Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


We Are Being Ripped Off | 500 Words

We Are Being Ripped Off | 500 Words


Cartoon by Martin Doyle - Click for big version

Later today we expect Prime Minister John Key to kick off the final countdown to the sale of a 49% stake in Mighty River Power.

As he does so the level of acrimony we can expect in political debate will rise. (Acrimony = "harsh or biting sharpness especially of words, manner, or disposition" )

Which is not to say that there are two sides to this debate - however much the cheerleaders say there are benefits to the NZ Capital Markets.

Bottom line this is not about benefiting anyone other than share-brokers, merchant bankers, company directors and investors.

It is not a democratically supported decision:


- a clear majority of the New Zealand public are opposed to this sale;
- a referendum will be held later this year; and
- the sale is taking place against the clear stated wishes of Maoridom - the Tiriti O Waitangi treaty partner;

There is no economic rationale for the sale i.e. no basis to believe - beyond blind faith and chauvinism - that this sale will result in any economic gain, either to the country, the government or us individuals as citizens and ratepayers:


- Treasury - using basic math - has told us that the deficit will increase faster as a result of these sales - due to the fact that the investment returns on the capital employed are substantially higher than the current cost of borrowing;
- We will all pay for it in higher electricity prices as private shareholders demand a higher return on their assets than the government would have been expected to (the government is moderated by fear of upsetting its voters - shareholders are not).

But the biggest negative in this sale is neither of the above.

If NZ sells down its electricity assets it will cut off a golden opportunity to pursue a bold and imaginative future.

NZ is in a position to become the first fully carbon neutral country. We could be the first smart energy country in the world.

We are already way ahead of the rest of the world in terms of renewable electricity. And we could get close to 100% on the electricity side of the equation - provided we have the right regulatory systems in place.

Yes we could.

But not if we sell the power companies.

Why?

Because:


1. We would almost certainly need to do a radical shakeup of the energy regulatory regimes in order to achieve this objective;
2. It would not be in the interests of the shareholders in the power companies for this to happen - they are powerful and rich and would oppose it - and then it would get too hard;

Or if you are inclined to disagree with (2).

3. Taxpayers would be required to compensate the shareholders in the power companies to make it in their interests to consent. Best case scenario they will be enlightened and the Govt. would only need to sweeten a reform package. Worst case - NZ signs a Trans Pacific Partnership agreement with investor state enforcement provisions in it and we have to pay a direct financial penalty to the shareholders.

This is 1987 all over again. A privileged elite is bulldozing through a policy against our wishes which enriches the personal short-term financial interests of a few at the expense of us all.

In short, we are being ripped off.

- Alastair Thompson | 500 Words 4/03/2013 8:59:58 a.m.

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Scoop Is Crowd Funding: Help Scoop.co.nz To Fly In 2015

Scoop is NZ's oldest and largest independent online news service. We have described ourselves as fiercely independent for more than a decade and we would like to stay that way... By making Scoop’s connection to the public and contributors more explicit we hope to achieve the level of support and sustainability that will enable Scoop to fly as a community asset. More>>

ALSO:

McBeth On The Cricket World Cup: It's How They Handle Fan Pressure

Brendon McCullum's team has achieved impressive results in the lengthy buildup to the contest and they deserve to be among the favoured teams, but... Their results need to be kept in perspective and fans should get a much better idea of the Black Caps chances when they face England in the capital on Friday. More>>

Keith Rankin: Contribution Through Innovation

The economic contribution of businesses and people is often quite unrelated to their taxable incomes. EHome, as a relatively new company, may have never earned any taxable income. Its successors almost certainly will earn income and pay tax. Yet it was eHome itself who made the biggest contribution by starting the venture in the first place. More>>

ALSO:

A Public Conversation: Reinventing News As A Public Right

Alastair Thompson: Oh how the mighty have fallen. Once journalism was possibly a noble profession, though that is certainly now, to quote our Prime Minister, a 'contestable' notion. It certainly seemed at least a little noble when I joined the ranks of reporters in 1989 . But ... More>>

ALSO:

Syriza Win Greek Election: The Rumblings Of The Left

Binoy Kampmark: The left – and by this, the genuine, progressive, unmanagerial left – is getting noisy. The Greek elections are upon us, with the similar challenges being played out from 2012. There are fears of Grexit – a heavy breathing departure from the eurozone that will do everything to rattle the central currency mechanism that has been taking a battering... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news