Hard News by Russell Brown

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Hard News: Unwarranted risk

255 Responses

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  • Sacha, in reply to BenWilson,

    cost + reinvestment sufficient to sustain growth in supply

    One (privatised) energy CEO isn't confident about that under current settings.

    Electricity consumers are paying less than the cost of secure supplies, making the industry unattractive to investors, says the chief executive of Contact Energy, Dennis Barnes.

    Speaking to the New Zealand Downstream energy conference, Barnes said current rates of return on electricity industry assets was "at a level that commercial investors shouldn't continue to invest in."

    "I borrow money at 8 per cent and I pay 6 per cent to shareholders," he said during a question and answer session with industry CEOs. "That tells me the industry isn't covering its cost of security. I'm not complaining, just stating the facts. Good businesses should respond to that."

    He feared the New Zealand industry would lurch between complacency followed by policy changes driven by supply crises.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha, in reply to BenWilson,

    an open bidding process that gives local people a chance to buy too

    Amazed to read this week that overseas advertisements by the receivers offered the Crafar farms either as a lot or separately when locals were denied the latter option.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Kumara Republic,

    And how does the proposed anti-privatisation referendum differ from the anti-EFA campaign and the pro-smacking referendum?

    The southernmost capital … • Since Nov 2006 • 5445 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    But when the government is selling things I think it should certainly be done in an open bidding process that gives local people a chance to buy too.

    And if the process isn’t open, then it goes to show some people living in Parnell and Dipton are still engaged in rain-dancing rituals in the hope that John Frum will fly a big jumbo jet all the way from Wall Street. Despite the fact that said jumbo jet has been grounded, and John Frum himself is facing Chapter 11 proceedings.

    So, how about that... John Frum Economics.

    The southernmost capital … • Since Nov 2006 • 5445 posts Report Reply

  • Rich of Observationz,

    the risks to the state balance sheet of owning make it overall unattractive

    The risks are still there if they don't own AirNZ or the utilities. If they go bust (as Air NZ did) the government has to pick up the pieces (we can't go without electricity, or air service to Hamilton). Selling shares just privatizes the profit and socializes the risk.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • peterpeasant,

    Listening to Ryall, Key, English is like listening to Enron executives and the defences of executives of failed finance companies.

    Bernie Madoff is clearly the mentor of the puppeteers who control Key.

    new zealand • Since Oct 2010 • 39 posts Report Reply

  • BenWilson,

    One (privatised) energy CEO isn't confident about that under current settings.

    They've found a way to make something that converts rainfall into money turn a loss. Easy, just borrow heaps, and give high dividends to shareholders. Then you're converting rainfall into debt repayment and shareholder recompense. If the stock falls, it leaves the shareholders with nothing and the lenders with bad debts, at which point a sensible government could do the opposite of what has happened for 30 years - they could privatize risk and socialize profits, by snapping up a bargain. Will they? Nah! Government can't make good investments - this government is determined to prove that true with everything they do.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Kumara Republic, in reply to peterpeasant,

    Bernie Madoff is clearly the mentor of the puppeteers who control Key.

    I was there first. ;)

    The southernmost capital … • Since Nov 2006 • 5445 posts Report Reply

  • DexterX, in reply to Tom Semmens,

    When you're a one trick pony government

    I have to correct you - they are a no trick pony.

    Auckland • Since Nov 2006 • 1224 posts Report Reply

  • Hilary Stace,

    The sang froid that has served Tony Ryall well in the Health portfolio

    He might not be so lucky when the next crisis, such as pandemic scare, hits. The Ministry of Health has been quietly shrunk and is now operating more as a business model Health NZ than a Ministry for the Public Health of NZers.

    Wgtn • Since Jun 2008 • 3229 posts Report Reply

  • Stephen Doyle,

    Whatever happened to good old fashioned nationalization. Is it now such a dirty word that no "left wing" party will utter it?

    Stillwater • Since Nov 2011 • 28 posts Report Reply

  • Craig Young,

    I think we all seem to agree about the importance of opposing asset sales, but I have major problems with the policy priorities and tactics of Labour, the Greens and CTU in this context, particularly the flawed citizens referendum tactic:

    http://www.gaynz.com/blogs/redqueen/?p=611

    Why not actively work on a capital gains tax as the preferable alternative policy?

    Wellington • Since Nov 2006 • 573 posts Report Reply

  • Luke Williamson,

    I guess, Craig, because the gummint is saying they have a mandate and is rushing ahead. I presume the idea of the "referendum" is to give people a quick way of saying "you don't have a mandate for this particular action". Blunt instrument but effective? I agree on Capital gains tax discussion - the time is right and people barely flinched when Labour offered it up as policy in the lead up to the election. maybe even capital tax as proposed by Gareth Morgan - oooooooooooo . . .

    Warkworth • Since Oct 2007 • 297 posts Report Reply

  • Sacha, in reply to Hilary Stace,

    He might not be so lucky when the next crisis, such as pandemic scare, hits.

    those 'back office' staff proved invaluable.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Joe Wylie, in reply to Stephen Doyle,

    Whatever happened to good old fashioned nationalization. Is it now such a dirty word that no "left wing" party will utter it?

    Isn't there some adage about nationalization being what governments do after they've run out of things to sell?

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Russell Brown, in reply to Craig Young,

    Judging by David Parker's hints about tax reform on the radio this morning, it looks like Labour's going to have quite a lot to say about a CGT.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • BenWilson, in reply to Stephen Doyle,

    Whatever happened to good old fashioned nationalization. Is it now such a dirty word that no "left wing" party will utter it?

    I wonder if it's because of the first 9 letters in the word ;-)

    Welcome to PAS, blood.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Sofie Bribiesca, in reply to Hilary Stace,

    The Ministry of Health has been quietly shrunk and is now operating more as a business model Health NZ than a Ministry for the Public Health of NZers.

    Ryall is full of shit. My friend who is a specialist at AK Hospital is now doing two peoples work, with no time for lunch break and reductions in funding for the dept she works in. He is manipulating figures which the Herald has questioned but which he just dismisses.

    here and there. • Since Nov 2007 • 6796 posts Report Reply

  • Bart Janssen, in reply to James Butler,

    Why bother? Gold has no intrinsic use

    It's SHINY!

    Auckland • Since Nov 2006 • 4461 posts Report Reply

  • Kumara Republic,

    And finally the PSA might be growing a pair. Those who have nothing to lose could wilfully spring a leak or 2. And they could do worse than to call on ex-public servants now in Oz.

    The southernmost capital … • Since Nov 2006 • 5445 posts Report Reply

  • merc, in reply to Kumara Republic,

    The first two comments are gold.

    Since Dec 2006 • 2471 posts Report Reply

  • Stephen Doyle, in reply to BenWilson,

    Thanks Ben.
    Is Labour ever likely to consider the n word. Even as a scare tactic to derail the whole sale process?

    Stillwater • Since Nov 2011 • 28 posts Report Reply

  • Kumara Republic, in reply to merc,

    The first two comments are gold.

    Indeed. The usual Randroid trolls are sensing the barbarians are tearing down the gates. BTW, that's not the same Ian McKinnon who's the Wellington deputy mayor.

    The southernmost capital … • Since Nov 2006 • 5445 posts Report Reply

  • Sacha, in reply to Stephen Doyle,

    Is Labour ever likely to consider the n word.

    No. But Mana might.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha, in reply to Kumara Republic,

    And finally the PSA might be growing a pair.

    could make all the difference this time if the unions refuse to roll over like they did in the 80s and 90s

    Ak • Since May 2008 • 19745 posts Report Reply

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