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Reports show National flogging off Genesis too cheaply

31 March 2014

Reports show National flogging off Genesis too cheaply

Five independent reports have all concluded that National is selling Genesis shares for less than they are worth, and losing the taxpayer money, Green Party Co-leader Dr Russel Norman said today.

Five reports by stock analysts have concluded that the shares in Genesis are worth more than the $1.55 that National is selling them for. The highest estimates says the shares could be worth $1.97 apiece, which is $200 million in total more than the Government is set to make from the sale.

“The best thing would be not to sell Genesis at all but, if National’s going to do it, they’ve got to get a good price for the taxpayer,” said Dr Norman.

“All the analysts have found that National is selling Genesis for less than it’s worth. Hundreds of millions of dollars will be lost to the taxpayer. National wants to attract as many retail investors as possible and they don’t care how much it costs.

“Once again, we see that National is just bad with money.

“John Key’s cornerstone economic policy of asset sales has been one debacle after another. Mr Key has sold the assets for less than they are worth. There have been only a fraction of the ‘mum and dad’ investors that were promised. Power prices have risen even as demand has fallen. The asset sales have cost $550 million. Selling Genesis too cheap will add to the litany of asset sales failures.

“John Key should listen to the overwhelming majority of New Zealanders who want the asset sales stopped,” said Dr Norman.

The reports also find that the New Zealand electricity market isn’t properly competitive and that NZ Power would have the effect of driving out excessive profits and lowering power prices.

“These independent reports all show that, if National wins the next election, then Kiwis can look forward to higher power prices to pay big dividends to electricity company shareholders. If there is a change of government, the Labour-Greens NZ Power plan will reduce power prices for families,” said Dr Norman.

“There’s a lot of scaremongering from the power companies and their protectors in National about NZ Power but the market is clear: only NZ Power is going to weed out the profiteering and get prices down to a fair level.

“Morningstar analysts call the New Zealand electricity market ‘oligopolistic’; the five big players effectively block out competition so they can charge more and make larger profits. NZ Power will break the electricity oligopoly and allow in real competition in generation, retail, and demand management,” said Dr Norman.

ENDS

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