By: Mike Hosking | Thursday, June 21, 2012

I guess if you’re opposed to something, it behoves you put up a fight. But I tend to favour the rule of democracy and the simple principle that in parliamentary terms if you have the numbers, you have the mandate.

And so it is with the asset sales. It’s almost done and it’s a farcical old business from here on in. Off to select committee, for what? So more people can line up and complain. Will it change anything? No. Are those people heard? Not really.  Are the majority of people in this country really against asset sales? I am not sure. The polls say yes but I put weight on the argument that depending on the question, you can come up with just about any result you want.

If the question is “do you like governments selling off public owned assets that potentially end up in foreigners hands?” l would bet the majority would say no. But if the question was “if the Government floated publicly owned assets and gave you the chance to own some of it while retaining state control, would you be interested?” you’d get a different answer. Or if the question was “if the Government didn’t float publicly listed assets but put your tax rate up, would you go along with that?” I know what the result would be then.

I have said all along, in this case I am not a fan for the very simple reason they are doing this to reduce debt. They’ve run out of money and are flicking stuff to fix it. That's not the end of the world if you have lots of stuff to flick but we don't. We’ve sold it all. So my very simple question is if that's your economic policy towards debt, when we’re in trouble next time then what? And they can’t answer that. But as to whether the float will work, l have little doubt it will be a success. A lot of local money will snap up the opportunity to buy into what looks like very safe, very solid companies with very consistent and reliable returns. If the Government tosses in an incentive scheme with free shares for Kiwi money it will be even better.

I have every belief that when the reins of complete Government control are dropped you will find these companies improve their performance immeasurably. Air New Zealand is a classic example. Ask yourself of the shares out there, who owns them? You don't know because you don't care. Do the Chinese own them? Americans? Germans? Has it ended up being held by foreigners? All you know is it’s one of the best airlines in the world that's turned itself around in spectacular fashion and there’s no reason to think the power companies can’t do the same. So for all the heat right now over sales, in a decade it will be a non-event.

Photo: Katie Bradford-Crozier