“Are we really thinking about selling 49% of our SOEs to pay for 1 year’s worth of tax cuts?”
How often have we seen quick asides on Twitter reveal the implicit assumptions on which certain commentators base their pronouncements. Take this exchange on Twitter yesterday about the partial privatisation of SOEs, which speaks volumes.
First of all, what’s with the “we” white man? What’s with the “our”? Since when did you or I or your interlocutor have any actual control or real ownership stake in these government monopolies? (Most of which, by the way, are power companies that should never have been placed in government hands in the first place).
Second, what’s this with the fixation on dividends? “They’re certainly generating a pile of dividends for someone?” Silly me. I thought the primary purpose of power companies (for example) was to generate power—you know, the lifeblood of an industrial economy. The stuff that keeps the wheels of industry turning. The stuff we’ve got too little of due to lack of real investment..
Power companies, sir, are primarily there to generate power not to fund a dying welfare state.
Or election bribes.
THIS IS NOT JUST an academic argument. In simple terms (which is clearly all Mr Hickey understands now he’s had his lobotomy) the power that power companies make effects every single company in New Zealand--which is to say, it effect the lives, wealth, wellbeing and wages of everyone in the country. That is a far more tangible thing than talking bollocks about “our” power companies at the Grey Lynn cocktail parties Mr Hickey now attends. The more cheap power we have (and instead of cheap and abundant power, we’ve been going headlong in the other direction) the more wealth New Zealand business will be able to generate. And the more capital that is invested and reinvested in power companies, the more cheap and abundant energy we might have.
And to put it bluntly, but not as bluntly as the blunt object Mr Hickey deserves for running with the statist ball, the more capital that foreign owners invest (since there’s blessed little real capital around “our” way to do anything with), the more power there is for New Zealand producers to use to produce things.
That’s a good thing. A very good thing. More foreign owners, more capital, more power. (I keep it simple so Mr Hickey can catch up.)
Now Mr Hickey and his ilk bleat about “foreign ownership” as if Genghis Khan will be coming down from the hills to ravage our cities, and “we,” i.e., “real” New Zealanders, have no power to stop him. Quite apart from this petty small-town provincialism (which is what this moron’s xenophobia amounts to) this is just more abject bollocks. The fact is that if left free to make their own decisions (an unfashionable notion, I’ll admit, amongst the people with whom Mr Hickey now sips his lolly water) the “mum and dad” investors in the first public offering of these shares will be able to choose to either keep their shares or sell to a higher bidder. Which means that the decision about foreign ownership is actually in the hands of real New Zealanders. i.e., the New Zealanders who are prepared to put their money where other people’s big mouths are, and to make these SOEs their own.
Moreover, if New Zealand investors in that initial 49% float are bought out by foreign owners, as is likely to happen when or if the shares are allowed to end up in the hands of those who value them the most (as they will if markets are kept free of interference) then those New Zealand investors in receipt of this subsequent windfall are not going to take their money and just bake it into pies, are they. They’re going to reinvest it. They’re going to start new businesses. They’re going to recapitalise existing ones. Which means we, i.e., you and I and Bernard Hickey (even though he wouldn’t deserve it) would be better off than we are now from this “second wave” of capital.
We’d all be better off because the country’s businesses would be getting a double bonus of two capital injections: one of which is flushed out by the first, and the first of which helps all our lights stay on. (And as far as dividends go, what do you think NZers would be receiving from their “second wave” of investments? Cookie crumbs?)
So everyone’s better off. Businesses, investors, wage earners. Even the people at Grey Lynn cocktail parties. Everyone, that is, except the moaners.
All very straightforward, really.
Now it might be objected however that any major improvements in power generation would only come about if we could harness the expertise of big overseas players. And we could only harness their full and undivided interest if they could buy more than the derisory 10% which our sad excuse for a Finance Minister will allow them to buy. Which is of course an argument not just for the pathetic partial privatisation proposed by this pussy, but for the fully-fledged full-blooded proper privatisation in which all the shares of all the government “assets” (sic) are allowed to find their way into the hands of those who value them the most.
But the Finance Minister is a moron too.