November 11th, 2011

Grey Power Calls For Any Asset Sales by a National Government Remain In New Zealand Ownership

Grey Power is strongly opposed to any sale of State assets, a position shared by the majority of New Zealanders, and a National win at the Election cannot be taken by the Government as a mandate to proceed with the unrestricted sale of shares in the State owned power companies.

“The bottom line is that any sale of shares must be restricted to New Zealanders with appropriate regulation to ensure that they stay in local ownership, and are not on sold to overseas investors”, said Mr Roy Reid, President of Grey Power New Zealand.

“It is not a normal commercial situation with the State power companies having the primary responsibility of providing a secure power supply to New Zealanders at a fair price. This is not compatible with the private enterprise market goal of maximizing profits for shareholders.”

They are collectively a monopoly providing an essential service. A full scale share market float to all comers will only lock in a highly inflated market capital base, subject to the fluctuations and sharp trading practices of the international share market that favour only the financial sector to the detriment of New Zealand overall.

The offset for high dividends and share market price rises is higher power prices for New Zealand consumers who are already struggling with a rapidly rising cost of living.

There are middle of the road alternatives that would provide both the capital inflow for the power companies and a safe investment opportunity with a reasonable return, a very attractive proposition for the ordinary Kiwi investors, many of whom are seniors.

One is the concept of a special preference share with a fixed return, topped up with a dividend dependant on trading profit, available only to New Zealanders, both individuals and major investors such as Iwi, and Kiwisaver Fund investment managers.

The New Zealand electricity market is an engineered one, with several Government companies competing ineffectively against each other, with no visible impact on lowering power prices that the so called competitive structure was supposed to create.

The whole sector must be reviewed with the aim of re-establishing an effective State owned power providor. Any sale to overseas interests would make any future review and rationalization very difficult.

Grey Power urges that our State electricity sector stay in Kiwi hands.

www.greypower.co.nz

ENDS

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