Hard News: Opening a canned worm factory
33 Responses
First ←Older Page 1 2 Newer→ Last
-
My favourite inanity of Gordon Copeland's is actually economic. He wants to sell down SOEs to pay for tax cuts.
-
Haven't we heard a bit lately about political mouthing-off with regard to Air New Zealand (not an SOE, but Labour will want to save English's statement yesterday that "Air New Zealand is a good example of this mixed ownership")?
Well, Russell, I thought the whole problem with Air New Zealand was that various politicians don't have a clue that it isn't an SOE.
And what to make of this rather odd "intervention" by Helen Clark into the Parliamentary Rugby Team farce:
Helen Clark said Air New Zealand's sponsorship effectively amounted to a public subsidy of the team.
Well, I guess that's accurate if you say the same thing about Parliamentary travel - and I understand that Parliamentary/Ministerial services quite legitimately negotiate substantial discounts because they spend a lot of money moving MPs and Parliamentary staffers around.
Anyway, if Labour wants to go to the electorate with an intention to buy out the private shareholders of Air New Zealand - and an upfront declaration of how it's going to be paid for - that's fine. But I'd really like Clark and Cosgrove to stop coming up with 'secret agendas' on the part of National, and come up with some policies of their own.
-
SOEs are in a strong position to raise debt if they need to.
Does anyone know how that works? Do they have "full faith and credit" behind them, allowing them to borrow at sovereign lender rates? Can Kiwibank fund it's home loans on that basis - or have they got the ability to borrow directly from the government?
-
SOEs do not have a government guarantee behind them, witness terralink's liquidation.
Kiwibank borrows as an independent corporate, and have a credit rating based on that, I am fairly sure the Electricity companies are the same.
I am unsure whether the ratings agency give them an easier ride because of their Crown ownership. but I guess that would be an internal decision for them.
If Kiwibank did have official backing I guess it would offer a large window for arbitraging against Government stock, which tends to have a lower interest rate than is offered by Kiwibank for Investments.
-
To use Air NZ of a mix of private/state ownership it would mean the intent is not to sell parts of SOE but rather buy back key infrastructure. Bail outs for bad management decisions = socialism for the rich.
I'm not sure that is what Key is all about. -
English had reason for discomfort: privatisations don't have a good rep in our recent history. Telecom. New Zealand Rail. Fay, Richwhite.
Whoa, hang on a minute there.
Telecom? Where you would phone up, like my parents did, and say "Can I have a phone put in our new house please, my wife is pregnant with twins and we might need to phone the hospital when she goes into labour.", and they reply, sure you'll get a phone in....
EIGHTEEN MONTHS!!!
Or New Zealand Rail. Which was a bloated useless dinosour simlpy unfit for a long, thin sparsely country like New Zealand. Another story. My Dad used to manage a company. One of their plants was in Rotorua, and to get anything anywhere they could not just put it on a lorry, they had to use the rail by law. He would have to spend a third of his day, hours and hours, every day on the phone to Rail trying to find out where things were, why the job meant to come to Auckland was in Whanganui and so forth.
Or Air New Zealand? Where the Taxpayer had to unnecessarily front up with $800 million dollars because of the government's silly nationalism where we have to have a "national carrier" as opposed to letting a big professional like Singapore Airlines sort Air new Zealand's problem's out at no cost.
And of course, as Craig points out, they get into trouble because they don't tell the government that they are sending troops to a war zone that we have sent our own troops to before, and without any directive from the government that they should be told.
Other than that, you're right. National should just front up with what it will do and why.
-
"New Zealand Rail. Which was a bloated useless dinosour simlpy unfit for a long, thin sparsely country like New Zealand"
NZ Rail did work, although with great inefficencies, but that was the aim. Full employment and so on. Those with reduced capacity could push a broom, have a sense of purpose, a paypacket, & pride in themselves. It kept Brent Todd out of trouble for a while as well.
So what has Toll done for NZ? -
Telecom? Where you would phone up, like my parents did, and say "Can I have a phone put in our new house please, my wife is pregnant with twins and we might need to phone the hospital when she goes into labour.", and they reply, sure you'll get a phone in....
EIGHTEEN MONTHS!!!
I was talking about how the public feels about those privatisations -- there were quite a few calls to that effect after the bFM interview.
I'm not saying that Telecom shouldn't have been privatised -- of course it should -- but the foolish manner in which it was done really hurt New Zealand. And I think you'll find that the real turnaround in Telecom's customer performance, and a lot of the capital investment, took place when it was an SOE.
