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SOE partial privatisations could help narrow the GDP per capita gap with Australia, says Goldman Sachs

SOE partial privatisations could help narrow the GDP per capita gap with Australia, says Goldman Sachs

National proposes SOE floats for Meridian, Mighty River and Solid Energy, and the further sale of Air NZ shares. Goldman Sachs argues in a 12 page report such floats would boost NZ wages and the government's accounts.

By Gareth Vaughan

The Government's plan to sell minority stakes in State Owned Enterprises (SOEs) could help halve the gap between New Zealand and Australia's Gross Domestic Product (GDP) per capita, say economists and analysts from Goldman Sachs.

In a report entitled Mixed Asset Ownership: Benefits Well Beyond Public Debt Reduction, Goldman's Philip Borkin, Bernard Doyle, Marcus Curley and Matthew Henry also suggest the Government' would be 39%, or NZ$306 million, better off financially if the proposed sales go ahead.

The National-led government has asked Treasury to advise it on the merits of a partial sale of Mighty River Power, Meridian Energy, Genesis Energy and Solid Energy, which it would consider if re-elected in November election. The Government's also interested in the possibility of selling down its 76% stake in Air New Zealand, representing an overall potential asset sale worth between NZ$8 billion and NZ$10 billion. For the three electricity generators and retailers and coal miner Solid Energy, the Government envisages an Air NZ style sharemarket listed ownership structure with the state retaining at least 51% ownership.

The Goldman analysts estimate New Zealand's GDP per capita on a Purchasing Power Parity (PPP) basis is currently about 73% that of Australia's, with Australia ranked sixth in the Organisation of Economic Co-operation and Development (OECD) in terms of economic performance compared with New Zealand's 22nd.

"While a number of factors may explain the underperformance of NZ relative to Australia, we believe capital market development, or the lack there of in New Zealand, has played an important role," the Goldman analysts argue. Their comments about catching Australia come after the Government set up the 2025 Taskforce, under former Reserve Bank governor and ex-National Party leader Don Brash, which has the aim of finding ways to help close the income gap with Australia by 2025.

Stronger sharemarket could 'halve the gap with Australia'

Using stock market capitalisation to GDP as a proxy for capital market development, Goldman says the relative differences in stock market capitalisation between the two countries explains some of the differences in GDP per capita.

"We estimate that if NZ's stock market capitalisation to GDP was the same as Australia's, that is, around 90% rather than 29% of GDP, then the gap in GDP per capita between the two countries would be around 15 percentage points narrower. In other words, and all else being equal, the gap between NZ and Australia's GDP per capital would be closer by around half."

They acknowledge, however, that this doesn't address causality and say there are bound to be a number of other factors that explain the difference in relative economic performance.

"Hence this result should probably be used for illustrative purposes only. Nevertheless, we believe it is still interesting and warrants further initiatives to support NZ capital market development."

The Goldman team suggests stock market capitalisation has a positive relationship with private non-residential investment. On top of this, a 10% lift in stock market capitalisation relative to GDP is found to correspond to about an 8% increase in business investment, they suggest.

With three quarters of household assets tied up in housing, SOE floats could be a major boost to direct equity ownership, currently sitting at just 3%.

"While housing plays an important role in sheltering the population, it provides little in the way of flow-on benefits for the economy with regard to productivity and growth," say the Goldman analysts. "Increased participation in equities, or financial investments more generally, would provide a number of businesses with much needed capital to employ and invest." Also see Double Shot interview with Bernard Doyle.

Net impact on Govt's accounts 'positive' to the tune of NZ$306 million

The Goldman analysts also crunch the numbers on the financial impact on the Government's books of a the possible SOE sell down. They note the median dividend payment over the past five years from the four electricity companies, Solid Energy and Air NZ, has been about NZ$500 million representing about 1% of total Crown revenue. Median corporate tax paid over the last five years by the companies is NZ$287 million.

So if the Government sold its stakes down to 51% and dividend flows stayed near the median from the past five years, dividends received would drop from NZ$507 million to about NZ$267 million, meaning a loss in Crown revenue of about NZ$240 million.

However, an asset sell down of up to NZ$10 billion would put "something of a dent" in the NZ$54 billion worth of gross sovereign issued debt, thus reducing debt servicing costs. Using a government bond yield of 6%, the Government could potentially save about NZ$540 million annually if say, NZ$9 billion in proceeds were used to repay debt. Furthermore, financial efficiency gains from a mixed ownership structure could boost the SOEs net profit after tax by about 20% with 80% of this stemming from stronger cost disciplines, they argue.

The Goldman team also analysises the financial benefits  from the previous privatlisation of Air NZ, Auckland International Airport, Telecom and Wellington International Airport, plus the sale of local government shareholdings in Port of Tauranga and Ports of Auckland. This research compared the average financial performance for each company three years before privatisation and three years after privatisation revealing an average increase in earnings before tax and interest (EBIT) margins after divestiture of 5%, from 31% to 36%.

In terms of tax income, they suggest - with a 70-30 local-foreign ownership split - a drop in tax revenue of NZ$104 million.

"Summing these benefits and costs together, we conclude that the Government stands to benefit to the tune of NZ$306 million. In other words, the Government would be 39% better off financially than the status quo."

Free up money to invest in schools, hospitals and even 'distressed dairy farms'

The partial SOE sell down could free up capital for the Government to use for its core functions, the analysts argue.

"That is, investing in schools, hospitals and other infrastructure. The Prime Minister himself has stated this as a key reason. However, we feel the argument goes even beyond this. All else being equal, it frees up capital that could be used to invest in 'more strategic assets.' For example, the Government could have had spare capital to invest in distressed dairy farms."

That would mean foreign ownership of NZ land might not be the "headline grabber" that it is. Other natural or strategic assets the Government could instead own include forestry or mineral resources or ports.

Meanwhile, some of the criticism of state asset sales from the 1980s and 1990s is justified, the analysts argue, given a number of individuals benefited "massively" from the transactions.

"New Zealand, as the seller, was arguable naive in its approach. In addition, the speed at which some transactions occured meant that appropriate regulation and competition measures were not necessarily in place at the time leading to some difficulties and ongoing problems - Telecom and NZ Rail potentially fit into this category."

The difference this time around is the Government plans to retain at least 51% ownership in each business meaning it will have effective control over all major strategic decisions and local investors will be "at the front of the queue" to buy into the SOEs.

"We shouldn't also forget that if concerns over foreign ownership do exist, then the Government has the ability to legislate to ensure that no one entity - excluding it - could hold a certain portion of shares," says the Goldman team. "This is something that Australia has done in the past, with its 'Four Pillars' legislation of its major banks the best example."

