When proxies fail, and university wombles prove they are idiots at business

The Labour/Green proxy blog at The Standard has a post by Anthony Robins where he generously quotes an article by some womble university professor. He says the article proves that the government is short sighted and at the same time proves that he has no idea what he is talking about.

Wayne Cartwright says:

The Government’s plan to sell publicly owned hydro-energy resources is a huge strategic blunder. This is not due to the objections raised so far, such as worries about the public-private ownership model or transgression of Maori water rights. The reason is arguably much more important than both of these concerns.

The Government has grossly underestimated the value of hydro-energy assets to New Zealand citizens. The assets are likely to be worth at least double the amount the Government is prepared to accept. This is because the valuations have apparently ignored the implications of clear signals that global energy costs and prices will increase greatly and permanently within the next 7 to 10 years.

Robins claims that this is proof that the government is doing the wrong thing. But he fails investing in shares 101. 

Far from proving that the asset sales programme is going to be a disaster because it will realise only half of what the assets will allegedly be worth in 7 to 10 years times he forgets that the government is retaining 51%. Now if he says that the assets will be worth at least double then in 7 -10 years the government will have recovered the value, plus got the value out of selling down 49%.

More importantly the people who invest in Mighty River Power and other assets can safely, based on the assessments of a womble professor, look forward to doubling their investment over 7 to 10 years.

All that makes the asset sales programme a win for the taxpayer, in doubling the value of their assets and scoring some investor cash now, and a win for those sensible enough to invest in long term infrastructure assets like power companies.

Robins must blindly believe that once sold someone is going to remove millions of tonnes of concrete and turbines and machinery out of the market and they just disappear. The dams and infrastructure will remain, the government gets some cash, the investors get a return, as does the government and we will also find the dividend stream to the government will be barely impacted.

Quite how this is near-sighted action from the government is beyond me, and quite how it is dooming us isn’t elucidated either by the womble professor nor by Robins at The Standard.


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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