'The Nation'
Helen Kelly
Interviewed by SEAN PLUNKET

Sean Well National is getting ready to get started on the first sale of assets since 1990. It's seeking a mandate in November's election but Treasury is already advertising for a Project Manager for the billion dollar selldown. Meanwhile the unions are gearing up for a fight. CTU President Helen Kelly joins me now from Wellington. Ms Kelly welcome to the programme. How important, how fundamental to the Union Movement is fighting asset sales?

Helen Kelly – CTU President
Well we're representing the public in this issue and it's not just the Union Movement, there's been an outpouring of opposition to this. These are our assets, they're currently owned by the whole of New Zealand. We've got a terrible record of privatisation and the impact of that, and we simply don’t believe that this is good for New Zealand, and we do intend to oppose it strongly.

Sean Do you believe you have the support of the Labour Party in that? Is this essentially an election issue rather than perhaps an issue about the actual sales themselves?

Helen Well it's an issue about both and completely Labour and the Greens have been very very strong in opposition to these proposals, and I don’t think it's about the election, I think it's about fundamental values. Actually we've had a failed experience of privatisation, there is nothing valid in any of the arguments to support it.

Sean Despite the fact that you say you're representing New Zealanders and taking the stance against the sales, it is fair to say that most polls, most indications are they indicate ambivalence, or a trust in the Prime Minister that the government will not lose control under partial privatisation.

Helen Well not on this issue I don’t think. I think they indicate strong opposition, and that’s what we've seen in terms of past privatisation…

Sean Well can you quote me a piece of research that says that?

Helen Yeah well our research definitely shows that our polling of union members shows that they're completely opposed.

Sean Well your polling of union members but not necessarily your polling of the country as a whole, right?

Helen Well the polls that I've seen in the public have been opposed to privatisation and actually then people will get the chance to discuss this around the election campaign. I think you know in terms of the issues, even partial privatisation people understand you get the worst of both worlds with partial privatisation and also the strong message that we own these things already, we've experienced privatisation, it doesn’t work and we don’t want more of it.

Sean Well the last privatisation, major privatisation as we said in 1990. Do you think for a younger generation of New Zealanders perhaps those under 40, they will not have that memory, the memory of the failures of the past?

Helen Well there's privatisation going on all the time at the moment actually. So we see for example the privatisation of ACC, privatisation can take the forms of laying off the public sector and contracting back services. The prisons have been privatised, the management of prisons. So it's not true that this government hasn’t already embarked on privatisation. PPPs for school buildings, there's all sorts of forms. What they're talking about is selling some of the state assets, but I think the younger generation are getting a taste of what happens when services re contracted out, and when access is restricted. The cuts to ACC that we're seeing are a direct response to preparation for privatisation.

Sean Certainly in terms of international experts the jury is either out or against the notion that privatisation necessarily means greater returns or more efficiencies in a business. Is that your understanding and would that be your contention?

Helen Well let's just have a look at our experience – rail – we had to buy it back, we had to buy it back for twice the price that we paid for it even though it had been completely stripped of all its assets, and those that bought it originally had made huge profits and walked away without the responsibility of maintaining a rail service. Telecom, you know we just had to invest huge amounts in Broadband because Telecom has under invested in our telecommunications infrastructure. We had to open a new bank because we privatised our banks. Electricity is a mess, not only are we subject to power cuts and some of them very very significant power cuts, but we then also have huge price rises that we can't control. So owning public services allows us not only to make good government income, but it also enables us to deliver social services in an equal way. We can subsidise public owned enterprises where things like power prices are too high. We can invest and get a return. There's a lot of good reasons for supporting retaining public infrastructure.

Sean We saw in Darryl's piece that opposition and union opposition to the asset sales there in fact damaged the price that was received in the asset sales, and meant that some sales weren’t taken up, and that certainly share prices were lower. Do you accept that you might discount the assets if they are sold, if National gets back in and proceeds with these plans, while you're protesting against it.?

Helen Well we're not taking responsibility for the outcomes of the privatisation of state assets. We will oppose the sale on the basis that they're bad for New Zealand, bad for the economy, bad for services, bad for the public, and that’s the basis on which we will oppose them, and if National continue to go ahead with them they have to take responsibility, not only perhaps for a reduced price, but also for the outcomes we've seen already from failed, absolutely failed privatisations of the past.

