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Absolutely bloody outrageous


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When Adam read this article at Stuff

Michael Cullen is being tipped for a six-figure salary as chairman of one of the country’s top state-owned enterprises.

Top of the likely list is power generator Mighty River Power, Government sources say.

on Cullen being tipped to chair an SOE, he wondered if he was reading The DimPost instead. The article seemed that surreal.

Then he remembered this Letter to the Dominion Post Editor of March 5

Letter to the Editor - Dominion Post - 5 March

Letter to the Editor - Dominion Post - 5 March

Adam agrees with Mr Burns, it is time for some revolving door rules in NZ.  Especially where former PMs and Finance Ministers are concerned.

Otherwise the whole thing gets far too incestuous; plus with what has come out about the PREFU and other matters, Adam considers that National are being far too cavalier on the Public Fiance Act issue. Though he suspects that even if the matter was referred to the police, they would do nothing.

Yet it would do the body politic a hell of a lot of good is a case was taken under the PFA, if only to ensure others do not take it lightly in the future. There is an unhealthy lack of regard for the law amongst our politicians in this country.

To return to the initial subject of this post. The idea of Cullen getting such a post, at this time, is not surreal. It is absolutely bloody outrageous and should not be considered, if at all, until at least a full parliamentary term has elapsed.

National must avoid a return to jobs for the boys. Cronyism has had its day and we are suffering the consequences, see ACC. Under National we should not have to regard Ethics as a county in south-east England.

NB, the article in question was by Vernon Small, did Adam not read somewhere that Vernon Small was close to Cullen. Might Cullen be flying kites?

  1. 23/03/2009 14:30

    I think, it’s true what you say


  2. adamsmith1922 permalink*
    09/03/2009 16:45

    I think the reason for the longevity of the ruling party in Singapore is probably down to the following factors:-

    1 Maintenance of power is only achieved through materially enhancing the lot of all Singaporeans over time – health, education, housing, wealth
    2 recruiting top talent into government service
    3 promoting business and creation of wealth as a positive and as a way for all to prosper
    4 low personal taxes and acceptable business taxes
    5 with no resources other than geographic location and the skills of its people, recognising that human capital and business friendly approach were essential
    6 the development of the CPF fund model bequeathed by the colonial power
    7 focus, focus and unremitting focus

    In return the majority accept what many would see as an authoritarian government, but one which delivers and delivers well

    There are some aspects of the Singapore model that bear consideration in NZ, especially around sunrise industries focused on services and virtual business


  3. 09/03/2009 14:50

    Yes I’ll go along with that. What is very surprising is that their government has managed to maintain the commercial focus over a long period of time. This makes the Singapore government unique I would think.


  4. adamsmith1922 permalink*
    09/03/2009 07:25

    I suspect that Singapore SOE equivalents are responsive to their government, but that their government recognises the desirability and benefit of the SOE performing commercially and not as a social arm of government


  5. 08/03/2009 22:02

    I don’t think it’s anything really to do with the New Zealand character, I think it’s more to do with the political system in Singapore which has developed in such a way as to keep governments from interfering with SOEs and the New Zealand system most certainly hasn’t developed this feature.


  6. adamsmith1922 permalink*
    08/03/2009 21:56

    Whilst not disagreeing, what is it in the NZ character that renders the Singapore solution unworkable here?


  7. 08/03/2009 19:53

    Personally I would argue for full privatisation not a partial sale. We have evidence that tells us that mixed ownership firms don’t do as well as fully privately owned firms. For example, Aidan Vinning and Anthony Boardman in “Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises”, Journal of Law and Economics vol. XXXII (April 1989) conclude ‘The results provide evidence that after controlling for a wide variety of factors, large industrial MEs [mixed enterprises] and SOEs perform substantially worse than similar PCs [private corporations].’ The basic problem is that even partial government ownership politicises the firm. Getting the Singaporean outcomes I think is very unlikely in New Zealand. What we know of partial and full government ownership in New Zealand argues against the commercially driven types of results that we have seen in Singapore. The Singaporean case is special and very unlikely to be replicated here in New Zealand. Our best bet is full privatisation.


  8. adamsmith1922 permalink*
    08/03/2009 18:16

    Precisely why the ‘no privatization mantra ‘ is such a disaster.

    As a matter of urgency all SOEs should be readied for flotation. A major educational programme should be undertaken to make sure that people recognise that this does not mean dispoasl but partial sale, with ebenfits for all. This is where the Singapore model, with the CPF has been so successful. CPF as opposed to Kiwisaver is a much better approach, especially as the first use of CPF for non pension use was to allow sate housing tenants to buy their homes, which had effectivelly been financed in the first place by CPF money.


  9. 08/03/2009 18:04

    “I cited the Singapore model, because to my mind, whilst it is a state holding, they have to my mind been much more focussed on growing value than on political purposes as we tend to see them here.”

    You are right, but that’s what makes them such a special case. I just don’t think that a firm with a large state holding would act in a commercial way in New Zealand. In fact Singapore may be the only example of where such firms they have acted in a commercial, rather than a political, way. To get a commercially run firm in New Zealand you have to maximise the distance between the government and the firm, which means privatisation of SOEs.


  10. adamsmith1922 permalink*
    08/03/2009 15:21


    I agree.

    I cited the Singapore model, because to my mind, whilst it is a state holding, they have to my mind been much more focussed on growing value than on political purposes as we tend to see them here.

    I may well be mistaken.

    Yet on balance, I would prefer to see our economy move along Singapore lines in many respects, tailored to our circumstances, than those we have been moving along.

    The ridiculous instance on retaining SOEs in state 100% ownership being a case in point.

    Part of the problem is the lack of rational debate on these issues.


  11. 08/03/2009 15:16

    Adam. I’m not sure how much you can generalise from the Singapore model. I think they are a very special case. Normally when you have a significant state holding, the government use it for all the wrong reasons. And you therefore get all the wrong results.


  12. adamsmith1922 permalink*
    08/03/2009 12:58

    More and more I think this betrays muddled thinking about SOEs as Paul Walker at Anti-Dismal suggests.

    This nonsense needs to be nipped in the bud.

    Floating the SOEs, whilst maintaining a significant state holding, along the lines of the Singapore model would reduce public borrowing, and apply the full discipline of publicly traded ownership to these behemoths.

    Further, it would reduce the dependence of Kiwis on property and finance company investments, especially as I am sure mechanisms could be put in place to restrict foreign holdings.


  13. Colin Lucas permalink
    08/03/2009 12:49

    I’ve only just come across this story after a Saturday in the real world.
    To say I’m mildly irritated about the potential of Cullen becoming the chair of an SOE is an understatement.
    Dog pound cleaner in Waipukarau yes, SOE head no.


  14. showmethetaxcut permalink
    08/03/2009 01:14

    It must be the year’s worst rumour.

    Why would John Key do anything to keep this prick’s head in the troth any more than need be?


  15. 07/03/2009 17:50

    I fervently hope that Vernon Small is merely whistling out of his jacksie, or flying a kite for Cullen as Adam puts it in a more refined way. I daresay thought that Key will have felt the pulse of the nation today!


  16. 07/03/2009 17:46

    This government is looking too Muldoonish for me. I made a short comment on the Cullen SOE job here.



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