TOWER says sell state assets to KiwiSavers

TOWER says sell state assets to KiwiSavers

Default KiwiSaver provider TOWER Investments has welcomed the Government’s suggested partial floatation of state assets, but wants initial sales to be to New Zealand investors only, including KiwiSavers.

“Kiwis should get an exclusive right to own the initial stakes being sold in state assets, either by buying shares direct or via their Kiwisaver schemes buying stakes”, said Sam Stubbs, Chief Executive Officer of TOWER Investments.

“Given Prime Minister John Key’s stated preference for mums and dads to invest in state assets, it is noteworthy that only New Zealanders can belong to KiwiSaver schemes.”

“The foreign ownership issue does not arise with investment by KiwiSaver schemes in sensitive state assets.”

“KiwiSaver schemes are natural investors in state assets because they have long-term investment horizons that match the long-term capital requirements of state-owned enterprises and Crown entities.”

“Capital raising needed for the 18 state-owned enterprises and 72 Crown entities on the Government’s books could be made much more efficient if KiwiSaver schemes were enabled to channel household savings into investing in them.”

“Governance will be a critical issue for private sector investment in state assets.”

“If mums and dads are to invest directly in state assets, who will represent their interests effectively at board level?”

“By contrast, if KiwiSaver schemes invest, appropriate board level representation can be appointed on their behalf that does represent the best interests of KiwiSaver members.”

“The case for KiwiSaver schemes investing in state assets is similar to the positive reasons for their investing in public private partnerships (PPPs), including having strong incentives to minimise operating costs and improve service quality.”

“Listing of state asset shares on the NZX would go a long way to increasing the size and depth of our capital markets and open up more investment opportunities for KiwiSaver schemes within the New Zealand economy.”

“Many state assets would easily become NZX Top 50 companies and that would put them on the “must buy” list for KiwiSaver fund managers, so the support is definitely there.”

“Kiwisaver schemes now have over $5 billion of assets, which is growing all the time.”

“Ordinary Kiwis, either directly or via their Kiwisaver scheme, now have the investment horsepower to be able to buy stakes in state assets, and they should be given the first chance to do so.”

ENDS

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