David Shearer
Labour Leader

23 July 2012

National’s billion dollar bonus stings taxpayers

Kiwi mum and dad taxpayers will potentially miss out on $1 billion dollars in revenue lost from the asset sales to pay for John Key’s bonus scheme for private investors, says Labour Leader David Shearer.

“John Key is refusing to say how the so-called loyalty scheme will work and how much it will cost. We’re seeing great big chunks of the promised windfall from this venture eaten into by brokerage fees, PR and advertising campaigns and now the bonus scheme. How many shares will have to be held back to cover that scheme?

“Treasury said last year that, for example, keeping back an additional 9% of the companies – selling down 40% rather than 49% - would cost around $1.3 billion in foregone revenue. It is Kiwi taxpayers who will have to cover the cost of the lost revenue to pay for a bonus scheme that benefits private investors. That is simply not fair.

“John Key is desperate to live up to his promise that 85-90% of the shares will end up in the hands of ‘Kiwi mums and dads’. That’s why he’s come up with his so-called loyalty scheme. But he’s not building up long-term ownership of shares as he claims, he’s just enticing people to hold onto the shares until after the next election, when with the extra loyalty shares they’ll be able to sell off even more to corporate and foreign buyers.

“It’s just another dodgy deal that will see taxpayers lose out in the end. John Key should be honest with New Zealanders and admit that these valuable assets will bring in less than he promised and that’s not in our best interests,” said David Shearer.

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ENDS

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