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28
Jan
11

Selling ourselves short

This isn’t a political blog. But sometimes things just get too crazy out there in the world and you’ve got to write some stuff down and say your piece. Economics is not my forte, I usually avoid it. Resilience, on the other hand, is something I do care deeply about. And the government’s plans to throw resilience and security out the window by selling state assets, at a time when energy security is becoming a major issue for nations, just flabbergast me.

It’s been widely cited today that the NZ electricity companies are worth $11 billion dollars and earn $700 million per annum. If the government sell off 49% of them now to pay for this year’s tax cuts, the roads of National significance, irrigating Canterbury for dairying and lignite mines, we’re jeopardising our environment, our future and our independence to foreign investors and private companies.

We currently own these assets, don’t be fooled into some idea that Mum and Dad investors (I’m so sick of that cliche) will want to buy them back off themselves. New Zealanders have lost all faith in investing, especially in our own country (there certainly was no interest in buying Crafar). According to Bernard Hickey, NZers have over $100 billion dollars in banks and we saved $3 billion dollars last year. The money is there to invest but thanks to the ravages of greed, Kiwis have no confidence in investments. I’m not surprised. 62 NZ finance companies and investment trusts that have had assets frozen or have collapsed in the past four years.

We need to look after our people, our land, our environment. The sale of state assets opens up too much future risk for very little gain now and in no way works toward meeting those needs. We need to reduce the $300 million dollars the government borrows every week. Spending needs to be reduced. New infrastructure spends (roads) need to be put on hold. I know it’s cotentious but cancelling the money black hole that is the Rugby World Cup would also help… major international events cost money, they don’t make money.

But enough of my ranting. I’ve read some excellent articles about this and suggest you do the same. Links below. Oh but may I just say how pleasantly surprised I am that even the Stuff.co.nz and NZHerald polls clearly show state asset sales are unpopular with the masses

Election 2011: GO! – Keith Ng

Opinion: Selwyn Pellett argues John Key’s ‘Smile and Wave’ on asset sales won’t cut the mustard

Opinion: John Key has finally got religion on debt reduction, but he needs to worship much harder – Bernard Hickey

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