Winston Peters recycles pledge to “buy back state assets” – where have we heard that before?

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Over the last two years (give or take), NZ First leader, Winston Peters, has stated on numerous occassions that buying back shares in the three energy SOEs (Meridian, Genesis, and Mighty River Power) will be a “bottom line” in any post-election coalition deal.

On 20 June 2012, NZ First posted this statement on their website,

TDB Recommends NewzEngine.com

New Zealand First will use its influence on the next coalition Government to buy back our state-owned power companies which are being flogged off by National.

Rt Hon Winston Peters says New Zealand First is committed to buying back the shares at no greater price than paid by the first purchaser.

“State-owned assets rightfully belong to all New Zealanders but National is intent on handing them over to rich foreign investors.

“It is simply lining the pockets of the wealthy by selling off well-performing assets that already provide the Government with extremely healthy dividends.”

Mr Peters says it is only fair to alert potential investors that New Zealand First’s intention to buy back the shares will be part of any coalition negotiations.

“As things stand now, the assets will end up in foreign ownership which is an outright attack on our sovereignty. We are committed to repelling that attack.”

The pledge was repeated on 29 November 2013;

New Zealand First is the only political party that has said since the beginning that if the Government did go ahead with this idiotic decision, then when we are in a position to influence the next Government, we would buy back the shares at a price no more than that initially paid for them.

On ‘The Nation‘, on 15/16 March, interviewed by Patrick Gower, Peters repeated NZ First policy that a share buy-back, at a cost no greater than the original purchase-price, was a bottom line policy for his Party;

Gower: So that means buying Genesis back?

Peters: That’s right. At no greater price than they paid for it.

Gower: And does that mean buying back the other power companies as well?

Peters: It means exactly that. That’s what our position has been for some time.

Gower: So that’s a priority for you in any negotiations?

Peters: It is a priority, and it also has the blessings in terms of economic calculations from Treasury.

Taken at face value, Peters’ committment to buy back shares in the powercos seems more comprehensive and radical than either the Greens or Labour. Neither have committed to buying back shares in Meridian, Genesis, and Mighty River Power until the government books allow it.

But, can Peters’ pledge be taken at face value?

Can he be trusted to make good on his word to (a) make a share buy-back a bottom-line in any coalition deal and (b) actually follow through?

His track record on such matters is not good.

On 27 September 1996,  the then-Bolger-led National government sold the Forestry Corporation of New Zealand Ltd cutting rights to a private  consortium (Fletcher Challenge Forests, 37.5%, Brierley Investments Ltd, 25%, and Chinese state-owned company,  Citifor Inc, 37.5%)

This became a major election issue in  the lead-up to the first MMP election in  1996, with the Alliance organising a CIR petition to halt the sale.

NZ First leader, Winston Peters, pledged to buy back the cutting rights, stating on several occasions that any government he was part of would “hand back the cheque“;

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The game plan - what we're all playing for - NZ First buy back forest corp

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During the election campaign, Peters stated unequivocally his intentions that the privatisation of Forestry Corp would not stand under any government he was part of;

“I want to tell the Chinese buyers and I want to tell Brierleys that they had better not make any long-range plans because the day after the election is over we will be sending them an emissary to them them exactly what is going to happen, that is, that we are going to keep out promise, they can give back the asset and we will give the money back.” – Winston Peters,  Otago Daily Times, 1 Feb 1997 (on pre-election statement/promise)

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http://fmacskasy2.files.wordpress.com/2013/07/otago-daily-times-1-february-1997-winston-peters-asset-sales-forestry-corp-buy-back-hand-back-the-cheque.jpg

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On 11 December 1996, Peters announced that he would be entering into a formal coalition arrangement with the National Party, to form the first MMP coalition government.

Subsequently, Peters’ pledge to “hand back the cheque” and buy back the forestry cutting rights, was ‘quietly’ dropped;

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NZ First ignored chance to implement own policy

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“… NZ First did not make any attempt to include  in the [Coalition] agreement its policy of placing a 24.9% limit on foreign ownership of strategic assets.

