Friday, May 24, 2013

So much for "mum and dad investors"

When National first moved to privatise Mighty River Power, it promised that the shares would go to "mum and dad investors", ordinary kiwis. Naturally, they lied:

A small number of wealthy investors including businesses and trusts snapped up nearly half the Mighty River Power shares set aside for retail buyers, sparking accusations the Government's sales pitch about selling to "mum and dad investors" was a cynical ploy.

An analysis of the partial float reveals that 101,000 "mum and dad" shareholders were allocated just 13.4 per cent of the former state- owned enterprise. Roughly the same amount went to a much smaller group of wealthy investors, charities, businesses and superannuation funds.

The figures, confirmed by Treasury, show that of the 113,000 retail investors who paid $912 million for shares at $2.50 each, 12,844 buyers who represented the top 10.9 per cent bought roughly half the retail pool. They invested an average $34,618.

Of those, a select sub- group of 394 investors bought $90m worth of shares in parcels of more than 100,000 shares - an average investment of $228,865

This is who National considers to be "ordinary kiwi mums and dads": the top 10% of the 2%. Or as the rest of us should know them, the 0.2%. As for the rest of us, we don't even feature in their worldview except as a peasant to be abused. If you don't have $30,000 sitting in the bank to steal a portion of a state-owned asset, then you're nobody to them.

Far from being a way of spreading wealth to all, National's privatisation was just a way of rewarding their rich cronies. And we'll all be paying for it - not just through higher power prices, but through the harmful social effects of the higher inequality it has caused.