Overseas investors eye potential New Zealand state-asset sales

Foreign investors are already eyeing the New Zealand market over the Government’s plans to partially privatise state-owned assets. This bursts the myth that any profits from sales would stay in the hands of “mum and dad” investors, says the PSA.

An article in today’s New Zealand Herald, shows global financiers are clearly excited about the potential profits to be made from New Zealand state asset sales.

“According to at least one bank survey late last year 46 percent of New Zealanders are not saving, says the public sector union’s National Secretary Richard Wagstaff.

“Over a third of New Zealanders weren’t saving because they had nothing left after paying the bills.

“Now the Government has announced its intention to cut Kiwisaver contributions. Alongside rising inflation, tax cuts that mostly benefitted the rich and slow pay movement, we can rest assured that a large number of so-called “mum and dad investors” won’t be in any position to buy shares if state assets are sold.

“Even if they were sold only to “mums and dads” in the first place, they would soon be on-sold as overseas companies move in to take advantage of the cash cow.

“Just as has happened in the past, profits from assets sales will go overseas rather than bring any boost to New Zealand’s local economy. Where is the benefit to ordinary New Zealanders in that?” says Richard Wagstaff.

The Government plans to sell parts of state-owned power generators Genesis, Meridian and Mighty River Power and coal company Solid Energy. It also wants to reduce its majority interest of 75 percent in Air New Zealand to 51 percent.

“State-owned assets earn $700 million a year. That money presently stays in New Zealand and benefits New Zealanders by way of public services. If that profit goes off-shore, the benefits to New Zealanders go with it,” says Richard Wagstaff.

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