Veteran anti-market critic Frank Macskasy writes (Letters, Dominion Post, 31 January), “why should Kiwi mum and dad investors buy something that they already own?”
Taxpayers are indeed the true owners of SOEs (and other government assets). A perfectly viable approach would be for the government to simply give shares in SOEs to them. This is not necessarily the best approach but it would yield benefits because of the disciplines of private ownership.
A variant would be for the government to give shares to taxpayers but to set up a trust into which shareholders could gift their shares if they valued collective ownership.
Would Mr Macskasy be happy with either of these approaches, I wonder?
But if the government simply sold shares, Kiwi investors wouldn’t just be buying what they already own (or, rather, buying more shares than they currently indirectly own). Those investors who bought shares would be paying fair value for them to all taxpayers (including themselves). All that would be happening is that the asset portfolio of taxpayers would be rearranged (so that the government had less investment in risky commercial enterprises and more in, say, roads, hospitals, schools etc. This is an argument prime minister John Key has been making. Why would this be a bad thing?