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Add a Comment (Go Up to OJB's Blog Page) Non-Commercial TVEntry 987, on 2009-04-14 at 20:15:19 (Rating 3, Politics) It seems that the National government is starting to show its true intentions when it starts making decisions such as shutting down the review of broadcasting regulation. Of course we should never be surprised that National would ignore the greater interests of New Zealand to further its ideological agenda of decreasing regulation and giving foreign corporations even more power than the already have.
If you vote a right-wing party into government then you are going to get right oriented policies. A center-left party like Labour would have probably taken a different approach and that's also to be expected. I'm not saying National shouldn't have done this because its in line with their political philosophy. New Zealand voted for them and now they will end up with a foreign owned company (Sky) becoming a virtual monopoly at the expense of easy access to New Zealand culture on TV (especially sporting events). After all, people get the sort of government they deserve!
If you read this blog much you will know I don't have much confidence in pure capitalism. If you want quality TV programming then you need to throw out private companies because they will always follow the quick profit for minimum effort model (there might be a few exceptions but this is overwhelmingly true).
We cannot expect a purely commercial model to produce good TV. It hasn't worked before and all the better TV produced overseas seems to come from organisations which aren't purely commercial, like the BBC.
The plan suggested by some people for turning TV1 into a non-commercial state broadcaster would have been the best idea I think. Why do so many people assume that every service has to be delivered through a purely commercial model? Wasn't that the sort of philosophy we had in the mid to late 80s and early 90s? Did it work then? No, it didn't, and it never will because pure commercial pressures are almost always contrary to variety, quality, and originality.
In the end it might not matter so much because the Internet is changing the way people view media. Ironically, the National government's plan to provide high speed Internet will help make traditional broadcasting far less important. Its interesting to note that their Internet plan is not based on a purely commercial model because private enterprise has totally failed to provide decent Internet services in New Zealand just like it has failed to provide any decent services here.
So it looks like TV will just continue to get worse but I hope the excellent plan this government has to create a fast Internet network will make up for that failure of imagination. Note to the government: forget about using Telecom's Internet connection to the rest of the world. They are deliberately providing a substandard, expensive service there (another failure of the free market). So you need to plan for a fast international connection too!
 Comment 1 (1981) by SBFL on 2009-04-20 at 06:31:08: (view recent only)
For every complaint you have of a private company you fail to point out that we are still enormously better off than when it was still state owned!! And you then somewhat pathetically always take a simplistic view..."another failure of the free market" - noone said it was perfect but everything you enjoy in life now is a result of the free market you live in. Only the Greens come close to anti-free market, so your political views are now well defined - socialist bordering on Communist!
Now to TV. Hands up all who GENUINELY believe that a non-commercial TV ONE owned by the state will be a viable entity with quality programs in little ol NZ? Of course OJB fails to say who's going to pay for it...even pipe dreams cost money OJB! Anyway, does any model provide quality programs?  Comment 2 (1988) by OJB on 2009-04-20 at 20:37:12:
You think private ownership is always better than state ownership. Does that include "hybrid" schemes like SOEs? Can I point out a few examples. Telecom: new equipment put in by government, run down ever since. Railways: just about completely destroyed. Had to be bought back by government. Air New Zealand: just about destroyed until bailed out by government. Banks: mediocre services and excessive fees until Kiwibank was created.
Sorry but there's just no way that private ownership will deliver the best outcome in most cases. The sort of people who run these companies are generally completely motivated my greed. It just won't work.
So here we go with the communist label again huh? Is that your standard answer to try to discredit anyone who disagrees with you?
Private ownership is OK for things that don't really matter but I think we should have better control over core services like transport, power supply, telecommunications. Comment 3 (1991) by SBFL on 2009-04-21 at 07:11:36:
We can debate again private vs public ownership till the cows come home but we've been there before. Yes I think private is always better in the long run, though happy for the govt to have non-management minority ownership for startegic assets (i.e. selected infrastructure). On the whole, necessary checks and balances should be determined by light regulation, including the commerce commission.
