The opposition are claiming National doesn't have mandate to sell SOE shares.
But all talk of mandates is pointless under our system of three-yearly electoral dictatorships. National won the last election and under our electoral system that means a National-led government can do almost whatever it wants.
The public are entitled to be unhappy at National's moves to partially sell SOEs, and to protest over the moves. But National told everyone they were going to do this, and people still voted for them. They have the mandate they need.
Buying back the shares
The idea that Labour should promise to buy back any SOE shares sold by National is a terrible one.
Why would any sane opposition party commit to spending in the future such an enormous amount of money? Where would this money come from? It's possible that a large chunk of the sale proceeds will have already been spent or committed before Labour next gets into office. Besides, nobody knows how much the shares might be worth in the future.
Some people say the solution is for Labour to buy back the shares at the original sale price, or even at a discount, so that investors lose out if there is any increase in the share price. Their theory is that this would make the shares almost unsaleable.
But this is another really, really terrible idea for two reasons:
- National might call Labour's bluff, leaving Labour in the awful position of having to follow through with its reckless promise. Most people may not agree with the asset sales, but we still do want to encourage people generally to buy shares rather than houses. Promising to leave investors far worse off than when they started would send a message that they should stick to real estate.
- It's the sort of thing banana republics do. Like it or not, New Zealand has signed numerous international treaties and trade agreements, and re-nationalising the SOEs while at the same time obliterating the investments of overseas investors would probably put us in breach of a number of international agreements. As a trading nation we can't afford to ignore our international obligations.
Throughout the asset sales debate National Party politicians and supporters have been eagerly pointing out that Labour sold a number of state-owned assets through the 1980s, citing this as evidence that Labour are hypocritical.
This historical fact did not escape the attention of most Labour supporters. But the Labour Party of the 1980s was a very different creature to the current Labour Party. The most prominent cheerleaders for asset sales within Labour went over to ACT some years ago. Those few MPs from that era who remain in Parliament have made it clear asset sales were wrong then, as they are now.
Political parties change. If they didn't we would still be arguing over whether to give women the vote.
It doesn't matter what Labour did three decades ago. If it did we would be entitled to hold John Key responsible for Muldoonism.