Or New Zealand Rail. Which was a bloated useless dinosour simlpy unfit for a long, thin sparsely country like New Zealand.
Of course. It was a much better idea to let Fay, Richwhite run the sale, grab some for themselves (their shareholders never benefited) and leg it before the house of cards collapsed.
Toll's subsequent takeover valued it at $230m. After originally selling the lot for $400m the government ended up paying $80 million for the Auckland rail network, $50 million for other assets and $2 for the rest of the network, which had been allowed to fall to bits. In 2004, having been gutted and loaded with debt by F&R and their mates, the company lost $364m.
What happened there was a complete disgrace.
Or Air New Zealand? Where the Taxpayer had to unnecessarily front up with $800 million dollars because of the government's silly nationalism where we have to have a "national carrier" as opposed to letting a big professional like Singapore Airlines sort Air new Zealand's problem's out at no cost.
And the assorted captains of industry who had been running it did such a good job, didn't they? FFS, even English is hailing it as a success. I don't think it's necessarily repeatable, but I'll take a publicly-owned and profitable Air NZ over a never-quite-clear prospective offer from Singapore Airlines (itself a winning example of "silly nationalism") any day.
I'm not saying the government has to own every enterprise, but the history of privatisations in NZ is horrible.
-
This whole thing is starting to strike me as a possibly an English f*&% up.
Certainly has covered it well and hasn't backed down from it, but given the can o worms (as mentioned) regarding privitisation you would expect a politician to tiptoe rather gently around it or have a specific goal to communicate.
There needs to be genuine reasons for specific SOEs - improving productivity, providing competition, even "better places to invest the cash" - and given that there can be an argument for this (the farms or the coalmines as a possible example) I fail to see why they didn't come out with a specific spin to deflate the inevitable public outcry.But I haven't seen any mention of this - give me a well argued reason why and I might support it. I'm therefore wondering whether it was either a slip from Mr English (contrary to impression), or just an exposure of the deepseated ideological belief in the party...
-
you would expect a politician to tiptoe rather gently around it or have a specific goal to communicate.
Seems to me to be another example of National trying to be all things to all people - raise some possible policy, see how it plays out in the polls, adopt or reject accordingly. It's not difficult to see a hidden agenda if you are on the left (guilty m'lud) if you look hard enough. It looks like National trying out how much of its old policy is preventing it getting elected and therefore should stay under the tarpaulin until after the elction.
-
to get anything anywhere they could not just put it on a lorry, they had to use the rail by law. He would have to spend a third of his day, hours and hours, every day on the phone to Rail trying to find out where things were, why the job meant to come to Auckland was in Whanganui and so forth.
The road network back then was about 100x worse. If I remember correctly, it was just barely a paved two lane road between AK & RT.
And a truck would have taken about 6hrs to do the drive.
Ah yes road transport is just so much better...NOT
On the phone ?... so this was before computer tracking. Hell everything was slow back then.
Ah the good old days. The rail yards were on Quay St, Ahhh -
raise some possible policy, see how it plays out in the polls, adopt or reject accordingly.
Hmmm, risky strategy - handing out ammunition to your opponents - but you could be right...
-
Hmmm, risky strategy - handing out ammunition to your opponents - but you could be right...
At the moment actual policy seems to be right out. JK doesn't want to say something that might offend anybody. I think that the Nats are relying on voter amnesia and Labour-fatigue as their strongest weapons (and why not? it looks like it is working).
-
Thre used to be a law for road transport that restricted the distance anyhting could be trucked Over 100km or so it had to go by rail. Hence there were lots of depots in country towns for repackaging of goods or local distribution of rail freighted goods. For instance there were inland oil terminals at places like Ashburton.
In terms of SOE sales the kneejerk "selling off the family silver, we'll never do it" response of Labour is just bad governance. Why do we own a coal mining company given Labour;s policies? Those will surely devalue it long term so why mindlessly hold onto it while it loses value? Funny how the pollies got upset about Air NZ transporting soldiers but have a blind spot to ownership of sinful Solid Energy.
Why do we own a children's book publisher? Are our children going to be illiterate if we sell it? Will school libraries suddenly be starved of books?
Everyone says Telecom was a disaster. It's easy in hindsight to see the errors but it was a time of learning and the Govt still got $4bn for it in 1990. That was quite a lot of money in anybody's terms. I see Vodafone got an Indian mobile company recently for $11b that is adding over 1m customers a month.
I think too many focus on the emotional issues around their visceral dislike for telecom rather than was it, on the information at the time, a good deal.
