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,
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“;
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)
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;
“… 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.
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.
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
Above image acknowledgment: Francis Owen
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