Thursday, November 10, 2011

Who benefits from privatization?


Brokerage fees and other expenses could cost up to $100 million for the state-owned enterprises tagged for partial sale if National wins the election.

The Government says those firms that want the business must keep fees down but, based on previous floats of public assets, the costs of sale were typically up to 2 per cent.

With signs the hoped-for $5 billion to $7 billion from the sale of four energy companies and more of Air New Zealand may be heading towards the lower figure, this equates to $100 million. The sales are expected over a period of three to five years.

Privatisation isn't just a way of redistributing society's wealth upwards into the hands of the rich; its also a way of further subsidising them, by paying them to steal our stuff. No wonder banks are wealthy interest groups push it so relentlessly.

As for the rest of us, we lose the dividend stream which is used to pay for schools and hospitals, and we lose control, which in the case of our energy sector could be disastrous. And despite that, we're still expected to bail these companies out when the private sector inevitably mismanages them, because as a country we need the services they provide.

If its too important to fail, its too important to be in private hands. It is that simple.