Neither did they raise the NZ First promise to buy-back Forestry Corp, which was sold earlier this year to a consortium including Fletcher Challenge.” – Otago Daily Times, 16 Dec 1996

As Treasurer and Deputy Prime Minister in the National-NZ First government, Peters had ample opportunity to implement his Party’s buy-back policy. It was a promise he could have kept. And should have kept.

Instead, NZ First opted to implement National’s policy of tax cuts on 1 July 1998. With even more tax cuts promised by then-Finance Minister, Bill Birch.

This was money that Peters could have allocated and spent of re-nationalising our forests – but was instead wasted on cutting taxes, thereby reducing the ability of the coalition government to implement a buy-back, as Winston Peters had promised.

If Peters holds the balance of power after 20 September, and if he forms a coalition with either bloc, he may well carry out his promise to buy back shares in our energy utilities.

Or then again, he might not.

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References

NZ First: NZ First Committed To Buying Back State-Owned Assets

NZ First: Our asset sales buyback promise – Radio Live Column

TV3: Winston Peters: Asset buy-back ‘a priority’

FAO.org:  Devolving Forest Ownership in New Zealand: Processes, Issues and Outcomes

Treasury: Income from State Asset Sales as at 30 September 1999

Wikipedia: CITIC Group [Citifor]

Wikipedia: Referendums in New Zealand

Otago Daily Times: Alliance quits quest for forestry petition

Otago Daily Times: NZ First ignored chance to implement own policy

Otago Daily Times: NZ First opts for National

Otago Daily Times: Further tax cuts unlikely before next century

NZPA: Birch pledges more tax cuts

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Be careful what you wish for - Key and Peters

Above image acknowledgment: Francis Owen

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20 COMMENTS

  1. That’s because Winston is a liberal conservative – and because he is of that ilk – he can not be trusted.

  2. I don’t trust him an inch but plenty will.

    and he’ll get be kingmaker again, on the back of this issue.

  3. All he needs to do is to get a commitment by the government he may support, that they intend to buy the shares of the MOM companies back bit by bit, year by year, gradually on a set percentage basis, and he will be seen to have kept is word.

    But even if Peters may be talking big, without sincere enough intention, then he may have at least the ulterior motive of “sabotaging” the Genesis share sales process, by scaring potential buyers to not bother.

    That alone will be a “master stroke” in his personal view, and if that happens, it gives him (and the whole opposition) yet more ammunition to attack Key and the government.

    Perhaps we should view his maneuvering as somewhat useful at this stage, no matter what will eventuate. As he is by the MSM and even Key considered as a potential “king maker”, this buyback talk will get more resonance out there than Key and English could fear in their worst case scenarios.

  4. Frank, I don’t think it’s so much that one can’t take Peters at face value, but that it’s necessary to look carefully at what Peters says.

    In none of the quotes you cite does Peters clearly state that buying back state assets is a “bottom line” policy: ie bottom line meaning that they will not got into alliance with another party unless they agree it implements said “bottom line” policy.

    On the Nation this weekend, when Gower pressed Peters about buying back assets as a “deal breaker”, Peters hedged and diverted and wouldn’t answer directly. Peters would not make such a commitment, even though Gower asked him if it was a “deal breaker” more than once. Peters talked about the need to wait and see what the electorate said, and then entering into negotiations after that. Peters talked about being prepared to go to the cross benches over it, but would not state specifically that it was a “deal breaker” or “bottom line”.

    It looks to me that Peters/NZ First is talking tough on their priority positions, but not making any statements about bottom lines they will lay down before the post election negotiations begin. He’s merely stating the policies NZ First will bring to the negotiating table.

    • In none of the quotes you cite does Peters clearly state that buying back state assets is a “bottom line” policy: ie bottom line meaning that they will not got into alliance with another party unless they agree it implements said “bottom line” policy.

      In the quotes I gave, Karol, Peters stated that the share buy-back “…is a priority“.

      Furthermore, at 2.08 into the interview, Peters states quite clearly;

      “We’re prepared to go to the cross-benches if we have to on this issue…”

      That’s as much a clear indication of his intentions as one can determine, without actually stipulating it in a legalese-written contract.

      If the use of his wording implies that he’s given himself “wiggle room”… well… what can one say.

