, but is being slowly used as Hutt River is too low.
Rain due on Sunday, with Monday rain, Tuesday showers and Wednesday showers clearing. Still not enough though.
While we townies have it bad, I have an uncle in Taihape _screaming_ out for water. Those farmers are doing it tough alright (although not as tough as the Aussie farmers – yet).
While I will be sad to see this glorious weather end, I guess we all will be happy to see some rain clouds on the horizon – as long as they deliver! But I am still curious as to what will happen if, one day, the city runs out of water. I had a wee premonition of that one day the other week, when workmen digging up the road accidentally cut off the water supply to the Home of the Fish. Surreal scene – pools of water gurgling down the street outside, while inside I turned on a tap and just got gasping, clunking airlock noises, with nothing but spittle and stale farts coming out of the taps. The building had, in effect, died. I couldn’t do anything – couldn’t wash my teeth, flush the loo (ie did that once, and then it wouldn’t refill), have a shower, or even get a glass of water.
Yes, of course like all good Wellingtonians, I have a supply of emergency water, but as this wasn’t yet an emergency, I did what any self-respecting young architect would do, and went to a bar and drank their liquid instead. When I came home several hours later, the water was back on, where it should be, in the pipes, and it was as if nothing had ever happened. But what if it hadn’t? What will we do, collectively, if after 20 days there is still no rain, no water? Will WCC try to truck in supplies? Where from? Taupo is too far, despite being deep enough. The sea is closer, but we don’t have a desalination plant.
Good grief! I know! We’ll have to import one of those errant icebergs from Antarctica. Or the Larsen B ice shelf, anchor it off shore for government flunkiest to be sent to denude it of its existing narrative. That is, turn it into Iceblocks for you to drink it too.
“flush the loo…”
Having spent ~48 hours without water supply (while living in Trinidad) I can tell you this is the one to be concerned about!
I do have my emergency water supply, of about 100 litres, from which to flush loos. Should see me ok for another 30 days without rain. But other houses are going to be smelly…
Wgtn has a few choices – Hutt River Supply with the two lakes – once EQ strengthened- and the tunnel leading to them can store roughly as much as one lake.
Two big tanks at the Haywards just above the substation
Independent Wainui water treatment plant from it’s own collection area
Aquifer pump station at Gear Island ( IIRC) tapping the Hutt Aquifer
That’s three independent sources
In emergency could truck drinking water out of the Hutt Aquifer while main system being repaired – presumably Southern suburbs would have it toughest
Plastic household emergency supplies from rainwater with a battery-powered pump are being stashed under houses and in gardens
Plastic 200l drums are on TardMe for about $40 or so – collect ya rainwater with a filter and diverter to the drain and use gravity
Gravity should be around for a wee bit longer
Given power prices I’m tempted to rig a homemade micro-hydro turbine to the tap – should be good for about 200w
Naughty naughty