Those of us who’ve wondered where Labour is getting its policies from have an answer:
David Shearer: Is the Prime Minister aware that Kurdistan recently postponed selling its state-owned mobile network, Russia recently cancelled three State privatisations, Hungary is preparing to renationalise a gas company, and Croatia has cancelled selling off its State bank?
Rt Hon JOHN KEY: No, but now it is all starting to become clear where Labour is getting its economic policies from!
Those who wonder why the government wants to sell minority shares in a few energy companies also got an answer:
Michael Woodhouse: Why is it important that the share offer programme goes ahead?
Rt Hon JOHN KEY: It is important, firstly, because the Government can use the proceeds of the share offer to invest in new public infrastructure without having to borrow so much to do so. This is exactly the same situation as in 2005 when the previous Government took $600 million from the sale of publicly owned asset Southern Hydro and used it to invest in roads. The share offer also gives New Zealand savers the opportunity to invest either directly or indirectly in big New Zealand companies, and being publicly listed will be good for the companies themselves. . .
I do believe bringing these companies to the market through the mixed-ownership model is a good, sound economic approach, and actually I think it will deliver a better result for New Zealand without having to borrow more money. . .
Those who wonder who will benefit from the investment got an answer too:
David Shearer: Is it his aim in selling off assets to maximise return to the New Zealand taxpayer or, given that the value of shares is likely to slump as result of the sales, is it to give enormous bargains to those buyers rich enough to buy shares?
Rt Hon JOHN KEY: The member will be aware, because of the Securities Act, that I cannot offer a comment on whether the share sales are likely to be successful or not. What I can say is that if one goes and looks at TradeMe as an example, they will see it was brought to the market under what can really only be described as the mixed-ownership model, and that has proven to be very successful. I think if one also looks at the number of KiwiSaver accounts, the New Zealand Superannuation Fund, the other pension funds in New Zealand, and mums and dads looking for investments, they will find those to be attractive investments. . .
And those wondering about alternatives to the partial sales also got an answer:
Michael Woodhouse: What reports has he seen on any alternative approaches to paying for new public infrastructure?
Rt Hon JOHN KEY: I am aware of a couple of approaches. One is simply to go out there and print money in the misguided belief it will make a country wealthy. Today I have with me actually a $500 million Zimbabwean note. Members might be interested to know that when this was issued in May 2008, you needed 100 of these to buy—
. . .
Rt Hon JOHN KEY: As I say, one option is to print money, and you would have needed 100 of these when it was printed, 100 $500 million notes, to buy an egg—poached, boiled, fried, scrambled, or any other way. The other option—
. . .
Rt Hon JOHN KEY: The second approach I have seen is to go out and borrow $5 billion to $7 billion, at a time when countries around the world are trying to reduce their debt. We know that that policy belongs to the big spending, big promising Labour Party.
We’ve sold non-core assets several times to allow us to reduce debt or reinvest in core assets. It’s normal and sensible business practice in countries with free markets.
The concept might be harder to grasp for those who get their policies and business practices from places still struggling from the aftermath of communism.