asset sales

John Key’s hottest line from the last election campaign could come back to haunt him as he ploughs ahead with the expansion of the “Mixed Ownership Model” by selling shares in a batch of state-owned assets.

The new National-led Government delivered a fine present as it shut down for Christmas – a big dump of official documents on its plans to extend what it calls the “Mixed Ownership Model”.  The Sale of the Century is scheduled to start in the third quarter this year and continue all the way through to next election in 2014.

Fear and greed may be the motivating emotions in the market place, but information is the life-blood of democracy. The voters of 2011 need a transfusion before they visit the polling booth on Saturday.

At this very late stage of the campaign, the biggest fear of every political party has to be a low turnout.

Governments are bad negotiators, because democracy demands they tip their hand before going to the bargaining table. That means governments get the short end of asset sale deals

A common claim in favour of asset sales is that the sale price is usually the “net present value of future profits”, which means that the sale price plus the interest you save on your lower debt is about the same, over the long term, as the dividends you would have made from keeping the asset. Where does this claim come from?

Bill English's third Budget has laid foundations. For a couple of short-term goals, in particular. But what's the point if those foundations are being undermined even as they are laid?

In his barn-storming, even cocky, address to the House yesterday, John Key let slip what this budget was really all about - twice. Was it growing the economy? No, that's not the work of conservative governments. Was it saving jobs? Nope, that was last year's message. Was it savings, as he had promised it would be in his address to parliament in February?

Has Labour managed to stuff up even a pretty good idea? [Turns out no - not as much as I prematurely thought.]

It's becoming so fashionable to knock the Labour Party's efforts to connect with a voting populace that just seems determined to ignore it that the contrarian in me feels like jumping the other way and hailing John Pagani as a genius.