One of John Key’s excuses for selling our SOEs is that we need the cash to buy $33 billion of new assets over the next 5 years. Sounds like a lot, eh? It turns out the Crown spent $42 billion on new assets* over the last 5 years without selling our SOEs and even with that $33 billion of new capital spending the deficit will be gone in 4 years … I wonder what Key’s next line will be.
PS. On the topic of asset sales and capital investment, Phil Heatley says Housing NZ has sold 24 properties for $19 million that could be used to buy 45 new four-bedroom homes in Mangere. Putting aside the issue of ghettoising HNZ tenants by shifting them from rich areas, I noticed the word ‘could’. In fact the government isn’t spending the money from these asset sales on buying new state houses. The budget for state house acquisitions was only $10 million last year. This year it’s zero.
*capital spending total $62 billion minus the $20 billion paper transfer of assets from Transit to NZTA.