Thursday, December 1, 2011

a ramble on asset sales and Iwi

There are many people that oppose the sale of state assets, partial or otherwise. National have been elected and are forming the government and that government will be pushing the asset sale agenda. Iwi are beginning to come out with their views and Mark Solomon, Kaiwhakahaere of Ngāi Tahu has stated the iwi position. I am opposed to the sale of any state assets and I also have doubts about Iwi buying into state assets. This post outlines some of my reasons for those doubts, please note it is a bit of a ramble and some of the thoughts need polishing.

Mark Solomon says that Ngāi Tahu have never advocated for the outright sale of state assets. And he explains that at a meeting in Feb 2009 with John Key and Bill English when Iwi leaders were told that the government books were rough and ‘cash strapped’ he suggested at that meeting, “When it comes to the settlements have you ever considered a shareholding in some of the SOE’s as part of settlement packages.” Solomon then says that “the government said that they would not consider it in their first term but they would put it up as a question leading into the next election, and have come back with their model of selling off 49% of the asset.”

My opposition to selling these state assets is that - they are already owned by the citizens, and that they are strategic assets which should never be sold, and that the price they think they’ll get is wildly overrated, and that they have already factored in the price they think they will get, and that overseas ownership is inevitable in this type of scenario, and that it leads to higher prices, and that it leads to further privatisation and commodification of natural resources which is designed to increase profit for shareholders, and that profit comes largely from price, but cost cutting is also there. So selling assets just doesn’t stack up, it doesn’t make sense. But that won’t stop national or their support parties.

Buying shares in these companies is an investment decision. As noted by Mark Solomon, “the returns – simple business decisions – good long term investments and allowing us to invest in our own country.”  At no meeting that Solomon has attended has their been any mention of Iwi having preferential shares. No added benefits to Māori like lower power prices because as Solomon says they would be buying a shareholding in a company and they would be a minority shareholder. It is a business deal. As a minority shareholder Iwi won’t be able to influence pricing decisions – or profit. They will reap the rewards and spread that reward amongst their beneficiaries, even though they are the same people that have paid the higher price to get the profit.

The argument is always put that if iwi don’t get into it, someone else will or why shouldn’t Iwi participate. My answer is of course it is up to Iwi to make their own decisions. And those decisions must be made after full discussion, with all points of view noted. For instance – if the benefits to Iwi members are just around the shareholding, why do it? why should generational striving for justice, paid out as a small percentage of the loss, be used to buy shares in companies, could it not be used in better ways. how is tino rangatiratanga advanced when we buy into the system and its values and place profit at a premium.

Māori should own the assets of this country, from within a Māori worldview and through the front door not the back door - through partnership not fakery and tokenism. Iwi that buy state assets will be minority shareholders and as more state assets are sold the more Iwi will dissipate their power, to ensure they have shares in those assets. This will bleed the power of Iwi and dilute their ability to do anything other than sit there and take their profits. They could sell but who to? Whoever has the money is the answer. There are other ways of growing the pūtea – the rebuild of Christchurch being one, anyway the investment team will decide – based on their objectives. I’d like to see the arguments framed around tikanga and illustrating the lessons from our ancestors and highlighting the benefits to the people and alignment with our values, not just the balance sheet.

If the decisions are investment decisions then that is how it will be assessed, no sense in trying to dress it up differently – there is no preferential treatment in allocation of shares or advantage for Māori in their power bills. There is nothing other than an investment decision – to my mind this is a pivotal point because the investment decision may disadvantage the overall group and therefore would be in conflict with our values. If you invest in a company that gets profit from a basic service like power, and if the price is raised then there is more profit but that profit comes from the higher prices paid by the consumers. They are worse off. The overall group has been disadvantaged. The investment decision assumes a position of dominance to the strengthening of the collective. Anything that assumes dominance against the benefits of the group is rejected, at least in my view. The counter is that the profit goes back to the collective but that profit has to come from somewhere and it comes from the collective itself. Another view is that it will happen anyway so at least some profit is made but that is defeatist IMO because it is giving away our power.

It may be that the Iwi has considered the small points I am making - it just seems to me that the debate must be widened. My opposition to Iwi investment is that the overall benefits to Iwi members cannot be guaranteed and that the decision is just a straight investment decision where other considerations relating to te Āo Māori do not impinge and because of that there is a dominance that does not align with our value of protecting and strengthening the collective, the community. When those reasons are added to the long list of other reasons for opposing asset sales, the case for selling and buying them thins out even more.

Now just to be clear I am a proud member of Ngāi Tahu whānui and I know that there are no clear right and wrong answers much as we would like them. I am not disrespecting the efforts to date to secure mana for the Iwi. I am simply putting up some counter views, constructively, so that wider points can be considered.

Everyone sees things differently, these are just some of my thoughts and I realise they may not attract much support but they come from an iwi member who cares.

Hattip - Pip and Maui St

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