Scoop Election 08: edited by Gordon Campbell

Gordon Campbell on the media’s sales job on asset sales

July 24th, 2012

Well, what an exciting weekend it must have been for the nation’s media. After a 2012 full, thus far, of gaffes, resignations, dodgy dealings at ACC and widely unpopular policies from the government, our press elite went into the National Party conference on the weekend and emerged with a shiny new meme – the government is back on the front foot! The heat has allegedly gone out of the asset sales issue! Bring It On, says Key! A good time was allegedly had, even if some lamented not being allowed to attend the Saturday night conference dinner:

…a great pity, as this saw senior party figures giving what delegates could not stop gushing about as very superior comedy in the course of a fun debate.

The waspish observational humour of Attorney-General Chris Finlayson was the top crowd-pleaser, though delegates were also charmed by a taste of the habitual faux-one-up-manship English and Prime Minister John Key go in for. A senior Young Nat also ventured a killer impersonation of Key. The party members spent the evening happily lampooning one another, more traditional foes like Winston, Labour and the Greens all but forgotten for the evening.

For most people, the experience of being locked up for the weekend with the National Party would not have been quite such a transporting experience. So what provoked this rather startling example of the Stockholm Syndrome? Well, it seemed to come down to (a) the lack of protesters outside the venue and (b) to a couple of rousing (and/or desperate) speeches by John Key and Steven Joyce to the party faithful. More on that later.

Reportedly, only about 70 protestors turned up to protest at the conference, and that was enough for the NZ Herald and the Dominion-Post to read into those numbers not only a change in the national mood about asset sales, but a mandate for the government’s entire programme. Here’s John Armstrong in the Herald:

John Key and his senior ministers will take the paucity of protesters as confirming National is on side with majority public opinion in pushing ahead with controversial policies such as more welfare reform and much more oil and mineral exploration.

Yesterday, the Herald even linked to Don Franks, always a reliable Eeyore on the state of the left, to support this analysis. Just how many protestors turning up at the conference, one wonders, would have been sufficient for the press gallery to form a different opinion? Say…somewhere between two to four thousand? Yeah, that might have done it. But hang on, that’s how many marched against asset sales in Auckland only last week. And back then, did the Herald conclude that the jig is up for asset sales, welfare reform and mining, and announce that revolution in the air? Well, no. As usual, it all but ignored the event. For the Herald, the only visible protestor is one who isn’t there.

Last year was election year. It seemed worth confronting National back then. This year, one could rationally conclude that for many, the National Party conference is a conclave of totally closed minds that has never remotely engaged with the public’s hostility to the selldown of the assets they own, and isn’t about to start now, when in conference mode. Simple arithmetic: roughly five to ten times more people were on the streets of Auckland nine days ago opposing the asset sales than the 400 inside the National Party conference celebrating them. There is no evidence that the public is warming to the idea of asset sales, or is even forgiving the government for inflicting the selldown on them.

As for the speeches: here’s John Armstrong in the Herald on the Steven Joyce speech:

Steven Joyce put things more bluntly. Delivering the best speech of the weekend, the Economic Development Minister offered a stark choice.

If New Zealanders wanted more jobs, they would have to stop being fearful of foreign investment, accept the “intensification of agriculture” and not forgo oil and mineral exploration.

That kind of thing may give Armstrong goose bumps, but others saw the speech as yet another example of Joyce’s overweening arrogance. Still there’s no doubt the media’s attention span for bad news about the government has run out. Expect more of the same “the government has turned a corner after its buffeting in recent months” kind of coverage.

Selling Asset Sales

The big news of recent days of course, has been the revelation that the fortunate few with the spare cash to plunk down $1,000 or more to buy shares in the assets we already own, will receive a gift of extra shares from the current taxpayer/owner if they don’t immediately cash up their shares and flick them on inside, say, the first three years. Yes, the predatory few who can afford to invest are to be rewarded for their “loyalty” with freebies.

Incredible. By most reckoning only about 10% of New Zealanders currently invest in the sharemarket. That’s partly because very few of us have a spare $1,000 to invest in even one of these energy company assets, let alone in all four. (Just why anyone would think it is a good idea to offer four energy companies in rapid succession to investors in a sharemarket that already has energy company investment options is another story.) If only – for once – the reporting on the asset sales process could be from the viewpoint of the people who can’t afford to (re-) invest in their assets, rather than from the media’s own middle class perspective of those that can, or might.