Facts & figures

The report by Borkin, Doyle, Curley and Henry also throws up some fascinating facts and figures. These include:

- OECD governments, on average, own 57% of their SOEs with the German state only fully owning 28% of its SOEs.

- More than half of Norway's stock market capitalisation is made up of SOEs compared with just 2% of New Zealand's.

- New Zealand, where privatisations between 1988 and 1999 raised proceeds of more than NZ$19 billion, was unique in its preference for trade sales. Some 60% of  assets were sold via trade sales compared with the OECD average of just 20%. Just 2% of NZ sales were via public floats, versus 62% across the OECD.

- About 60% by value of NZ's public assets sold between 1988 and 1999 went to international rather than domestic buyers.

- New Zealand's net equity liabilities represent 4% of the country's net foreign liabilities with 96% stemming from households borrowing through banks to fund consumption and housing investment.

- Our stock market capitalisation to GDP of just 29%, down from 56% 15 years ago, lumps us in with two types of economies. Either emerging ones like Colombia and Turkey, or advanced economies in a "downward spiral" like Ireland and Greece.

- Average daily turnover on our sharemarket has "oscillated around a flat trend" for 15 years, and at current levels of NZ$60 million per day, is the same as in 1997. In contrast, Australia's daily trading has risen from an average of $1 billion per day in 1997 to $5 billion daily now.

(Update attachs the actual Goldman Sachs report).

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Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Is this analysis being proposed as "independent"?


Fair point. But  in the end everyone in NZ is an interested party.

I'm guessing Goldman Sachs, along with a bunch of other people, will want to help the government float these assets.

But the analysis is detailed.

This is how we have the debate. Analysis is put forward. The assumptions and facts are questioned.

An argument is had. In the end it will produce a better decision.

Much better than behind closed doors.

I say good on them for publishing this research.

Now let's debate the assumptions and facts.




I am going to suggest that the debate is stacked!

On one side you have government and the major beneficiaries of such sales all with no shortage of resources and lots of PR spend.

On the other side you have stuff all - private individuals with opportunities to write letters or comment on blog sites but little more.

No, indeed the general public have the upper hand here in decision-making IMO.  Don't Vote National if you don't wnat SOE sales.

At the end of the day, the public will speak in November.

Almost as good as a referendum.



Bernard, you are guessing they 

"will want to help the government to float.."


You are always admonishing us to stick to the facts, (and rightly so),

wherever  have you seen FACTS  of an attitude TO HELP at  the firm GS? 

Before the party mantra / xenophobic crowd get too carried away with this, it is important to recognise a few basic realities:

  • When the SOE gets sold - its not like the government (or NZ as a whole if it gets sold to an overseas buyer) gets nothing.  The asset doesn't simply go poof in the air and that's all that happens.  A big shot of cold hard liquid cash gets injected into the economy.
  • This websites dogma is that we have too much debt (among others).  Well - sell off assets that the government doesn't really have much purpose owning (governments shouldn't be in the business of owning private enterprise).
  • The cash from the sale of SOE's could and would be applied to debt. 
  • So okay - - the government has heard your cry for less debt.  Now when they go to try to do something about it - everyone moans about the government selling things off.  You have to give the government the tools to pay down debt.
  • This is how normal businesses run.  A government and a business aren't that different.  They have revenues, they have expenses.  They run surpluses and deficits.  And they both have debts.  When companies get themselves into debt problems, they often sell non core assets.  You can't tell me that these SOEs aren't non core to the government.

Anyway - sure i'll get flammed by the nativist crowd.

The Government will not put it to repayment of debt. Key has already said it is to free up capital to invest on other areas. I'm  not arguing for or against, just correcting your statement

Hi Keyser, you shouldnt represent your opinions by saying at the start and finish those that disagree toe a party line are xenophobic or nativist, but anyway...

Why not hold onto the assets and keep the cash coming in forever? That income can be applied to debt also.

 You could argue that private enterprise has no business operating effective monopolies with impossible barrieers to entry on essential societal services.

It just seems to be overly dogmatic , and ,can you really blame people for being gunshy after essentially they have been pillaged by the few repeatedly over the past 24 years?

Anyway - sure Ill get flammed by the frothing individualistic crowd.

an soe probably only has a dividend yield to the government of a couple of percent.  So say it had a 4% dividend yield, it would take 25 years to get the cashinflows that would equal getting an immediate capital injection.  Second, the difference between what you could have paid off with 100%, vs 4%, will have massive impact on the net debt of the government, and interest bill. So take the present value of the interest bill into account.

Second, the government may spend it on other things, but things it would have had to do anyway, so expenditure picture hasn't really changed, its just that it won't have to borrow and will have a better net cash position anyway.

i'm not being dogmatic - people freaking out about those horrible investment bankers wanting to fleece the people of their precious state owned companies that the majority of the population doesn't even know exists - that is dogmatic.

Okay , so we need to be careful about these sharks who will arrive on our shores.

Fundamentally, Goldmans are right it will free up capital , make the sectors  more efficient , give some meat to our Capital and equity  markets, and  have a whole host of benefits 

Some rules need to be put in place  as to the mechanics of " how - what- where- when "  

1) The assets must be fairly valued and listed at fair market value , not firesale prices. 

2) The Government should only float 30% to start with, and these should be offered to Kiwi investors only as the IPO process . 

3) No single shareholder be permitted to own more than say 5% of the free- float  

3) The NZ Super / Cullen fund should have an option to purchase another 19% from Govt over say 10 years 

4) Government should retain 50,1%  in perpetuity, given that previuos generations of Kiwi's have already paid for these assets in taxes  

5) The proceeds of sales of these assets should not go into the general pool of government funds and be wasted or spent . The proceeds must be re-invested in income generating assets or developmental assets such as mining , windfarms, broadband development , toll roads 

"The proceeds must be re-invested in income generating assets or developmental assets such as mining , windfarms, broadband development , toll roads."

So, private investment is prepared to buy some SOEs but hasn't been willing to apply that same capital to the investments you mention. Instead the government will.

To me that arguement doesn't stack up to a good reallocation of the nation's capital. Even if you could ensure points 1-4, which simply won't happen.

SOE partial privatisations could help narrow the GDP per capita gap with Australia.


Selling the SOEs will make Key, English, Brownlee and their big business mates as wealthy as the politicians and big business people in Australia.

And that's all that matters.

Goldman Sachs would make the case for assaulting your grandmother if they thought they could clip the ticket  'on the action'.

