The National Government's asset sale programme is complete but the debate about the process just won't go away. Complaints about the ideology of partial privatisation won't bother the Government, it campaigned and won an election on the sale policy.
But what should bother it is the steady stream of complaints and criticism coming from those investors who took part in the process and have been left far from happy with the result.
These range from those who feel burned by the pricing on the Mighty River sale to those who feel they were shunted to the back of the queue with the heavy scaling that was required for last week's Genesis Energy float.
These are the middle New Zealanders whose votes National can't afford to lose. They, the small investors and the first-time investors, were the group touted as a target for the asset sales process. Getting them into the capital markets to strengthen and deepen them was a key plank of the asset sales policy.
The Government argues the process was hijacked by opposition parties on the left. The opposition parties argue it is their right to run the policies they choose to.
What is clear is that the Government's tight timeframe on the sales process put it at a disadvantage as a seller. As that timeline was largely self-imposed for political reasons the Government must surely carry the responsibility for the results - warts and all.
The process hasn't been a disaster, of course. Mark Lister, head of private wealth research at Craigs Investment Partners, has crunched the numbers and delivered the Government marks out of 10 on three key measures:
Getting value for the taxpayer:
Seven out 10, says Lister.
The Government raised $4.67 billion from the sale of minority stakes in Mighty River, Meridian, Genesis and Air New Zealand. The original target was to raise $5 billion to $7 billion, although that included Solid Energy, so the revised target range was $4.6 billion to $5 billion.
"The Government just scraped into the bottom of that range, but I think that's quite commendable, especially given all of the political drama that has occurred throughout the process," Lister says. "Genesis was probably sold too cheaply, but the taxpayer was the big winner with MRP (and remember that Genesis represented just 15 per cent of the total proceeds, while MRP accounted for 36 per cent)."
I think this is generous and I will go with five out of 10. That's still a pass, but only just. The politics were part and parcel of the process and the Government was caught out. It took a long time to get the process underway because of legal challenges from iwi. Once committed to a narrow window, running up to the election, the process was always vulnerable to opposition attack. The Government didn't have to stick to the timetable to sell all the assets this term.
If the goal was genuinely to get the best result for taxpayers it could have delayed after Mighty River as the market turned. Growth stocks were running hot, defensive utility stocks weren't. If National had backed itself to win this year's election it could have sold in the first year of its next term and largely negated the threat from opposition policy. It would also have allowed more flexibility to sell into a favourable market.
Offering good returns to investors:
Eight out of 10, says Lister.
"Three out of four isn't bad. The NZX 50 has delivered a 14.9 per cent return over the past year, yet Meridian is up 22 per cent since October, Air NZ is up 28 per cent since November and Genesis is up 17 per cent since Thursday," he points out.
"Some will argue that it was much easier to get big allocations of the worst performer (MRP), while nobody got much Genesis, although there was plenty of Meridian and Air NZ to go around at the time and those have been the two best performers of the bunch."
This seems about right to me too, although I'll go seven out 10 because I'm a miserly journalist.
When you look at the returns on the last three assets sold it is hard to be too harsh. The timing of Mighty River was good for the Government and not so good for investors, which has caused problems addressed in the next category. But three of the assets have proved good investments and Mighty River hasn't put a foot wrong operationally. It should still deliver over the long term.
Getting a new generation of Kiwis to embrace share investing:
Four out of 10, says Lister.
"The programme was a great opportunity to give everyday people a good experience with owning shares in solid, predictable, reliable companies," he says.
"This would have been an important step in growing our capital markets, teaching people that the sharemarket is not just a casino, and making potential investors consider something other than 'another rental property'."
Sadly, it hasn't played out that way and participation rates just haven't been anywhere near levels that were hoped for.
As Lister points out, "MRP should have looked like Genesis did."
I'll agree and stick with a four out of 10. It is on this measure that the process has been an outright fail. With the advantage of hindsight the most generous offer should have been the first, allowing the Government to get progressively more aggressive in its pricing.
Was the Government greedy with MRP or did it just get caught out by the market?
"Many of the first-timers got burned on MRP, so stayed away from the next three (which have all turned out to be great investments) and the more experienced retail investors have reaped the benefits," says Lister.
We do now have 111,000 new share investors (based on new CSN numbers issued) but the number could have been much higher - and much happier for that matter.