True, the implication of Communist was raised again, but based on fact right? Labour is pro free market. Maybe not as pro as those to the right of them, but in general, pro, like most of the western world. So where does that leave you aligned? Comment 4 (1996) by OJB on 2009-04-21 at 11:44:52:
That's your opinion on private ownership but do you have any evidence or even anecdotes to back it up? I have given several significant examples of where private ownership has been unsuccessful. Want more? How about the duopoly between Telecom and Vodafone. Both provide mediocre services at inflated prices. How about the fact that we got crap broadband from Telecom until strong regulation was introduced?
I agree that I am somewhat to the left of Labour from an economic perspective but Labour is fairly well right of its original position. My position doesn't really equate with communism though. Comment 5 (1998) by Jim on 2009-04-21 at 17:08:00:
While we are discussing the efficiency of government run companies can I ask what you think of NZ Railways before it was sold in the 1980s. That seems like a classic case of gross inefficiency. Is that a good example of how a government controlled organisation should run? Comment 6 (1999) by OJB on 2009-04-21 at 22:07:17:
Well I agree that railways was run very inefficiently - at least in conventional terms - but it has been badly run while in private ownership too, although in a different way. Also remember that government ownership has changed a lot since then. Maybe the best model is a combination where the company is run like a "real" business but still has some guidance from the government to ensure greater goals than just a quick profit are pursued. Comment 7 (2000) by SBFL on 2009-04-22 at 08:22:47:
Actually Telecom was run like a dogs breakfast before that was sold in the 80s as well. OJB - you have nothing but politically speculative anecdotes based on selective timeframes. Back in your "good ol days" of government ownership and control, a duopoly was a pipe dream for consumers! Comment 8 (2001) by OJB on 2009-04-22 at 11:14:00:
And I think you are also very selective about the cases you use in evidence. I am only trying to say that both private and public ownership have a place. You are claiming that private is always best. It seems that you have the harder case to prove and the least evidence in support of that case. Comment 9 (2019) by SBFL on 2009-05-23 at 08:25:42:
Nonsense. Telecom is always one of your pet examples, so hardly selective. Actually maybe private is not best but my point is it is better (than state owned). You often forget this. It's all too complicated to decide on a "best", but evidence has shown again and again, that shareholders provide the better model for a company than the state.
Read this speech. Comment 10 (2024) by OJB on 2009-05-23 at 12:56:50:
SBFL said: evidence has shown again and again, that shareholders provide the better model for a company than the state. Can you show me this evidence? It has been shown again and again then it should be pretty clear and unambiguous, right?
You want me to read a speech by a right wing party politician? No thanks. Let's stick to the facts instead. I mean a National party member is hardly likely to be presenting an unbiased opinion! Comment 11 (2026) by SBFL on 2009-05-24 at 19:59:37:
Why bother when you refuse to read it anyway? Can't have anything that makes claims contrary to your beliefs, now can we. Anyway I'm sure that a Google search can find plenty of references to cases where public ownership has only held back an organisation. I think your baby, Telecom, makes a load more money that it used to. Shame you didn't read the article Groser speaks of getting the right govt regulation in place, mentioning it needs to catch up. Comment 12 (2030) by OJB on 2009-05-24 at 22:13:28:
But getting back to the evidence for the superiority of private ownership where the "evidence has shown again and again". Where is it? Surely you're not saying that just making more profit makes the company superior? Comment 13 (2035) by SBFL on 2009-05-28 at 06:32:40:
All around you. Banks, telcos, energy.... There are many factors, and profit is just one, but yes not the be all and end all. Shareholder value is probably a better measure, improved service also, but of course they are all related to each other (most of the time!). Bullies and poor performers get punished by the customers, unless they are protected by a state monopoly. Then we suffer. Of course I am speaking in general terms, not doubt there are isolated examples to the contrary. But over time.... Comment 14 (2055) by OJB on 2009-05-28 at 22:08:40:
You seem to be talking about the ideal, theoretical case rather than what really happens. Look at the NZ cell providers for example: what a duopoly that is.
Banks! Are you for real? Closing branches, charging for the simplest services, shipping huge profits overseas. Its only since Kiwibank arrived that they have had any real competitive pressure at all!
Energy! Ha, you jest, surely? The oil companies are really good at increasing the prices but they take their time reacting to price drops. And even this government is investigating the "competitive environment" in the electricity industry.