Haven't we learned anything about them after the last few years?

Can I have a directorship on one of the SOE's that is to be partially sold.  The directors fees will rise exponentially.

Sorry already reserved for Rodney Hyde, Simon Power, Don Brash, et. al.

Charles Ferguson puts forward a compelling argument in his Oscar winning documentary 'Inside Job', regarding the predatory nature of corporations such as Goldman Sachs. Ferguson describes a disturbing  world based in profiteering by these companies deeply entrencherd in primarily US markets that is unlikely to go away soon, and appears in New Zealand

What is more disturbing is that our current political leadership has significant historical links with these corporations.

As a first time poster on this site I would be curious to hear the views of some of New Zealand Financial Specialists regarding the claims made by Ferguson regarding the likes of Goldman Sachs.

You are the beneficiary.  Why are you so freaked out by it?

So we are going to be given a chance to buy what we already own; what we and out parents have already paid for, and that provide revenue to the Crown on an on-going basis. Sounds like selling the family car to the next door neighbours kid, to pay off last summer's holiday credit card bill, and leasing it back from him at yet to be determed rates, to me.

It is even more like owning your own car, if you want to retain some ownership, you have to stump with some money to buy it off yourself, but the kid next door owns the majority and he is going to lease it back to at as yet undetermined rates.

As it is the only car that you can actually use, and you have to use it, and the kid is actually required to extract as much profit from you as he possibly can, it is likely that the lease rate will increase to far outweigh the intial cash he gave you.

From there, as it becomes unaffordable, you decide you must buy it back off the kid, for approximately $200 million more than you sold it for.

The kid will be knighted for services to sport.

Well lets look at what we have at the moment:

a) Currently some of the lowest electricity prices in the OECD

b) Electric companies that run at a profit and pay dividends and tax of well over NZ$500m a year to the NZ government which then gets recycled to NZ taxpayers

c) Vast amounts of fixed assets that the NZ government and hence the NZ taxpayer ultimately own.

You want to swap this for what exactly? Oh yes:

a) The chance for various brokerages, insiders and PR firms to indulge in an orgy of ticket clipping

b) A one off boost to the government books, with absolutely NO guarantee that this money is not misdirected at the last minute in some emergency program rather than paying down debt.  Governments should pay down debt by balancing their budgets, not by selling down strategic assets. Take an axe to anyone of WFF, Superannuation or student loans.

c) Foreign ownersip of crucial assets which in an energy contracting world is idiocy. Subsequent rights issues (to enhance 'shareholder value' no doubt etc) will soon dilute the governments 50% share.

Asset stripping by a preditory finantial institution that _only_ recommends what is best for thier own bonus/bottom line.

"The National-led government has asked Treasury to advise it on the merits of a partial sale of..." 

so why is the Vampire Squid now involved? the kings of information asymmetry. are they actually running treasury?

i'm open to asset sales in theory, but i simply do not trust the people who are likely to be involved.

i like a line from matt taibbi's latest spiel on wall st:

" "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

let's see some jailtime for this crowd to fix their attitude, then we'll talk

"so why is the Vampire Squid now involved? the kings of information asymmetry. are they actually running treasury?"

Because TSY wasn't that excited by the merits of partial sales, and then ranked other SOE's as having better cases for sale than the ones national has chosen.

Excuse me, is this an American based financial organisation?  Which one was portrayed as the "Vampire squid sucking on the face of the Planet"?

Just asking .....


Come on guys. Play the ball not the man.

Bernard Doyle and Co at Goldman Sachs are proud New Zealanders I'm sure. I'm also sure they are genuine in their belief that the whole of New Zealand will be better off with this and they've done their analysis.

Check out this Double Shot interview Bernard had with Gareth in December where he talks about the need for stronger capital markets.

I'm not necessarily a huge fan of state asset sales, but we do need some decent capital markets.



Stop trolling Bernard

''I'm also sure they are genuine in their belief that the whole of New Zealand will be better off with this''

Bernard - is this for real? This is Goldman Sachs we are talking about here. Yes, it may be the relatively insignificant NZ chapter of the organization but do you have ANY basis on which to assume this has been issued with anything other than naked self interest at heart?

Tell you what, lets find out:

a) what the costs associated with floating these entities will be,

b) what portion thereof Goldman Sachs will suck up?

Then come and tell us about these 'proud New Zealander's' who are apparently the greatest altruists since we came down from the trees.

When the ball carrier is Goldman Sachs I haven't the slightest compuction about delivering the stiff right arm.

Thank you andyh please keep up your good work, you are able to put into words what I can only think about!

I get annoyed by this talk of closing the gap with Aust, Aust is a country the size of Europe with 4 times as many people as NZ has. They have enormous mineral resources that will keep them in funds for the next 25 years. They do not have the Treaty issues we have or earthquakes!

NZ has to find some other way to make everyone happy and stop them leaving for overseas, selling SOEs is not the way to do it. 

Bernard - eh?

Justify "we do need some decent capital markets". Who said  that's a given?

As you would say - sigh.

What hit Chch Bernard?   Mother Nature and the laws of Physics. Money had nothing to do with it. Which should be respected in which order, then?

What is energy - which is what is under the hammer here?

Along with food and water, it's an essential. It can be argued that food and water don't happen without it, so it's actually the essential of essentials.

Then, as well as what has to be seen as a grab for control of an essential, we've got to consider whether 'capital markets' are of any relevance in the powerdown phase.

I say not.

And we own the energy-source now. Selling it just means we have to rent it - which always over time means we pay more. Never doesn't, or there wouldn't be keen buyers.

At risk of playing the man -------- you need to understand that 'capital markets' were a completely artificial, man-made construct, and only relevant on the up-side - the first (left-hand) side of the gaussian. Useless past the peak, and seemed to be a bit useless in the face of a 'quake.

As you say ------sigh.

And - you can defend GDP while you're at it (or, with respect, please cease to present it as a 'given'. As a 'desirable'.

I've pointed out here before, that it's a nonsense - and the comment on another thread that the 'quake will raise it to whatever %, just substantiates the nonsense. In reality, Chch will never get back to where it was, and if GDP sees that fact as 'good', then GDP is a nonsense measure.

I'm not sure what part of Goldman's the research came from, but investment banks like that have different divisions.  They have an investment banking team - basically those bonus hungry pushers of transactions and IPOs - an equity/stock trading team, a research division, and an economics division.  The flow of information between the divisions is severely restricted by law. 

