In before dairyflat.
Three for me, and two for them.
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Saw some graffiti near the Basin Reserve and immediatley thought of Foal and DF:
"Capitalism cannot last"
then
"Format your hard drive"
"Phoenix till they lose"
Posting 97% bollox, 8% lies and 3.658% genuine opinion.
Genuine opinion: FTFFA
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Prefer less debt tbh.
We will never fully decide who has won the football.
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trademe.co.nz FTW!!!
"Ive just re-visited this and once again realised that C-Diddy is a genius - a drunk, Newcastle bred disgrace - but a genius." - Hard News, 11:39am 4th June 2009
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you get what you vote for.
and some get what they pay for.
and some get what they pay for.
E's Flat Ah's Flat Too
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While we are at, let's privatise prisons to some place like Algeria where the cost is one-tenth.
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you get what you vote for.
and some get what they pay for.
and some get what they pay for.
yes and I hope that those that voted National are hanging their heads in shame!
Queenslander 3x a year.
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To the tune of a YF chant:
Same old National, always selling off our assets.
Same old National, always selling off our assets.
I let my guitar speak for me
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So I'll be honest I know what privatization is but really don't know a lot about the positives and negatives in it. What's so wrong with this, is it that foreigners are going to have greater influence in NZ? Because in some cases isn't privatization a positive as the buyers can then focus all their resources on improving whatever it is that's been privatized while the government, for whatever reason, couldn't so this means whatever function they serve will be done better and the government reduces debt?
loyalgunner2011-01-27 12:27:01
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Thats about it.
Remember when labour bought the rails? Fail.
Allegedly
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So I'll be honest I know what privatization is but really don't know a lot about the positives and negatives in it. What's so wrong with this, is it that foreigners are going to have greater influence in NZ? Because in some cases isn't privatization a positive as the buyers can then focus all their resources on improving whatever it is that's been privatized while the government, for whatever reason, couldn't so this means whatever function they serve will be done better and the government reduces debt?
The argument against it pretty much boils down to the fact that most of these companies are monopolies/duopolies/oligopolies. That is, they are a major player in their industry so they have more ability to gauge prices. So if there is private investors involved, they may start demanding a higher dividend, which is result in higher prices or lower cost (through perhaps lower quality) or both.
Dividends on those 5 companies provides the govt with $700m of income per year. So you need to weigh up whether a steady stream of $700m (or half that if half of each company is sold) is better or worse than one lump sum.
It's also impossible to say that a private investor will run a company any better than a SOE. Air NZ went bankrupt while in private hands, but now (where the govt has a majority shareholding) it is pretty high performing and well regarded.
As for the trains, the assets were pretty much run into the ground because as a monopoly they had no incentive to invest money.
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While we are at, let's privatise prisons to some place like Algeria where the cost is one-tenth.
not sure if this is a piss take, but there are plenty of examples in 1st world countires that show the opposite in terms of staff safety, staff turnover, staff pay, prision performance. Some even show that opperational costs increase. So the arguments either way aren't clear cut.
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Dividends on those 5 companies provides the govt with $700m of income per year. So you need to weigh up whether a steady stream of $700m (or half that if half of each company is sold) is better or worse than one lump sum.
So are these companies effectively run as private companies but it just so happens the govt owns most/all of them and that's why they are considered public? Are the govt just an investor like anybody or any company can be?
And can the company at any point decide to ditch the govt as one of its investors (privatizing it without the govts consent) or is the investor the only one who can decide whether it stays or leaves?
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While we are at, let's privatise prisons to some place like Algeria where the cost is one-tenth.
not sure if this is a piss take.....
Bait duly swallowed. Perhaps I should have said Fiji instead....
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you get what you vote for.
and some get what they pay for.
and some get what they pay for.
yes and I hope that those that voted National are hanging their heads in shame!
www.kiwifromthecouch.blogspot.com
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So are these companies effectively run as private companies but it just so happens the govt owns most/all of them and that's why they are considered public? [/QUOTE]
Yes. Pretty sure that 100% govt owned companies (SOEs) are run as private companuies. They have a board of directors (appointed by the govt) and two Ministerial shareholders (one being the Minister of SOE)
Are the govt just an investor like anybody or any company can be?
I assume so as they are a shareholder
[QUOTE=loyalgunner]
And can the company at any point decide to ditch the govt as one of its investors (privatizing it without the govts consent) or is the investor the only one who can decide whether it stays or leaves?
