today mighty river power shares are on sale. i can't think about this without feeling a little sick, mostly because of the inequality being created. these are assets that were built up through contributions by taxpayers over generations. ownership by the state means that all nz'ers get the benefits generated by these assets. but now, 49% of the ownership is being taken away from the poorest people and put into the hands of those who are already wealthy.
the reality is that most of the shares will go to institutional investors. a large part of them will end up being owned by overseas investors, and that means wealth that could have benefited all nz'ers will be leaving the country, no longer to circulate in our economy.
i'm of the view that core infrastructure assets should be owned by the state, and i certainly don't subscribe to the view that such assets are run more efficiently by the private sector. i've seen government departments run effectively, providing timely services. the companies office is one that really took off about 15 years ago with a huge reduction in fees, and simplification of company administration procedures, especially through the use of the internet. it's only in the last year or so that this government introduced another of their stealth taxes by reintroducing an annual return filing fee - a service which had been free now costs $45.
IRD used to be running pretty efficiently 5 years ago. again, it's only in the last few years, as call centre staff have been cut, that it has become difficult to get through on the phone. but when the department was adequately staffed, it was working well a lot of the time. nz post was another one that actually went through a phase of dropping the price of posting letters - something that almost certainly wouldn't have happened had it been privatised. on the other hand, we've seen the effects of the privatisation model in the telecommunications industry, which has left nz way behind many other countries both in terms of telecommunications infrastructure & costs of internet & phone calls.
there's no intrinsic reason our power companies can't be run effectively & efficiently by the state. i'd actually prefer to see them run as government departments rather than as SOE's which are required to pay a dividend back to the state - especially when that dividend isn't reinvested back in to the infrastructure required to maintain the electricity system. if it goes into the general fund, then part of the price of power is effectively a tax, and it's a regressive tax ie those who are earning less pay a higher percentage of their income towards that tax.
taxes should be transparent, not hidden in our power bill. the price we pay for power should include the costs to generate it, the costs of maintaining & renewing the infrastructure, and the cost of investing in new technology (including some expenditure on research & development to develop those new technologies). i'd also want to be sure that my power bill was enough to pay all workers in the industry a decent living wage, with safe working conditions. and that's it. we shouldn't be paying for anything else at all via our power bill.
now that the companies are being sold, we've finally had a statement from the labour party that they will be taking action to lower power prices once in government. but i'd like to see more than that. i'd like to at least see a commitment to renationalising the assets, with investors getting their money back on shares (inflation-adjusted) with no capital gain. in an ideal world, i'd love to see the SOE model removed but i don't know if any party is talking about that yet.
yes, it's a sad day for nz.