No more asset sales after next election, says English

Monday 18th November 2013

Finance Minister Bill English says a re-elected National Party-led government is not planning any more asset sales after the 2014 election, largely because everything that can be sold will have been by then.

With 20 percent of the shares in Air New Zealand for sale by private placement in the next two days and only Genesis Energy left for partial privatisation next year, English said the government was doing no more than carrying out a policy it outlined to voters before the 2011 election.

This year, it has sold 49 percent stakes in MightyRiverPower and Meridian Energy, neither of which has attracted the listing price or the number of first-time retail shareholders hoped for, and only after prolonged court battles over Maori claims to freshwater bodies used to generate hydro-electricity.

Solid Energy, the state-owned coal miner, was to have been partially sold too, but ran into serious financial difficulty which has ruled it out as a candidate for sale.

There were no other obvious candidates for partial privatisation, English said.

Farmland owner Landcorp, for example, was important to retain in government ownership because its assets were often a feature of Maori land claim settlements, while entities such as Housing New Zealand, with assets valued at $17 billion, was undergoing substantial reform.

"The kinds of assets that would benefit from it (partial sale) are in the programme," said English. "The other assets need different management."

He scoffed at Opposition party claims that dropping the government's share of Air New Zealand from 73 percent to 53 percent would have an impact on airfares or public safety as "a ridiculous claim", while Economic Development Minister Steven Joyce called it "adolescent economics."

The government remained as much the controlling shareholder at 53 percent as at 73 percent.

Joyce said "we will be transparent" about announcing any intention to resume asset sales.

The asset sales issue overshadowed a press conference held by English and Joyce to release a 91 page "Business Growth Agenda Progress Report" enumerating the state of play on the long list of initiatives across six areas of focus to boost economic performance.

Light on self-criticism and long on policy description, the report does note slippage against one of its key targets - to increase exports to 40 percent of Gross Domestic Product by 2025. They slipped by 2.1 percent to around 33 percent of GDP in the year to June.

The government had warned in August last year that "the soft global economy could result in a decrease in the percentage of exports to GDP in the short term.

It also noted that some exports to China had "stumbled" because of the Fonterra infant milk formula botulism scare and incorrect certification on meat exports, although Joyce said after a visit to China last week that the relationship with New Zealand was in good heart.

English highlighted the progress being made with the new Vocational Pathways policy, which was giving young people more focused advice and choices on their training options.

While the Reserve Bank believed New Zealand was unable to grow faster than 2.5 percent a year without spurring inflation, English said he expected that rate would go higher.

BusinessDesk.co.nz

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