Isolated examples? I would say the isolated examples are where the great free market system actually works! Comment 15 (2062) by SBFL on 2009-06-04 at 08:24:51:
But isn't a duopoly better than a monopoly (what we used to have). Like I said it's not perfect but better.
Re banks: you sound like a talkbalk radio caller. I hate branches, avoid them like the plague with their queues full of nanas chit-chatting with the tellers. Re fees, NZ probably the better of countries by international standards, and you can negotiate to remove (most of) them if you try. Kiwibank...isn't that the bank that runs and anti-Australian-bank-owned campaign yet runs part of its call centre from Australia? A bit hypocritical don't you think?
On fuel, those companies have always been privately owned (and yes they are pricks) but you should go to Indonesia where it is all state owned. It's much worse, that's my point.
Re power companies, yes but they are making more money aren't they?..;) Therefore arguably a better model? Got to be some evidence for you. Is it a "quadopoly" or a cartel? Some regulation may not go amiss, but I wouldn't get too upset, in time it is the better model (than a state owned monopoly). Give it a chance to come right. Remember the M.E.D.? (if not, maybe that was just in Chch). Wow, that was service for you!!
As for your other baby, KiwiRail, I see it has become a resounding success with its value halving in 12 months. Maybe we need to give it some time, or is it the "sale of the century" as the aussies call it? Ouch. Comment 16 (2073) by OJB on 2009-06-04 at 21:45:03:
You would think a duopoly might be better than a monopoly but looking at telecommunications in New Zealand I sometimes wonder.
If Kiwibank are using foreign call centers then I totally condemn them for that. That is totally unacceptable, especially considering their advertising. Of course, they are run like a "real business" so all concepts of right and wrong will be forgotten.
I don't think you can compare NZ fuel companies with one in Indonesia because that's a totally different country. Individual cases can show one side or the other to be superior. My point is that both systems can work and we should never assume private ownership is always the best.
Making more money is a better model? Well if that's your criteria then I can't argue. I like to look at the bigger picture though. Give it a chance? I don't see nay sign of improvement so far. We need regulation and that alone is a sign of failure of the free market.
I think it was stupid spending so much buying rail. They should have created regulations which either forced the owner to provide real service or to sell at a reasonable price. Comment 17 (2081) by SBFL on 2009-06-05 at 10:20:00:
You missed my point on the fuel companies. I was comparing models, not countries. And even if we were comparing countries...so what? Comment 18 (2086) by OJB on 2009-06-05 at 17:37:27:
I was saying that choosing a government owned company from a country which has a culture we would probably not agree with and comparing it with private companies here in new Zealand is not a fair comparison. It would be like comparing Kiwibank with the privately owned First Bank of Afghanistan (I made that up but you get my point). Comment 19 (2088) by SBFL on 2009-06-06 at 05:06:12:
What do you mean by "which has a culture we would probably not agree with"? And you have still missed my point. Economic methodologies cut across cultures and countries. Comment 20 (2092) by OJB on 2009-06-06 at 19:58:34:
Actually I was thinking that the country didn't have as free a government as it actually has, but it seems that I was wrong. On the other hand I don't see what's wrong with the fuel industry there.
From Wikipedia: Badan Pusat Statistik provisionally valued the petroleum refinery industry at 119,833,900 million rupiahs in 2006 thus registering over 139% growth since 2003 while the liquefied natural gas industry was valued at 53,791,300 million rupiahs in 2006 thus registering over 94% growth since 2003. Seems fairly successful!
