Assets might still be saved

David Clark
David Clark
As partial asset sales legislation is "rushed" through Parliament, Labour's Dunedin North MP David Clark decries the policy and the process.

You may be thinking asset sales are inevitable and that there's nothing more that can be done to stop them.

Think again.

Across New Zealand Grey Power's citizens-initiated referendum is gathering pace. A realistic target of 350,000 signatures is likely to be reached before the year is out.

This will force a public referendum on the Government's decision to sell up to 49% of the voting shares in top revenue-earning assets like Mighty River Power, Genesis Energy and Meridian.

Such a referendum will not be binding. The Government can chose to ignore it. But it would be a foolish Government that did, and one unlikely to be re-elected.

It is also likely that one of these companies will already be on the block by the time the referendum is complete. That should not stop us from saving the others.

In the meantime, asset sales will be kept in the public eye.

Grey Power has organised a silent march down George St, Dunedin, scheduled for June 16.

Leaving the Dental School at 11am, the silent protest is one of a series that will take place across the country as citizens express frustration at persistence with a decision that lacks popular support.

I sit on the select committee that has heard submissions on asset sales and the message has been overwhelming. Of around one hundred oral submissions, just one has chosen to speak in favour of the current proposal.

Government members of the select committee have been accused of having cotton wool in their ears and, in a sense, it is hard to blame them.

A sales platform website is operating. They were always likely to be on the receiving end of criticism that the consultation process was a sham. The legislation to enable selling up to 49% of the energy companies will likely be returned from our select committee to Parliament very soon, as a result of an unusually hasty process.

Government members are scrambling to get the unpopular law into place as quickly as they can, in the hope that the issue will go away. It won't.

Treasury figures show the Crown accounts will move backwards by $94 million per year. This has not been lost on submitters or the general public. The energy assets have generated significant profits for us taxpayers, by one measure 18.5% per annum.

At the same time, these have come at the expense of energy consumers - you and me. But the silver lining has always been that the profits have generously funded our schools and hospitals. Under a mixed ownership model, a smaller portion of profits will come back to us.

Lower returns for the taxpayer will mean more services cut to balance the books. This Budget has shown where that logic leads: fewer teachers and higher prescription costs. My experience on the select committee tells me that ill-feeling about asset sales is not restricted to voters of a particular hue.

Folks across the political divide recognise that a stable and predictable energy infrastructure is imperative.

Businesses and our economy are dependent upon electricity for profitable production.

Privatise it and we risk New Zealand's future prosperity ranking far lower on an energy company's priority list than its own bottom line. Overseas studies of board behaviour suggest 51% is no safeguard against motivated shareholders chasing maximum profits.

Brown-outs and black-outs that result from organisations focused on shareholder return at all costs have wider economic, as well as social, consequences.

What is bad for business is also bad for our people.

Protection of these new "mixed ownership" assets from social obligations currently incumbent upon energy companies is a backwards step.

Under the proposed new model, power companies will no longer be held accountable for power outages that cause medial respirators to stop, or for power price rises that drive the elderly to freeze in their own homes.

There are more arguments against these asset sales than column-space to carry them.

The removal of Official Information Act transparency has exercised some submitters, concerned that supposed ongoing majority Crown ownership should demand continuing public scrutiny of activities. Others cite overseas examples of the slippery slope into full private ownership.

Yet others are concerned about implications for New Zealand's balance of trade. And that is all before future taxpayer cost of Treaty implications is discussed.

Whatever the ideology that drives these sales, it is clear their mandate is, at best, ambiguous. More New Zealanders voted in the last election for parties that actively opposed the asset sales than those that actively supported them.

It is the quirks of MMP that have allowed them to proceed.

And having now examined the evidence, it seems that even the present Government's most loyal supporters are shocked at the rush to put our best assets on the block.

Dr David Clark is the Labour member of Parliament for Dunedin North.


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