What we’d see then is that the assets we own are being sold down – to people wealthy enough to buy them, who will then be given freebies by us for keeping on owning them, even though the only way those shares will turn a profit is if the same shareholders can find a way to force up our energy prices. This looks more like a process of sado-masochism than rational wealth generation. Oh, and who else might eventually buy these shares? According to Rod Oram on RNZ yesterday, it could well ber Kiwisaver fund managers. Fantastic. More of our money being used on buying back – at a premium – what we already own, in the fond hope that we can somehow extract higher energy-related profit from ourselves. Yesterday, Labour MP Clayton Cosgrove called that a Ponzi scheme. It would be easier to call it theft, or in white collar terminology, a wealth transfer. From us to them.

Yesterday on RNZ, the question of whether it was fair to compel the poor to issue freebie shares in their own possessions to the relatively wealthy was put by Geoff Robinson to Prime Minister John Key who chose to talk about something else entirely, without further interference from Robinson. Instead, the Key interview and this subsequent item moved onto an anxious consideration of whether the “loyalty” share scheme would actually work. (You will be relieved to hear that apparently a group of academics met in Helsinki in 2005, and concluded that they did, and would.) The issue of who it would work for was largely left to slumber on, undisturbed.


Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Scoopit
  • Digg
  • Reddit
  • NewsVine
  • Print this post Print this post
    1. 16 Responses to “Gordon Campbell on the media’s sales job on asset sales”

    2. By Draco T Bastard on Jul 24, 2012 | Reply

      More of our money being used on buying back – at a premium – what we already own, in the fond hope that we can somehow extract higher energy-related profit from ourselves.

      A perfect description of the circular logic from NACT. Of course, NACT don’t see it that way – they just see it as rich people being able to have more profits. They really don’t consider that for rich people to have more profits everybody else must have less.

      Profit is a dead weight loss and makes most people worse off while enriching the few.

    3. By donna on Jul 24, 2012 | Reply

      I read John Armstrong’s latest piece of forelock tugging, then heard Matthew Hooton on nine to noon describing assets sales – a widely loathed policy as far as I can ascertain – as ‘popular’. I don’t know what happened at that conference but there was obviously something in the punch.
      And thanks Gordon for calling out morning report. It seems the intrepid morning duo will pretty much let any nonsense uttered by a cabinet minister pass unquestioned – a bit more scepticism would be a welcome change.

    4. By Simon T on Jul 24, 2012 | Reply

      Get real Gordon. Some people have more capital than others to invest, wow. You seem to be locked into this concept of “everyman must own an equal share in everything”. I would much rather the Government use their capital for infrastructure, policing and social services etc rather than tying up funds in corporate stand-alone entities. They will retain control anyway! I am very happy for those who can afford it to pay the funds over and use their own capital rather than us fund unnecessary 100% investments. Yes its called capitalism, which may not be a nice word to you, but I don’t think the other model worked too well either

    5. By Simone Thistle on Jul 24, 2012 | Reply

      Indeed, Mr Campbell, get real. Inequality exists. Ergo, more inequality is necessary, popular and logical.

    6. By mpledger on Jul 24, 2012 | Reply

      What we need to do, those of us “Mums and Dads” who can afford to buy shares (and feel they have to because they don’t want them to fall in to foreign hands) is to form a collective with the imperative of keeping power prices down.

      If we form a big enough group that works for the benefits of consumers we may be able to fend off some of the profit seeking from investment groups.

      (I am not a business person/lawyer so my sole contribution is the idea.)

    7. By Andrew R on Jul 24, 2012 | Reply

      @Simon T — what utter bollocks you write. “I would much rather the Government use their capital for infrastructure, ….” You mean infrastructure like what Mighty River Power, Genesis and Meridian are responsible for?

    8. By Jane England on Jul 24, 2012 | Reply

      I was just wondering where one of New Zealand’s finest journalists, Gordon Campbell, had gone and hey presto i find he’s well and writing on Scoop. Hooray. As a top journalist in this country he deftly demonstrates the ability to analyse the sell-off of assets including the rendering of any profit from water rights inaccessible to most New Zealanders. And yes, Key has been given the strong message that this is not what the people want. But there is a fair chance Key won’t be around to apologise when the consequences become clear. In fact, he may well be spending a good deal of his retirement offshore.

