Should David Cunliffe buy back flogged off state owned assets?

Apparently David Cunliffe’s seriously considering buying back the sold-off state owned assets. I have never been a fan of this solution to the problem. It suggests that a Labour government’s main role is furiously Ctl-Z backwards through the last National government’s acts, in an attempt to undo their actions.

First of all, at this point it sits awkwardly with NZPower. NZPower is premised on a group of predominantly private generators, who are then heavily regulated. Within that framework, the regulator acts in the public interest, while the power companies look to their own self-interest. If we are going to buy back the power companies, we need to go further and abandon the SOE model (as Giovanni Tiso puts it “And – again, to state the bloody obvious – you don’t need to privatise SOEs to be neoliberal. You just run them as private companies”), and establish a model for public enterprise that isn’t just running them as private companies. NZPower’s attempt to mediate the issue then becomes redundant.

But also, over the past thirty years the NZ state has divested itself of large chunks of key infrastructure. NZ needs to re-establish democratic control of those aspects of the economy that we feel should be under that control. This will require a programme of nationalisation and municipalisation.

The first targets for that programme should not simply be those assets last sold off by the privatisers, but should be determined by a clear analysis of the country’s economic strategy. The Labour Party often writes policy by a simple process of reaction: this policy is about that bad thing the National party has done, this policy about that. But on this issue we need to go beyond simply undoing the last bad thing National did, and answer some deeper questions about the proper role of public enterprise in NZ.

Will we buy back Contact? Why not? Functionally, they are the same thing — is it simply a matter of historical precedence?) It may be that renationalisation of Chorus is on the cards: would it be better to own Chorus, and 51% of the power companies, or would it be better not to own Chorus and own 100% of the power companies?

These questions, that go deeper than simply shifting SOEs to MOM and back again, which require fundamental readjustments to the neoliberal SOE model, and a clear analysis of what in the economy needs to be subject to democratic control and why, are certainly harder. They are certainly not as easy or simple as “will you buy back Meridan?” But they are certainly key to any attempt to re-establish social democracy in New Zealand.

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