Sean Oh well apart from coming in a programme like this and talking about it, can you give us any concrete examples of how you are going to debate this issue, what actions you're gonna take, the CTU and other unions?

Helen Sure, we'll be talking to members leading up the election, we've got a major election campaign planned, including delegates' forums and public information and public meetings. If post election there are proposals to privatise asset sales, we will protest in similar ways as you’ve seen in your introduction piece there, but in all the ways that unions are able to object to this sort of thing. And it's not gonna be just us Sean, don’t let this turn into a union versus government issue. New Zealanders across the country have suffered from the effects of privatisation. Every time they pay their power bill, their Broadband bill, every time they can't maximise the benefits of their telecommunication services, they are suffering from the effects of privatisation, and I know that we will join together with them in these protests.

Sean But you must look at Queensland and say no matter how many of you march in the street, how loudly you talk through the megaphone, it is likely if National win the election that these sales will proceed.

Helen It is absolutely likely if National win the election that these sales will proceed, I agree with you.

Sean So would you abandon the campaign if they were to win the election?

Helen No we wouldn’t abandon the campaign because it's wrong and we campaign against things that are wrong, and in the end, in the long term we've been proven to be right, and that’s what's important, that we are on the record opposing these and that there isn't any sort of public spin that these are good for the nation. People understand that and it's our job to make sure that that message is rung loud and clear.

Sean Alright Bill English tells us a billion dollars could come in from this. Where would you get that billion dollars from if you're not gonna sell these assets?

Helen Well we're currently getting income from these assets, so what Bill English doesn’t do is tell us what income we're getting from these assets. We're also able to use these assets for more than just profit to the government, income to the government, we're able to use them to build services to New Zealanders that are essential. To do the sorts of things like cross subsidisation, to provide services that people need to heat their houses and all the rest. So Bill English isn't giving the true cost of privatisation, and what we know is that government for example can borrow to invest in long term investments that give good returns, and government can actually borrow at cheaper rates than the private sector, who will also borrow to buy these assets and increase our foreign deficit problem. You know the money, the profits from these assets once they're sold will go offshore, as Telecom did, five billion dollars.

Sean Okay, but I'm coming back, if you don’t get that billion dollars, if you don’t get that in the short term where do you get it from? Do you tax people more highly or do you cut services?

Helen You can do both actually, you can borrow to build infrastructure, which is an option. You can tax people more….

Sean But the whole point of it Helen Kelly is to reduce the indebtedness of the country.

Helen No the government has just put in massive tax cuts, they have created the indebtedness of this country. Massive tax cuts and then to say, to bridge the gap between their own choices around tax cuts by selling our assets, the things that we own as New Zealanders, and to leave us with the legacy which we're already seeing in terms of the privatisations of the past, is just unjustifiable. They haven’t put up a valid case, that’s why their no on your show. That’s why they're not here explaining it because they know politically it's the wrong thing to do.

Sean You say the nature of these companies would change if they were to be partially privatised. At present though they are acting like private companies. And for example Tony Ryall recently came out and criticised the huge bonuses paid to the heads of those energy companies and their senior management. Is this gonna make any difference, privatisation. Are they already private beasts.?

Helen Well what you’ve got is – the first thing you can change that. While you own them you can change the ownership and people are demanding a change in the electricity sector, and ironically the government's talking about forcing a change in the energy sector. But what you’ve got in the energy sector is actually dual ownership, you have got some private companies running electricity supply. So then you’ve got this very poor model where if the government were to step up and start subsidising power prices through their public sector companies, they'd also have to do the same in the private sector companies, or those companies would squeal, they would be uncompetitive in a competitive market. So the dual ownership model is very disadvantageous, you lose the state benefit of running the whole thing yourself.

Sean Helen Kelly do you think there is a hidden agenda here?

Helen No, I think it's quite blatant, it's quite out there. We know the effects and I'm hoping people will join with us to oppose it.

Sean How do you rate your chances?

Helen How do I rate my chances of people joining the bus? Very very high.

Sean Of stopping these asset sales?

Helen Well I think it's a key election issue, we've got a very good chance during the election campaign, of raising it, of talking about our experience, and of winning considerable support.

Sean But you accept that if you do not have Labour election at the victory, John Key does get his mandate, the sales go ahead?

Helen I will accept that if National get elected at this election they will sell off the family silver and New Zealand will be the poorer for it.

Sean Helen Kelly I thank you for your time.

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