Apr 16, 2008

Herald On Asset Sales

The NZ Herald Editorial today looks at the National Party position on asset sales.

Mr Key is tip-toeing around the issue because he clearly sees no public relish for asset sales. Rather than startle the horses, he seems happy to bow to the prevailing mantra that state control is good and privatisation or corporatisation is bad. He is not prepared to advocate the selling of assets and to explain the benefits. That is unfortunate because, as Mr Key well knows, there is a strong case to be made.

This is not about ideology. It is reasonable to ask whether it is sensible for the Government to own the likes of vehicle testing stations, farms, coal mines and courier businesses. But most of all, this is about such businesses operating more efficiently and providing a better service to the public. Part or full privatisation brings a discipline, transparency and customer focus that is absent when a business is underpinned by taxpayer funding.

This is also about questioning whether Government ownership of three-quarters of the electricity sector - with Contact Energy sitting awkwardly off to one side - is a successful formula. Ongoing concerns over power supply suggest that is far from the case, and that Genesis, Mighty River and Meridian cannot be said to have passed the public service performance test. This, more than sale receipts and retiring public debt, must be the main motive for disposing of state assets. It is also the reason why Mr Key should abandon his timidity.