Asset fire-sale returns uncertain – Cunliffe

Press Release – New Zealand Labour Party

Bill English’s admission that the proceeds from SOE asset sales are uncertain begs the question of why National is determined to continue with them, Labour’s Finance spokesperson David Cunliffe said.Asset fire-sale returns uncertain

Bill English’s admission that the proceeds from SOE asset sales are uncertain begs the question of why National is determined to continue with them, Labour’s Finance spokesperson David Cunliffe said.

“What is certain is that nearly three quarters of New Zealanders oppose asset sales, they are irreversible, and New Zealanders can only prevent them with their vote on November 26,” David Cunliffe said.

“Bill English was forced to admit on Sunday’s Q&A programme that he does not know whether his government will actually receive the ‘$5-7 billion’ they have pre-spent from the 49 per cent privatisation of Meridian Energy, Genesis Energy, Mighty River Power, Solid Energy and Air New Zealand.

“He could not name a number due to international market uncertainty,” David Cunliffe said.

“International equity markets are in crisis as the Greek government appears on the brink of collapse and increasing questions are being asked of Italy.

“New Zealanders are right to be extremely concerned. National’s position on privatising state assets is riddled with contradictions,” David Cunliffe said.
* In the Pre-Election Economic and Fiscal Update (PREFU) issued on 25 October, National listed (page 82, B.16) “Balance sheet funding of new capital spending” largely from SOE asset sales: $125m in 2013; $560m in 2014; $790m in 2015 and $835m in 2016

* In the same PREFU (p 29, B.16, footnote 6) the Government says “As there is insufficient information to forecast individual transactions, there are no estimates of sale proceeds, selling costs, foregone dividends or ownership changes”

* Mr Key has since “rebranded” the same money calling it a “Future Investment Fund”

* The PREFU ignores the cost of sale but Treasury estimates this at 2-5per cent of the proceeds ($120-$340m); and at least $6m has already been spent on bankers without an electoral mandate.

“National is trying to have this both ways, counting on chickens that have not hatched to fund its spending on roads and prisons; but refusing to disclose the costs of sale or the loss of dividends.

“Now National has done a complete backflip. ‘Apprentice Finance Minister’ Steven Joyce says he has precise data on the lost dividends, and Mr English says he has no idea whether the $5-7 billion target will be achieved.

“It all begs the question: when in an economic hole, why sell your ladder? Why fire-sale the cornerstone of our energy system when global equity markets are in turmoil and rising oil prices means energy security is a vital national interest?

“Within a decade, and probably much less, New Zealand will be poorer for having fire-sold these assets and lost effective control of our energy system to powerful multinational energy interests.
“New Zealanders have just one chance to stop this irreversible madness – on November 26,” David Cunliffe said.

Authorised by David Cunliffe MP, Parliament Buildings, Wellington

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