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Asset sales failure leaves big hole in Budget

David Shearer
Labour Leader
4 September 2012

Asset sales failure leaves big hole in Budget

John Key’s economic credibility is riding on selling assets and more mining but his ideas have gone well and truly off the rails, says Labour Leader David Shearer.

“The collapse of John Key’s asset sales plan could leave a $558 million hole in the Government’s Budget for this financial year. He must explain how he’s going to fill it.

National promised to spend $558 million using the proceeds of the asset sales. At the time it said it wanted to invest in infrastructure ‘without borrowing more from overseas lenders’.

“Well what is it going to do now? The delay in the sale of Mighty River Power puts that spending at risk. So how will they pay for their promises? Will they borrow more?

“National is taking New Zealand nowhere.

“It said mining and asset sales were our economic future. Yet today hundreds of miners and their families are marching through Greymouth protesting against job cuts announced by Solid Energy. And the asset sales agenda is in tatters.

“National is spending millions of dollars on consultants, advertising, PR experts and lawyers preparing the assets for sale. It’s now estimated the Mighty River Power delay will cost up to $10 million.

“That’s not National’s only problem. Solid Energy’s outlook is dire, Meridian Energy is under pressure to lower its power price to the Tiwai Point aluminium smelter and the sale of Air New Zealand is well back on the backburner.

“Where will National get the $5-7 billion in proceeds that it promised? The uncertainty around the asset sales is increasing the risk that they will be sold at rock bottom prices. But given the Key Government's $558 million budget hole, it's likely they will carry on regardless of what price they will get.

“National cannot be trusted to deliver on its promises. It has failed on the economy with the worst growth under any government in 50 years.

“Labour will build a modern and clever economy. We are the party of new ideas. National has no idea. Its promise of a brighter future is darkening by the day,” said David Shearer.

ENDS

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