Only the investor can sell their shares.
2ndBest2011-01-27 13:44:47
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While we are at, let's privatise prisons to some place like Algeria where the cost is one-tenth.
not sure if this is a piss take.....
Bait duly swallowed. Perhaps I should have said Fiji instead....
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Thanks for clearing that up, 2ndbest.
loyalgunner2011-01-27 15:44:54
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While we are at, let's privatise prisons to some place like Algeria where the cost is one-tenth.
deport to Australia? It's been done...
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Thats about it.
Remember when labour bought the rails? Fail.
Question: re-purchase of rails equals fail or socialising loss and privatising profit equals fail?
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Where I think the Aussies got it right was privatising a small slices, so the company gets up to speed then the share price goes up, so you end up with locally owned, highly valued, high dividends. NZ made the mistake of selling 100 percent at any price, 20 years ago.
The second thing this raises is the size of government, which has a direct impact on growth rates. Smaller government generally means higher growth and that's what we want right now.
I wouldn't want to be a contractor in a government department right now.
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Whether a company is owned by the govt or private sector has very little impact on the size of government. It has no impact in terms of number of public sector employees, and it may have no impact on the amount of govt spending if the dividend generated is used to pay off debt.
Pretty much two separate issues.
2ndBest2011-01-27 23:58:16
Pretty much two separate issues.
2ndBest2011-01-27 23:58:16
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The amount of money and assets tied up by government owned companies and not available for core services, definitely has an impact, especially on interest rates, growth rates.
There is pretty much overwhelming evidence that governments that crowd out the economy definitely slow down the growth rate.
What I am looking for is a structural change that will lead to long term sustained growth and lots of jobs for you and me.
Whether the money is re-invested in infrastructure or used to pay off debts is another issue.
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So are you saying that holding on to these assets will cause interest rates to go up? Because if you are then I should probably remind you that crowding out of investment only occurs when there is increased govt spending (and I should point out that there isn't a concensus amongst economist when this happens, or how much it happens). Since we already own the assets there isn't any more spending going on. We aren't talking about buying new assets. We are talking about selling current ones.
And anyone who thinks our debt levels are high internationally, should check out how we rank.
2ndBest2011-01-28 09:33:02
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So are you saying that holding on to these assets will cause interest rates to go up? Because if you are then I should probably remind you that crowding out of investment only occurs when there is increased govt spending
Like when the NZ core govt expenditure increased 56 percent from 2004 to 2009.
There really is a strong statistical link between high govt spending as a proportion of GDP and low average income growth in countries with similar income levels to our own.
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you are confusing two issues. Like I said...we already own the assets there isn't any more spending going on. We aren't talking about buying new assets. We are talking about selling current ones.
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I hear what you are saying. I'm rather focused on the end result of asset sales which should be greater room for growth. The growth in govt expenditure over a number of years and amount of assets they hold, tend to get in the way of economic growth.
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All privatisation smacks of is more profits leaving New Zealands shores for foreign investors.
As if they really love NZ that much that they want to re-invest their profits back into it. Yeah right. I feel a Tui ad coming!
Proud to have attended the first 175 Consecutive "Home" Wellington Phoenix "A League" Games !!
The Ruf, The Ruf, The Ruf is on Fire!!
The Ruf, The Ruf, The Ruf is on Fire!!
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I hear what you are saying. I'm rather focused on the end result of asset sales which should be greater room for growth. The growth in govt expenditure over a number of years and amount of assets they hold, tend to get in the way of economic growth.
Explain to me why the amount of assets held by govt affects growth?
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It depends on how they are owned and the nature of access to capital (for development / growth).
Not quite a red herring, ownership is just one part of the mix in terms of establishing an environment conducive to performance and facilitating a more productive economic environment.
It suits the politicians to revert to the simple slogans of "selling the family silver" or "we're in the business of government, not the government of business".
What I find slightly hilarious is those that say "No More Asset Sales!" yet are also suggesting No more asset purchases. So exactly why is the current (accidental) Crown ownership mix spot on? If we were to put together a portfolio of business for Crown Ownership, this is NOT what we would end up with.
It is blindingly obvious that ANY owner should review what it should and should not own. ANY owner will learn from lessons made in the past, and also make an "own & future return" v "more cash right now" (or less cash right now, if buying) decision based on their current balance sheet v cash flow position.
