Congratulations 48%

[Oscar]

Substantially correct.

Ethics aside private owners have no incentive to spend money on maintenance or new capital projects. It's just more profitable to run it into the ground and then bung it on the market, pointing at the last couple of years revenue as a measure of market value. NZR went through several iterations of asset stripping through various "infrastructure management specialists" before it was handed back to the taxpayer requiring a decade of maintenance and a couple of billion in re-investment.

Ownership of hard infrastructure assets stretgically critical to the national economy should remain controled by the state. I don't think the same nescesarily applies to service industries, though.

How soon we forget.
NZR was fucked when it was sold and was probably never viable in its history.
It had been nurtured through the years with copious amounts of taxpayers money, overmanning which was effectively a way of disguising unemployment figures and most of all by draconian rules on freight transport (IIRC a 100km limit on road freight). This enabled NZR to operate a monopoly which choked local businesses whilst holding them to ransom and made sure that economic development anywhere more than 100km from a railway line was impossible. The final indignities were the endemic theft and graft by staff, constant industrial action and "service" which was provided by Stalinist officialdom.

[Ocean1]

How soon we forget.
NZR was fucked when it was sold and was probably never viable in its history.
It had been nurtured through the years with copious amounts of taxpayers money, overmanning which was effectively a way of disguising unemployment figures and most of all by draconian rules on freight transport (IIRC a 100km limit on road freight). This enabled NZR to operate a monopoly which choked local businesses whilst holding them to ransom and made sure that economic development anywhere more than 100km from a railway line was impossible. The final indignities were the endemic theft and graft by staff, constant industrial action and "service" which was provided by Stalinist officialdom.

I hadn't forgotten, I wasn't suggesting a return to the bad ol' days. I can't see why we can't have our cake by retaining infrastructure assets in state ownership and eat it by out-sourcing private enterprise to run it. Tender the service elements of the business every couple of years in county-sized lumps to encourage competition.

It should be about retaining and excercising prudent control of the market on behalf of the owners, exactly the opposite to the anti-competition tactics employed by Telecom et al. And that's another story...

[Brian d marge]

Telecom

Tthe Ameritech/Bell Atlantic/Fay,Richwhite, Gibbs,Farmer syndicate bought Telecom for $4.25 billion in July 1990, when the company
had shareholder funds of $2.5 billion.

Shareholder funds declined over the next several years despite
cost-cutting because of large capital payments to its shareholders who walked out of the company from
1997 with a realised capital profit of $7.2billion, in addition to a share of over $4.2 billion in
dividends– adding approximately $10 billion to New Zealand's international liabilities.

Between1990 and 1998 the company's shareholder funds halved to $1.1 billion by when it was heavily in debt. In the
decade from 1995 to 2004, Telecom paid out dividends of $6.7 billion from net earnings declared in
New Zealand of $5.4billion, of which approximately $5.0 billion went overseas.

Not sure its the mom and pop mortgages , or me with me credit card that increased the international liabilities ........

Mr Key doesn’t tell you about these things

Stephen

[Winston001]

Telecom

Tthe Ameritech/Bell Atlantic/Fay,Richwhite, Gibbs,Farmer syndicate bought Telecom for $4.25 billion in July 1990, when the company
had shareholder funds of $2.5 billion.

Shareholder funds declined over the next several years despite
cost-cutting because of large capital payments to its shareholders who walked out of the company from
1997 with a realised capital profit of $7.2billion, in addition to a share of over $4.2 billion in
dividends– adding approximately $10 billion to New Zealand's international liabilities.

Between1990 and 1998 the company's shareholder funds halved to $1.1 billion by when it was heavily in debt. In the
decade from 1995 to 2004, Telecom paid out dividends of $6.7 billion from net earnings declared in
New Zealand of $5.4billion, of which approximately $5.0 billion went overseas.

Source please.

[Brian d marge]

Source please.

bloke down pub told me.
Stephen
I'll post the list , later tonight when I've some more time

[pzkpfw]

Are we dead yet?

[mashman]

Are we dead yet?

I would be hoping for something a little more hellish if that's the case.

[Winston001]

Remember Ansett

We are just as nasty as they are.

Sorry man but as Ocean said - WRONG. In fact exactly the opposite: Ansett was yet another example of NZ business being conned by Aussies.

Background: Ansett was allowed into NZ to compete with Air NZ and Mount Cook on domestic routes - but Air NZ was not allowed into Oz to compete on their domestic routes. Ansett were great for a while...until they went broke.

Bob Ansett was a good airline operator but he had one flaw - he liked planes. All sorts of planes. So he bought them. It would be like me setting up a motorcycle rental business and buying a Aerial Square Four, a Suzuki RE5 (rotary), a Z1, a Norton Commando, a Ducati Darmah, some Jawas, and a Zundap. Lots of fun for enthusiasts...but I've only got one mechanic to service the lot. And he trained with Honda...

Anyway, here's Air NZ and our government banging on the Australians doors with the Closer Economic Relations (CER) treaty demanding access for Air NZ. The aussies kept saying NO until one day - "oohhh looky over here, mate have I got a deal for you!! We've got this spare airline not doing much - yeah Ansett thats the one, how'd ya like to buy it? That way you get access to Australian routes and everybody's happy."

Not very long after Air NZ is in crisis on the verge of bankruptcy and our government has to inject hundreds of millions to keep it afloat. And Ansett was dead.

[Winston001]

bloke down pub told me.
Stephen
I'll post the list , later tonight when I've some more time

Ok while we are waiting for your source, can you or anyone else tell me exactly - with specific details - why the 1984 Fourth Labour Government and 1991 National Government sale of state assets was completely wrong/bad/stupid etc??