    9. By Roman on Jul 24, 2012 | Reply

      Simon T Its not “capitalism” in a “free market”.
      How can you comment if you think its just “capitalism’? It is a model of unregulated corruption, greed and ignorance.
      simon thistle, baby rapers also exist, it does not mean more self serving delinquents are necessary, popular or logical.

    10. By Simon T on Jul 24, 2012 | Reply

      Duh, roads and better broadband for a start, that type of infrastructure. You can’t increase national productivity if you can’t move fast. But why do stand alone corporates have to be 100% owned by mother state? Perhaps you would prefer all corporates be nationalised?

    11. By iainz on Jul 24, 2012 | Reply

      So the capitalists want to buy what the taxpayer paid for. So why don’t the capitalists build their own power companies?
      History shows the capitalists sit back and get governments to build assets then demand that it sold off to the capitalists.

    12. By nznative on Jul 24, 2012 | Reply

      Gordon Campbell is bang on when he points out the truth that our state assets presently owned by all New Zealanders are going to end up in the hands of the already better off amongst us and they will profit at the expense of the many , the free gift/money as a further sweetener to the wealthy is absurd and offensive.

      Key has also accidentally let another ring-wormed cat out of the bag, I quote from norightturn : ….. “Here’s Key today on the possible cost of the loyalty scheme:………. “If you think about the entire float that could be in the order of $5 billion to $7 billion. Let’s argue that it’s $5 billion for a moment if you then turned around and said about 20 per cent of that could be for mum and dad, it could be more it could be less – but just for the purposes of maths that’s a billion.” ……

      National expects big (overseas ) business and corporations to take about 80% of the shares and that are flogged off and that percentage will climb higher.

      The profits will flow overseas leaving the country. Just like with the Crafer farms, just like with Telecom.

      Not to mention how strategic electricity generation and supply is to a country.

      The whole National party asset sales/rip-off has been a shambles degenerating into a debacle.

      And its New Zealand who will end up picking up the bill from this sub-zero government .

    13. By Kat on Jul 24, 2012 | Reply

      National knows that what follows protest in the street is usually a disquiet towards the incumbent government. What follows the disquiet is usually a resignation to the status quo similar to a ‘no ones listening’ or a ‘no ones picking up the phone’ attitude. Then election time comes around and the incumbent government is replaced. You can see this knowing in their faces.

    14. By Dave McArthur on Jul 25, 2012 | Reply

      Every single NZ journalist failed us and was complicit in these immoral asset sales. This is the conclusion future historians will make based on the overwhelming evidence of our reality. The evidence will reveal that our leading journalists and commentators wilfully chose to ignore this significant series of events:
      1986 “Pricing is no longer subject to democratic control unless Parliament changes the law or ministerial powers to regulate are exercised on a political decision under Part IV of the Commerce Act 1986”
      1993 Electricity Industry Reform legislation effectively makes it illegal for NZ communities to adopt coherent energy efficiency strategies.
      1998 Electricity Industry Reform legislation effectively makes it illegal for NZ communities to own the intelligence of their local electrical potential. (Traditionally 60 communities representing all New Zealanders practiced this right. Not one community does now.)
      2011 Electricity Authority decrees it is illegal for householders to own the intelligence of their mains electrical meter.
      2012. Legislation enables the global Banker oligarchy to effectively complete their control of NZ’s electrical potential via the asset sales legislation.
      The cumulative impact of these legislative changes is to completely disenfranchise New Zealanders from their electrical and other potentials, thus promoting waste, debt, misery and the destruction of wealth potential worth hundreds of billions of dollars.
      Chris Trotter (Radio New Zealand The Panel) argued National received a democratic mandate at the 2011 Election to sell these assets. It is true that most New Zealanders implicitly endorsed National’s policy by casting their most potent votes in favour of it. I refer to their votes at the petrol pump and airline counter. These votes are effectively votes for national bankruptcy. All our political parties also have implicitly endorsed National’s policy in various ways such as via their support for KiwiSaver, the ETS, education programmes etc.
      However Chris is incorrect in his belief that the 2011 Election was a democratic process. As detailed above, not one journalist explored the central issues surrounding the control of our electrical potential and yet the sale of our remaining electrical assets was the dominant platform of the election. Our journalists also remained wilfully oblivious to the fact that National subverted the democratic process by pouring many millions of dollars into advertisements promoting the asset sales via the Electricity Authority, Consumer NZ, Meridian Energy (Power Shop) and the other SOEs. Such activity cannot occur in a democratic society. As future historians survey the images of the massive “Whatsmynumber?” “Powershop” and other pro-sale hoardings that dominated our streets, pages and screens during the election they will wonder at the complete failure of our journalists to expose this fundamental corruption.
      Gordon, you are correct – this transfer and destruction of wealth is not a Ponzi and it is theft. In a Ponzi credit is raised based on the delusion of collateral. For example, nearly all our systems are based on the belief that there exists eternal mineral oil $25 a barrel. All our main media and our political parties subscribe to this delusion with the possible exception of the Greens. Of course no such stuff exists and our credit systems are imploding because they have little real collateral.
      KiwiSaver, the ETS and the firesale of these vital assets are simply the means by which our rich elite can steal remaining community wealth to bolster their lifestyles amidst the implosion of this giant Ponzi. It is theft because they know the vast bulk of the value of these three electrical assets resides in their information systems and they are taking this enormous wealth without payment. Our media is complicit in this theft because it puts zero value on these information systems too.
      I heard the Morning Report items you refer to. It was a sickening betrayal of public broadcasting. I am concluding the global Banker oligarchy completely control Radio NZ’s current affairs programmes now. I predict future historians will use Radio NZ as an exemplar of our lack of democracy and civics in general as they attempt to explain how and why we destroyed such immense wealth in so few years.

