LabourGreen can’t win this one

The Mighty River Power float closes at 5pm today.

An experienced investor told me he’d written to David Shearer and Russel Norman thanking them.

Their power play was likely to depress the price so he’d get more shares.

Peter Sherwin at the NBR thinks the price is likely to be lower too:

Potential investors may now hold back because of confusion about the future of the power industry, uncertainty whether MRP will stag at a higher price and a fear the price will go down upon listing.

The lack of take up will dampen the listing price, which is more likely to be at the lower end of the scale, around $2.25 rather than the expected $2.80.

The Greens and Labour may have scored political points, but effectively they have slashed the government’s cash investment to fund health, education and infrastructure programmes. . .

So who pays the price for the opposition’s political gain? Every Kiwi, even those they claim to champion.

Professional and institutional investors will not be daunted by any of this and are making big offers, but with fewer “mum and dad” buyers they may not have to go to the market for as many shares when they are listed on May 10. . .

The investor I spoke to said much the same thing.

The LabourGreen power play was putting off first-time and small investors who had been planning to dip their toes in the water but now have cold feet.

The Hey Clint clip shows that Green MP Gareth Hughes thinks it’s funny. But Patrick Gower points out it’s not:

Now I know a lot of people watch “Hey Clint!” and find it funny.

But to me it showed much more than a bit of humour. It showed what we know – the Greens, like Labour, are trying to act like they are not gleeful that the policy is screwing with the MRP float.

In fact, it looked like Gareth Hughes was stoked. It was in the public interest to run it. No question.

It busted spin, in fact, it blew the spin apart.

It showed that the Greens, like Labour, are trying to come up with ‘lines’ to pretend that it’s not about wrecking the float.

And that’s fair enough; the Greens want to emphasise what they see as the good parts of the policy.

But, thanks to Gareth’s indiscretion, we could show what they really feel. . .

Putting politics before people isn’t the picture LabourGreen wish to portray.

They forgot that what’s good for the economy is good for people and their power play isn’t.

They can’t win on this one.

Support the policy or not, it’s in New Zealand’s best interest for the shares to sell for the best price.

If the float goes well their many attempts – most at the public’s expense – to counter the policy will have failed.

If it doesn’t, they’ll have cost the country millions of dollars.

Either way, they lose.

26 Responses to LabourGreen can’t win this one

  1. I do wish I was living in NZ to have taken up the offer, oh well I am sure many did!


  2. Dave Kennedy says:

    You could say that this is purely a LabourGreen political stunt, but you could also say that Labour and the Greens are actually representing the 65% to 80% of New Zealand citizens who have opposed the sales according to numerous polls.

    You could also say that the two parties are representing the almost 400,000 people who signed the referendum petition.

    It also seems to be dangerously stubborn for the Government not to wait for the results of the referendum before continuing with the sales. If the referendum voted overwhelmingly in their favour then they would have a strong moral mandate to continue. Instead they are even preparing to put two other power companies up for sale against the advice of Treasury.


  3. TraceyS says:

    It’s presumptuous and foolish to suggest that this ‘stunt’ has anything to do with representation. People who signed the referendum petition did not agree that they opposed asset sales. They agreed that they wanted a referendum. You write as though the referendum has been held already and that all those who signed the petition opposed partial asset sales, and furthermore you extrapolate this to the general population. That’s not correct.

    The stunt put me off sufficiently. Not off the investment, because in a physical sense, it changed nothing about the investment. It is still what it always was. But it did put me off buying shares right now.

    If we did buy them now and then had reason to sell them prematurely, and made a gain, then we would be open-fodder for criticism. The opinions of those we work for and with matter to us. So too does the freedom to do with our own money what we wish, when we wish. I would hate to be in the situation where we needed the money back for some unexpected reason, like an unforeseen business threat, and being seen as a profiteer if the shares happened to be on a high at the time of selling.

    The fact that I could have bought shares, and chose not to, does not mean that the Green or Labour parties represent me. I support the asset sales and the reasons for them.

    Investing in what has become a political football situation doesn’t appeal anymore. I will invest later, and with a clear head, when no-one is trying to tell me what to do with my own money. Especially those who have vested interests and purport to care, but don’t.

    Who would trust parties that encourage people to invest in KiwiSaver on one hand and hammer your investment with the other? Reckless. I will not invest as long as they are meddling in this way. I’m sure many others will feel the same.

    Reckless and thoughtless. I would have had much more respect for the opposition if they had given people the respect to make up their own mind, rather than trying to buy them off at the last minute. Meteria Turei made it clear in Dunedin very recently that asset sales could still be stopped. They tried to scare and buy enough people to thwart the sale and I think that is appalling. Bullies.

    Just wanted to make it clear that they haven’t bought me.


  4. TraceyS says:

    And well done to the government for sticking with it this far. I respect those who take on a challenge and commit to it.

    Ele, could you repost that barbed wire pic again?


