The Mask Slips
The mask slipped briefly on Cunliffe yesterday.
““if the Government is going to sell off precious state assets then we would not rule out re-nationalising some of them. And people need to be aware of that regulatory risk.””
Today he is back-pedalling a lot:
““At no time have I said that would have to be a forced re-nationalisation and at no time have I ever said that would be without compensation. Nor have I said that was something we would have to do, I’m just saying we have to look at future circumstances as they arise and we couldn’t rule it.””
Yet we know that the real Labour sits with the first statement – that nationalization is good and that it would be at the risk of investors. We know this because it is Labour that re-nationalized Air New Zealand after destroying it by refusing to allow it to be sold to Singapore Airlines. We know because it was Cullen who bought a defunct railroad at vastly inflated prices. We know because Labour seriously damaged share value time and again by interfering in the market. And, finally, we know because a brief glance at the left wing blogs tells you that the remark resonated heavily with them, particularly with the denizens of the Standard and with the Idiot at NRT.
The mask has slipped and the socialist underneath has bared its teeth. The attempt to destroy the value of asset sales was flagrant and amounts to economic vandalism. Small wonder that Cunliffe had no choice but to back track rapidly. He ran the risk of frightening off every investor in a 10,000km radius, including all the ones in New Zealand. Why invest in something that you hope will build in value only to have the government take it back -usually at a bargain basement price (unless you own a train set!)? One of New Zealand’s prime assets is a relatively benign, stable political environment and Mr. Cunliffe has very nearly screwed that up.
But then again, the left has always excelled at economic vandalism.
Related posts:
- Generally Stupid Tax I am not a big fan of GST. I appreciate...
- Some More Observations ◊ I am horrified by the complete lack of economic...
- Nothing New to Say You can tell that there is not much political news...
- Sell-Down Bernard Hickey lays into National‘s plan for a partial sale...
Dec 6 11 1:20 pm
I reckon that was the end of his campaign. Game set and match to Shearer.
Dec 6 11 9:21 pm
I’m in two minds on the asset sales issue. I am certainly not a socialist, but can anyone tell me in all honesty that the need for a utility such as an electricity company to fulfil the expectations of private shareholders will not result in substantial hikes in the retail price? Where do we draw the line? Sell half of the public hospitals and the police force, and require them to turn a profit?
Dec 6 11 9:46 pm
Your observation would be correct if a) the government were selling the entire shebang and b) The company being sold was a monopoly. This was the essential position for telecom and resulted in our current high pricing. The electricity companies, however, are intensely competitive(keeping the prices down) and the government is not selling a controlling interest.
I have no particular problem with selling hospitals but that act alone, of course, would not make state controlled medicine, private medicine. It would just add to the pool of private hospitals.
outsourcing some police functions might be feasible, but I would doubt if even the libertarians would be comfortable privatising the police (I may be wrong in this). Defense and Law and Order are certainly legitimate government interests, whereas, electricity generation and airlines are far more dubious possessions.