Government considering state asset sales - English

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Finance Minister Bill English has signalled the Government is again considering partial state asset sales - including Kiwibank.

At a post-Budget lunch in Christchurch today, English told business leaders that National would "get to grips'' with its position on state asset sales in the next eight months.

He revealed the Government was conducting a stock-take of its assets and their worth and would produce an "investment statement'' next year.

''It seems to me, and I have checked this, that there is a strong demand among the mums and dads for a Kiwi investment model and if we put product into the market people would buy it. Would I be right about that?''

A few hands went up in the room.

''In fact I think there would be a bigger proportion of the population than that would have a crack at it. So we will have a think about it,'' English said.

''My guess would be there's a lot of demand for good share value and it would certainly help us to be able to free up that capital.

"But we have made undertakings to the public and we certainly won't move anywhere without getting a mandate to do so,'' English said in answer to a question about asset sales.

A good example was Kiwibank, English said. 

It had got to a size where it needed either a government guarantee or ''an awful lot of capital''. If there was any asset that was regarded as risky by credit ratings agencies it was a rapidly growing bank.

''So one option would be to go to the market and raise capital. So keep crown ownership, majority crown ownership and raise the rest of the capital from the market. So who'd buy into that.''

A member of the audience, sharebroker Jenny Moreton, said a lot of her clients would be interested in shares in Kiwibank.

English said the Government was intending to next year produce an ''investment statement'' which would tell the story of its investments and their value.

At present there were about $220 billion. That included about $40b of state-owned enterprises, nearly $80b of financial investments and about $60b of social assets such as schools and hospitals.

While the Government had a policy of not selling assets in this term the Government had been spending time on getting to grips with what investments it had. It had no visibility of what happened to the assets and had not in the past paid much attention to them.

He said the Television New Zealand business was ''going through the floor''.

After the lunch he said both of the Government's network assets, TVNZ and New Zealand Post, were being hurt by new technologies. New Zealand Rail was ''a black hole of complexity'' to which it had committed recently another $750m. ''This is the price of nostalgia,'' English said.

Asked later was he softening up for asset sales in the future English said ''No no, we are just outlining the position.''

Progressive Party leader Jim Anderton, who founded Kiwibank when he was a minister in the previous government, said the bank was a huge success because it was publicly owned.

"National's threat to sell Kiwibank is economic vandalism," he said.

"National repeatedly promised not to sell Kiwibank...people worried about Australian banks buying Kiwibank will immediately be concerned."

-with NZPA

- © Fairfax NZ News