Stand in front of any group of superannuitants and ask them if they lost any money on investments with finance companies in recent years and there is a forest of hands. In fact, Kiwis lost somewhere between $7 billion and $8 billion.
These aren't rich people but people wanting to be
the best stewards of the money they have built up in savings over decades. They almost invariably acted on the advice of people they trusted. They were not greedy; they were careful. These people understand sales and purchase. Few live in their first home, they sold it to buy a better one and they didn't buy the house out of their savings, they got a mortgage and borrowed the money. That is just life.
Ask that same group of people if they would like to invest in New Zealand infrastructure with a majority shareholding held by the Government such as power companies and the Auckland Airport and those same people say a resounding "yes".
Detractors say it is a sale of state assets and point to previous sales such as the 17 enterprises sold by Labour and the 12 sold by National. But, of course, selling a maximum of 49 per cent of the company with the Crown retaining a majority of shares is not the same.
Detractors say that the 49 per cent will force the SOEs (state-owned enterprises) to reap bigger dividends for the shareholders, meaning less return for the Crown, but of course they cannot do this and SOE laws force these companies to act in a commercial way. New private shareholders cannot force any further what already carries the force of law.
Even Labour Prime Minister Helen Clark decided she would allow further private investment in Auckland Airport from what her government had initially allowed.
Funny how, now that it is a National government idea, it is all wrong from Labour's perspective.
The fact is that we need to build new roads, schools and hospitals and a broadband network to keep this country moving forward. Borrowing even more money from overseas will not help our long-term interests and it is far better to use the money of New Zealanders rather than the Asians or Europeans who have no stake in the success or failure of New Zealand. Borrowing more from overseas further threatens our credit ratings and could drive up interest rates of those wanting to borrow privately to buy first homes or invest in businesses and so create jobs.
Detractors say: "We already own these companies so why should be buy them again?" This is a simplistic response to the base problem, which is the need to find money onshore rather than borrow offshore.
New Zealanders will be given a priority purchaser status and it is expected that taxpayer-owned entities such as the Superfund, Kiwibank and the ACC Fund will be big investors. Many iwi who have Treaty of Waitangi settlement money have indicated a desire to invest in these companies, too. The Government intends to add $34 billion to its $220 billion of state assets already owned. The ability to invest in these five SOEs provides a safe investment in our country's future while retaining control in the hands of the Crown.
Previous governments' initial public offerings, including Contact Energy, suggests we can achieve widespread and substantial NZ ownership across the five companies. In Contact's case, most of the shares initially taken up by Kiwis have remained in NZ hands.
There will be no shortage of Kiwis wanting in. Good on them for backing New Zealand.
Stand in front of any group of superannuitants and ask them if they lost any money on investments with finance companies in recent years and there is a forest of hands. In fact, Kiwis lost somewhere between $7 billion and $8 billion.
These aren't rich people but people wanting to be
AdvertisementAdvertise with NZME.