English claims surprise at size of Crown asset base

English claims surprise at size of Crown asset base

By Pattrick Smellie

Dec. 14 (BusinessDesk) – New Zealand taxpayers own assets worth a total of $223 billion, and can expect that total to rise to above $250 billion within the next five years, according to the first ever Investment Statement to be released by the New Zealand government.

Finance Minister Bill English said the government had scoured through the public sector looking to create the first full register of Crown assets and liabilities.

“It’s been a bit of a revelation to the Cabinet about the size of what the taxpayer owns,” said English, who insisted the new focus on the government’s asset base was not a precursor to state asset sales.

The government has promised it will only embark on privatisations if it chooses to campaign on that issue before the 2011 election, a promise that English repeated.

However, it was clear many state assets were under-delivering value, and that government processes of bidding for and approving capital spending were of “low quality”.

“Step one is getting the information,” said English. “We can make the most difference with the pressure for new investment. Over the coming years, most state agencies will be expected to first show their existing capital base is being fully and effectively used before being granted additional capital.”

Among immediate opportunities to “reprioritise under-performing capital” were 27,000 state houses that are “the wrong size” and moving on 5,000 tenants of state houses who could afford private sector rents; defence base consolidation and divestment of housing stock; taking action on $96 million tied up in 244 surplus schools, teacher houses, vacant sites and other education assets.

“Disposing of these surplus assets faster would provide additional capital for new schools, more appropriate social housing and modern defence equipment,” English said. “We are asking other agencies to investigate a similar approach.

The Investment Statement found the Crown had total assets divided up as follows:
• social assets: e.g., highways, schools, housing hospitals, conservation land = $111 billion
• commercial assets: e.g., state-owned enterprises, rail network, Air New Zealand = $52 billion
• financial assets: Crown financial institutions, Reserve Bank, Debt Management Office = $60 billion
o TOTAL = $223 million
• Liabilities: e.g., debt, ACC, government superannuation schemes = $128 billion
• Crown net worth = $95 million

(BusinessDesk)

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