The share price of New Zealand's listed energy companies will keep increasing if there is any possibility a Labour-led government may buy back shares in already-privatised assets.
The National-led Government sold down its share of three SOE energy companies - Meridian, Genesis and Mighty River Power - along with Air New Zealand. Meridian, Genesis and Mighty River Power were listed on the NZX and Air NZ was already listed.
Labour leader David Cunliffe yesterday made a last-minute pitch to stop supporters switching their vote to the Greens by promising to set up a NZ Inc policy to drive growth, boost clean technology and protect strategic assets to achieve a goal of a ''smarter, cleaner and fairer economy'', a phrase used consistently by the Greens during the election campaign.
Labour and the Greens want to establish a central buying authority for electricity, something brokers say will push down the price of listed energy companies, including Contact Energy and TrustPower.
But brokers contacted yesterday by the Otago Daily Times said any hint a government wanted to buy back the shares would push the shares higher in anticipation, adding to the cost for a government.
''It seems a money-go-round, being funded by the dividends they receive from the SOEs to buy them back,'' Craigs Investment broker Peter McIntyre said.
''The assets were sold at the bottom end of the price range because Labour and the Greens threatened to interfere with the electricity market. Their credibility will be hurt because they will be responsible for pushing the prices up.''
A buy-back would be difficult, he said.
A government would have to either have a ''block buy'' of shares or have a 5% creep, buying small blocks of shares to get to a takeover threshold, Mr McIntyre said.
The three components of the policy announced by Mr Cunliffe were:
• A sovereign wealth fund to drive sustainable growth and invest in strategic assets.
• A KiwiShare programme to enshrine New Zealand's current asset ownership by preventing more sell-downs.
• A review of the Crown's commercial assets management to ensure they stayed in public hands and drove growth.
Mr Cunliffe said the sovereign wealth fund would seek to invest in strategic assets and might choose to buy back shares in already privatised assets if and when that made commercial sense.
''It will be funded by $100 million in dividends in privatised assets and by new royalty payments from oil and gas above and beyond current projections.''
That would put Labour at odds with potential coalition partner New Zealand First, whose leader Winston Peters has said his party's ''royalties for the regions'' scheme would allow 25% of the royalties from extractive industries to be kept in the regions.
''The regions generate our mineral and oil wealth. They should have share of the royalties and make their own decisions about how best to use this money for development and job creation,'' Mr Peters said.
Associate Finance Minister Steven Joyce said Labour had decided to go for broke and heap more spending commitments on to the spending pile in a bid to turn around the Left's flagging polling numbers.
Dividends received by the Government from state-owned enterprises were already being used to pay for public services such as education and health, and to pay down debt.
''They can't just keep being spent again and again. On top of that, the so-called strategic investment language is quite obviously code for spending money on experimental clean technology investments that have lost money the world over.''
Mr McIntyre said the clean tech investments meant taxpayer funds being used to invest in start-up industries which had a low success rate.
