Taxpayers foot bill for corporates

17 Sep

By Matt McCarten

Herald on Sunday, 15 September 2013

There’s a blind spot with John Key when it comes to giving taxpayers’ cash to corporate monopolies.

The “trickle-down” ideology once espoused by the far right – that if we made the wealthy even richer their good fortune would trickle down to the masses – has been thoroughly discredited.

But the Prime Minister has taken this nonsense to a new level – Key now trickles money upwards from the poor to the rich.

It’s unnerving that under Key there is a growing list of wealthy monopolies padding their profit margins, with this Government writing out cheques or passing favourable laws for them.

In other countries they call this corruption; our former financial trader calls it deal-making.

On Thursday, a broad coalition of business and community groups (including my union, Unite) launched a campaign against the Government’s stated intention to pass a law allowing Australian-owned company Chorus to be effectively subsided by New Zealanders.

Internet users will be required to pay $12 a month more for copper wires than recommended by the Commerce Commission. This apparently means $600 million will be transferred by internet users to a private business.

It seems Chorus’ profits of $171 million aren’t enough, and we need to shovel even more largesse their way. If that wasn’t enough of a gob-smacker, this week (in defiance of Treasury advice) Key authorised giving $30 million of taxpayers’ money directly to Rio Tinto, the foreign owners of the smelter at Tiwai Point.

At the same time, Government-owned Meridian Energy slashed its power prices to the plant.

The Government claimed it did this to save jobs. Has it suddenly become a market interventionist to subsidise favoured corporations to help job creation? Or is it about Rio Tinto pocketing a windfall from politicians desperate to preserve the sale price of Meridian Energy?

The smart operators at Rio Tinto saw how Sir Peter Jackson and his United States backers got Key to cough up millions of dollars for nothing and thought, why not us?

After the SkyCity deal, where Key gave a monopoly a guaranteed mechanism to make money, his motivation has become clear: these deals help advance the Government’s political agenda and a corporate is guaranteed a profit. The taxpayer foots the bill and the guy who put the deal together clips the ticket.

Something stinks of aluminium, copper and money. It’s a smell that shouldn’t be ignored.

Today, the Labour Party announces its new leader. The party and the three candidates have had a great campaign. Now that it’s over, the victor should ensure his two contesters are kept on the front bench so they can focus on Key and his Government. The leadership has always been Cunliffe’s to lose. But whether it’s Robertson or Cunliffe, they are both capable of holding Key to account. I’m looking forward to it.

(Matt McCarten is National Secretary of Unite Union. His weekly Herald on Sunday column are a commentary on social and political issues in New Zealand. The views expressed are his own and do not necessarily reflect the views of Unite Union.)


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