Why asset sales isn’t the silver bullet for Labour

NZ Herald

John Roughan explains why asset sales isn’t the silver bullet Labour would like to think it is:

John Key’s achievement this week deserves more recognition than it might ever receive. In a year or two, when the power companies are all on the sharemarket and it seems entirely normal that they would be, it will be hard to credit how much opposition there has been.

Key was heavily criticised, by me as much as anyone, for excessive caution in his first term. When eventually he committed himself to some partial asset sales and said he would go to the country with the programme first, it was brave.

But I didn’t realise how brave.

One of the four power companies had been privatised long ago. A float of minority stakes in the other three, plus the coal mining operation and Air Zealand, didn’t seem drastic.

It was incremental, logical. It hardly compared with the courage of the fourth Labour Government or National in the 1990s, though neither of them had dared to put privatisation to a public vote.

That is the single key difference between the past and the present. National put a stake in the ground and took it to the public:

Labour, however, staked its whole campaign on opposition to asset sales.

The Opposition did far more than Key to ensure the election was a referendum on them.

Mercifully, I wasn’t here to see what happened but it seems to be agreed National was returned despite its programme, not because the nation was reconciled to it.

Labour and the Greens were sufficiently heartened by opinion polls then and since to oppose the sales all the way to the enactment of the necessary legislation this week.

Polls continue to find most people against the idea but the Government has not suffered very much.

Its polled support is down to around 47 per cent, which is high considering the state of the economy and the steps it is taking.

The election result and everything that has happened since can be explained, I think, by Key’s business credibility.

Labour have bet the farm on asset sales twice now. The election and polls haven’t really budged. Labour and the Greens are now going to bet the farm again on a referendum, which will be held long after the minority shares have been snapped up by Kiwisaver funds, ACC and the NZ Super Fund. In two years time it won;t be a touch stone issue.

Of course Labour and the Greens total campaign against the policy has been based on lies, and they haven’t resonated with the public. It hasn’t stopped them using them though. In two years time their lies will be shown up for what they were. The sharemarket will be straightened, the majority of shares will be Kiwi owned power prices won’t have increased dramatically and Labour will have not a leg to stand on as people wonder what the fuss was ll about.

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