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

22/2: Christchurch Quake Memorial To Be Unveiled

A city, a region, a nation and an international community impacted by the Canterbury Earthquakes will come together tomorrow to mark the sixth anniversary of the deadly quake and dedicate Oi Manawa Canterbury Earthquake National Memorial.

The Canterbury Earthquake National Memorial Dedication and Civic Memorial Service starts at 12 noon tomorrow, February 22, at the Memorial site on the Ōtākaro/Avon River, in the area bordered by the Montreal Street Bridge, Durham Street, and Cambridge and Oxford Terraces. More>>

 

Gordon Campbell: On The Mana-Maori Party Deal

If the self-interest involved wasn’t so blatant, the electorate deal between the Maori Party and Hone Harawira would be kind of poignant. It’s a bit like seeing the remaining members of Guns’n’Roses or the Eagles back on the road touring the nostalgia circuit… playing all the old hits of Maori unity and kaupapa Maori politics. More>>

ALSO:

Private Provision: First Social Bond To Focus On Mental Health

New Zealand’s first social bond will help around 1700 people with mental illness into work, Finance Minister Steven Joyce and Social Investment Minister Amy Adams say. More>>

ALSO:

Megaupload Case: High Court Rules Dotcom, Co-Accused Eligible For Extradion

Internet entrepreneur Kim Dotcom and his three co-accused are eligible for extradition to the United States, New Zealand's High Court ruled... Justice Murray Gilbert upheld a decision by the District Court that there were grounds for Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato to be extradited. More>>

ALSO:

PREVIOUSLY:

Immigration: Short Reprieve For Nine Indian Students

A temporary hold on deportations of nine Indian students is a step in the right direction but the Government urgently needs to implement safeguards to stop further injustices to more international students, the Green Party says. More>>

EARLIER:

Port Hills Fire: Midday Update, Monday 20 February

• 9 homes destroyed
• 2 homes with partial damage. Damage includes things like cracked windows, heat damage.
• 3 properties with damage to other external structures e.g sheds or outbuildings More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news