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

 


Mighty River Sale Leaves $2.3m a Week Hole In Govt Books

Mighty River Sale Leaves $2.3m a Week Hole In Government’s Books

Mighty River Power’s financial results show that National has increased the Government’s net deficit by $2.3 million a week by selling a profitable public asset, even after accounting for the reduced cost of Government debt, Green Party Co-leader Dr Russel Norman said today.

Today’s financial results show that Mighty River Power recorded a shareholder equity gain of $167.7 million and issued dividends of $168 million in the 2012/13 financial year. Total Shareholder Return is the change in shareholder equity plus dividends, which equates to a 11.1% return for MRP. Yet the average Government 5-year bond borrowing rate was only 2.9% for the same year. Thus, the net position of the Government, accounting for reduced Crown borrowing costs, as a result of selling 49% of Mighty River is $2.3 million a week worse, or $121.7 million for the full financial year.

“So much for the supposed business acumen of the National Party; they sold an asset that’s returning four times the Crown’s cost of borrowing,” said Dr Norman.

“Today’s result show that Treasury was right: asset sales increase the Government’s fiscal deficit. The Government is losing over $2.3 million each week on foregone net profits due to the Mighty River sale. That’s on top of the $66 million that the sale process itself cost the taxpayer.

“The cruel irony is that those New Zealanders who listened to National’s expensive ad campaign and invested in Mighty River have also lost money as the share price has fallen.

“The only people who seem to be profiting from National’s asset sales are the stock-brokers, the lawyers, and the ad-men who are clipping the ticket, and the big institutional investors.

“Asset sales just don’t add up. That’s why the overwhelming majority of New Zealanders are so strongly against them.

“National could save whatever remains of its tattered economic credibility by listening to New Zealanders and cancelling the remaining asset sales,” said Dr Norman.

Additional information:

Mighty River Power return$m
Shareholder equity, 30 June 2012$       3,014.0
Shareholder equity, 30 June 2013$       3,181.7
Equity return$          167.7
Equity return %5.6%
Dividends$          168.0
Dividend return %5.6%
Total Shareholder Return$          335.7
Total Shareholder Return %11.1%
Average 5-yr bond rate 2012/13 (source: Treasury)2.9%
Net TSR %8.2%
Net TSR$        248.29
Net TSR on 49%$        121.66
Net TSR on 49% per week$            2.33

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell:
On The Kim Regime

During the Cuban Missile Crisis, the US had a very clear objective and eventually offered a quid pro quo of the removal of some of its own missiles from Turkey. This time, there’s no clarity about what the US is seeking, or offering.

It hasn’t helped that the US and the global media consistently agree on calling North Korea and its leadership “crazy” and “irrational” and urging it to “come to its senses”. When you treat your opponent as being beyond reason, it gets hard to comprehend what their strategy is, let alone work out the terms of a viable compromise. More>>

 

Recovery: Economic Impact Of Kaikōura Quake Revealed

The report details the impact on small businesses and tourism caused by disruptions to transport infrastructure and the economic impacts... The impact on New Zealand’s Gross Domestic Product (GDP) over the first 18 months following the earthquake has been estimated at $450-$500 million. More>>

ALSO:

Human Rights Commission: Urgent Need For Action On Seclusion And Restraint

Chief Human Rights Commissioner David Rutherford says that while the report makes for sobering reading, the focus should now be on how the recommendations can be used to reduce the occurrence of seclusion and restraint in New Zealand and, in circumstances where it is necessary, to improve practices. More>>

ALSO:

CORRECTIONS (March 2017):

SCHOOL SECLUSION ROOMS (2016):

$11bn Capital Spend, New Debt Target: Steven Joyce On Budget Priorities

First, delivering better public services for a growing country – providing all New Zealanders with the opportunity to lead successful independent lives... And finally, we remain committed to reducing the tax burden and in particular the impact of marginal tax rates on lower and middle income earners, when we have the room to do so. More>>

ALSO:

JustSpeak Report: Bail Changes To Blame For New Billion Dollar Prison

In 2013 criminal justice spending was falling and the Government was mulling over what to spend the money on. 3 years later there are 10,000 people in prison and a new billion dollar prison is announced. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news