Wednesday, 25 April 2012

Asset Sales: the Treachery of Government

This is some of the coverage in mainstream media on state asset sales. This is going to heat up.

Partial sale of state assets 'treachery'

The Government has been accused of treachery during emotive pleas for it to dump its plans to partially sell state-owned assets.

25 April, 2012

Parliament's finance and expenditure select committee yesterday began hearing some of the almost 600 submissions it received on legislation to enact the Government's controversial mixed- ownership model.

The Government plans to sell up to 49% of Mighty River Power, Genesis and Meridian, and further reduce its shareholding in Air New Zealand, although it does not need to pass new laws to sell shares in the airline.

People Power Ohariu was formed after last year's election to convince UnitedFuture leader and MP for Ohariu Peter Dunne to vote against the bill.

Dunne has the deciding vote. If he and ACT leader John Banks support it, the Government has the numbers to pass legislation by 61 votes to 60.

Her voice breaking and close to tears, People Power Ohariu spokeswoman Ariana Paretutanganui-Tamati told the committee the sales were "nothing less than treachery".

"It is absolutely ludicrous that in our country a group of 61 people can make decisions that have serious, serious, implications for our country and our children's future and our land."

The group was concerned about the impact on power prices, with already a quarter of New Zealand children living in poverty and elderly people dying of health complications in cold homes they could not afford to heat, she said.

Her concerns were echoed by Grey Power.

Spokeswoman Molly Melhuish said an Economic Development Ministry comparison showed that consumers with state-owned energy companies paid on average 3.31 cents less per kilowatt for their power than those with private companies.

That meant consumers with private companies paid $265 more a year.

People Power Ohariu spokesman John Maynard said it was particularly concerned about the Trans Pacific Partnership free-trade agreement being negotiated among New Zealand, the United States and at least eight other countries.

"The deal could open the Government up to being sued by a foreign investor with as little as a 1% share in energy companies," Maynard said.

Wellington orthopaedic surgeon Russell Tregonning is the spokesman for OraTaiao: New Zealand Climate and Health, which represented 150 doctors around the country.

He, along with other submitters, raised concerns that partially privatised energy companies would not face the same requirements as state-owned companies to take climate change into consideration.

The World Health Organisation rated climate change as the No1 health threat this century.

Tregonning said his plea was also deeply personal.

"I'm a grandfather and I have fears for the world they will inhabit."

It was an often-testy session with arguments between National and Labour MPs joined by NZ First leader Winston Peters, with submitters often caught in the middle as MPs asked loaded and pointed questions.

Labour MP Trevor Mallard objected to individual submitters being given just five minutes to put their case, when organisations were given 15 minutes.

All 45 of yesterday's submitters were opposed to the asset sales.

Gordon Copeland, who led the now-defunct Kiwi Party, said he supported partial asset sales but said shares should never be sold to foreigners.

Power price rises main fear over asset sales bill
Struggling families will suffer because of higher power prices

File image of a hikoi which marched to Parliament last year

25 April, 2012

Struggling families will suffer because of higher power prices as a result of the Government's "mixed ownership model" and few "mums and dads" have cash to buy shares in the partly privatised power companies, MPs have been told.

Parliament's finance and expenditure committee yesterday heard dozens of submissions on the partial privatisation or Mixed Ownership Model Bill which paves the way for the sale of up to 49 per cent of shares in Mighty River Power, Genesis Power and Meridian Energy, and coal company Solid Energy.

The submissions were overwhelmingly against the plan.

Sarah Free of the Domestic Energy Users Network said she was representing the children of poor households who would lose out under the policy.

Parents of those children were struggling with their household budgets and attempts to save money on power bills meant their children were "suffering from underuse of energy" in the form of preventable illnesses linked to poorly heated homes.

Ms Free said the three publicly owned energy companies were doing much more to help poorer consumers than the private sector companies but she feared that would be undermined if they were partly privatised.

National MP Tim McIndoe said investors, including "mums and dads", had lost up to $6 billion in finance company collapses and the partial privatisation plan would give them the opportunity for a solid investment.

However, while Ms Free said there needed to be better investment opportunities, shares in partly privatised power companies would be unaffordable for many households.

"How are very indebted private households going to buy into these? Those people can't even afford to have a leaky roof repaired, or replace an unflued gas heater that's 20 years old nor can they afford to put in insulation even with a very generous subsidy.

"They have absolutely no spare money."

Submitting on behalf of Grey Power and the Domestic Energy Users Network, consumer advocate Molly Melhuish said she'd attended at least two public meetings where Prime Minister John Key said privatisation would have no effect on power prices. "I challenged that and he said 'you're wrong'."

But Mrs Melhuish presented data she said proved that on average domestic customers of privately owned electricity companies paid about $265 more than those with state companies each year. She said the mixed ownership model should not proceed until key regulatory issues in the market were addressed, including the "free market pricing" which enabled energy intensive industries to expand "at the expense of higher prices to domestic consumers".

Ngati Porou's Apirana Mahuika, Matanuku Mahuika and Horiana Irwin said Treaty provisions were not sufficient to protect Maori interests and the law should not proceed without alterations.

However, although Ngati Porou opposed the asset sale plan, should it go ahead the iwi wanted changes to allow it to participate more fully, including the removal of the 10 per cent shareholding cap for iwi consortiums.

Few, if any, of the 45 submissions heard yesterday were from supporters of the legislation. Labour MP David Parker said that was because "it's abundantly clear that they would be quizzed on the now indisputable fact that the Government is worse off through the SOE sales, by $94 million per annum and it's clear that New Zealand residential consumers will face increasing power prices".


* Dozens of submissions were heard yesterday on the partial privatisation or Mixed Ownership Model Bill.

* This paves the way for the sale of up to 49 per cent of shares in Mighty River Power, Genesis Power and Meridian Energy, and coal company Solid Energy.

* The submissions were overwhelmingly against the plan.

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