Thursday, April 09, 2015

National's corrupt privatisations ripped us off

In the Herald, Mark Lister reports on what a bad deal the supposed master dealmakers National got for our state-owned power companies:

Since listing at $1, Meridian shares have more than doubled, providing investors with a return of more than 100 per cent in less than 18 months. If dividends are included, this return jumps to 125 per cent over the period.


The Crown received $1.8 billion (including the 50c a share due shortly) for the 49 per cent of Meridian sold, and that stake is today worth over $3.2 billion. The 49 per cent of Genesis sold down a few months later for $760 million is now worth almost $1.2 billion.

Lister blames the opposition for this by creating regulatory uncertainty over power prices (and hence monopoly profits). But the sale prices were set by the government, not the opposition. And they set them to ensure that floats were over-subscribed and that their donors and cronies got shares cheap, not to maximise the return to the government. Its just another example of National being bad at business and acting corruptly to enrich their cronies. And if it had happened in the third world, we'd have no qualms whatsoever about calling it that.