I can’t decide how to vote in this referendum
I don’t know… I just really don’t know.
I was never convinced by the case National made in 2011 for selling 49% stakes in certain state assets. I didn’t really understand what they were trying to achieve. First, they would use the proceeds to pay off public debt. Then, they would use the proceeds to build schools and hospitals. I realise you can do both, but the more you do of one, the less you can of the other. Clearly debt wasn’t that pressing an issue. Then, they would give “mums and dads” a chance to invest in some of New Zealand’s best performing assets. So they obviously thought they were high-value, presumably because they brought good dividends. But they also thought a good way to balance books was to sell them. Which explanation flies?
At the same time, Labour’s opposition tactic baffled me. Something emotional about “owning our future”, whatever that means. Something nationalistic about being “tenants in our own country”, as if I felt ownership because my government owned it. Something about profits going elsewhere, when presumably the sale price reflects anticipated profits. It amazed me how a technical economic topic could become as emotion-driven as marriage equality. As unconvinced as I was about National’s case, I couldn’t see why it’d be a disaster, either.
Here’s what I never got. If you think the government will “win”, as in, get a good price for the shares, then you must also think that these New Zealand “mums and dads” will be paying a premium for them. Conversely, if you think that that it’s a real opportunity for investors, then you must also think that the government will get lacklustre proceeds from the sale. So either the government cheats itself, or it cheats its constituents.
Okay, not quite. Firstly, you might think that neither party will win or lose, and it all won’t be much different. But then, why the hype, the angst, the excitement? Secondly, you might think it is a win-win, like most economic transactions. But stocks don’t work like consumable goods: their value (in general) is in their capacity to make you money. Thirdly, you might take the ideological line, about states being bad conductors of business. But no-one made this argument. They couldn’t, because National was going to retain a controlling stake.
This tension might seem convenient to opponents, but a similar one strings them. If the assets are high-value, as Labour and the Greens campaigned in 2011, then selling them means giving up good dividend streams—but also getting a good price from buyers. If the assets are low-value, as Labour and the Greens think now, then selling them means getting disappointing sale proceeds—but also ridding its books of poor investments. Either way, the price will (presumably) reflect the value of the asset.
So when asset sales became the defining issue of the election, I never got it.
After the election, the re-elected National government proceeded to do exactly as it said. And Labour and the Greens continually claimed that National didn’t have a “mandate” to run the sales. Why? Because polls showed that 70% of New Zealanders opposed them.
There is a huge meta-question behind that chain of logic. If the majority of a constituency opposes a policy, is the government obliged to follow them? How do you ascertain that for every single policy? Everyone made this issue the defining question of the election, and one side lost. Why does or doesn’t that constitute a mandate? What does that mean for the concept of representative democracy? When do we abandon it in favour of direct democracy?
Frustratingly, those questions got almost no attention. I don’t intend for this post to be an analysis of constitutional principles (hint: this means you should not comment giving or asking for an analysis of constitutional principles), but to provide some context, briefly: I think we elect governments to do a job, and then let them do their job. There are lots of nuances to this, and I think it’s important to hear opposition, but I don’t think polls should alone be enough to dictate government policy.
So when National proceeded, I wasn’t fussed. I don’t think it’s an affront to democracy, and I can’t see why it’ll be hugely either damaging or beneficial.
I actually abstained in the last citizens’ initiated referendum, because I thought the question was dumb. My threshold for boycotting a vote is very high: along the lines of, there is no correct way to answer the question. Otherwise, in general, I think people should vote in referenda. Tactically, there’s no way to distinguish between a boycott vote and an apathetic one. In principle, even if opposed to citizens’ initiated referenda, I think we should change the system, not try to undermine it.
So I’d like to vote. If someone can suggest to me why I should vote one way or the other, I’m happy to hear it. But please don’t revert to ideological references to the past, emotive nationalist ownership arguments, arguments that contradict the 51% stake thing, or other ridiculousness. And please try to be consistent. If you think a low price makes it a failure, I expect you to think that a high price makes it a success. Otherwise, find an argument that isn’t premised on the amount of proceeds or dividends.