    15. By Joe Blow on Jul 25, 2012 | Reply

      @ Simon T

      Duh, the energy companies are already corporatised. They make us a profit now! They pay for themselves and more! It’s already capitalism!

      And duh, I think you need to look up the term “infrastructure” and examine what kinds of physical and organisational structures it actually includes…

    16. By Cat O on Jul 26, 2012 | Reply

      When you look at John Keys experience at the Federal Reserve Bank (on 33rd Street)one gets a clear picture that an “exchange of ideas” happened in New York. When a group of 7 men, Rockafeller, Morgan, Warburg including a complicit President Woodrow Wilson met on the Island of Jekyll off the coast of Georgia in 1910 they devised a thieving “Oceans 13 Plan”. A bit like a blue print for America they could hook the rest of the world through the Bretton Rule of hedging all currencies to the ever printed US $. The plan involved the simple of transferring of control of all state/federal run banks (and printing of the Green back) into private hands (their private hands). So on 22 Dec 1913 when all of the House of Representatives were getting ready to go on Christmas holiday with a core group of Representatives: they stole the money through (Congress). This quick legislation is very similar to what is happening here with our Asset Sales but also with this TAF structure laid out for the Fonterra Cooperative.
      Which leads me to say how disturbed I was to find the date John Key gave us the delayed information from Ernst and Young document concluding that our Energy Companies are in fact better off in Public ownership and have competed better on return on investment than the private sector.

      22 Dec 2011 .

      So to celebrate next year we around the world can toast 100 yrs of

      money created “out of nothing”, worse even, out of “less than nothing”, out of DEBT. Whenever the government is in need of money, they “lend” it to the Federal Reserve, which, isn’t a government institution, but a cartel of private banks, invented by the Rockefeller and Morgan families in Jekyll Island in 1910 and established by Congress in 1913.

      No one questions exactly who we are all indebted to in New Zealand. We have a ministry of sound in the media that sings so loudly on this hymn of how much debt we have acquired: but to whom? That debt gets a twist and turn back to the architects of the 1913 legislation.

      The reason why the Federal Reserve in US needs to be abolished is simply:
      1. It is incapable of accomplishing its stated objectives (which are basically moderating the business cycle and maintaining a stable dollar – it has clearly failed on both counts.)
      2. It is a cartel operating against the public interest.
      3. It is the supreme instrument of usury.
      4. It encourages our most unfair tax (ie, inflation.)
      5. It encourages war.
      6. It destabilizes the economy.
      7. It is an instrument of totalitarianism.

      Bloody frightening is all I can say for the next 100 years

    17. By Icebox on Aug 7, 2012 | Reply

      Thats true Cat O, so do you think our assets have been earmarked for the top 1% multinationals.

    Post a Comment