  5. Dave Kennedy says:

    You make some valid points, Tracy, however we will never know the real public support until we have a referendum. It would be prudent to wait for the results of this because if it did come out in favour of the sales it would not only give the Government a clear moral mandate to continue, but it would effectively close off most dissent. It would mean any further sales would not be hampered by ongoing action and there would be clear economic advantage for doing this.

    It does worry me that this Government has a history of ramming things through in a determined fashion despite clear signs that things may not go well. Novopay, National Standards, the Christchurch school closures, the Housing New Zealand call centre are some obvious examples.


  6. inventory2 says:

    You could also say that the Government has a democratic right to implement policies it campaigned on in a democratic election Dave. You could also say that the Government is representing the more than 400,000 people who pre-registered for the MRP sale. And you could also say that after the Roy Morgan poll released this week, 75% of which was conducted AFTER the NZ Power policy announcement that the Government has won this argument.


  7. inventory2 says:

    Dave – did you go around during 2011 with your eyes and ears closed? Asset sales was the main election issue. Your side lost in a democratic election under MMP, the electoral system your party endorsed. Aren’t you being ever-so-slightly suggesting that we have to have another election/referendum just because Labour and the Greens didn’t get the result they wanted?

    Roll that out across the board, and instead of government, we would have paralysis by referenda.


  8. inventory2 says:

    You still can kiwiincanberra; MRP lists in Aussie on Monday


  9. Dave Kennedy says:

    Below is a copy of one of my past blog posts that probably provides the best response to your assertion that the Government has a mandate to sell the assets. Even if you use the political meaning of the term in its narrowest sense (a little like John Banks’ legal justification for his continued presence in Parliament) the moral mandate is nonexistent.

    When the National led Government struggles to explain or justify its policies it resorts to its trump card “we have a mandate”.

    This claim was first used when the introduction of National Standards in Eduction met widespread criticism. National had indeed promoted the Standards in their 2008 election campaign and there was broad support for them, but there was no detail in the policy and the justification for them had no professional basis. What was introduced as the National Standards has struggled to deliver the clarity of reporting that was claimed nor have they made any perceptable difference to those struggling children who were purportedly going to benefit from their introduction. The National Party has still not delivered on this “mandated” policy.

    The National Party received a tenuous mandate to govern when elected in 2011, their claim that the election was a resounding victory is a huge exaggeration. In one of the worst turnouts in New Zealand’s election history (74%) National failed to win a clear majority with only 47% of the vote and therefore 53% of those who voted did not vote for them. The election was not fought on policy as National has tried to claim but on the personality of John Key and some of his popularity was based on the perception that he listened and responded to public concerns. Even during the election campaign the policy of a partial sale of state assets was not well supported and the details behind it were deliberately hidden. Not only did National block close scrutiny of their asset sale policy but they refused to share any of their policies on our national broadcaster’s election website. If the sale of state assets was a major pillar of their campaign then this was not well promoted and voters were not provided with the information to vote on this in an informed way.

    To progress the asset sales the Government has had to pass new laws and 1430 written submissions to the related “Mixed Ownership Model” legislation were received and 100 of those submissions were presented orally to the Finance and Expenditure Select Committee. Practically all submissions (1421) were opposed to the Government’s plans and, given the enormity of these plans, one would expect full and careful consideration of the evidence provided. Not only were submitters treated with some disdain from the National Party members of the committee but the chair, Todd McClay, demanded that the deliberations be cut by six weeks. This undemocratic process became even more pronounced when it was revealed that Treasury Officials had written their final report before all the submissions had been fully heard and considered.

    With the sudden change to the original timeline the Green Party were forced to present their rushed minority report without the opportunity to circulate it amongst their caucus, totally against existing conventions. The bill was passed last night with a majority of one (61/60).

    Grey Power, New Zealand’s University Student’s Association and the CTU have joined forces with the Green and Labour Parties to promote a petition demanding a citizen’s initiated referendum on the asset sales. Russel Norman has requested (due to the mounting evidence from most opinion polls, the submissions to the select committee and the minimal majority in passing the bill) that the sales be delayed until December when the strength of the petition can be ascertained. The request was brushed aside and Mighty River will be up for sale after this July.

    This National led Government has not given due diligence to either establishing the long term value of the asset sales nor to ensure good democratic process is followed. John Key led a personality based election campaign that largely relied on the public perception that he listens to public concerns and his election was a actually just a mandate for him to continue listening. John Key has no mandate to sell our state assets and he has stopped listening!

    Russel Norman’s excellent speech against the bill provided the facts against National’s fiction.

    (I agree with you, inventory2, about the over use of referenda but surely in this case it would settle the argument once and for all and potentially make it easier for the Government if their support on this issue is strong?)


  10. TraceyS says:

    Imprudent would be to run the country by referendum.

    ‘Closing off dissent’ and ‘moral mandate’ in the same sentence Dave? What is moral about closing off dissent? Freedom to express dissent must surely be a healthy sign of democracy.


  11. homepaddock says:

    We don’t govern by referenda and when we elect a government we get a bundle of policies.

    Those who vote for a party might not support all its policies but people had plenty of anti-asset sale options to vote for and still chose National. That might have been in spite, rather than because of their policy on selling minority shares, but that’s irrelevant.