And the main reason the government owns these companies is because the private sector screwed things up completely in 1997. Comment 21 (2100) by SBFL on 2009-06-13 at 09:01:35:
Excellent theory. Mediocrity is your speciality! I would love to see explain to the millions of poor there why it is okay for the govt monopoly to reject competition and force them to pay prices that suits the state. And don't get me started on the service. The ironic thing about the left is that say they defend the poor yet (probably unwittingly) go to extremes to make it worse for them! Comment 22 (2111) by OJB on 2009-06-13 at 16:15:55:
in the past you have defended companies by quoting their profits and growth. I just thought that you would be impressed with this company's stats in that area which indicates, buy those criteria, that its very successful! Comment 23 (2114) by SBFL on 2009-06-16 at 08:43:07:
To be fair we have gotten two topics intertwined here. One is what (model) is best for a company, and the other is what is best for the market. For me a state owned monopoly is best for a company (profit wise), but not for any potential competitors (other companies), and certainly not for the market (taxpayers, consumers). Even if a state monopoly reams in cash for the govt, it usually gets lazy as a result and the service suffers (they have no incentive to improve). Also by being lazy and having no competition to compete against, so they also get horribly inefficient, which generally means they aren't making as much for the govt as they could be. And this is why Labour introduced Rogernomics into our country. The End. Comment 24 (2118) by OJB on 2009-06-16 at 11:19:57:
I wasn't really worried what was best for a company or a market, more what was best for society in general. Some people will say what's best for a market is best for society but I see no proof of that. Sure, some state monopolies get lazy but so do private companies: I've given plenty of examples of that. Labour introduced Rogernomics because they were hijacked by extreme political ideology. The end. Comment 25 (2156) by SBFL on 2009-07-01 at 10:54:30:
This is why idiot politicians shouldn't be involved in businesses:
"The final valuation of KiwiRail was $369 million – more than half the price the Government paid for it.
The Labour government bought TranzRail from Toll on July 1 last year for $690m. A provisional valuation in the government financial statements in September 2008 put the value at $442m.
Today Transport Minister Steven Joyce said the final valuation by PriceWaterhouseCoopers was $388.29m.
A Treasury report said a fair value for KiwiRail at the purchase date would have been $369.54m.
"This results in a final financial loss on acquisition of Toll NZ Ltd of $320m," the report said.
In Parliament Mr Joyce said a further $210m was spent on loans and $90m on operational subsidies.
"It's quite obvious to anyone looking at this transaction that the previous government significantly overpaid for KiwiRail and paying that much handicaps its future," he said."
Keep reading the article if you're up for it. Comment 26 (2157) by OJB on 2009-07-01 at 17:51:59:
I totally agree that the government shouldn't have paid that much for KiwiRail but did they have a choice? The private sector had systematically destroyed the rail system and its too important an asset to have allowed them to continue in that incompetent and/or corrupt way.
In my opinion what they should have done was introduce tough regulations. This would either have forced the previous owner to run the railways properly or sell it a reasonable price, plus we might have got the added bonus of discouraging future foreign investment! Comment 27 (2158) by SBFL on 2009-07-02 at 00:43:47:
Of course Cullen had a choice. You have 60 secs to work out his alternative option!
I love how you believe "discouraging future foreign investment" is a good thing. Classic far-left thinking..."No, no! Keep your money away from NZ! We don't want it! We don't want more growth and jobs here. We prefer to be like Zimbabwe!"
But more concerning is your preference for blatant bullying " introduce tough regulations...forced the previous owner to...sell it a reasonable price,". Let me tell you who has done similar recently - Chavez, with Venezuelan fuel and cement industries. Several companies have gone to International Courts, and do we really want to head in the same direction as that country? Comment 28 (2160) by OJB on 2009-07-02 at 10:28:43:
Not sure what alternative you were thinking of. After 60 seconds I'm still not sure. Maybe you could clarify.
Many foreign companies seem to treat their "investments" in New Zealand with contempt. It just goes on and on: railways, telecommunications, banks. When will you "far right" understand that people from other countries don't invest here for our benefit. They do it because they think they can exploit our economy for their own benefit. Is that really what we want?
And you shouldn't introduce a false dichotomy here. Having tight control over foreign investment is not the same as taking the extreme course Zimbabwe has. That type of idea is quite disingenuous. Comment 29 (2165) by SBFL on 2009-07-03 at 10:52:43:
Not to waste taxpayers money buying TranzRail of course!! Even if one agrees that rail (how archaic that sounds these days) should be nationalised, then that was not the time. And the price was not the right one. Can you imagine how much better that cash could have been spent on social services (even before the global economic crisis)?
