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Key will melt the family silver down

15 April 2008 Media Statement

Key won’t sell the family silver, he’ll just melt it down

John Key’s attempt to move asset sales off the agenda does not wash with his hints at a slippery attempt to dilute public control of state assets, Finance Minister Michael Cullen said today.

On television this weekend, Mr Key re-announced his 2005 pledge not to sell state assets in National’s first term in office. But Mr Key also hinted at a major dilution of state control of assets when he said National would “…adopt those other ways of ensuring that there’s better discipline and control on those SOEs.”

“This is a year when our economy faces real challenges arising out of the global environment,” Dr Cullen said. “All New Zealanders deserve straight answers from political leaders about their plans for our economy.

“Under Labour, state assets have been revitalised and have contributed significantly to our economic development. But we know that National does not believe in protecting our assets, even if they don’t have the courage to tell us that.

“John Key has been meeting with merchant banks lately and is now hinting at moves that would see SOEs issue a complex array of debt and equity instruments to fund infrastructure projects. This would be part of a debt shell game that would serve to create more money for tax cuts.

“But it would also see our state assets answerable to the holders of their debt, not to New Zealand taxpayers. So John Key won’t sell the family silver, he’ll just melt it down.

“This is not a move the Labour-led government will support. Mr Key needs to clarify if it is a policy he would support. If it isn’t, Mr Key needs to tell us what ‘other ways’ he will propose.

“It is worth remembering that in 2005, Don Brash sent John Key to front to the media to tell them that assets would not be sold in National’s first term in office. This was reported as a major policy reversal at the time, just as it is has been over the past couple of days. Richard Long congratulated Mr Key on a ‘sensible inoculation’.

“But we also know that National’s own staff instructed Don Brash and John Key to be patient and ‘sort out privatisation in the second term.’”


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