    National campaigned on the Mixed Ownership Model and won. Labour, Green Party, NZ First and Mana campaigned against it and lost.

    We got a National-led government and the policies it campaigned on. The argument was settled on election day, had enough people objected strongly enough to the policy, National wouldn’t be in a position to implement it.

    There have already been delays because of court action and there are pressing needs for the money the partial sale will bring in. The sooner the money is in the government coffers the sooner it can be put to better use.


  12. TraceyS says:

    The personality or personal presence of a potential leader is very important to some people and a valid reason to vote for what that person represents (here we are talking about fiscal responsibility with partial asset sales as a susidary of that policy).

    Neither Russel Norman nor David Shearer have the personal presence to be effective, whatever the policies they promote.


  13. Dave Kennedy says:

    I’m sorry, Ele, I can’t agree, the view that the election was campaigned on this issue is too simplistic. As I said in my earlier comment there were many reasons why National received 47% of the vote and it was mostly around personalities, not policy. Leading up to the election most opinion polls showed that around 80% of people apposed asset sales.

    True democracy does not stop between elections and if we use Lincoln’s definition “Government of the people, by the people, for the people” surely it is important that this is reflected in day to day governance as well. The broad dissatisfaction with the asset sale policy has been obvious in many forums and most especially through the select committee dealing with the MOM legislation.

    As for the way the money will presumably be used, Jane Clifton expressed it well, ” the Government’s plan was not to optimize this growth potential by reinvesting float money in the companies, or to even retire debt, but to spend it on schools and hospitals. This is pure politics and almost nothing to do with sound business or economic strategy.”


  14. Dave Kennedy says:

    You are misrepresenting me, Tracey, I wasn’t suggesting this be done by force or blocking people’s ability to express a different view, but by acceptance through a referendum that one party holds a majority view. If the Government does have a majority on this issue then this would have to be largely accepted by those who are the current dissenters.


  15. Dave Kennedy says:

    I guess really need a referendum to settle this argument once and for all 😉


  16. Dave Kennedy says:

    I do hope we don’t end up with elections always being decided on the personality of the leader, as this is dangerous. Voters should also be looking for sound policy and capable teams. We have already seen the problems that can arise through incompetent Ministers (I’m not only referring to National here) and pushing through policies that have not been well founded in research or cost benefit analysis. John Key is only one man, who is often out of the country and and his own portfolio responsibilities are obviously limited. In reality day to day governance is dominated by Stephen Joyce and while he may be very competent (he certainly is vey busy attempting to fix up the mistakes of others) few people voted for National because of him.

    I know very few teachers, and many had voted National, who are happy about National’s education policies or the competence of the Education Ministers. National Standards was part of the election campaign (no detail however) but very little else that has been imposed on us. Policy is important.


  17. TraceyS says:

    I disagree. No one has to change their view based on the outcome of a referendum. Dissenters would remain as such. They would not have to accept anything. The government already has a majority on this or it would not be happening.


  18. TraceyS says:

    I know a few parents, and haven’t a clue who they voted for (nor do I care), who are not happy that their kid is failing to make the grade. I’m one btw.

    At least with National Standards we know. That’s something a parent needs to know, and to use your words, the government has a “moral” mandate/obligation to provide.

    Yes, policy is important. But you can’t have a policy to please.

    You should know that, being a teacher. Have you ever seen all parents and teachers happy with all the policies of a school, for example?


  19. Dave Kennedy says:

    Trust me to start another debate 🙂 I was just meaning to use education as examples. I do think there are things that will improve education but it is more about lifting the capabilities of teachers rather than introducing new systems that have failed elsewhere. At the end of the day we just want all teachers to be great teachers and all schools to be great schools and I think Finland has understood this more than most. Teaching is regarded as having greater status than being a GP and they have 6,000 applicants for the 600 training positions each year. Consequently the quality of teaching is high and their attainment levels are generally the best in the world.


  20. TraceyS says:

    “6,000 applicants for the 600 training positions each year” Really? I hope they’re not all driven by attaining a “status” higher than being a GP. It must be a cushy number as well.

    Got to be better ways than creating massively oversubscribed demand for such roles just so the very best can be creamed off.


  21. Dave Kennedy says:

    That’s where the selection process kicks in, Tracey, to ensure that those selected have the right attitudes and abilities to make good teachers.

    We are currently adopting systems that have failed in America, while the US is now looking at Finland as the example to follow, why shouldn’t we be doing the same?


  22. TraceyS says:

    Why would we have to follow any other country’s model? What’s wrong with home-grown innovation?


  23. Dave Kennedy says:

    You are so right in what you say, Tracey, what Finland is doing isn’t much different from what our local educationalists have been saying for years. The Ministry of Education also produced a series of documents called Best Evidence Synthesis that looked at what research and evidence has informed everything from teaching to PD. This has been ignored over the last 4 years as we introduce league tables and Charter Schools etc.


  24. ooo I am going to have to go looking. I was sure they were only available to those within NZ


  25. Okay I believe you but…. can’t anything on the interweb talking about an Australian float


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