National tries to sweeten asset sales

07:02, Oct 30 2011

So now we know the sugar pill National has prepared to make the asset sales medicine more palatable: a ring-fenced “Future Investment Fund” that will be used to redevelop hospitals, modernise schools and invest in transport projects.

It could even be used to expand KiwiBank’s capital base, if the state owned bank move into small and medium business banking, PM John Key told reporters after the campaign launch.

The fund is a fund in name only though; similar to the Canterbury earthquake recovery fund, with no separate structure of its own but essentially an in-an-out accounting exercise designed to reassure voters the money will not be blown on consumption and pet projects.

National’s problem will be convincing voters that the extra projects will come on top of capital spending that would otherwise be made … and if it is such great investment why the Government would not invest the money anyway, without selling off income producing assets to fund it.

Unless, that is, it can convincingly argue the interest on debt saved is clearly more than the dividends and retained earnings from the sold assets.

Key, however, told me afterwards he believes it is easier to sell the asset sales message, with minimal direct impact on individuals' lives, than it will be for Labour to sell the very personal message that workers in their 40s are going to have to slave away for another two years under Labour.

The protest sit-in outside the Sky City conference centre – maybe 200 people at its peak – was a cross between Unite Union and Occupy Wall St. Most of the rhetoric aimed at National and John Key, though Phil Goff got a flick on a couple of banners.

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The most impressive part of it was the end.

Police looked like they were getting antsy and told the crowd to move to let traffic flow – after first thanking them for their protest!

The organisers complained that the reason they had stopped was because the 20-strong police line had blocked their way – and if they moved they would be gone in five minutes.

I was braced for the cops to stand on their dignity, and for things to get ugly but the deal was struck, the police stood aside and off they went peacefully.

Kudos all round.