Last year I signed the petition calling for a referendum on the sale of the power companies. Although our minority National Government went to the polls in 2012 saying they wanted to sell, they only scraped past the post; ending up with 59 + 1 (ACT) + 1 (United Future) seats that were for the programme out of the 121 that were available.
Without getting into the debate over what sorts of margins should be required for governments to pass irreversible legislation, questions regarding the economic merits of selling asset generating an 18% return, when with an extremely strong dollar and low interest rates borrowing is such an attractive option. Especially as the Government intends to spend all of the money raised rather than retire debt.
I’m not an economist, but the fact that they (economists) are arguing among themselves as to the merits of the programme and prices are likely to be depressed by the economic climate all suggest that the sales might not be a smart option. Yet John Key remains locked in to the strategy with a resolve that reflects ideology rather than sense.
So what do I do now?
Do I buy shares in Mighty River Power – the first cab off the rank in the sale process? Because if I don’t, my allocation could go offshore, or be consolidated within the portfolios of a minority of New Zealanders.
Do I boycott the sale in the rash hope that everyone else does too? Leaving the government with an under-subscribed float and egg on its face.
The answer is I don’t know. My inclination is that I should buy, but it feels wrong. The continued flow of wealth and wealth-generating assets to the few is not an equitable, nor fair solution for the bulk of New Zealand society.