Tuesday, February 07, 2012

Privatisation lenses

How has the government managed to get itself into such a hole already over its plans to part-privatise our State-Owned Enterprises? Clearly, they just didn't think that the plan to remove the Treaty clause from those SOEs would be contentious. But why?

I think it comes down to how you see part-privatised SOEs. National clearly sees them as private companies the government just happens to own a majority of - rather like Air New Zealand (if you ignore its past as an SOE). Under this view, they should be treated like any other company, and therefore the Treaty clause, and other protections requiring social responsibility and good employment practices and oversight by the Ombudsman and OIA are redundant. Meanwhile, the rest of us see them as state monopolies the private sector is going to be allowed to take a stake in. Under this view, those protections are essential to their role, and part of the deal; if private shareholders don't like such operating under constraints, then obviously they're welcome to put their money elsewhere, in the hands of our usual business managers (you know, the ones who have produced such successful companies as Hannover Finance, South Canterbury Finance, and Bridgecorp).