The Mixed Ownership Model is the Government’s new ‘fancy term’ for the privatisation of our State-Owned-Assets.
I had the privilege of submitting my views on the on the ‘Mixed Ownership Model Bill’ to the Finance and Expenditure Parliamentary Select Committee at its recent meeting in Auckland.
A majority of New Zealanders are strongly against the National-led Government’s proposed move. State-owned Assets contribute over $700 million annually to our economy. Selling profitable assets with 18.5% return on investment for the past five years, including capital appreciation and dividends, to serve debts that are no more than 4% of the current Government’s cost of borrowing, does not make any fiscal sense. It is unfair to sell the assets, which belong to all Kiwis to a small minority, who can actually afford to buy shares.
My report was simple, reflecting public view. It said that the National Government has no mandate to sell what belongs to all Kiwis. If the National Party is so confident, it should run a binding referendum.
Partial sale of assets will inevitably result in full privatisation and foreign ownership of our energy companies and other major organisations, resulting in higher prices, loss of dividends and fewer jobs.
But most importantly, there is no limit to the amount of non-voting shares that can be issued and sold, thus diluting the dividend stream the crown would receive to tiny amounts, even though it may meet with the Government’s promise to retain 51% of voting rights.
I believe that selling off the assets is simply a cover up for massive government debt incurred when the times were tough and due to National’s mismanagement of the economy.
My recommendation for the Select Committee was to find a way of securing our future. Rather than looking for a short time unguaranteed fix, we should consider long-term options such as Capital Gains Tax and measures that would generate revenue for the Government.
But this Government is not offering any options to the people.
In the inevitable event of sale, the legislation concerned should restrict ownership of these assets to New Zealand Companies and New Zealand residents.
The Mixed Ownership Model Bill should contain provisions to prevent the sale of non-voting shares into private ownership and thus, the majority of profits, at the end of the day – should remain in Kiwi hands.
Shail Kaushal is a Member of the Labour Party representing the youth. He is a Politics, History and Media student at the University of Auckland.
