ACT Urges Bolder Approach For State Assets

Prime Minister John Key’s announcement on State asset sales – while a step in the right direction – does not go far enough, both in terms of the number of assets up for sale and the extent to which each asset could be sold, ACT New Zealand Finance Spokesman Sir Roger Douglas said today.

“While Mr Key can be applauded for recognising the value of the private sector in asset ownership, we should not stop short at the five assets he outlined today – for example: why do we have Crown ownership of Landcorp, Quotable Value, Learning Media and AsureQuality?” Sir Roger said.

“It is bizarre that National can see the benefit of selling power companies and an airline but at the same time insists that taxpayers continue to own large tracts of farmland, a publisher, and a property valuation company. Equally unwise is National's decision to rule out full privatisation. Partial privatisation – where the Government is the majority shareholder – poses the risk that assets remain open to political interference. This creates uncertainty and scares off private investment – precisely the opposite to what is intended.

"We have witnessed the benefits previously of privatisation in New Zealand. The sale and deregulation of Telecom had net gains of around half a billion dollars per annum for the New Zealand economy between 1987-1993. For customers this meant significant reduction in the price of phone services and increased access to those services. For Telecom it meant increased productivity and output. History has shown that full privatisation of State assets in New Zealand leads to greater investment, efficiency and productivity gains, and frees up Government resources to invest elsewhere or even pay off Government debt.

“ACT will support the asset sale measures outlined today because private ownership boosts asset performance and frees up taxpayers’ capital to be invested in other areas. But we believe that New Zealand deserves to have all options considered and we will urge the Government to take a much bolder approach to the sale of State assets,” Sir Roger said.

ENDS

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