But, he could also have included some assessment of the impact of the MRP delay and the options presented to the government by the Waitangi Tribunal, which, if taken seriously, constitute an additional raft of investment risks which possibly exceed those which Oram considers.
On the positive side, electricity generation and distribution in New Zealand should be a sound strategic investment, principally because it is a virtual monopoly and also because it is a strategic industry essential to the day to day functioning of our nation. Apart from one significant generator, Contact Energy, the others are all owned by the New Zealand government, which also owns the National Grid, Transpower.
In spite of some degree of blatant government nepotism in the appointment of directors to the boards of these companies, by and large the boards appear to do a sound professional job. Governance is not currently an issue in the generators. The electricity industry returns significant dividends to central government coffers annually. So, by any measure, an investment in a principal generating company such as Mighty River Power should be a very good move indeed, should it not? And government retaining a 51% shareholding might, to some, be an additional measure of comfort - after all, if you cannot depend upon the government to look after our national interests, who can you trust? And Government Bonds are said to be the safest of all investments, and used as a base line against which some interest rates and other forms of equities are measured.
Notwithstanding this shift, the taxpayer-funded Maori Council has threatened to take the government to court to seek an injunction to prevent any sale until Maori interests have been investigated and obviously settled to their satisfaction. (What is this, if it is not a direct threat or challenge to the government’s ability to govern?) Suddenly, the deal is off-at least until April-May next year. What was stated to be absolutely critical to the governments fiscal management programme ( ie floating MRP this year) is now seen to be not quite that important after all. No matter that this delay is estimated to cost the taxpayer an additional $10 million.
Professor Martin Devlin has a distinguished career in the fields of education - in business, management, entrepreneurship, and corporate governance - in the private business sector, and in the NZ Army. He was appointed an Officer in the NZ Order of Merit, ONZM, in the Queen’s Birthday honours in 2011 for services to education. He is a fifth generation New Zealander.