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Government must front up on full costs of asset sales

23 August 2012

Government must front up on full costs of asset sales

New information shows that the energy companies that the Government is planning to sell have already spent millions preparing themselves for sale, Green Party Co-leader Russel Norman said today.

Official Information Act responses from Genesis Energy, Meridian Energy, and Solid Energy show that they have collectively spent over $1.3 million on preparing themselves for sale. A request for the same data on Mighty River Power, the first company up for sale, was refused by the Government and Dr Norman will be questioning the Minister of Finance on the issue today in Question Time.

These costs are additional to the $106 million in the Budget to pay for asset sales costs (of which over $10.5 million has been spent so far), the millions of dollars in Waitangi Tribunal costs, the pay-rises given to senior managers at the energy companies to bring them up to “commercial rates”, the potentially $200 million cost of a share give-away, and the $100 million a year that asset sales would add to the deficit due to the net loss of profits.

“It’s time for the Government to front up over just how much these asset sales are costing New Zealand,” said Dr Norman.

“New, hidden costs keep on coming to light and the total spent is racking up at an alarming rate.

“Since early 2011, the publicly-owned energy companies have been siphoning resources into preparing themselves for sale.

“Lawyers, consultants, PR consultants, and senior managers are raking in the money at the taxpayers’ expense.

“New Zealanders will pay for this largesse through higher power prices and the loss of the dividends these companies bring,” said Dr Norman.

Additional information:
OIA responses from the energy SOEs on costs they have incurred in preparing for asset sales.

ENDS

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