Monday, December 05, 2011

Buying back our stuff

National's big (hell, pretty much its only) policy platform this election was to sell our state-owned assets, stuff kiwis have worked a lifetime to build and which benefits all of us, to their rich mates for a song. On Saturday, Labour's David Cunliffe put a stake in the ground on opposing that policy, by saying that they would simply buy those assets back:

"I don't stand for a paler shade of blue, and I want to look down the barrel and say this: if the Government is going to sell off precious state assets then we would not rule out re-nationalising some of them. And people need to be aware of that regulatory risk.''

When asked by host Guyon Espiner whether he would buy them back, Mr Cunliffe replied "we would look very hard [at buying them back].''

This has of course led to the usual claims that it would be a poor use of government money to buy those assets back at a premium. And it would. Which is why Labour needs to clarify now that it won't be paying a premium for them, and that any buyers will get at most what they paid for them, less any dividends extracted in the meantime. There should be no windfall profits from receiving goods stolen from the New Zealand people.

(The aim here isn't so much to buy assets back, but to discourage purchasers in the first place, by making it clear that they will lose money - undermining the policy by creating regulatory uncertainty. Its something oppositions should do more of. Climate change is another obvious target for this tactic, and the Greens and Labour need to be making noise that any investor who builds polluting industry on the basis of National's subsidies is going to face a very different and far less profitable regulatory environment when there is a change of government)

The standard response to this sort of tactic (voiced by Keith Ng on Twitter last night) is that "reneging on current governments deals would be catastrophic", and that it would "discourage investment". Firstly, buyers of state-owned assets are not investors, they are speculators. The stuff is already built, and all they do is take the profits. They add nothing to the real economy. But more importantly, the government reneges on its predecessors' deals with voters all the time, sometimes with dire individual consequences (student loans. Benefit levels. Conditions of employment. ECE costs. Kiwisaver subsidies. Retirement ages. Just to pick a few examples). Why should transnational capital be immune?

Living in a democracy means accepting that the government can change, and therefore change its mind. And that applies to foreign speculators just as it applies to us. In this case, the current government is planning to do something its voters view as deeply illegitimate. It is entirely right that that policy be reversed, and it is entirely right that those who collaborate in it do so at their own risk. The question is whether Labour will stick up for that, or whether it is simply mouthing empty platitudes.