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Key broke promise on asset sales cost

25 August 2013
Key broke promise on asset sales cost
John Key spent twice as much as he promised he would on the sale of Mighty River Power, Green Party Co-leader Dr Russel Norman said today.
Newly released figures show that Treasury spent $28 million on the sale of Mighty River Power, the company itself spent $12.8 million, and bonus shares cost a further $25 million. That brings the total cost to $65.8 million, or 3.9% of the sales proceeds. That's twice the 2% cost that John Key and his ministers promised.
Also the latest update from Treasury brings the total cost of the asset sales so far to $115 million, not including the interest-free loans to Meridian buyers (see table below).
"John Key has blown the budget on asset sales. The privatisation of Mighty River cost twice as much as he promised,” said Dr Norman.
“The Prime Minister wasted over $65 million of public money on selling Mighty River. That was 4% of the sales proceeds; twice the 2% that Mr Key promised. Only 2% of the population bought shares; the rest of us had to pay.
“All up, National’s asset sales programme has cost $115 million and the bill keeps climbing every day. That money should have been spent on important public services, not wasted on brokers’ fees, lawyers, and ad men.
“The question is why is National spending money on asset sales at all? They don’t make economic sense, they permanently increase the government’s deficit, and they put upward pressure on power prices.
“Kiwis don’t want to sell our assets. National needs to listen and stop wasting our money,” said Dr Norman.


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