That the recent partial sale of state assets by New Zealand is regrettable

ContextNZ's government has long been fairly socialist, and primarily for that reason most of our assets are primarily in government control. During the 80s and early 90s, a massive privatization movement by then-finance-minister Roger Douglas took place. After the new millennium, New Zealand began buying back many of these assets at massively inflated prices due to the incredibly poor returns New Zealanders were seeing. The model proposed by the NZ government is a mixed-ownership - the government retains a plurality of the shares (we've learned how bad it is to sell all of them) but sells what stake it can. What we're effectively selling is power companies. In NZ, the power market can be roughly described as an oligopoly, with most (but not all) companies in government control. Due to a large degree to the fact that most of our big companies are owned by Aussies, and they don't like reinvesting back here, coupled with a strong Australian mining boom, wages in New Zealand are incredibly low compared to Australia right now. As a result, many New Zealanders are currently flocking to Australia to seek their fortunes there. Screwing over taxpayersSo here's the deal - the government spent a lot of time, effort and money building up these power companies and all the resources/assets they own and operate. That money was entirely taken from taxpayers in the form of taxation. So far so good - we paid money, and we get something back for that (a shareholdership in our power generation systems). When the government sells the stake that they purchased via the people's money, all that money goes to the government. Although they could be nice about it and hand us all paychecks for the paltry prices they are selling their shares for, they're using that money to stop themselves going into debt over the things that they're already providing to us (. http://bit.ly...). Even if this marginal debt was accumulated, it's no problem. Think about it. The government hopes, at best, to make $7 billion off these sales. That's nothing compared to our national debt of around $76 billion (. http://bit.ly...), which is itself pitiful compared to the national debt of pretty much every other first-world country anywhere. So really what taxpayers get back is not having to pay interest on a tiny amount of marginal debt. New Zealand is not in a debt crisis at all - our individual debt share is approximately equivalent to the price of a new Rolex Datejust watch. But it gets worse. These assets that the government spent millions of dollars of OUR money making, and are now selling for a few thousand in interest payments - the government wants to sell most of them back to New Zealand "mom and dad investors". So they're expecting us to fork out most of the $7 billion they hope to make AGAIN, for shares that we already own. And it gets even worse. A socialised energy sector exists mostly to provide a steady supply at a reasonable price, while a corporatised sector aims to maximize profits for shareholders. In New Zealand, one of our power companies is fully privatized after a similar series of asset sales - Contact Energy. Contact also so happens to be New Zealand's most expensive provider in all regions (. http://bit.ly...) - and they're currently STILL raising their prices with the explicit aim of increasing returns for shareholders (. http://bit.ly...). Long story short, less socialised systems mean we pay more for power. The profits from these increased prices go to the shareholders. Despite assurances many of these will be New Zealanders, we know from the experience of every single state asset we've ever sold that those Australians will buy them up, lowering our wages relative to them further and basically screwing over everyone. After all, demand for power is pretty elastic, so if the Australians have a foot in every part of the industry (like they did for a long time with our banking sector after the privatization of Bank of New Zealand was bought up by Australians) then we're forced to invest in their country to the detriment of ours. Screwing over themselvesAny benefits (in this case, an optimistic prediction of $7 billion) that might possibly accrue from the sale must be seen relative to the opportunity costs that the sale provides. In our case, that's all the income that the power companies themselves generate through the sale of power paid via dividends. A portion of this will of course still go to the government assuming no additional sales are made, but they're basically halving their income. That's a problem because their income is huge, returning an average 18.5% per annum (compared to the cost of borrowing, which is around 4%, so it makes zero fiscal sense to NOT get a loan for those nice things they're already giving us) (. http://bit.ly...).It might help to know that we've been building a lot of new power systems recently, which has of course required large capital outlays, meaning valuing the true returns at 18.5% is in all probability an underestimation. If that doesn't tell you the NZ government is seriously undervaluing the assets then I don't know what will. What's worse, NZ has two big political parties - National and Labour. They each seem to have a policy of undoing each others work, not unlike the Democrats and Republicans of the USA, regardless of how good the policy in question actually is. That's why we spent billions early in the new millennium (under Labour) to buy our stuff back off the Australians, that we sold for incredibly cheap prices a decade earlier (under National). Now National is back in power and selling our stuff. When we buy it back (there's no "if" about it - in fact Labour's sole policy in the last election was that they were NOT going to sell our assets) we're going to pay a whole lot more for it - again. Of course, the Australians know Labour will pay any price for those assets, so it's anyone's guess how massive their demands will be. I should also add that certain legal provisions requiring the state's enterprises to care about their communities would no longer apply under the deal, so communities will be worse off too. Treaty of WaitangiThis is an issue that people internationally sometimes have trouble understanding, so let me explain. When the British came to colonize New Zealand, they did so by signing a treaty with Maori who already lived here at a place called Waitangi. The Brits were allowed to buy land, but the Maori could still keep their important natural assets and became British citizens (much to the annoyance of the French who arrived a short time later). The treaty was at various times neglected, but eventually it was mostly recognized. Importantly, the so-called State Owned Enterprise Act states that the government must act in accordance with the principles of the Treaty of Waitangi when dealing with State Owned Enterprises (like the power companies) (. http://bit.ly...).The courts of New Zealand have already established that this covers things like giving Maori special FM radio frequencies, and have previously also ruled that government asset sales can be in breach of the treaty (. http://bit.ly...). So if radio frequencies, why not electricity? It's not just electricity though. The biggest share of our electricity actually comes from hydroelectric stations - rivers like the Waikato, a Maori resource with Maori water and crucially, Maori fisheries which are specifically protected by the treaty. It got so bad that the Maori Council themselves sued the government in the government's own courts over these very asset sales (. http://bit.ly...).Selling 49% of the companies is like selling 49% of the saying power that Maori have (in proxy via the state) over the resources they are guaranteed undisturbed possession of. Losing 49% of their possession is a huge disturbance.