      • Frank, I think Peters gave himself more than wriggle room on the issue. The first time I watched it, it sounded to me Peters was refusing to explicitly make the asset buy back a “bottom line”.

        Avoiding a legalese type contract? Well, Peters was quite deliberately dancing around the issue

        He was kind of suggesting that it ewas a bottom line, but Gower called him on it and asked him directly. Peters refused – he was evasive and diversionary, and actually stated he was’t going to be “nailed down” on it.

        This is how the interview actually went.

        Gower: Would you walk away from negotiations over that if either side – because remember Labour and The Greens haven’t even committed to that – if either side says they won’t buy back the power companies will you walk away?

        Peters: Well look you say you if that

        Gower: well will you – will NZ First walk away ?

        Peters: NZ First party is having its 21st birthday

        Gower: Yes. Congratulations.

        Peters: in July of this year, which means we haven’t been around because one guy has been running it all by himself like a dictator. We consult, we ensure that everybody signs up, even to these sorts of arrangements and talks. And we’re prepared to go to the cross benches if we have to on this issue. So in terms of walking away, we’re not even walking in until we get what we believe New Zealand economically and socially needs

        Gower: So that’s a deal breaker essentially if either side doesn’t want to buy back the assets?

        Peters: Well if either side, prefers to sell out New Zealand’s long term heritage, then they can line up and find their own support. But if they want to line up with the vast majority of New Zealanders, as the latest poll shares [?] on this issue of asset sales, then they can perhaps line up with New Zealand First.

        Gower: So that’s a deal breaker, buying back the assets is a deal breaker?

        Peters: No, no. Look, I’m not going to be sitting here like some sort of you know ah, star chamber, Federal case in the United States, while you think you’re going to nail me down. I think you need to understand one thing about MMP – and it goes like this – even on the old system it went like this – the voters vote first, and then they decide in what numbers that the parties in parliament are comprised in parliament. Then you know what you are dealing with.

        So, basically, Peters was refusing to say this policy was a bottom line for NZ First.

        • Well, Peters says several things in his interviews. Much of which is contradictory. Or plain unintelligible.

          He’s made much about his prioritisation of a share buy-back – including alluding that he’d walk away from any negotiation.

          It remains to be seen if he continues to insist that this is a “deal breaker” for NZ First – or if he’ll let it quietly drop.

          Then, after the election, if he becomes “king maker”, we’ll see if he is true to his word or breaks another of his promises.

          Going by his track record, I find it hard to have any faith in his integrity.

          But hey, if I’m wrong, I’ll be the first to put my hand up and admit as such.

          Personally, I’ll be delighted if he delivers on his promise and I’m proven wrong.

  5. I’m typically a Green (sometime Labour) voter, but what Winston’s got going for him is that he SEEMINGLY REALLY wants to solve this housing problem in Auckland-NZ, by the only real option (unless we all want to wait 10-20 more years) …………banning foreign speculation in the NZ housing market.
    Now he’s a tricky character and needs to be way more specific, but Labour and Greens have a barmy ‘plan to fail’ policy, of 100,000 houses in 10 years……..I doubt that’s enough to EVEN cope with the immigration inflows, let along the back log.
    But at least it is a plan, unlike the (for the benefit of wealthy foreigners over Kiwis) National party, who have NO PLAN , other than to talk about making a plan and building maybe 10-20 houses and claim they’re doing something. And the compliant MSM report it positively.
    Basically IF we don’t solve this housing crises immediately we’re screwed. And for that reason ALONE, any party that does similar is in line for my (and I guess many many many others too) vote, i.e ban-STOP this speculation in the NZ housing market (invariably by rich overseas people with ‘printed out of thin or money’ or illegal money being hidden in a conveniently compliant and NAIVE country)………that’s us NZ.

    • Do you seriously believe he will achieve that by going with National and John Key? It is easy to wave that sort of thing around knowing full well he will not have to stump up if he teams up with Key. That and asset sales, he will bluff and blunder his way out of it and deny till he is blue in the face that he ever said it was a bottom line, while he waves us goodbye as he heads overseas on a jaunt in his new (old) foreign affairs (out of the hair) ministry

    • Interestingly, Kevin, when Peters was in coalition with National in 1996, he made no attempt to implement restrictions on foreign ownership of assets, land, property, etc, (See media report above; ” NZ First ignored chance to implement own policy”) despite these being core NZ First policies.

