Government's asset sales retreat is pure politics

Press Release: ACT New Zealand
25 March 2014, 11:10pm

“The National Government’s decision to end the privatization of government trading enterprises is pure politics and makes no economic sense,” said ACT leader Jamie Whyte.

“The reason to sell government assets is simply that government is not good at business. Owning businesses is risky, as the collapse of Solid Energy shows. Such risks should be taken by voluntary investors, not by politicians using the money of taxpayers with no choice in the matter.

“If Labour had sold Solid Energy the taxpayer would have been a billion dollars better off today. 

“National is now saying that the taxpayer has to keep Solid Energy and its other loser businesses. Yet it is irrelevant that some of these businesses are making no money - private companies often sell their loss making divisions. Let someone who can do a better job of running it have it.

“Of course, the government has other assets, such the remaining half of the energy companies.  Is National really saying that there is no better use for $4 billion of taxpayers’ money than owning half of some energy generators?  The only reason not to sell is the political promise not to sell.  Ownership by the taxpayer makes no economic sense.

“New Zealand Post has made no money from Kiwi Bank.  The bank is draining resources from the postal business.  The rise of internet business delivery has seen a recovery of postal businesses around the world but New Zealand Post has put all its investment into a bank that is yet to pay a dividend and the postal service is getting worse.

“A logical move would be to let the public invest in Kiwi Bank.

“The PM’s refusal to sell more state-owned businesses is pure politics.  It is another reason why politicians should keep out of business and concentrate on what the government should be doing, such as improving our education, health and welfare systems.”

ENDS

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