Just because something came from an investment bank doesn't make it automatically terrible.  Goldmans attracts some of the brighest people.  It is also a powerhouse for economic research.  

The fear some people have of anything that comes from or resembles a financial institution is really bizarre to me. 

KS - I think that it is a very naive statement.  We are talking about the Vampire Squid here.   GS has only one mission and that is to suck up as much money, no matter how it is achieved.  The organisation must be seen as a whole not individual parts.  No doubt the sell off will also be getting the S&P stamp of approval to ensure that it is kosher.

You can't have a debate based on facts with people like you.  Congratulations.

Given that your opening gambit was:

""Before the party mantra / xenophobic crowd get too carried away with this...""

most folk would get the impression you weren't much interested in informed debate either.



Of course I opened like that - look at the tone of this website: it is filled with hateful spite towards foreigners, capitalists, bankers, etc.  There is almost an anti-intellectual attitude and spirit within some of the readers (the later has nothing to do with the staff or writers who definetely do think about things).  When you come into a commentary or debate where people are talking about vampire squids and scum and ripping off taxpayers, yeah, i am gonna say something.  But at least I offer something not based on spite and hatred: look above (or copied below) for what I was writing as  opposed to "scum" and all that jazz:

"an soe probably only has a dividend yield to the government of a couple of percent.  So say it had a 4% dividend yield, it would take 25 years to get the cashinflows that would equal getting an immediate capital injection.  Second, the difference between what you could have paid off with 100%, vs 4%, will have massive impact on the net debt of the government, and interest bill. So take the present value of the interest bill into account.

Second, the government may spend it on other things, but things it would have had to do anyway, so expenditure picture hasn't really changed, its just that it won't have to borrow and will have a better net cash position anyway."



that was just for a bit of fun.  no harm in it. 


Yes indeed I recall the comment and I remember thinking how blessed we were to have someone of the calibre of Mr Soze on board to illuminate our ignorant meanderings through the world of high finance.

and she is hot. and that was funny.

yep. hey great input today.

The flow of information between the divisions is severely restricted by law. 

You have GOT to be kidding?  When did this company have any regard for the law?

And that's just one example.  The SEC case underway - another.

And I could go on and on.


Kate - I agree with Keyser Soze, Goldman Sachs is an organisation of the highest integrity with only the best intentions for the people of New Zealand.  Just ask anyone in the USA how good GS has been for their economy.  I aso believe in the tooth fairy.


Wow, my comment has already been deleted.

Looks like I hit a nerve, huh BH?

One of yours.


What you struck was a nerve that runs on every article on this site. Look above and you'll see it.

"Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making these comments."

Consider this your final warning.

Kind regards


.......let the countdown begin....

sorry BH couldn't help myself.

So...your opinion that the Goldman Sachs boys are shiny and wonderful and only have NZ's best interests at heart are better than my opinion to the contrary?

Got it.

it's a curly one really.

the squid and their ilk are obviously of the opinion that a corporation's moral obligation is to maximise it's profits for its stakeholders, and that this is the most importatnt thing.

some people will agree with this (keyser soze?) but i think the wider issue is around what the actual societal obligations of corporations is.   if capital markets are supposed to price risk and allocate capital correctly haven't these guys failed?  if modern neoliberal economics is based on personal responsibility havent these guys also failed at that?

the govt may well be justified in getting some professional researchers to look at the case for partial privatisation, but should that advice be coming from a firm that is arguably the posterboy for croney capitalism and information assymmetry?


like i say, i'm all for having this debate, but it doesn seem like all the people lining up for it at the moment are the people who stand to make a short term profit at the expense of NZ's long-term situation

Bernard, you need to appreciate you are going to get on your blog axe-grinders, conspiracy theorists and the like who will spout their invective against whatever and whoever, you won't change them.

Vic, did you miss this bit?

"Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making these comments."

Read the bold bit. That's why your previous comment was cut...

The only way to close the GDP per capita gap with Australia is to become part of Australia.

There, I said it.

So don't panic about the A$/NZ$ @ .7280, then, because we will get 1:1 when we cede ourselves to Terra Australis.

Could everyone please read the full report here

and then come back with their views on the report.



Like this bit? There must be an incentive to all works of analysis.

" Goldman Sachs and/or its affiliates have received during the past 12 months compensation for financial and advisory services from the company, its parent, or its wholly owned or majority owned subsidiary. VCT.NZ: Goldman Sachs and/or its affiliates expect to receive or intend to seek compensation for financial and advisory services in the next 3 months from the company, its parent, or its wholly owned or majority owned subsidiary."

Wow scary.  There are two major investment banks (with significant operations) in NZ: Goldmans and First NZ.  So one of only 2 investment banks works with Vector, who will require outside financial expertise on an ongoing basis. Wow thats terrifying. 

That's like asking folks to taste the poison chalice poured by the most inhumane organisation the world over. 

Anyone prepared to allow their name to be published in association with that company deserves nothing but the scorn and wrath of the general public.

Really? THE most inhumane organisation IN THE WORLD? You don't think you are exaggerating just a little bit?

If you really believe that - just wow.

Considering their actions are amoral, if not illegal and they see nothing wrong with making a profit at anyone elses expense and that incls pushing up food prices to make a $.....I wonder if inhumane isnt justified...the difference is between a bullet in a hungry man's head by some crackpot dictator which is direct or food he cant afford so starves is one of distance and indirectness.


there is a pretty big difference in what the New York headoffice does and what some freaking little outpost in little new zealand does.  They are just a bunch of blokes trying to make a buck selling shares.  hardly scary.  It's like flogging the whitcoulls employees for the mistakes the PEP made loading them up with too much debt and ruining the company.

Bernard - you seem to spend half your time recently musing as to why folk aren't revolting on the streets of the USA at the way big financial corporations (foremost amongst them Goldman Sachs), in league with debased mongrel politicians have raped the US economy and impoverished the common man. Then today you act all surprised that we don't all stand to applaud when the New Zealand chapter of this insidious organization produces supposid research on the sale of SOE's, which if enacted on, it stands to gain significantly?

Seriously, are you that surprised? Perhaps we wont be as pliant as them thar folks in the US as the National government seek to bend us over the nearest log.

Having Goldman Sachs come out with this piece of self serving 'research' might just be the biggest propaganda own goal the asset strippers could have scored.


I think you're asking a bit much for a serious conversation on a Friday afternoon, but since you asked nicely...

The point about our capital markets being endangered species is a very valid one. However trying to fill the void by selling utilities that are there to provide essential services to the public is very questionable in my opinion – regardless of who is recommending it. I don’t think profit maximizers in oligopolistic sectors such as electricity can be relied upon to provide the quality and security of supply that we need. No amount of waterfall charts from GS or anyone else will convince me otherwise.

