John Armstrong: Too many unknowns to judge asset share float

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By releasing some of the detail of the float of shares in Mighty River Power, the Prime Minister may have finally shifted what has largely been a heavily one-sided debate on privatisation somewhat more in National's favour.

The argument is turning away from one of principle - whether minority shareholdings should be sold in the three state-owned electricity generators - to one of practicalities and the mechanics of how they should be sold.

Those parties opposing the sell-offs have had to shift the focus of their attack. Their initial target has been the "loyalty bonus" which John Key confirmed last Sunday would apply to retail investors who hang on to their shares for three years after being issued them.

As Key has pointed out, Labour and the Greens are guilty of some inconsistency. The two Opposition parties oppose the sales for fear of foreign ownership. They are now opposing the loyalty bonus - a device designed to encourage New Zealanders not to sell their shares to overseas interests.

As Labour and the Greens have it, the ratio of bonus shares to ordinary shares has to be generous if people are going to be persuaded to hang on to their ordinary shares.

However, the more generous the ratio, the greater the cost for the Government in terms of less revenue from the sales.

In a perfect world, the debate would go into limbo until more details have been finalised and inserted in the prospectus covering Mighty River Power.

Given that partial asset sales are this year's most potent political issue, Labour, the Greens and New Zealand First are hardly going to give up their advantage and agree to a temporary truce.

Yesterday consequently witnessed a plethora of statistics which had been massaged by opposing politicians to purportedly show how large or how little the cost will be to the Government's books of the bonus shares.

In the belief that whoever attacks first defines the subsequent debate, Labour and the Greens are also endeavouring to paint the bonus shares as a "giveaway" to the rich.

However, there are simply still too many unknowns about the sale process to draw any firm conclusions.

It will consequently be wise to treat the predictions of both opponents and those in favour of privatisation with a healthy dose of scepticism.

In turning down an application from Labour yesterday for a snap debate on the announcement of the loyalty bonus, Speaker Lockwood Smith probably did everybody a favour.