      Indeed, in two speeches (11 Feb 1997 and 28 Feb 1997), Peters stated his position on pursuing established orthodox economic polices.

      In a speech to NBR Deloitte Touche Tohmatsu Government to Business Forum (11.2.97), he said,

      “…That is why we are committed to low inflation, prudent and conservative fiscal management, lowering taxes and reducing debt”.

      He also stated,

      “The key to maintaining an open internationally competitive economy will be:

      * stable macroeconomic policies;

      * deregulated, competitive and open markets;

      * quality public services provided as efficiently as possible;

      * and the lowest possible tax rates.

      The government [National-NZ First coalition] is committed to innovative reform.”

      In another speech, this time to the American Chamber of Commerce Luncheon in Auckland (28.2.97), he said,

      “That strategy is based on four key principles laid down in the [NZ First-National] Coalition Agreement. These are:

      * Providing sound, stable government on an agreed basis.

      * Ensuring there is an economic climate that is conducive to sustainable development and growth.

      * Maintaining an open, internationally competitive economy, supporting a strong export sector, particularly by managing cost structures downwards and continuing deregulation and policies to stimulate private sector and individual performance…”

      Peters also said in the same speech,

      “To ensure that investment of our national savings is made in areas of the economy offering the best returns, an open and competitive economy will be maintained.”

      I believe Peters has made his position on “economic orthodoxy” fairly clear.

      And as I pointed out, Peters did not restrict foreign ownership of land, assets, etc, when he was Treasurer/Deputy PM in 1996.

      If anyone is interested, I can scan the documents and post them on my “News & Views” sister-blogsite.

      • Well IF the option is trust Winston to do what he says, or vote for a plan to fail (e.g. the Labour-Green housing solution-‘plan’), then YES, I’ll have to take that (big !) gamble, AS I believe this is the ONLY solution to NZ-Auckland’s housing problem and SOMEONE has to do something REAL about it, and DOUBLE QUICK.
        And NO ONE BUT Winston is talking sense about it,…..as of TODAY !!!!

      • Fair enough.
        However this is now and the problem we have is fairly recent,……..e.g since QE (money printing out of thin air) and illegal money realising how EASY it is to launder cash through NZ and particularly via the housing market.
        So although it worries me Winston might not do what he says, as I’ve said, it’s better some chance of someone fixing the problem than NO chance of someone fixing the (real) problem.
        If other parties grow some B@lls and come out against this mess that is crucifying the average NZ citizen, then I’d consider voting for them………….so come on Greens as and Labour, do what’s right for NZ and tell your financial backers-controllers to take a hike over this issue……..big money controlling the (not for the average Kiwi) National party is more than enough in NZ politics

    • Is the immigration flow immutable.

      I suggest that the problem of immigration inflow is not a hard one to tackle.

      Certainly no reason to carry on creating housing shortages with immigration and foreign speculation on both houses and land.

      We could go a lot further sorting out who get houses to live in.

      That is what they are for.

  6. Is that what you got from that interview, Frank? I heard something completely different and I am positive that what I heard was actually what he was saying.
    “In the great scheme of things, all things considered, at the end of the day, when all is said and done, it’s an ill wind that blows, a bird in the hand, after all, when you cut to the chase, it’s what you make of it, and I’ll say it again at the risk of repeating myself”.
    I’m damned if I know how you got what you did from that.

  7. Great work @ Frank .

    Winston Peters .

    Machiavellian ;
    adjective
    cunning, scheming, and unscrupulous, especially in politics. a whole range of outrageous Machiavellian manoeuvres.

    Confederate ;
    noun |kənˈfɛd(ə)rət|
    1 a person one works with, especially in something secret or illegal; an accomplice.

    I can’t spell it out more clearly than that .

  8. I like his position on the slave ships – overdue, and other parties need to think seriously about just what it is they’re licensing by allowing it to go on.

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