Why is John Key selling assets to Mums and Dads when they already own them?
Last year, Mighty River Power paid the Government $159.6 million in dividends. That is, it paid us taxpayers $159.6 million and John Key wants to sell this golden goose. Why? I smell a rat.
If they can't
get a better return on the money they receive from the sale of Might River Power, year-in, year-out, why sell?
As I understand it, the money raised from the sale would be used, in his words, to "fund new public assets". What? Like roads, broadband and hospitals?
What will the return from these assets be? Will the return match the $159.6 million received this year from just one of the assets he has his eyes on? I suspect they won't give a return and how can that make sense?
You sell something that is giving a great return and spend the money on something that will give no return. Why not just spent the $150-odd million each year, every year, on new public assets.
Or is there another reason for wanting to sell the golden goose? We all know those who control and own vital infrastructure such as power, water and communication hold the rest of us to ransom - try living in the modern world without them. The big boys know this and have a desire to own those critical assets. The funny thing is, they don't build them themselves. They wait until the good old taxpayer builds them, takes the risk, gets them profitable and
then they pounce. To do this, they need a friendly government willing to sell them and it looks like they have one. I wonder how much their campaign funds were boosted by these people.
"We are selling them to the mums and dads" is the biggest con out there. Auckland Airport was sold to the mums and dads. Who owns it now? Or who nearly owned it? The BNZ was a bank owned by taxpayers - who owns it now?
Mums and dads already own it. We own Mighty River Power, we own those power stations on the Waikato river. We built them, we benefit from the returns. Why then, when they are making money, should we sell them - in all honesty - to an overseas corporation?
I hear you say: "No Rod, we are selling them to ourselves." Okay - who owns all the pine plantations the taxpayer planted with cheap labour in the 1950s? Not the tax payer, but some overseas superannuation fund. Do they care about our sawmills, which can't get quality logs at the right price? No, they care about flogging the timber off to the best price overseas. Do they care about New Zealand jobs? No. Is there a pattern here?
Yes. We take well-performing, taxpayer-owned assets and sell them to our mates. After our mates have stripped the wealth out of the asset, we buy them back - think New Zealand Rail.
Be warned - mums and dads won't end up with these prized assets. Overseas investment groups will. And where will the dividend go then?
It may take a while, but they can wait, it's all part of the plan. Who controls Telecom? That too was a New Zealand asset sold to mums and dads.
Don't buy what you already own, unless you want to steal your neighbours' share because they can't afford to buy. And, if you do, I'm picking you will be only too keen to sell to the overseas corporation the minute they make you an offer you can't refuse.
No wonder they are called Key assets.
- Rod Meharry is a former member of the Government's Small Business Advisory Group and an ex-small business owner looking for a new challenge