Cunliffe backs privatisation

David Cunliffe signalled Labour's new economic policy today. Unfortunately, its bad:

Labour will make bold changes to the economy including allowing public-private partnership for transport, considering an "inbound transactions tax" and allow private shareholders to own shares in subsidiaries of state owned enterprises, finance spokesman David Cunliffe said today.

In a speech to the Institute of Policy Studies in Wellington Mr Cunliffe said Labour would not go on a spending spree, but would reduce net debt and build a stronger capital base.

He said private equity in SOEs' subsidiaries would not dilute taxpayer equity or lead to wholly or partially privatising the SOE.

Which is technically correct - instead we have a partially privatised subsidiary. But by permitting that, he effectively gives away the farm. To point out the obvious, Kiwibank is not an SOE, but a subsidiary of one (NZ Post). And this policy means he has no objection to selling it to rapacious Aussies. More generally, by allowing part-privatisation of SOE subsidiaries, he removes any grounds to prohibit it in the SOEs themselves. The result is to open up space for National to do exactly that.

Cunliffe has just undermined the excellent work his fellow MPs have been doing in deterring any attempt by National to privatise our state assets and give away our national wealth to their cronies. He's made hypocrites of every Labour MP who has spoken out against it. And he's also just alienated everyone in his voterbase who hates privatisation and thought that Labour stood clearly and unequivocally against it. Heckuva job there. You'd almost think he was trying to lose the next election, so he can become leader...