21 July 2009 Media Statement

Treasury claims about privatisation boosting productivity

Treasury’s claim that privatisation boosts productivity is an old song that Treasury should be embarrassed about, Progressive Wigram MP Jim Anderton says.

“Treasury made the exact same claim about the privatisation of rail. It could not have been more wrong. The privatisation of rail was a disaster on any reasonable measure.”

Jim Anderton tabled in parliament Treasury’s 1999 report “the privatisation of New Zealand Rail.”

In the report, produced when Bill English was finance minister, Treasury claimed, “welfare increased from the privatisation of rail. This reflects the remarkable improvement in productivity that took place.”

“Treasury has long made a habit of calling for the same medicine regardless of the facts. When the facts showed Treasury’s advice about privatising rail was hopelessly wrong, they made up a case that said it was great anyway! You can’t beat this for poor quality advice. If Treasury was a doctor, the patient would be dead.

In an ironic twist on Treasury’s call for other government departments to contract out more work, the discredited rail report was produced under contract for Treasury.

ENDS

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