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National ready to kiss untold millions goodbye

Phil GOFF
Labour Leader
4 September 2011

National ready to kiss untold millions goodbye

The state-owned assets that National plans to sell if it wins the election returned $900 million to taxpayers in the year to June 30, says Labour Leader Phil Goff.

“This return makes it even more extraordinary and nonsensical that National is prepared to flog these companies off,” Phil Goff said.

Phil Goff said the return from three state-owned electricity companies, Solid Energy, and Air New Zealand in the 2010-2011 year followed on from $800 million returned to the government in the previous year. “Yet, despite these returns, National proposes selling half of these companies --- and this week it also admitted it has no way to prevent the shares being snapped up by foreigners, even if individual companies can only own 10 per cent.

“It is inevitable that dividends from these companies, currently used to fund vital public services like schools, hospitals and police, will flow offshore if National gets its way,” Phil Goff said.

“Over the past five years, the average total shareholder return to the Government from SOEs has been about 17.5 per cent. The Crown’s cost of borrowing is 6 per cent (the average 10-year bond rate).

“Selling them makes no sense. Why would you sell an asset in order to pay down debt, when that asset’s average return comfortably exceeds the cost of borrowing? The policy is illogical and economically illiterate,” Phil Goff said.

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“Most New Zealanders don’t want to sell off assets that are New Zealand and community- owned. But National will claim if it’s elected that it will have a mandate to do so. That makes this election a referendum on whether our assets should be sold.

“National refuses to explain the detail of its policy to voters. Tony Ryall said this week that the Government won’t make the ‘final arrangements’ for the asset sales proposal until next year. People should not give a mandate to a proposal they haven’t even seen. National’s claim that it is only selling half the assets would quickly turn to selling off all the assets, which is actually what National believes should happen.

“Once shares are gone, they will be gone forever,” Phil Goff said. “Labour’s economic policy will ensure a strong export-led growth economy and allow us to keep our assets at the same time. Labour is committed to ensuring that New Zealanders own their own future.”

ENDS


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