The not-OK Corral

It has been an interesting week for a government that is so clearly out of its depth that it can only be compared to cowboys in the Wild West.

The trouble is, this is our country and our economy that we are talking about.

It started with the ongoing story about the sexual assault at a Young Labour rally, where the government found itself in trouble over a shambles of an event where underage people were drinking alcohol, and a pervert was wandering around putting his hands down people’s pants. To be fair, he was not discriminatory. He treated men and women equally.

Then we got into a spin with the Deputy Prime Minister trying to pretend that the Russians had definitely not shot down a plane over the Ukraine, and even if they had, we should still do a trade deal with them. The fact that all our international friends were in the process of imposing sanctions on Russia didn’t seem to worry him at all.

Then the leader of the Green party announced that the Greens are going to give some of their questions in the house over to the opposition. This means that he is actively encouraging the opposition to criticise the government… of which the Greens are a part.

As the Dowager Countess from Downton Abbey might say: “Have we all stepped through the looking glass?”

Then on Monday the Prime Minister snubs a visiting dignitary in order to play student politics and receive a petition from Greenpeace, asking the government to stop all oil and gas exploration. She announced that her government was “actively considering it”, putting the lucrative industry into a tailspin, and introducing one thing that the markets simply do not cope with well: uncertainty.

The oil and gas industry produces millions of dollars in revenue for the government and provides something in the region of 11,000 jobs. To even hint that it would put the industry in jeopardy is damaging and disgraceful. Any such policy needs to be thought out properly, approached in a clear and concise manner, negotiated with the industry itself, and needs to be handled with a long-term view for the future of the country. Just throwing out some ill-thought-out comments and backtracking on them later are the actions of the leaders of a banana republic.

Particularly for a government that is already saying that there is no more money to reduce ‘child poverty’, as they have already committed every cent they have to existing programmes.

Then out came the news that the government’s policy of providing free tertiary education has made little or no difference to the number of student enrolments this year. So, all that has happened is that the same number of students have enrolled at the universities and polytechnics as would have enrolled before. It is just that the government is paying millions towards it now when they didn’t need to.

And then there was the Shane Jones debacle.

A minister’s “meddling” in Air New Zealand could wipe up to 30 per cent off the airline’s market value, an investment analyst says.

Forsyth Barr head of private wealth research Rob Mercer said the Regional Economic Development Minister Shane Jones’ questioning of the airline’s decisions to axe some regional routes was “problematic”.

Jones has called for Air NZ’s chairman Tony Carter to resign over the issue on Wednesday morning and advised the airline’s chief executive Christopher Luxon​ to stay out of the “political boxing ring”.

But wait. There’s more.

Air NZ’s share price opened at $3.38 on Wednesday morning and remained flat throughout the day, inching up 0.5c at 2pm.

A politician’s “behaviour” towards a company the Government partly owned, like Air NZ, could create a slippery slope, Mercer said.

If a Crown-owned company’s value dropped, it would pay less in dividends to the Crown, he said. If a company was not profitable, it would not pay taxes to the Government.

So, that is more money they are set to lose. All because one of their senior ministers cannot keep his rather tarnished opinion to himself.

Shane Jones needs a bit of a history lesson. The reason that the Crown owns 52% of the shares in the airline is because Air New Zealand had to be bailed out by the last government that he was part of. Since then it has had exceptional management, excellent marketing and has won awards all over the globe. It is one of the few airlines in the world that is actually profitable. Not bad for a small country at the bottom of the planet, competing on the world stage with much larger airlines and sometimes winning.

But don’t worry. Shane Jones will make it harder for Air New Zealand to remain competitive. And it seems that Winston Peters agrees with him.

Such consequences proved why state-related enterprises must operate independently of the Government, he said.

Mercer said state-owned – or in Air NZ’s case, government majority-owned – businesses should be free to make decisions to boost profit for for the benefit of all shareholders, without government influence.

That objective was written in law under the State-Owned Enterprises Act.

“[State-owned enterprises] already operate independently … regardless of what Shane Jones believes, he cannot meddle.”

NZX-listed Air NZ is 52 per cent owned by the Crown but operates under the Companies Act not the State-Owned Enterprises Act.

And there’s the rub. Shane Jones cannot, and has no right to, try to influence the operations of Air New Zealand. He is speaking out of turn and runs the risk of doing significant damage to an industry that pays a lot of money to the government.

For a country that punches above its weight in a lot of areas of business, it seems that the biggest threat to our economy is not any looming economic downturn that Winston Peters waxed lyrically about when he announced the new government.

No. The biggest risk to our economy is the government itself.

-Stuff


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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