Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Key to give away another $40 million in Meridian sale

20 August 2013

Key to give away another $40 million in Meridian sale

The National Government’s plan to sell Meridian Energy shares includes a $40 million give away of public money to a handful of retail investors, Green Party Co-leader Dr Russel Norman said today.

National today announced the sale of 49% of shares in Meridian Energy will occur in November this year. Retail share buyers will only have to pay for 60% of their shares’ value up front and the remaining 40% in 18 months’ time, which amounts to a 18-month interest-free loan from the Crown to those investors. A recent poll shows only 3% of New Zealanders are likely to buy Meridian Energy shares.

“John Key’s 18-month interest-free loan to Meridian Energy buyers will add around $40 million to the already outrageous cost of his asset sales policy,” said Dr Norman.

“Mr Key has already wasted well over $100 million of public money on the asset sales programme, including a $30 million gift to Rio Tinto.

“Giving retail investors a 18-month interest-free loan on 40% of the value of the shares only adds to the cost to the Crown. The additional borrowing cost borne by the Crown as a result of this loan to investors will be around $40 million. On top of that, the sale of Meridian will cost tens of millions in fees to brokers, lawyers, and advertisers.

“Continuing the asset sales is just throwing away more public money for no good reason.

“While a small percentage will benefit from Mr Key’s $40 million interest-free loan, the rest of New Zealand will have to foot the bill. Kiwis will pay for Mr Key’s loan through higher public borrowing, they’ll lose half the dividend stream from Meridian to the Crown, and they’ll face higher power prices.

“Asset sales just don’t make sense. That’s why Kiwis are overwhelmingly opposed to them and why we will soon be having a referendum on the issue. It’s not too late for Mr Key to do the sensible thing – stop his asset sales and listen to New Zealanders,” said Dr Norman.


Additional information:
Costwatch: tracking of asset sales programme costs
Estimate of cost of additional borrowing by Crown due to deferred receipt of Meridian sale proceeds

Latest estimate of value of Meridian Energy$6,580,000,000
Value bought by retail investors (assuming 26.9% bought by retail as per MRP)$1,770,020,000
40% of value of retail investors’ shares$708,008,000
Interest cost to Crown of borrowing $700m for 18 months @ 4%pa$42,480,480

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Patience: Drive Safe

Be patient before passing is the AA's message for drivers this Labour weekend.

"People taking crazy risks to get past other vehicles is one of the most dangerous things on the road,” says AA spokesperson Dylan Thomsen.

“The weather is looking good for the long weekend so the roads will be busy. Unfortunately, that also increases the chances of people getting frustrated and trying a risky passing manoeuvre. When they get past, there will probably be more traffic up ahead anyway so it won’t get people there faster.” More>>

 
 

Parliament Today:

Employment Relations Bill: Govt Strains To Get Tea Break Law Through

The Government has been left with egg on its face - failing to get its much-vaunted, but hugely unpopular, meal break law passed in the first week of its new term, Labour spokesperson on Labour Issues Andrew Little says. More>>

ALSO:

Guns: Police Association Call To Arm Police Full Time

"The new minister gave his view, that Police do not need to be armed, while standing on the forecourt of parliament. The dark irony was that the interview followed immediately after breaking news of a gunman running amok in the Canadian parliament in Ottawa..." More>>

ALSO:

Gordon Campbell: On The Tokenism Of New Zealand's Role Against Islamic State

Our contribution against IS will be to send SAS forces to train the Iraqis? That’s like offering trainers to General Custer just as the 7th cavalry reached the Little Big Horn. More>>

ALSO:

Scoop Business: Shell And Todd Caught Drilling Without Approval

Multi-national oil company Shell’s New Zealand arm and local energy giant Todd Energy have breached the new law governing New Zealand’s Exclusive Economic Zone, the Environmental Protection Authority says in an Oct. 10 document released by the Green Party. More>>

ALSO:

Gordon Campbell: On Pharmac, Gough Whitlam And Sleater-Kinney

We’re not at the outset of these negotiations. The outset was six years ago, and negotiators were hoping to have some sort of ‘framework’ deal finished in time for the APEC meeting in a few weeks’ time. These ‘extreme’ positions are what we’ve reached near the intended end of the negotiations… More>>

ALSO:

PM Of Many Hats: Questions, No Answers On Whale Oil

Dr RUSSEL NORMAN (Co-Leader – Green) to the Prime Minister: How many times since November 2008 has he spoken with blogger Cameron Slater on the phone and how many times, if any, has he texted him?
Rt Hon JOHN KEY (Prime Minister): None in my capacity as Prime Minister. More>>

ALSO:

Aussie Investigation Dropped: Call On Minister McCully To Pursue The Case Of Balibo Five

West Papua Action is deeply concerned at the lack of any clear outcome from the Australian Federal Police inquiry into the 1975 deaths of the ‘Balibo Five’ including NZ journalist Gary Cunningham. More>>

ALSO:

'Feed The Kids' Bill: Metiria Turei To Lead Fight On Feeding Hungry Children

Green Party Co-leader Metiria Turei is urging all political parties to support the Feed the Kids Bill which she inherited today from Mana leader Hone Harawira. More>>

ALSO:

Parliament Today: State Opening Of Parliament

The House sat at 10.30am on Tuesday before MPs were summoned to hear the Speech from the Throne in the Legislative Council Chamber. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news