John Key’s promising new capital spending projects left, right, and centre that would be funded by asset sales. But, with the European debt crisis spreading, the odds of getting $5-$7 billion for slices of our energy companies and Air NZ are worsening. So what’s the plan when they need more money for Key’s promises? What do you think?
That’s right, sell more assets.
Partial privatisation of the big SOEs would be just the first stage, a stop-gap to avoid a small amount of extra debt (Labour’s net debt track peaks at $52 billion compared to National’s at $48 billion) while maintaining funding for new capital spending. Once that money is gone, which could be much sooner than expected if the sales revenue is smaller than forecast, then they would have to sell the other half of those companies, or Kiwibank, or the remaining small beer SOEs.
Key admitted as much yesterday saying that more could be on the block if the first round were to ‘go well‘.
This just reflects what a fundamentally short-term policy asset sales is. We would lose the dividend stream for a one-off revenue hit, and when that hit is used up they would go in search of more to sell.
Good on Phil Goff for saying his first action in government would be to stop the sales process, which National has already begun without a mandate.
What we need are the sustainable plans presented by the Greens and Labour – getting the revenue for capital investment from capital gains tax and SOE dividends, not flogging off our most valuable assets.