-
It does strike me that given the fact that a massively hands-off approach to governance of public enterprise seems to have become part of our unwritten constitution, there seems to be little point in a having a lot of SOEs under public ownership. In terms of return on capital, we could get more in the Cullen fund.
The alternative would be that the government reassert why these organisations are in public ownership in the first place.
-
Paul Rowe wrote:
It's not difficult to see a hidden agenda if you are on the left (guilty m'lud) if you look hard enough.
Oh, do I really have to take the cheap shot? Looking around the blogisphere - foreign and domestic - there's plenty of people (not all on the left either) for whom a cigar is never a cigar. I don't know about anyone else, but I've wasted far too much time and energy getting into futile pissing matches with people who've turned politics into some secular religion - with the full apparatus of unquestionable dogma, the elect and a full pantheon of devils, infidels and heretical backsliders who must be smote with great force.
Fuck it.
-
Don't forget to keep taking the pills Craig.
-
Everyone says Telecom was a disaster. It's easy in hindsight to see the errors but it was a time of learning and the Govt still got $4bn for it in 1990.
Can't quite face going through all this again, but from a very long post on related matters:
For nearly 20 years, New Zealand's official approach to telecommunications has been unique in the world, embodying a philosophy of "light-handed regulation", and (until recently) eschewing an industry-specific regulator. It's too long to go through here, but Auckland network industries specialist Paul Hewlett has an excellent backgrounder on events since the Post Office monopoly was broken up in 1987, and the network placed with a new entity, Telecom Corporation of New Zealand.
Although most of the horror stories about the Post Office era are true - it sometimes took two or three months to get the phone on - the old system had some successes. We had a very high penetration of phone lines relative to our population. In three years of public ownership, the new corporation made another important step; establishing digital connections to nearly every exchange in the country.
One of the most striking parts of the story is the then-Labour government's acceptance of an "undertaking" from Telecom's new management that it would "ensure that interconnection would be provided to competitors on a fair basis, and the relationships between Telecom companies would not disadvantage competitors." On this vague assurance, any mention of interconnection was left out of the Telecommunications Act.
It is difficult now to credit the stupidity of those who devised the policy. After Telecom was sold to Ameritech and Bell Atlantic (themselves, ironically the product of the greatest regulatory intervention in telecommunications history - the forcible break-up of AT&T in 1982) for $4.25 billion (the money was prudently used to retire external debt) in 1990, there was no way that its private owners would - or even should - have made any agreement not to their advantage.
Something like that. I just don't think "it was a learning time" cuts it.
-
Sorry Craig, but yawn
I knew that we could rely on you for some righteous indignation where necessary. Actually, after the indented bit in grey, your comment is almost untelligible.
-
Don't forget to keep taking the pills Craig.
Heh... I've been keeping up my meds and sobriety just fine, thanks for asking. Just as an FYI. I'm not redbaiter and know from experience that paranoia is a pretty horrible mental ditch to get stuck in, not a particularly good mode for reasoned public policy discourse. So excuse me if I treat mutterings about 'secret agendas' (whether from the loony left or the rabid right) with considerable, if sometimes intemperate, disdain.
Anyway, if Bill English is prosecuting anything of the kind, he really really sucks at it. Lordy, the 2008 general election can't come soon enough.
-
**Charlotte Glennie** is an award-winning journalist and former Asia correspondent for TVNZ. She won the supreme Qantas Media Award for her Boxing Day tsunami reporting and a Special Service Medal. She was based in Hong Kong until TVNZ closed its Asia bureau in 2006. She currently resides in Beijing as the China correspondent for the Australia Network which broadcasts in 42 countries in the Asia-Pacific region.
<sigh>
-
Russell
I meant it was a learning time in that we had never sold a telco off before. It's naive to think all assumptions would pan out exactly as envisaged. Paperless office anyone?
We are all brilliant at property investment, avoiding sharemarket crashes and regulation with the benefit of hindsight.
-
The naivety of various Labour and National govts over privatisation did pour money into some pockets that were as deep as they were undeserving but that doesn't mean that the privatisation being suggested now should be treated as economic heresy.
I'd need to see detailed argument on a case by case basis to make any decision one way or the other but it's only to be expected that the centre-right should propose more privatisation, if only to prod the centre-left into justifying govt involvement in business.
-
And for people interested in re-litigating the economic shifts of the 80's, keep an eye on France. Sarkozy is about to do a Roger Douglas. Maybe having learned some lessons from places like NZ.
-
damn, missed the obvious joke about there being another reason to keep an eye on France.
Post your response…
This topic is closed.