Podcast: The Green Plan for our SOEs

Green Co-leader, Dr Russel Norman, last week outlined his plan for a sustainable and prosperous economy at the Party’s AGM.

One of his most talked-about initiatives was how our state-owned enterprises could be leveraged to lift our country’s economic performance in partnership with the private sector. He proposed this as an alternative to John Key’s plan to sell them off after the election — a plan that lacks any kind of vision for a mixed economy that retains New Zealand ownership.

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13 Comments Posted

  1. Valis says “a limited company’s main responsibility is to return a profit. ”

    Conpletely wrong. It’s main responsibility is to do what it’s shareholders want. And if the govt own 51%, they can dictate the company to do whatever they want.

    I own a limited company, and it’s responsibility is to do whatever I want it to do. So top priority is to give me a lifestyle I want, hours I want, and to pay a living to those who work for the company. If the company can do that, then making a profit is nice, but the other priorities come first.

    Even with public companies protecting capital and lessening risk is probably a higher priority than making a profit.

  2. The biggest issue with partial privitisation is not the percentage sold off, but the conversion from SOEs to limited companies. As an SOE a govt can set strategic goals as it wishes, while a limited company’s main responsibility is to return a profit. Once our energy companies are operating solely on a profit motive, we will have lost all hope of keeping coal in the ground. And that loss of control would happen even if only 1% was hocked. I think this is the real reason the Nats have targeted energy companies. They’re not stupid, just insane.

  3. FYI Photonz1: The Overseas Investment Office specifies 25 percent ownership as a ‘controlling interest’ for the purposes of the Act they work under for reviewing foreign investment. They do this because with 25 percent ownership, you can control a company.

  4. It’s clearly a superior policy to selling off ownership (share) in existing assets – issuing new shares to New Zealanders to enable the SOE’s to grow without increasing debt. It also enables economic growth without worsening our BOP deficit. The share issues would also occur in a more measured amounts and thus be easier for local investors to finance.

  5. Photonz – the TPP would give some jerk in the US with 1% of the damned ownership the ability to sue the shorts off the majority shareholders if he cared to make the case, and the business kangaroo court set up for upholding that shareholder’s “rights” would (as it almost always does) rule in favor of the government paying the private business/person owner. The actual setup is crap and the 49% of profit or non-loss is important in a NON-GROWTH stable economic system… as almost any sustainable system must be.

    (I am almost back)

  6. cliches and sterotypes is what the national party and its trolls specialise in …………..

    This short term Govt ( they all only last a couple of terms ) has no right to gut and sell our assetts . And you’d have to be a mug or a troll to think or pretend that they wont eventually sell the whole things off like NZ rail …….. and that worked out well didn’t it……. for fay and richwhite

    The people most likely to buy them will be the rich which who are the ones who got so much extra money, not that they needed it, from nationals tax cuts to the rich.

    Nationals plans for the country seems to be coal and cow shit.

    They are dirty authoritirian con artists.

    And they are bad for the country on so many levels …..

  7. Russel – all the words about clean green energy are very nice, but look past the cliches (there were an awful lot of them in your podcast) to the reality, and things don’t look quite so rosey.

    The massive market of clean green technology you describe isn’t particualrly easy to make money in – some examples –

    I’ve looked at buying into a number new energy companies in the past.

    I was considering NZ Windfarms who build and run windfarms, at $1.15 per share. They are now down to 15 cents per share.

    Similarly Windflow Technology make wind turbines. A couple of years ago they were at $4 per share – they’re now around 50 cents.

    I did buy into a fund of some of the worlds leading new energy companies from 20 different countries – it’s now worth about half of what I paid – that’s how well the world’s top companies are doing.

    When it comes down to it, manufacturing new energy products is little different to manufactutring any other products – so China can probably do it much cheaper, hence the huge decrease in costs of wind turbines (30-40% drop in two years).

    The other problem is with continual improvements there’s little time for manufacturers to recoup development costs.

    So you would need to be very careful sinking hundreds of millions of taxpayers dollars into investments that have a very high and very real risk of failure.

  8. Just to state the obvious. A sustainable economy is certainly not a growing economy. Consequently, I wouldn’t expect the “private sector” to look anything like it does now. Businesses, as currently constituted, would expect to get a return (i.e. a profit) out of anything it takes part in. They expect to grow, they strive to grow (we’re not talking about the small family business here). I hope Russel has taken this into account when envisioning a sustainable economy, but it doesn’t sound like it.

  9. greenfly says “The seeming naivety of Photonz would be sweet, were he not so duplicitous.”

    Oh – abuse – with no intelligent comment – what a surprise from greenfly.

    Shame you don’t priorities environmental issues over abusing people.

  10. sprout asks “Since when did 51% provide 100% control? ”

    Since always. Doesn’t matter what you want of you’ve only got 49% of the shares – it’s impossible to outvote someone with 51%

    I used to own electricity generating assets – I sold them when the return dropped below interest rates. That was a few years ago, and despite low interest rates, the returns are still lower than interest rates.

  11. And lose, long term, 49% of the profits…
    Since when did 51% provide 100% control? Under our free trade agreements overseas investors would expect some degree of influence. The Government’s history of bending over backwards to accommodate big business provides no assurance of maintaining sovereignty over our assets either, Photonz1.

  12. Russel says ” He proposed this as an alternative to John Key’s plan to sell them off after the election — a plan that lacks any kind of vision for a mixed economy that retains New Zealand ownership.”

    Far from selling them off, the govt is retaining 51% ownership, which means they retain 100% control.

    And with $60 billion to be spent in the next decade, the biggest buyers of NZ shares will be kiwisaver schemes, along with the likes of ACC, and perhaps the NZ Superannuation scheme.

    The NZ stock market needs to get a lot bigger if kiwis are to have an alternative investment to houses and investment companies.

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