We need to ask why there is such a decline in IPOs and why there have been so many de-listings and attempt to address those issues rather than just sell the biggest assets we have to give a temporary shot in the arm to our markets.

Similarly the Government’s fiscal position must be addressed by taking a long hard look at WFF and other largesse.

I would rather see the Govt put more emphasis on bringing NEW companies to market, particularly in the tech sector. We live in an increasingly digital and informational economy which means our geographical isolation need not be such a barrier to competitiveness.

We should be trying to be a South Pacific silicon valley. What happened to riding the knowledge wave? Part of the problem is our telco infrastructure is so poor and that’s because profit seeking utility Telecom has failed to sufficiently invest in it for so long.

I know state owned utilities are supposed to be notoriously inefficient but why not consider ways of changing the incentive structure of their management and employees rather than selling the assets themselves?

I agree the spirit DC but not the method.  Small tech companies are extremely volatile, have no earings or revenues, and it is extremely difficult to get a market to function for them.  Venture capital should and does fill that void in NZ.  tech companies shouldn't turn to mom and pops who don't understand the risks.

The other problem is that they are so small that it is difficult to build institutional interest in them.  And by being small they will have low stock turnover so getting analyst coverage will be next to impossible.  Without analyst coverage instos again wont follow them, retail will be weary because brokers like to send clients into stocks they can give research reports on, etc.

Getting big, stable companies on the stock exchange is the way to go.  There is a dearth of potential listings from the private sector. SOE's seem like a good way to go.


It's true that the hit rate in tech start ups is very low, but we would only need 1 home run to make a big difference to our market. I'm not advocating mom & pop provide the seed capital, just that we have a more vibrant sector, that will eventually bring strong and (relatively) stable companies to market.

No doubt listing the SOEs would help the market in the short term, but I don't think it does good things for our longer term economic development.

If we're in more urgent need of a (pardon the expression) blue chip listing, then I would much rather see Fonterra on the NZX than the electricity co's.


the_dc says - "No doubt listing the SOEs would help the market in the short term"

And that is all that Goldman Sachs is concerned with, quick profits and bugger the long term future. Anybody remember GS's involvement in sub-prime?

So the blood sucking vampire is hoping to make a killing....

Why does anyone even listen....


Hi Keyser.


FYI Bernard think sthe return on investment to us is more liek 7.6%. 

"But Mr Hickey, from financial website, said that based on last year's earnings the four state-owned enterprises paid a dividend of 7.6 per cent, against the 5.5 per cent cost of new borrowing. "On the face of it the Government is a net loser by selling half of these state assets."  " 

Given your 4% assumption does this make a difference to your opinion?  Is there a level of return of invetment that your think is good enough to retain public ownership or is yours view more than governemetn should not be invovled in these sorts of businesses?

 I am always sceptical of any anaylsis from a group that has a vested interest in the outcome. Forward looking anaylsis is inevitably underpinned by numerous assumptions and unless these are clearly stated right at the start of said analysis then the findings can be skewed either intentioanlly or unintentionally.  That all said off to read the report and prepared to to be wowed with clear assumption statements, logical options, and reasoned recommendations that benefit NZ Inc as a whole...  what will I find? (obvious and acknowledged pre-determined view of the value financial investment advice based on context of the last 5 years of observation)

Sounds like back to the 1950's with a hint of Muldoon in there as well:

Price Freeze

Wage Freeze

Generate Wage Orders

Reserve Asset Ratio

Interest Rate Controls

Foriegn Exchange Controls

etc ...................................................

When corruption is a way of life from the TOP of the leader pack to the bottom feeder arse-holes in Banks, stealing from the elderly and the ill-informed TAXPAYER, then why the hell would we ever sell our souls to these arse-holes to do more of the same. 

So you believe that the average person who works in Bank is an A.......... as you call them.

Really if NZ is such a bad place why don't you take the next flight to somewhere like Cuba where you will be able to live out your fantasy







Why doesn't the government sell the 49% stake in assets it is looking to sell to NZ insitutional buyers, in particular our Kiwisaver funds?

This way:

a) NZers still own the income generating assets for their eventual retirement.

b) Government gets some urgent funds to invest in infrastructure in other areas.

Robby217 - did you miss Alice in Wonderland? It's been done.

 Mad Hatters Tea Party.

Total debt is total debt.

Are you a Party hack?

@powerdownkiwi - Thanks for addressing my points in a mature way.

My point was that given we are all effectively compulsorily saving via Kiwisaver where do you think these savings are presently invested?

The answer of course is international stocks, international bonds, domestic bonds, stocks, commodities etc.

Given that the NZ sharemarket offers such lack of depth, to me it makes some sense that a percentage of the power companies are divested to NZ Kiwisaver funds overtime (not saying all at once). This will free up funds for NZ govt to invest in other infrastructure etc at the same time provide a quality dividend stream for NZers saving for retirement, without losing underlying 'ownership'.


As for your questions, I recommed you check your own sanity first. What the hell is just spouting "total debt is total debt" supposed to mean or provide in the way of rebuttal?

You seem to be the one with the party political ideological blinkers on!

Robby 217

I think we're a long way apart - you still think in 'business as usual' terms. Readers here will tell you I'm not in that camp.

I say that no activity - including of course, economic actvity - happens without the expenditure of energy. That when it peaked in terms of supply, then - with the exception of efficiencies - you've peaked in weath-creating ability. No more underwrite,

Means that I don't think there will be retirement funds. Or profit ere long, from 'investments'.

Profit being an expectation that the future will honour the cheque.

This is probably unheard-of territory to you. Me, I worked out that this would happen hereabouts, and got there in 1975. Been studyng global energy supplies ever since.

If you peruse the 'Bernards homework' post on my blog ( there is a primer on the subject. The blogroll includes a few worth reading too.

There has to be a re-defining of 'wealth', 'earning', and what profit or usury will have to morph into. Which is why I bother being here.

We do need infrastructure - but of the kind to address the right-hand side of the graph in that 'homework'. Energy efficient food, transport, social services, reduced build energy, elimination of planned obsolescence, retro-efficientising of the existing building stock.....

The only interesting upside upside its that given that you and I use fossil energy at the rate of having 300 slaves apiece (for the Yanks it's 1000) I don't think unemployment - in a time sense - will be an issue.

I don't think the NZ investment regime will outlast the global one, hence I don't see them as separate.

