Economic sabotage

Ever since National came to power it has concentrated on making the economy stronger.

It is succeeding but more than a year away from the next election the spectre of a LabourGreen government is providing a hurricane force headwind.

The government has put a lot of effort into policies which encourage savings, investment and export-led growth and LabourGreen are sabotaging that.

The façade behind the Labour-Greens power plan is crumbling as it becomes clear their electricity nationalisation ‘plan’ is nothing more than deliberate economic sabotage for attempted political gain, Economic Development Minister Steven Joyce says.

“Comments made in recent days by Grant Robertson, David Parker, and Russel Norman show they don’t care about the damage to KiwiSaver accounts, mum and dad investors and the wider New Zealand economy,” Mr Joyce says.

“Financial analysts including JB Were, Woodward Partners, Milford Asset Management, First NZ Capital, Devon Funds Management and Forsyth Barr are unanimous in their condemnation. One has labelled it a ‘hand grenade’ to the New Zealand economy, while others have said it will cut the value of every New Zealanders’ KiwiSaver account and lead to rolling blackouts.

“Investment in new power generation would suffer as would wider investment in the New Zealand economy. The National-led Government is focused on attracting investment in new business and jobs for New Zealanders. Labour and the Greens would do the exact opposite.

“Kiwis are deeply suspicious about the Labour-Greens announcement and its timing. It’s simply economic sabotage.

“The great irony is that it’s clear the policy is not worth it for anybody. The last time that we had central planning of the power industry, prices went up faster. Labour’s own Cabinet paper in 2006 said it would push costs up.

“New Zealanders will see it for what it is: a cynical and selfish attempt by left-wing parties to play politics with the value of New Zealand’s economic assets.”

The market isn’t perfect but I’d rather put my faith in it than an army of expensive bureaucrats.

And I’d feel much happier investing in companies that weren’t going to be at risk from government interference.

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6 Responses to Economic sabotage

  1. Neil says:

    Ele life on the sharemarket is not easy. I have shares in Lloyds TSB in London who was pushed into taking over the Bank of Scotland by Labour leader Gordon Brown. Shares plunged from 460p to a low of 30p.
    We can call it sabotage but most people would say it’s sour grapes. My answer is increasing the number of shares I buy and pointing out defects in Lab-Green policies.
    My best advice is in money matters never trust politicians of any shade. Another piece of advice – be wary of investing in companies with politicians on the board of directors. They know how to spend other peoples money !!!!

  2. homepaddock says:

    You’re right, no-one should invest money if they can’t cope with losing it. First world markets don’t usually have to worry about political meddling in this way, experience suggests your advice is wise.

  3. Roger says:

    And the arrogance of GreenLab is they are trying to buy votes at less than $1 per day (based on their annual saving of $300 per household).

    This policy will go the same way as Shearer’s $300,000 Auckland houses.

    Lab are desperate to be seen to be a hands on manager of the economy (their new schtick) – all they are doing the lunacy of the policy in the general and their abject incompetence as operators in the specific.

    Fran O’Sullivan today excoriates Lab (it’s a real ouch moment) and shows how Lab have given in completely to following Green developed strategy.

  4. Denny says:

    I’m with Neil. When it comes to money matters don’t trust politicians of any shade. Steven Joyce is great at spin. I will look more closely at your post from Milford Investments. Objective analysis is completely lacking in any aspect if this float, unless you are an Institutional Investor. Treasury has told retail investors to get advice from financial advisors but financial advisors don’t have any analysis because of the black out due to US investment laws. Treasury had overlooked that to its embarrassment. The prospectus is long on history, which is completely irrelevant in this case, and has no assessment of the risks listed. Regulatory changes is listed as a risk, so taking the float off the market while this risk was analysed was a political stunt too. I was waiting for an assessment of the risks of an oversupply of power due to the aluminium smelter closing, but that analysis is not available to retail investors. That’s just as big a risk to me as anything else, so i was pulling out anyway. Now the whole thing is turning into political point scoring on all sides, I’m switching off.

  5. TraceyS says:

    Labour are following the Greens and the Greens are just defending against asset sales. Theoretically the Greens should be happier with higher energy prices because this is the measure most likely to curb energy consumption. They might say it’s fine because of the % of hydro, but that wouldn’t be a consistent message from them.

    If their priority is cutting living costs, then I hope they will be looking at ways to bring down petrol prices next. Some families can’t even afford to run a car anymore and this affects all sorts of family choices. I know a lot of kids in such circumstances and they’re disadvantaged. Some of them think we’re wealthy just because we have a car!

    Labour/Greens might look like they know what they are doing, but are really just playing follow the leader – instead of coming up with new directions. Therefore they’re exposed to a curve ball being thrown right back at them.

    The Government getting back to surplus before the next election would be such a curve ball. It would not be hard to trump $300 savings a year.

  6. TraceyS says:

    … or $1 a day as you have pointed out Roger!

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