Key hints at delay for asset sales

John Key

Prime Minister John Key raised the possibility of delaying state asset sales this morning.

Speaking on Television New Zealand, Mr Key said his government would have three years to implement its policy, assuming it was re-elected, and that the slump in confidence in global financial markets could delay this.

Mr Key’s National-led government is seeking a mandate at this year’s eleciotn for the partial sale of up to 49% of four state owned energy firms.

The government estimates that between $NZ5-7 billion could be raised from the sales, and this would be used to reduce the government's overall debt, which is projected to rise to 30% of GDP 2016.

The sales are seen as a way of deepening New Zealand’s shallow capital markets, but also as a way of assuaging the international ratings agencies, tow of which – Standard and Poors and Fitch – have New Zealand’s AA credit rating on negative credit watch.

Ministers have always anticipated the sales would be scheduled over a three to five year period, and Mr Key has previously said any delay due to financial market turmoil would be “a matter of months.”

However today he sounded more circumspect.

"In reality, if we're in the fortunate position to be the government post-November 26, we have a three-year mandate - that's a long time in global financial markets...
"Obviously we're not going to be silly about these things, but I'm still confident we can undertake that programme."

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30 Comments & Questions

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Just make sure that someone doesnt get insanely rich by being the lead manager or underwriter. That would be money for jam. Surely the govt department involved can do the management of the asset sales inhouse. This would save money for the tax payer!

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Mr Smile & wave is realising how unpopular asset sales is to heartland nz. Shame he cant seem to line up the same brain cells over the ETS scam.

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frog and Anonymous, do you understand business at all. Can you read a balance sheet. Or do you just listen the the bull put out about the asset sales without doing some reading. You commets make this the most likely. Sell them John, sell them

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JP, you are not very charitable, and neither do you show much common sense.

Sell the 49% yes I agree, but why do it in a hurry when the financial markets in the next 12-18m are still very uncertain. I want to see competitive bidding for the role of lead banker (perhaps insisting on a very NZ focus for that company). The assets will to some extent be very sale-able, and we want the very most for the sale.

One company that springs to mind as a persona non grata would be Goldman Sacs. If the debacle in Greece is anything to go by GS will line their own pockets and their mates.

John Key has enough savy to know, he needs a number of stars to line up to get the most benefit for the country. There is no need to rush, the benefit is long term in nature so an extra year or two will matter naught.

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wouldn't it be great if Key and his New National-Labour Party were just as cautious about implementing the economy trashing scam (ETS) in the same context.

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I agree entirely. The pressure being applied by our export market Governments is huge. One of the reasons he needs to be cautious with this sale and be in control.

When the BNZ was sold if I remember correctly it was Goldman front running the deal pushing the line "that Banking was a stupid industry to be in" as a Government. What what they (GS) do and be very very wary of what they say.

The whole ETS is also being pushed by, yep you guessed it, the big merchant banks / market makers, they need something else to trade, CDOs have gone, Package / Repackaged Mortgages are gone, off balance sheet debt trading a-la Greece is gone (so is Greece).

John Key has to get the debt down, either we as Kiwis get productivity through the roof (fat chance with Unions and Employment law), or we cut costs drastically. It is time to pay up Kiwis (of which I am one) you can't live / fund consumption on ever increasing debt.

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You are correct on one point and incorrect in your political context/agenda/propoganda on another: The external influences driving many very confused agenda's are causing significant impacts to New Zealand's well being. One could also argue quite strongly New Zealand no longer exists as a sovereign nation. However, the current government appear complicit with this in the same fashion as the last mob. It's all simply a posturing exercise as to holds the rights to various strains of global power not more of what's good for the local concern. New Zealand is as equally a victim in this tussle as most other countries. There are too many bullies in the playground where siding with one or the other in a game of global bull rush......well

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Anon, I don't have a political agenda in respect to what is going on with the ETS. It is just obvious that when a small country has a long list of needs...... Need Export Markets, Need shed loads of $s to finance our Earn $1.00 and Spend $1.20 lifestyles, then in that situation the country is going to be told what to do in many respects. Its future is in its hands, the question is What are we going to do about that.

It is possible to have a small nation that is not under the same scrutiny (Singapore) but to be in that position the country as a whole has to get its act together, and pay its way in the world.

Yep there are bullies, but that is the same for all nations, even happens in our schools.

It still comes back to simple maths, earn more than you spend, save enough to cover the period when your earning capacity has diminished. What's so hard about that. In NZ we have far too many who think they are owed a living provided by taxes or transfer payments from workers else where in the economy, and we have a bunch of idealists who feel it all has to be fair. No one ever promised life was fair, but if you work and no matter how much / little you are paid you spend less than you earn then life will be rosy.

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Repeated with grammar corrected. Watch, not What.

I agree entirely. The pressure being applied by our export market Governments is huge. One of the reasons he needs to be cautious with this sale and be in control.

When the BNZ was sold if I remember correctly it was Goldman front running the deal pushing the line "that Banking was a stupid industry to be in" as a Government. Watch what they (GS) do and be very very wary of what they say.

The whole ETS is also being pushed by, yep you guessed it, the big merchant banks / market makers, they need something else to trade, CDOs have gone, Package / Repackaged Mortgages are gone, off balance sheet debt trading a-la Greece is gone (so is Greece).