Hey I may implied your views as "left" but I didn't use the term "far". You know me well enough to know "far right" doesn't fit with me. Anyway, back to the matter at hand, you are right in that foreign investors probably don't have NZers wellbeing as their primary interest, but that's not the point is it? Their money - for return on investment - incidently creates growth and jobs. That's the point. This creates wealth for all sorts of people, including your local tradespeople that now get to work on new projects. I wish you could see that foreign investment actually creates wealth for your classic "local kiwi battler" (man I hate that term). Without any inflow of cash, things get pretty static. It is not important that foreign investors do not act as social welfare providers in the sense you wish, it is only important that their injection of cash creates growth, which in turn creates jobs (and wealth) from the new local managers needed to the technical and tradespeople needed, to the cleaners of the new offices. Why are the left so against the creation of wealth? Redistribution heads nowhere, creation heads upwards. Comment 30 (2166) by OJB on 2009-07-03 at 11:06:31:
Maybe the continued destruction of what is re-emerging as a key asset wasn't acceptable. They made a mistake paying so much, but the actual decision to buy will be shown to be the right one, I think.
You actually said my idea of discouraging foreign investment was "Classic far-left thinking". That isn't true and I made the point by labelling your ideas (equally inaccurately) as "far right".
You then bring in the classic argument that its OK for foreign investors to exploit us because we get jobs, etc. Well do the sums. The amount of cash brought in by Telecom (for example) is much less than what they steal from us every year. Would we not have been better to borrow the money and make the investment ourselves? Of course we would. Maybe a public-private partnership or an SOE model would have worked better. I can't see how it couldn't have.
These people aren't creating wealth. This is another weird piece of propaganda the right use. Unless you print money you are just redistributing it. I can't see the difference between bringing in some wealth from overseas then taking back a lot more than redistributing it internally (expect the second option is much better for NZ). Aren't both of these forms of redistribution? Comment 31 (2172) by SBFL on 2009-07-03 at 12:37:36:
If they paid a fair price you may (one day) maybe have a leg to stand on. As it stands, I'm not holding my breath (though still paying for it via taxes).
But refusing foreign money is classic far-left thinking. Do you deny? Labour at least weren't this stupid.
I never said 'exploit', you did. You said 'steal', I didn't. Sounds like you are ideologically inclined here - not objectively. Why don't you spare me the emotion - you know I have no time for it!
I like how you seem in favour of public-private partnerships. A discussion for another day (health).
"Unless you print money you are just redistributing it." I can see I gave you too much credit than you deserve. Sorry, a bit mean, but for goodness sake, what planet are you from? Did I not already ask that fresh cash in from outside NZ tends to result in more opportunities for your classic local tradesman? Why is growth so evil to you? Is it okay for NZ companies to invest overseas, but so bad for overseas companies to invest in NZ? For a guy so hung up on logic you really lose it in ecomonics. Stick to the stars and religion! Comment 32 (2173) by OJB on 2009-07-03 at 13:24:04:
Well that's almost an admission. We both agree they paid too much but you concede it might turn out to be a good thing that we now own the asset. I'm happy with that.
Foreign money is fine as long as its examined carefully. I'm against free foreign exploitation, not investment in general. I would have preferred telecommunications to be modernised while still under NZ control for example, instead of selling it off to an overseas company and losing billions every year as a result.
Yes, I think PPPs can work in some situations. Seem like a good compromise to me (I am realistic).
Telecom (for example) have invested a certain amount but taken out many times that. How is that a win for NZ? Since they arrived the workforce has dropped significantly. How is that a win for employment in NZ?
And you know its not just Telecom, same thing with the banks (just to choose another example at random). Are you sure its not you who can't see the simple logic in this situation? Comment 33 (2178) by SBFL on 2009-07-06 at 10:12:51:
Hmmm, let me clarify. Saying "having a leg to stand on" meant that they might have more oomph to their argument, a far cry from me conceding "it might turn out to be a good thing".
I don't have the numbers on Telecom's employment numbers over time, but if they have reduced numbers to be more efficient, more competitive, then that is fine for me. Holding pointless, redundant jobs for the sake of NZ's employment level is a road to ruin, and then everyone loses. The number of employees must fit reasonably and rationally within their scope and size. Waste is never a good thing.
