Daphne Lawless

Why does the New Zealand state own for-profit companies, anyway? We’re taught at school that the purpose of state ownership is to enable economic planning and fulfil social welfare functions. But the State-Owned Enterprises of today aren’t doing any such thing. In the last month, we’ve had announcements of at least 1000 jobs at Telecom, while Solid Energy have cancelled the $10 million in funding they provide to West Coast communities (to compensate for the ongoing despoilation of their environment).

Meanwhile, especially since the government abolished its Charter, Television New Zealand certainly has no public service character which distinguishes it from its commercial competitors. And with power prices for working families going through the roof, we certainly don’t get any benefit from state ownership of power generation.

The justification for the state hanging on to these large corporations is to keep them in “Kiwi” hands, and to pay the state a dividend on their investment. New Zealand has had a history of failed privatisation – both Air New Zealand and our national rail network had to be taken into public hands after being run down by their new private owners.

Why, then, are the National government so insistent on the part-privatisation of Mighty River Power, in the teeth of mass opposition? And why are they throwing a fit at the Labour/Green plan to bring in a “single buyer” of wholesale power? To understand this, we have to understand the real motives for the corporatisation and privatisation of state trading assets.

Corporatisation and privatization

We are almost four decades into a slow-motion crisis of capitalism. The old Keynesian-interventionist consensus was based on the government, as collective capitalist, using its economic leverage to expand opportunities for profit for the  capitalist classes. This “picking winners” and “demand management” approach is now strongly associated with the Muldoon government of 1975-84 – which happens to be the era when the strategy ran out of steam. All the government investment and administrative diktats in the world couldn’t make the New Zealand economy profitable in the era of the oil shocks and “stagflation”. What was needed was a new way for government to guarantee private sector profits.

The 1984-90 Labour Government pacified the left and the union movement with “social liberal” reforms on women’s rights, Tiriti o Waitangi issues, homosexual law reform and the anti-nuclear stance. This left them free to take a neoliberal machete to traditional models of welfare and public service. The old Keynesian consensus was dead – in particular, the idea of the State sector as a “sponge” to absorb excess labour from the market was doomed.

Labour politicians like Richard Prebble went around the country screaming about the amount of people employed by the railways and the state forestry service to do not very much. But this was always a social welfare issue, rather than a simple issue of business inefficiency. “Make work” schemes, money-losers though they be, encouraged social cohesion and passing on of skills from one generation of workers to another – they were also a payback to the unions for allowing real wages to be eaten away by inflation. [Read more…]

Fightback is endorsing the Aotearoa Not for Sale national day of action against asset sales, on April 27th 2013. The day of action has already been endorsed by the Council of Trade Unions, Unions Auckland, Unite, the Mana Movement, Occupy and Socialist Aotearoa among others.

“The government is set on asset sales despite opposition from 80% of the general population, and 90% of tangata whenua,” says Fightback member Ian Anderson. “We cannot take this passively, or vote and expect capitalist parties to represent us. We must fight in the streets, in workplaces and communities, to take control of assets.” Fightback supports full nationalisation of assets under community control.