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

 

Labour: Healthy Homes Bill Passes First Reading

Some of New Zealand’s most vulnerable children and families are on their way towards safer living conditions with the passing of the first reading of the Healthy Homes Guarantee Bill in Parliament last night, Leader of the Opposition Andrew Little says. More>>

ALSO:

Werewolf Satire: Home, And A Way

The one thing even more popular than an Auckland house is offering advice on how to afford an Auckland house. So, on the grounds it can’t be worse than some of the stuff that’s out there, here’s my three cents* worth. [*Up 50% since 2013!] More>>

ALSO:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news