John Key has to get the debt down, either we as Kiwis get productivity through the roof (fat chance with Unions and Employment law), or we cut costs drastically. It is time to pay up Kiwis (of which I am one) you can't live / fund consumption on ever increasing debt.

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It think it is you who is confused. It is plain from your contrarian view that you believe heartland NZ supports asset sales and you support the ETS. Wouldn't be an accountant mate of 'Dick' Smiths by any chance?

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In response to JB
Watch the prices go through the roof of these monopoly coys to their customers
Price gouging will show its hand
Some politicans will never learn

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Just for a change sell the assets for what they are worth, and not a lot less...
Within two years any sold assets will have majically doubled in value...
I'm sure the right people are queing up already.

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Must be an election soon

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Forget about selling 49% of them. Sell one or two generators outright and let some competition into the market. Nobody gets away wiuth price increases like we have seen in govt. services.

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Sir John is NZ'S best PM we have ever had. lets hope Don Brash gets enough votes (10-15%) so he can influence Keys policies for the good of NZ.

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PM will be all about the options

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Selling is ridiculous. Clear the debt and then what? What will cover the shortfall from what we currently receive back from those assets. It is nonsense. Post asset sales we will be unhappy once again. Why can we not have long term goals rather than quick fixes?

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Listen to you all, sell, sell , sell, you'd all sell your grandmothers if you thought you could get even a short term sugar fix, power should be getting cheaper in this country, not more expensive and that can only be achieved by running our, I'll repeat 'OUR' electricity generating and distributing assets built up AND PAID FOR dozens of times over across the decades as a not for profit national standard of living/economic enabler, the friendly power saving hint lad with his more than obvious saving tips on TV is just not enough folks. Perhaps the people who are paid too much relative to the average Kiwi and frequent these comments sections with their version of reverse patriotism might not notice the 300 dollars a month the average family has to cough up for power (up nearly 100% in the past ten years and nearly x 4 times more expensive than most places across the ditch burning gas and diesel), how do you economic Einstein's explain that then? oh it must be the rain from the clouds that just keeps going up in price, yes that rain's expensive these days let me tell you.

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Electricity in this country should be amongst the cheapest on the planet thanks to our forbears. What a failed economic experiment for most this model of market competition is. What a joke, give me clean green reliable hydro or geothermal any day over the useless expensive and unreliable wind machines, or maybe give me nuclear.

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Labour sells state assets as well! NZ Post sold 50% of Courier Post under a labour government.
Now look at NZ Post - its a financial basket case

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I agree with Toryburchbags!

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I agree with Toryburchbags!

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so do I!

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You don't get it do you? The parties are just different masks on the same face. And our 'government' (like all others that took an IMF loan) are forced into the UN-commissioned globalist fascist agenda for centralisation of power and control into a one world government. Wake up and see the bigger picture before it's too late sheeple. Once our infrastructure is out of our ownership, it is gone forever but the engineered debts remain for control.

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Mr flip flop glamourous primeminister. Maybe he just is so scared not to be in with public feelings, shame poor john, this politics game of his is not always fun, anyway, for him he is just having fun, as he said, when he is not voted in he will leave nz politics as he only wants to play as PM!!!.

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Not sure what planet you are on, or what polls you are watching, but there is no one else going to get voted in in Nov...asset sales or not

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An interesting question would be
" how much of the four state owned energy firms " are actually owned by state?.

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Politicians pamper to their masters. They lie cheat and deceive; and the present government is no different.

History has shown that the sale of state assets doesnt work. The railways and telecom get asset stripped, staff numbers get slashed, service levels decline and huge profits get paid out instead of reinvested back into the company. And because its a core asset, they end up being recapitalised by the taxpayer; which is the disappearing middle class.

A short term fix for a long term loss, if you ask me.

Warren Buffet is right, and I believe he is more than qualified to make such a statement 'The rich need to pay more taxes'. Keys policies seem to be going in the opposite direction.

What the rich seem to have ignored in their race to the top is you need customers that have the ability to pay for business to continue. While you may be able to get away with monopoly type companies, eventually people wont be able to pay for these either. Then there are no winners.

Its time journalists asked Key some hard questions, or confine the next generation to poverty.

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Chris "we have far too many who think they are owed a living provided by taxes or transfer payments from workers elsewhere in the economy".

Bring on the CGT, and close the trust/tax loopholes that allow these wealthy leeches to pay less tax than the workers.

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Struck a nerve did I. Your CGT will do nothing, those who work to create capital wealth will hold onto it and because the asset is not sold there is no gain.

You need to find a way to put the energy you have for dissing us wealthy leeches to finding a way to gain wealth on your own account.

A tax on capital is a possibility, at the moment we have a FDR (Fair Dividend Regime, a joke really cause it is not fair) for overseas investments. The only issue I have with this tax is that the rate is a bit high compared to what is a fair dividend (should be taxed on say 3% of the asset value, not 5%). However, if a tax like this was applied across ALL assets including homes, land, industrial plant etc etc, then those who invest will make sure they get a rate of return that compensates them for the risk. AND if the assets go up in value the tax rises as well, people will then be less inclined to live in huge mansions, you know the ones us wealthy leeches live in, and they will sell down to smaller dwellings and put the money to work to cover the taxes.

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