The Tory Templar | Issue 10

On Asset Sales

The left has been crying foul over asset sales virtually from the moment the first syllable left John Keyís lips. Letís clarify a few points from the beginning; a lot of people seem to not know much about this issue, yet are still up in arms. The government is looking to sell off up to, and no more than, 49% of some state assets to raise funds to curb our debt.

At the most fundamental level partial-privatisation occurs because governments very rarely make good owners of commercial business. Look at KiwiRail, which made a loss for the tax payer for pretty much every year for 20 years before it was sold. Governments will inevitably only be interested in improved function or performance when it directly affects its ability to get re-elected. Where thereís no political gain to be had thereís no effort to make things run smoother.

Thatís what private companies bring to the fold, efficiency. The Templar loves that word! Itís the bedrock of a well-drilled, steam engine economy. Private companies and firms have a greater incentive to produce more goods and services for the sake of reaching a customer base and hence increasing profits.

A more efficient economy also means job gains. As the economy becomes more efficient, more profits are obtained whilst no government subsidies and fewer taxes are needed. There will be more private money available for investments and consumption and more profitable and better-paid jobs will be created than in the case of a more regulated economy. Plus government investments will increase in value and put their books more into the black than the ghastly shade of red they are currently full of.

Besides, all this scaremongering over selling our assets is utter nonsense. Kiwis will still have ownership of over 50%. We will still have control. Even Iwi are likely to get preferential bidding. We can all invest in these companies and all prosper from them being better run and more profit-focused. The fear of overseas control of our assets is small-minded, economically suspect and just plain bigoted.

If we want to grow, prosper and close that gap with Australia partial-privatisation is a must. If not we can be the next debt-ridden economy to drown under the weight of its own mismanagement. Want to know what thatís like? Just ask Greece, Ireland, Portugal and Spain. The Templar suggests it wonít be a pleasant conversation.

ĖThe Tory Templar
This article first appeared in Issue 10, 2012.
Posted 12:51am Monday 7th May 2012 by The Tory Templar.