Parliament

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

Another Leader Exiting: Statement From Peter Dunne

I have concluded, based on recent polling, and other soundings I have been taking over the last few weeks, that, the volatility and uncertainty notwithstanding, there is now a mood amongst Ōhāriu voters for a change of MP, which is unlikely to alter...

“I have therefore decided that it is time for me to stand aside, so the people of Ōhāriu can elect a new electorate MP. More>>

 

Gordon Campbell: On Labour’s Campaign Launch

One of the key motifs of Ardern’s speech was her repeated use of the phrase – “Now, what?” Cleverly, that looks like being Labour’s response to National’s ‘steady as it goes’ warning against not putting the economic ‘gains’ at risk. More>>

ALSO:

Lyndon Hood: Social Welfare, Explained

Speaking as someone who has seen better times and nowadays mostly operates by being really annoying and humiliating to deal with, I have some fellow feeling with the current system, so I’ll take this chance to set a few things straight.. More>>

ALSO:

Deregistered: Independent Board Decision On Family First

The Board considers that Family First has a purpose to promote its own particular views about marriage and the traditional family that cannot be determined to be for the public benefit in a way previously accepted as charitable... More>>

ALSO:

Transport Policies: Nats' New $10.5bn Roads Of National Significance

National is committing to the next generation of Roads of National Significance, National Party Transport Spokesperson Simon Bridges says. More>>

ALSO:

Gordon Campbell: On Why Labour Isn’t Responsible For Barnaby Joyce

As a desperate Turnbull government tries to treat the Barnaby Joyce affair as a Pauline Hanson fever dream – blame it on the foreigners! We’re the victims of the dastardly New Zealand Labour Party! – our own government has chosen to further that narrative, and make itself an accomplice. More>>

ALSO:

Rail: Greens Back Tauranga – Hamilton – Auckland Service

The Green Party today announced that it will trial a passenger rail service between Auckland, Hamilton and Tauranga starting in 2019, when it is in government. More>>

ALSO:

Housing: Voluntary Rental Warrant Of Fitness For Wellington

Wellington City Council is partnering with the University of Otago, Wellington, to launch a voluntary Rental Warrant of Fitness for minimum housing standards in Wellington, Mayor Justin Lester has announced. More>>

ALSO:

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election