Thursday, February 10, 2011

English dishonest over SOEs

So, Bill English thinks our state-owned electricity companies have been making "excessive" returns. Which invites the obvious question: does he really think they will make lower returns in private ownership? That private shareholders will voluntarily relinquish profits and accept lower dividends than the government does now?

These are absurd beliefs, and I don't for a minute believe English holds them. Corporate directors are legally obliged to maximise the return to their shareholders - i.e. gouge us for all the profit they can - and the Minister of Finance knows this. Instead, he's pretending that's not the case so he can talk down the value of those SOEs, and so make the case for their privatisation (oh, and also ensure they can be sold on the cheap). This is deeply dishonest. But it does show how far English is willing to go to transfer these assets (and the wealth they represent) from the public of New Zealand into the hands of his rich mates.