"Are you sure its not you who can't see the simple logic in this situation? - sorry not sure which situation you are referring to here? Foreign investment? Loss of jobs? Anyway I refer you to above paragraph. Comment 34 (2180) by OJB on 2009-07-06 at 11:52:57:
You're arguing minor points of semantics now. We agree the price was too much and I think we agree some good may come of it in the long run (I'm more optimistic than you though).
First you say foreign investment brings extra employment to the country then you defend Telecom for laying off most of its skilled and (previously) loyal employees. You also seem to be saying that whatever employment level Telecom chooses then that's OK.
That's not only a circular argument and you also seem to be saying that foreign investment creates employment but when its shown it doesn't that's OK too. Well it either increases employment or it doesn't. Clearly it doesn't, so you should stop using that argument.
I was referring to the printing and redistributing money argument you criticised me by claiming I didn't understand above. Comment 35 (2182) by SBFL on 2009-07-07 at 07:02:32:
No that is not semantics, that is clarifying my intent. Significant for me as I felt I was misinterpreted. You don't mind me setting the record straight, do you? Honestly, I don't think any good will come of the govt buy-out, but a better price means a smaller negative return on equity.
I stand by everything I said. To be honest I am not sure how much foreign ownership in Telecom, then and now, but my preference is for privatisation and being efficient. Of course more money into NZ means more jobs generally speaking, but the jobs must be real ones for any company to compete and survive. No patsy jobs. Waste is bad. I believe you and I differ in that I take a longer term view than you, and I don't say that in a derogatory sense (by the way).
Okay I have read further back but still don't really follow that comment of yours. I mentioned that investment creates wealth in multiple areas. I think you said beforehand that they didn't. Comment 36 (2183) by OJB on 2009-07-07 at 14:17:10:
OK, so you have stated no good will come of the buy out. I wonder how we could establish whether you are right or wrong in a year or two? I guess you would want to measure the success or otherwise based on simplistic measurements like profit, where I would want to look at the bigger picture, so it seems unlikely we would even agree on a way to measure success much less whether it has actually been achieved or not!
Your preference is for privatisation, mine is for getting the best outcome for the country. I wonder which of us is right? You want efficiency which usually means less staff (and poor service) but you cite more employment as a reason for foreign investment. Do you see where I think you are being inconsistent?
You take the longer term view? Really? I would say that since I take into account social issues, the long term effect of shipping billions in profit overseas, and the ability of the government to shape our services for the good of the country where you look at the profit at the end of the financial year its me who has the long term view. And I do mean that in a derogatory sense!
I really can't even remember what the last comment was about now so let's just give up on that one! Comment 37 (2197) by SBFL on 2009-07-11 at 11:53:49:
Well even if I used only a simplistic measure such as profit, at least it is more defined than "look at the bigger picture". Seems to me you are more ideologically based rather than results based. Symptomatic of the left.
"getting the best outcome for the country" - another mean-nothing quip. And do you assume that privatisation and "getting the best outcome for the country" are mutually exclusive? Of course, I don't.
Why does less staff equate with poorer service? I spoke of removing waste. Waste means no value was being generated in the first place, so therefore no service is lost. Investment (foreign or otherwise) creates jobs. Have spoken on this already. Investment needs people to grow it. People = jobs. Pretty simple stuff really.
What social issues? If money comes in (investment) and money goes out (profits) than what's the problem? You can't have your cake an eat it too. If there is no reward for the risk then no money will come in. Obviously then you want no money to come in. If your ideology is so great why isn't everybody doing it? Isn't it somewhat small minded to be discriminate on mere international borders? Please also remember that government services are reliant on taxation, and taxation comes from income, and income comes from investment. Less investment = less jobs = less taxation = less services. Again, pretty simple stuff really.
You really shouldn't be so racist when it comes to foreigners wanting to put their money into our country. It benefits us. Just look at Ireland from the mid-90´s onwards, compared to Ireland of the 80's and earlier. Foreign investment works and everybody wins. Creating wealth and growth is good for 'the man on the street', it lifts people out of poverty because jobs are created. These people with their new jobs spend their income, creating more jobs. A government can never do this alone, as their (tax) income begins at ideas that become investment (domestic or foreign). Governments should stick to governing.
If I didn't know better, I would say you're a communist at heart.
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