Treasury comes in below budget for running government asset sales programme
By Tina Morrison
June 20 (BusinessDesk) - The Treasury came in below budget for its costs in running the government's asset sales programme.
The Treasury spent $85.5 million, or 1.83 percent of the $4.67 billion in total proceeds from the share offer programme, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall said in a joint statement. That was below the 2 percent estimate made at the start of the programme, which excluded costs to the companies and incentives to New Zealand retail investors.
Of the costs, Treasury spent $12.6 million on advertising and communications, $64.9 million on professional services such as legal, brokerage and advisory, and $7.9 million on its own internal costs. The companies whose shares were sold incurred an extra $35.1 million in costs associated with the programme.
The government has sprinkled the proceeds of the asset sales programme across projects ranging from housing developments to irrigation schemes and an increased bailout for state-owned KiwiRail. Some $1 billion of the money, held by the Future Investment Fund, was allocated in the 2014 budget.
Gross proceeds from the sale of shares in MightyRiverPower, Meridian Energy, Air New Zealand and Genesis Energy came in below the original estimate of $5 billion to $7 billion, partly reflecting the decision not to sell the financially troubled coal miner Solid Energy.