Crown assets under scrutiny

HAMISH RUTHERFORD
Last updated 18:02 26/03/2014

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Treasury is pushing for government departments to consider whether they need to own assets or should sell them to help meet future demands at lower cost.

Treasury this afternoon released a snapshot of the Crown's balance sheet and an examination of how well it is being managed.

The report was the first in a series of what are to be investment statements issued every four years.

The report concludes that while the value of Crown assets has never been higher, at $244.4 billion in mid-2013, the makeup of the balance sheet will change over time. Financial assets held by the Crown, such as ACC and the NZ Superannuation fund, are now worth about 12 per cent of gross domestic product, a figure expected to grow to about 45 per cent by 2057.

The report admitted there was room to improve the way the Crown managed money.

"Significant Crown investment occurs without being subject to a formal process that ensures it aligns with overall government priorities," the report said.

"This means while individual agencies may be making investment decisions that reflect their own priorities, assets may be better deployed to reflect [the] government's long-term priorities."

There should be a focus on "how capital could be recycled" to meet changing priorities, the report said.

"Public ownership needs to be assessed against its ability to deliver on outcomes and value for money, and should not be seen as the default setting," the report said.

It noted that while most schools were owned by the Government, there was a large proportion of publicly funded private provision.

Secretary to the Treasury Gabriel Makhlouf said the push to get government departments to investigate whether ownership was appropriate was not ideological, but a search for best value.

"What we're absolutely focused on here is that we get value from the balance sheet and the massive investment that the Crown has made over the years and is planning to make in the future," Makhlouf said.

"This isn't an ideological thing, this is actually looking to ... ways that we can actually get best value."


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