Avoid another Solid Energy – sell Landcorp farms now

ACT New Zealand
August 19, 2015. 1:00pm

Landcorp’s dismal performance shows that the government should wind down the company’s asset base, says ACT Leader David Seymour.

“The parties who campaigned on ‘keep our assets’ need to explain why the taxpayer should keep any companies that are just as often liabilities,” said Mr Seymour.

“The New Zealand taxpayer deserves better than another Solid Energy-type meltdown.

“The dividends received from this business (0.4% in the past year) signal the poor returns to the taxpayer.

“The government should start selling down Landcorp’s farms, transferring risk to the private sector and ending the potential for a costly corporate bailout.

“The role of government is to provide essential services – not to run businesses. The data from here and across the world is unequivocal: perverse incentives cause governments to misjudge risks and fail to extract value from investments.

“In the hands of expert, profit-focused private owners, these enterprises can prosper on their own merits, maximising productivity without threatening taxpayers with costly corporate welfare or risk on investment.”

ENDS

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