Thursday, February 27, 2014

A bad deal for New Zealand

The government has announced its plans to sell genesis Energy - and as expected, they're going to dump it on the market at a fire-sale price:

The Government is expected to set a low price for shares in Genesis Energy, to entice investors burnt by earlier asset sales, analysts say.

Finance Minister Bill English confirmed in Auckland yesterday that Genesis would be sold next month, bringing the Government's flagship mixed ownership model policy to a close.

English said though he remained willing to sell up to 49 per cent of Genesis, this could be reduced to 30 per cent if there was insufficient demand for a larger sale.

If the government needs to sell cheap to find buyers, then this suggests that its a bad time to sell and that the taxpayer is getting a poor deal. But National's privatisation policy has never been about getting a good deal (if it was, they wouldn't sell), but about transferring state assets and their oligopoly rents into the greasy paws of their rich mates. And if they get to do that cheap, allowing those rich mates to make windfall profits, then that's seen as a feature, not a bonus.

The solution to this corrupt policy is for the opposition to announce that the stolen assets will be renationalised at a loss to the thieves. Sadly, its been a long time since Labour has been enough of an opponent of privatisation to do that.