Internationally, governments do not have a good track record as commercial owners of businesses. Yet, some see mixed (political) objectives as a blessing, even if from a commercial value perspective they are bad news. However, NZ's SOE Act is one of the best at protecting businesses from the interference of politicians (which ironically raises the question as to why governments need ownership to achieve goals).
Flogging off assets will not necessarily be the silver bullet some see it to be, but neither is it the great ogre that others portray.
Like most things, it's not what you dance, but the way that you dance it (thank you, Swingers!).
Not quite a red herring, ownership is just one part of the mix in terms of establishing an environment conducive to performance and facilitating a more productive economic environment.
It suits the politicians to revert to the simple slogans of "selling the family silver" or "we're in the business of government, not the government of business".
What I find slightly hilarious is those that say "No More Asset Sales!" yet are also suggesting No more asset purchases. So exactly why is the current (accidental) Crown ownership mix spot on? If we were to put together a portfolio of business for Crown Ownership, this is NOT what we would end up with.
It is blindingly obvious that ANY owner should review what it should and should not own. ANY owner will learn from lessons made in the past, and also make an "own & future return" v "more cash right now" (or less cash right now, if buying) decision based on their current balance sheet v cash flow position.
Internationally, governments do not have a good track record as commercial owners of businesses. Yet, some see mixed (political) objectives as a blessing, even if from a commercial value perspective they are bad news. However, NZ's SOE Act is one of the best at protecting businesses from the interference of politicians (which ironically raises the question as to why governments need ownership to achieve goals).
Flogging off assets will not necessarily be the silver bullet some see it to be, but neither is it the great ogre that others portray.
Like most things, it's not what you dance, but the way that you dance it (thank you, Swingers!).
I know, I know, its serious!
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The underlying issue is what do we, as a country that is borrowing $300m a week, do differently to live within our means ?
A substantial portion of the $300m of weekly borrowing is government debt. If the government cannot reduce borrowings NZ's debt rating will drop and it will cost more to service existing debt and borrow in the future - if that continues it will become a death spiral leading to economic oblivion or very very painful restructuring of the economy (ala Greece or Ireland).
The government can spend less (which services should be cut ?), earn more (which taxes should be increased ?) or sell assets.
Whatever path is chosen ( the reality is it will be a combination of the three options available) needs to address not only the short term borrowing issue but also provide a foundation for a long term solution which has to be growing the economy.
To those who think selling off a portion of SOEs will result in price rises the price of power has increased 70 odd% over the last 9 odd years of 100% state ownership of the majority of the power industry. Prices have much much more to do with the competitiveness of the market than who owns the assets.
To those who think selling to the public or, god forbid foreigners, is bad who do you think we borrow $300m a week from and what do you think is the security on those loans ?
The questions to answer before you get your tits in a tangle over the concept of asset sales and your politics become all consuming are;
How do we balance our (NZ's) books ?
How do we grow the economy to generate jobs and government revenue to fund services ?
He dribbles a lot and the opposition dont like it - you can see it all over their faces. (Ron Atkinson)
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A substantial portion of the $300m of weekly borrowing is government debt. If the government cannot reduce borrowings NZ's debt rating will drop and it will cost more to service existing debt and borrow in the future - if that continues it will become a death spiral leading to economic oblivion or very very painful restructuring of the economy (ala Greece or Ireland).
[/QUOTE]We are so far away from these countries they should never been mentioned in the same sentence. The reasons we are different is because we had close to zero debt before the global clusterf**k happened.
To those who think selling off a portion of SOEs will result in price rises the price of power has increased 70 odd% over the last 9 odd years of 100% state ownership of the majority of the power industry. Prices have much much more to do with the competitiveness of the market than who owns the assets.
Have hear this stat before. Not surprised prices have gone up. They all are practically monopolies so of course they have an incentive to reduce supply to drive the price up. You think that is they had been (partly) owned during this time period that the increase would be less? Because I reckon it is safe to say that having private sector shareholders should be a lot more heavy handed in order to get a greater dividend.
[QUOTE=Whitby boy]
To those who think selling to the public or, god forbid foreigners, is bad who do you think we borrow $300m a week from and what do you think is the security on those loans ?
So selling an asset that return 7-8% per year to pay debt that costs 5% is a good idea? Say you own a house with a mortgage. Your mortgage rate is 5%, but you could rent it out and get 7% of the mortgage back each year in rent. What should you do? Sell the house? Or hold on to it and let the renter pay for you mortgage? I know which I'd do.