Which is why I see shuffling 'investment' as a mad-hatters tea party.

There is a more serious concern I have, though - with the energy companies. Energy is the underwrite of underwrites. Whoever controls it, has more control over lives, than anyone, with the possible exception of water owners. The poor of the planet get outbid, but they are bidding with their lives - I wouldn't like to see our kids in that situation.

Airports, though, and airlines, might as well be flogged off while they're worth soething. You don't get electric 747's, and no airline had a viable business model at $147 a barrel.

Seriouser and seriouser?

Perhaps we are someway apart, however I take issue with the arrogance that I am thinking in business as usual terms, or that your ideas are so profound that they are in such an unheard of territory. You blogroll is hardly 'out there'.

I agree that economic activity doesn't take place without energy.

The potential energy abundant in our universe is absolutely unfathomably massive (it is so great we don't even understand what energy really is, nor how it 'works'). 70% of the mass of the universe we theorise should be there we have no real means to detect.

Sure it may still mean that we could be limited by energy on a timescale of millions or billions of years, but certainly not in the next 100, or a timescale limited by the availability of fossil fuels. The stone age didn't end because we ran out of stones, but because we invented better technologies and so it will be for the oil age.

We haven't yet even really mastered the extraction of energy by chemical means (biology being far more efficient than that of humans burning petroleum fuels). Then there is nuclear fission and fusion technologies and I'm sure in the future understandings of physics that we don't yet understand. On a more near term basis things such as oil production from algae (3rd generation biofuel) hold promise that solve many issues with earlier biofuel production. Look up say OriginOil etc

The suggestion that you figured this energy equation out in 1975, means you have been wrong for 35 years. The exponential function is not a recent discovery or all that profound either, however I note it is used by every 'peak' theorist out there who has DVD's to sell. Yet they continue to be wrong.

On the subject of profit, earning, wealth and usury. I accept that some of these concepts may change in the future as the current monetary system is essentially broken, ie China produces and receives paper in return for it's efforts. This has been allowing unconstrained consumption. But this can't be projected into the future as the Chinese see what is happening and it is in their interest to change it. Nobody wants to be a slave.

I don't see usury as altogether a bad concept, however there needs to be something to extinguish debt (the role gold used to provide). Who knows in the future what human society will be like, I doubt the consumption of physical items will play the role it does today. Who is to say these things won't be virtualised (similar to the matrix) where we plug into a computer, that would certainly lower the energy requirement. Once we understand the human brain it will probably be possible.

Things such as planned obsolecence etc I don't see as a problem either as no matter is destroyed, ie. the garbage is still available for future 'mining' if required.

Neither am I worried about the control of energy supplies, there has been no other time in our past history where it has been as easy or cheap as it is today to go 'off the grid' if you so desire. This is certain to be even cheaper in the future.

I hardly think it's worth planning for armageddon just yet.

but certainly not in the next 100, or a timescale limited by the availability of fossil fuels. The stone age didn't end because we ran out of stones, but because we invented better technologies and so it will be for the oil age.

Says it all. You don't get the exponential bit. That trite 'stones' thing fails to mention that there were a couple of hundred thousand souls around at the time.

And you - by what you say - miss the difference between peak, and 'all-gone'. Peak is now.

If your society runs on a resource (look around you) then it has to morph to the next, before the top of the gaussian curve (Hubbert Peak, bell-curve) of the first, as it has to use a fair amount of the existing to develop the new.

We now have a society demanding all - and more - of what can be supplied in barrels/time, and it hasn't done the adaption. None of your answers are a goer, but better qualifies folk like me can debate that one.

Some on my blogroll, or you could try the head of Energy Studies at the Otago University.

Yes, of course in an e^x system, the growth in a doubling time is greater than than in all the previous doubling times added together.

My point is what is going to drive the adoption of better technology, I would say price will be this determinant. Even with oil at US$147/barrel there was still much oil wasted. What is needed is higher prices, I would suggest that oil is actually too cheap (especially when you adjust for currency debasement) and hence limiting the adoption of other methods.

Will this mean consumption patterns change - likely (they always have).Will global population be controlled by disease, war etc, probably (it always has).

The key question is what are we going to do about it to reduce human suffering over time?

Nothing was ever invented by throwing our hands up saying 'we can't' and returning to the hermit cave. It is those scientists that ask why not and actually go and invent,create and seek a more optimistic future.

I'm not saying I believe in exp. population growth, without perhaps coupling this with inter-planetary travel. However so far the only method of reducing population growth has been an increase in the standard of living. Is there any other solution more ethical?

I'm not sure either that you can say that none of the ideas I outlined are a goer, and in the very next sentence say that you are not qualified to know!?

Good return.

I think we need to re-look at lots of things, starting with population control. If we don't do it, mother nature will do it for us, and I know which approach I'd rather.

That increased standard of living worked while we tucked in to a pile of solar energy, stored up over aeons, used in less than 300 years. It is/was not a long-term solution.

Efficiencies and better tech are part of it - we came ome to the house this evening - southerly all day, overcast, 11 deg outside, currently 27'3 indoors, no artificial (and there won't be all night). Currently (bad pun) drawing an average of just over 3 amps at 12 volts (fridge, lights, radio, laptop). 

if you google then 'powerdownkiw'i, the 'mk4' is what we run off. One $2 Gentle-Annie motor re-configured as a 3-phase 'genny. 1 litre/sec @ 80ft.head.

I suspect that if every house was like this, we'd have 90% of the grid available to replace oil.

But I think we're out of lead-time. The reality is that the existing house-stock is what we will go into energy deficit with - retro-fitting will be the best use of time and energy remaining.

Solar is the only permanent source - but you're not going to run society-as-we-know-it on solar.

The problem is that we aren't addressing the problem. Mother Nature and physics did Chch, nothing else. Within 24 hours, the 'problem is back to being 'GDP'.

They've just been taught that there are something you can't buy, but they're right back to it.

Please be clear, I'm not one who throws up his hands and says 'can't. I'm further down the path of addressing this in a practical sense that just about anyone. And I reckon I'm late. So does Martenson.




robby 217 ....Invest in infrastructure.

...yes spending NZbillions with foreign companies importing our infrastructure in sectors such as telecommunication, energy and transport, in stead of using NZcompanies and NZworkforce - what investment ???? - HA !!

regards Steven Joyce/  Gerry Brownlee etc.

..and why is that tolerated by the public here in NZ ???

I don't entirely disagree, however would point out this doesn't mean we shouldn't structure the assets in NZ ownership via retirement savings.

