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Share sale a win-win for the government

14:01 Fri Mar 8 2013

The Treasury was pleasantly surprised, the government was overjoyed.

Ministers might be wondering whether the $1 million advertising campaign to explain how to buy shares in Mighty River Power is necessary, because before it even started Kiwis were registering their interest at a rate of one a second.

They were reacting to media reports of the government's big bang announcement of the timetable for the share float.

The saturation coverage was partly, perhaps mainly, due to the political controversy surrounding the partial privatisation of the state-owned energy company.

So far it's a win-win situation for the government. The worst-case scenario of public disinterest or even a boycott, briefly dreamed about by Labour and the Greens, has been blown away.

There's no evidence that opposition to asset sales has diminished, and it probably hasn't. Surveys have repeatedly shown more than 70 per cent of voters don't like them.

Is it only the other 30 per cent who want to buy shares? Not likely. They're a good deal, Kiwis are guaranteed $2000 worth and there's going to be a bonus if they keep them for a while, with details still to come.

And an odd quirk is emerging, which the government didn't previously mention so maybe didn't foresee.

A retiree who took part in a Fairfax poll last year and agreed that asset sales were the major thing going wrong in New Zealand was in the rush to register. His reason: "If they're going to be sold, it's better that I get my slice than some foreigner."

He isn't likely to be the only one who feels like that, and if a "keep them in Kiwi hands" attitude spreads the government couldn't ask for more.

It has given what Prime Minister John Key describes as "crystal clear commitments" to do everything it can to ensure 85 per cent to 90 per cent of the shares in Mighty River are bought by New Zealanders.

Failure to meet the mark would give opposition parties a big stick to beat the government with, and they badly need one.

At the moment they're falling back on plans B and C. It's being pointed out that although the pre-registration figure quickly passed 100,000, it's still a tiny percentage of the population and doesn't have any impact on their core complaint that an asset owned by everyone is being sold to a privileged few.

They have a point - 100,000 is 2.2 per cent of New Zealand's 4.4m people. If it reaches 220,000 that's still only five per cent of the population.

And pre-registration isn't an obligation to buy, it's getting a foot in the door ahead of a firm decision.

NZ First's Winston Peters has, as usual, gone one better than Labour and the Greens.

"New Zealand First will use its influence on the next coalition government to buy back our state-owned power companies... at no greater price than paid by the first purchaser," he said.

Peters knows that won't happen because the next government won't be able to afford it.

If he is in coalition he will demand it, then blame the major party for refusing to do it.

It isn't clear how the shares could be bought back at the original sale price, assuming their value will increase.

Right now, none of this is worrying the government.