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It depends on how they are owned and the nature of access to capital (for development / growth).
[/QUOTE]
If you ever wrote this as an answer to an exam question, you'd get zero. Doesn't answer the actual question.
What I find slightly hilarious is those that say "No More Asset Sales!" yet are also suggesting No more asset purchases. So exactly why is the current (accidental) Crown ownership mix spot on? If we were to put together a portfolio of business for Crown Ownership, this is NOT what we would end up with. Well in this economic environment I'd doubt you'll find anyone keen to spend up large to (re)gain control of a key asset. But that is not to say that in the case they would rule it out. For example, I personally think that govt ownership in areas/industry where there is a monopoly is key (Rail,power, water, airports etc). But at present I wouldn't be advocating the govt to go buy Wellington Airport freight this minute.
[QUOTE=Turfmoore]
Internationally, governments do not have a good track record as commercial owners of businesses.
[/QUOTE]
If you ever wrote this as an answer to an exam question, you'd get zero. Doesn't answer the actual question.
What I find slightly hilarious is those that say "No More Asset Sales!" yet are also suggesting No more asset purchases. So exactly why is the current (accidental) Crown ownership mix spot on? If we were to put together a portfolio of business for Crown Ownership, this is NOT what we would end up with.
[QUOTE=Turfmoore]
Internationally, governments do not have a good track record as commercial owners of businesses.
Er internationally and locally, the private sector don't have a good track record as commercial owners of businesses. Enron, Air NZ, NZ Rails, US banks.
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....... very very painful restructuring of the economy (ala Greece or Ireland).
[/QUOTE]1. We are so far away from these countries .......
price of power has increased 70 odd% over the last 9 odd years.... Prices have much much more to do with the competitiveness of the market .....
2. .....having private sector shareholders should be a lot more heavy handed in order to get a greater dividend.
[QUOTE=Whitby boy]
......who do you think we borrow $300m a week from and what do you think is the security on those loans ?
3. So selling an asset that return 7-8% per year to pay debt that costs 5% is a good idea?.....
1. Actually we are going down exactly the same path that lead to these and other countries having to be bailed out and implement austerity programs - however we are trying to address the problem before we get to that point.
2. You miss the point - electricity price increases reflect a lack of real competition. Whatever is done with electricity and other public assets must be conditional on the result being a competitive market place - failing that the market place will need to be regulated.
3. Obviously depends how much you sell it for.
He dribbles a lot and the opposition dont like it - you can see it all over their faces. (Ron Atkinson)
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Are you guys economists (I know you aren't immigration lawyers)?
I love it when you talk all dirty and fiscally like!
(Maybe we should all read up on the Economists Can Never Agree Act of 1901)
I love it when you talk all dirty and fiscally like!
(Maybe we should all read up on the Economists Can Never Agree Act of 1901)
"Phoenix till they lose"
Posting 97% bollox, 8% lies and 3.658% genuine opinion.
Genuine opinion: FTFFA
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No comment (on the other hand, I have 5 fingers ...).
Brian Gaynor's NZ Herald article is not a bad non-technical read on the matter. Lays out some of the lessons of the past and why asset sales are (deserve to be?) a touchy subject in these parts. Also warns against this being some kind of silver bullet for investment and savings issues in NZ.
Brian Gaynor's NZ Herald article is not a bad non-technical read on the matter. Lays out some of the lessons of the past and why asset sales are (deserve to be?) a touchy subject in these parts. Also warns against this being some kind of silver bullet for investment and savings issues in NZ.
I know, I know, its serious!
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Are you guys economists (I know you aren't immigration lawyers)?
I love it when you talk all dirty and fiscally like!
(Maybe we should all read up on the Economists Can Never Agree Act of 1901)
Everyone is an economist on the internet...and lawyers and businessmen.
I love it when you talk all dirty and fiscally like!
(Maybe we should all read up on the Economists Can Never Agree Act of 1901)
But clearly not english teachers.
Allegedly
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C'mon then. Show me your production possibility frontier!
(I've got a downward sloping demand curve and I'm not afraid to use it)
(I've got a downward sloping demand curve and I'm not afraid to use it)
"Phoenix till they lose"
Posting 97% bollox, 8% lies and 3.658% genuine opinion.
Genuine opinion: FTFFA
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