We do need to make NZ more competitive, so those foreign companies can base more production here. For a start I see no reason why Australian companies couldn't be lured here with attractive tax concessions etc. It would be worth a try.

Yes, bring foreign companies, including their skilled staff to NZ, so NZyoungsters can serve them cappuccino in the cafes and serve them in shoe- shops on their knees – while the NZtalented export them selves - what an economy !!  

What economy? We needed 9,000 outside toilets ( not an over complicated item!) to supply the needy of Christchurch. We needed them built quickly, cheaply and efficiently. Where did we have to go to get , even our toilets....China!

Yes and what does NZtalented exporting themselves tell you? We need to change from the status quo.

If foreign companies were to base themselves here because we became much more competitve I see no barrier as to why they wouldn't hire talented NZers.

I am guessing that Bernard is messing with us re his comments such as: But  in the end everyone in NZ is an interested party. Because as Bernard knows some are infinitely more interested than others. People like Goldmans are in this for the fees that they will get , that is all, around 300-500million in fees off the top. I have repeatedly asked Bernard through this site for info on what the fees will be. These fees mean that they are not like anyone else in New Zealand debating this issue, there is so much money at stake for them alone vs 'jo public' that Bernard's comment troubles me.

Then we get: Bernard Doyle and Co at Goldman Sachs are proud New Zealanders I'm sure. I'm also sure they are genuine in their belief that the whole of New Zealand will be better off with this and they've done their analysis. Playing the patriotism card is just silly. Their analysis had to say sell- that is what they do they are middle men, brokers. 'Ask a builder if he thinks you should move house or add an extension and he will say build on, ask a real estate agent and he will say sell.'This has always been the case. Their analysis always had to say sell.

But I am guessing that Bernard is encouraging debate with his comments which is a good thing.





The comment by one contributor:

"an soe probably only has a dividend yield to the government of a couple of percent.  So say it had a 4% dividend yield, it would take 25 years to get the cashinflows that would equal getting an immediate capital injection.  Second, the difference between what you could have paid off with 100%, vs 4%, will have massive impact on the net debt of the government, and interest bill. So take the present value of the interest bill into account.

Has this contributor not looked at Bernards analysis that says it is more like 7.6% This is better than the price the government pays for debt so not a good reason to sell.




The comments bt the_dc are excellent. The point was raised at the end that: I know state owned utilities are supposed to be notoriously inefficient There is of course very little evidence for this. John Kay and others writing for The Financial Times have pointed out time and again that privatisation has not brough efficencies to utilities in the UK. This is a fact, well know to people at Goldman, To John Key and to anyone who has suffered a train ride, a water bill, a power bill , BT or almost anything else privatised in the UK. They are expensive, without real competition, poorly controlled, with over paid management, fees etc. New Zealand should not go down this road, there is no comfort for us there.

OK read it.... (bad telly)

Who requested this report?

I think I'd read it all before though - treasury/govt releases etc, comments on this site.

Was this a company acting to sell services - a sort of tender bid?

Trying to show they were on side with 'current thinking'.

It gathers it all up quite nicely in one place, but I don't see the reason for the document otherwise. What have I missed this time.

@Sore-Loser: CO-OPERATIVE BANK .... yes please.



Dear Bernard

Please refer to your comments

Come on guys. Play the ball not the man.

Bernard Doyle and Co at Goldman Sachs are proud New Zealanders I'm sure. I'm also sure they are genuine in their belief that the whole of New Zealand will be better off with this and they've done their analysis.


Harold Meyerson writes at that American business is booming

America's leading corporations have found a way to thrive even if the American economy doesn't recover. This is very, very bad news.


I think it is not about the personal character of Mr Doyle and CO, its about the culture and power of Big Corporation. Do you believe that public should simply trust a corporation s agenda because it employs Kiwis?

The link you provided above highlights American Corporate Values. I read the book , Confessions of an Economic Hitman which gives a very good insight in to American Corporations and their values.Those who believe that privatisation is the answer to our economic woes should look at the private healthcare sector in USA and investigate its cost and productivity.

I voted for National but I would vote for Greens if Nats want to sell SOE

I have also noted that your sensorship is not consistent.

The partial privatisation of  New Zealands power companies is at best a transfer of wealth from all New Zealands to a few rich New Zealanders and at worst a transfer to overseas interests. Why would the majority of New Zealanders agree to such a deal. Fear. We will be told in the coming months how much trouble we are in and how the only answer for us is to sell everything. There is no logic to this, it does not make sense to anyone but it will be repeated again and again. My problem is that even debating the Goldman Report legitimises it. The report needs to be ignored and consigned to the rubbish bin. Goldmans do not want a debate they want our money. To get it they propose selling anything we can get ur hands on to pay them.

To combine the issue of ownership of monoply infrastructure and the needs of capital markets is simple nonsense. The reason New Zealanders invest the way they do have absolutely nothing to do with our Power Companies.

Further proof that the Goldman report should be ignored. Comes from it's almost total lack of any understanding of the importance of energy security , energy affordability, and energy efficiency to the wider public of New Zealand.

From the report under the heading RISKS, t comes gems like:

Wholesale market dynamics: A number of the Ministerial Review initiatives are targeted at improving security of supply by lifting the dry year cost to hydro generators.  We believe these initiatives have contributed to a change in pricing policy from generators which could alter medium-term dynamics/outcomes in the wholesale market.


Water rights: Defining future water rights over hydro power station waterways.

These are political descisions, decsions that will only be made with the concent of the public of New Zealand. No country actually leaves these issues to 'the market' as they are of course political in nature. Goldman's seem to gloss over these considerations.

Privatisations have been shown to have failed on these very grounds in the UK in utility after utility. Short term gains can be made at the expense of resiliance, Our energy security is simply too important to be handed over to private interests.

Plan B

Water rights is one of the most important issues our government should by legislation secure for  New Zealanders.

When the IMF descends on a country and starts to "help" them, one of the first things and a routine requirement and rule is to stipulate the country in question has to privatize (sell) the use of water sources besides several other restrictions to "get your house in order".

This  is one of the reasons, why so many countries, particularly in Africa, resent ever having asked  for the IMF to step in.

There are many sites on the internet, this is one of them:

Nzrs be realistic FFS!

Govt does not belong in business.

Sell all non essential assets

The  other glaringly obvious and disgusting observation is that whenever these types of issues arise in NZ is that we are horribly xenophobic nation! If  English , American or white ethnicities are investing its all good if the investors are foreign and dark skinned or have slightly different facial feature to us its as its as if  we are being overrun and enslaved in an invasion of the body snatchers type scenario! Its ridiculous , pathetic and embarrassing!