For simplicity, you can pick one or two sales at a time for comment.

[pete376403]

Source please.

Don''t know the OP source but theres a lot of good info here, roll down to about the mid '80s
http://www.wordworx.co.nz/KiwitelcoTimeline.htm

[Brian d marge]

Source please.

I have three main sources

Hp , Heinz and A1 brown sauce

Stephen

though the list of the guilty is as follows (there are some humorous ones in there so do dismiss to easily , as the info is also available from other sources) ;

"Testing years ahead for Telecom", by Brian Gaynor, New Zealand Herald, 26 May 2001.

"Telecom: What a winner!", financial report on winner of the 2004Roger Award, Sue Newberry,

http://canterbury.cyberplace.org.nz/.../Roger2004.pdf.

Investment: Track record costly to public", by Brian Gaynor, New Zealand Herald, 21 October
2000
"A tough case ... and a long one", by Brian Gaynor, New Zealand Herald, 16 October 2004.

"Government Toll buy a sad indictment", by Brian Gaynor, New Zealand Herald, 10 May 2008.


"Privatization and Public-Private Partnerships", Chatham House,NewYork, NY, p.3.

"Privatisation: 'more a political than an economic act'", by SueNewberry, presentation to
"Privatisation by Stealth" conference, 16 March 2008


"NZ's first PPP prison to be built at Wiri", Bill English, JudithCollins, 14 April 2010,

"Private prison to cost $300m to build, $60m a year to operate", byMartin Kay, Dominion Post, 13
July2010, p.A9.

"School PPPs in New Zealand: Will PPPs Provide Value for Money as a Method of Procuring
Schools in New Zealand? Stage One Business Case", CastaliaStrategic Advisors, May 2010, p.24,
produced for the New Zealand Government,

[Winston001]

Thanks Stephen, good on you. I respect Brian Easton.

Sue Newberry is a leftist academic (like Jane Kelsey) and her views are coloured by her political compass. There's nothing wrong with having such views but the problem is her writing starts off with a biased perspective which undermines its value. The same is said of Marxist economists.

I also note that much of what you have referred to and/or quoted comes from The Campaign Against Foreign Control of Aotearoa http://canterbury.cyberplace.org.nz/community/CAFCA/ of whom Sue Newberry is a member. Not exactly an open mind.

[Winston001]

For anyone interested in a balanced view on the NZ privatisation experience, there is a very readable paper written for Treasury in December 2010:

https://docs.google.com/viewer?a=v&q...EDlU_q7DZ_p2_Q

A clip:


"Sale price: Contrary to what might well be the public view, it does not appear from
looking at these assets now that the Crown received consistently poor prices for its
sales. There are some where shareholders who have held their shares have done
very well (Auckland Airport, those who bought into Contact at float), and some where
at least those who held onto their shares did badly (Forestry Corporation, Air New
Zealand)....."

[Brian d marge]

Thanks Stephen, good on you. I respect Brian Easton.

Sue Newberry is a leftist academic (like Jane Kelsey) and her views are coloured by her political compass. There's nothing wrong with having such views but the problem is her writing starts off with a biased perspective which undermines its value. The same is said of Marxist economists.

I also note that much of what you have referred to and/or quoted comes from The Campaign Against Foreign Control of Aotearoa http://canterbury.cyberplace.org.nz/community/CAFCA/ of whom Sue Newberry is a member. Not exactly an open mind.

Actually I dont Know Sue Newberry , but Jane I have had correspondence with ( She HAS to be a lesbo ! ..not sure that has anything to do with the current argument , but it cant hurt )

I had a quick read of the link you posted and would be a balanCING view , still inst gushing with praise about privatization
even Paula Bennett on prisons, concedes that it would not be cheaper, to privatise

But on the other hand neither were the old institutions. The thing about those old work schemes such as benmore , the railways, it was WORK , abet subsidized work, but work , and work gives the man worth . ( meaning full work that is )

Unfortuantly once those shares go into private hand , then control is lost so, even in SOE form they still have responsibilities to perform

State owned assets have multiple functions, the balance of which will differ in each case. They include ( imho)

• Preventing excess profits in important services which are a monopoly or are otherwise less than
fully competitive;
• Ensuring essential services are provided equitably and affordably
• Providing security of services;
• Social solidarity mechanisms such as ACC (or equivalently perhaps, providing services which
are considerably more efficient to provide universally than individually)
• Providing services in the public interest which the private sector is unlikely to provide;
• Providing additional income to the government.

which is reduced or lost in the search for shareholder profit. IMHO

Stephen

Ta for link that gets printed and into the notes folder..........

[Brian d marge]

I also note that much of what you have referred to and/or quoted comes from The Campaign Against Foreign Control of Aotearoa http://canterbury.cyberplace.org.nz/community/CAFCA/ of whom Sue Newberry is a member. Not exactly an open mind.

You might note; that I might support that view , Sorry but , While I do indeed , live and work in Japan , (Brave Sir Robin did indeed bugger off ) , I do a lot of my business with NZ companies , save with Kiwibank and Supoort the view of New Zealand for New Zealand and NOT to be exploited by americans or Auzziecans . I would also support Moari , if they didnt spend so much on Underpants.

New Zealand was very good to me when I was growing up , and the very least I can do is fight to keeep it what it was , a damn fine country to live in.

I think some confuse PPP or Privitisation with the small business they operate, when IMHO , its actually a cash vehicle for international money , who are interested in ONE THING , maximising ( shareholder profit ) at ( all) costs, and bears little relationship with small business, who may have a more ethical side to their activities

Just my thoughts

Stephen