The asset does not vanish or leave Nz! it simply becomes more efficient and releases  vital funds to Social services ( i.e. earthquake relief)

I was born in Waitakere and these xenophobic attitudes do not exemplify the real kiwi spirit to me 

Stop being selfish , mean and miserable! We as a nation are about to enjoy the fruits of the biggest rise in commodity prices in decades lets open up more to the world including our asian neighbours  

Anthony - with respect, you need to do some homework. Over on the 'top 10' thread is a good start.

Something from Gordon Cambell about the author of the Goldman report a one Phillip Borkin. Can anyone confirm if he actually works for Goldman's, is he a freelance writer, is he employed by the NZ Herald? Is he an independent  journalist or as a Goldman analyst or both? When writing for Newspapers etc does he declare an interest as a Goldman employee?. Have Goldmans hired him as a PR consultant who happens to be an economist, is he an economist?



The NZ Herald article confirming this sorry situation is an interesting piece for other reasons as well, though.

Written under Philip Borkin’s byline, the article cites the salient facts about credit card inactivity etc and then seeks commentary from…Goldman Sachs economist Philip Borkin, who conveniently confirms the trend that his journalist self had just gleaned from the figures. Namely, that the Christmas period had not been joyous for retailers and – judging by these figures - the level of spending in the New Zealand is still stuck much where it had been back in the middle of 2008. In all, Borkin-the-economist takes up six paragraphs of Borkin-the-writer’s 12 paragraph piece.

Full article here.

Regarding the comment by Antony  that: Govt does not belong in business should really be restated as 'buisness should not really be in Govt'. The power companies that John Keys wants to flog off are not businesses. They are public utilities owned by the public of New Zealand. They are part of the common wealth of all New Zealanders. Real New Zealand Businesses need energy security, energy affordability, and energy efficiency. The privatisation of power utilities eg in the UK has been shown to provide none of these for business. They fast become a tax on businesses as they exploit their monoply/oligoply position to the detrement of all actual businesses in New Zealand. hey become an aditional tax on enterprise without oversight or representation. And taxation without representation leads to Revolution.

The problem is that many people do not seem to understand what a free market is, a free market is an opportunity to try , and opportunity to fail, it is not a guarantee of success. A free market needs a great many participants to find the winners. It does not guarantee that all participans will win, far from it most will fail, but we only remeber the winners. The provision of power for New Zealand people and businesses simply cannot be allowed to fail. The country cannot afford it. The decsions on power provision, pricing , efficiency etc are essentially political ones as under the current technology real markets simply do not exist.

Steps like smart metering, feed in tarrifs, effecient, wind, solar, could bring some market elements but large scale utilities- Hydro, etc are simply too big. They are too big to leave to the market in the US and every other major market. They are too big for us to go down that path.

Antony goes on to say: The asset does not vanish or leave Nz! it simply becomes more efficient and releases  vital funds to Social services ( i.e. earthquake relief) As if private ownership has anything at all to do with efficiency. As anyone who has worked for a major multinational can attest, ownership structure is not the only or even the main influence on the efficiency of the organisation. the market conditions underwhich it opperates are.

To pay for our current lifestyle  we have  tried selling of the efforts of our forebears through so called asset sales- as if they are company assets rather than part of the common wealth of the country. and then mortgaging our future by loading up our students with debt. None of these approaches has been show to work but the people who are peddling them keep re keeping up with the sales pitch, 'sell off some more'.

Good lord, what a ramble, take a chill pill.  Bernard, you are getting the looney brigade coming out of the woodwork now

And the coherent. 'Plan B's posts are good reading and made me think!

there are a number of private companies out there investing in their own(and nz s) future,i work for one of them.distinctly different from parasitic lifeforms that would resort to theft of publicly owned assets.john key is losing his shine!!!!


I always wondered, we have a Treasury, a Finance Ministry,  Reserve Bank, a Public Debt Management Office  with all the "necessary" economic specialist and staff and we still have to order some outside people (aka Goldman Sachs) to estimate and advise what's best for the country.

I googled to get some answers.

There is also a UMR research company, which was ordered by government to do some research about the financial management capability in the public sector, done in august 2008. No later data available.

Executive Summery Report states in an overview: "The financial management capability in the public sector is uneven and in some areas weak....."

19 different financial management systems are used across 42 Departments and Ministries

All in all  the UMR research has don 10 (!) interviews. Would just like to know what this survey did cost and if there was some practical reaction to this.

Read the whole report. And this in a small country with about 4 Mill. people.


If there is no possibility to cut and save in the Public Sector Administration, then I don't know where it can be found!

Looks like a good bit of homework you have done and would be interested if you expanded on it, the '10 interviews' in particular.

So are you saying that we have a bureucracy full of bean counters but some departments have too many counters but not enought beans, whilst some have too many beans and not enough counters?

While some of our bean counters aren't acutally qualified to count beans at all, they count bananas. So being a banana republic we should be okay.

Or is there a contracting pool of beans and surplus counters, but since leave is considered a book debt they have been forced to take a break to reduce their accumulated leave and thus at any one time while we have a surplus of counters the actual situation is a shortage?

Or is it that one department has a surplus of beans, so the other department with a surplus of counters gets busy to help out by employing a consultancy firm to analyse the situation to see where and why there is an imbalance.

So - the redundant would be has-beans. I'll buy that - even if they can't anymore

Link to above .pdf - typo?

Try again:

My computer also seems to have difficulties with loading this site.


".......expanded on the 10 interviews in particular"

No, could not find any more, the SMF research company only explained they focussed on "Quality" instead of "Quantity"....the 10 interviews were online interviews......

you can read for yourself, please try, use the second link given after Johns question.

Would you by a used Power Company from these guys , would you even let them in the house?

A former Director of Goldman Sachs, Rajat Gupta has been arrested in the US on charges of insider trading. He is of course a 'former Director' because as always, Goldman's front ran the market and shorted him first. The use of the word 'former' of course allows Goldman's to distance themselves- in fact he is charged with insider trading while he was a Goldman's Director. And yet we  are supposed to trust these sort of people with the part of the common wealth of New Zealand. The Goldman report should be seen for what it is, an advertising pitch posing as analysis written by a PR flack* all in all not a great combination. The corporate model of PR always allows the entity to remain ongoing whilist casting out any malignant appendages along the way. Of course this just may be more proof that the body of Goldman's is rotten to the core.

*Philip Borkin, seems like he is an undercover journalist and Goldman employee- can soeone confirm.