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No work yet on selling part of SOEs - Bill English

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Fuseworks Media
Fuseworks Media
Bill English. Pic: NZPA
Bill English. Pic: NZPA

Wellington, May 23 NZPA - The Government has not done any work on part-floating state owned enterprises (SOEs) Finance Minister Bill English said today, but the opposition believes otherwise.

Mr English was criticised on Friday after he told business leaders the Government would "get to grips" with its position on state asset sales in the next eight months

Answering questions from the audience at a post-budget function in Christchurch, Mr English said Kiwibank had reached a size where it needed either a government guarantee or "an awful lot of capital".

He suggested there would be strong demand for shares in it.

National promised before the last election that it wouldn't sell or partially sell any SOEs during its first term in office, but it has not made any commitments beyond that.

Today, Mr English told TVNZ's Q+A show the partial float of state companies "may or may not work" but the Government had not done any work on it.

"The Government position is pretty clear, no asset sales at all in this term, and if we're going to change it, that has yet to be considered let alone decided."

If National were to change its policy, it would campaign on the change, he said.

The Government's focus now was on better management of its $200 billion in assets.

"I get asked all the time by people when or if they're going to have good opportunities to invest somewhere, anywhere, because finance companies have been in trouble, they're not sure about the sharemarket, they see the housing market now going sideways, it doesn't look quite the sure bet that it used to," Mr English said.

The Government was focused on financial market regulation so people would be confident to get back into investment and "we don't have all this cash sitting in the bank when it could be creating jobs".

However, Labour MP Clayton Cosgrove told NZPA that mum and dad investors would not be able to afford to buy into any SOEs, and it would be large institutional and overseas investors who would buy in.

Mum and dad investors already owned the SOEs. "It's called taxation ... so Kiwi mums and dads get to pay twice for something that they already own".

Despite claims to the contrary, the Government was readying some SOEs for sale, including Meridian Energy, he said.

"The agenda's quite clear -- Kiwibank is on the block."

It would take about a year to restructure and maximise the sale price. "If he's true to his word and if he got a mandate, they'd been on the block the day after (the election if National wins)".

"Of course you're not going to call up a Treasury paper and say ready state assets, you simply send the word out to the state assets -- 'right, restructure yourselves'."

National would need to sell SOEs soon after the next election, should they win, to pay for the tax cuts in last weeks budget, Mr Cosgrove said.

"Then once, you've flogged it, you can't flog it again, all that's left in the jar to flog is hot air."

Labour leader Phil Goff said National's sale pitch was for a partial sell off directed at mum and dad investors but "experience tells us that the real winners will be private speculators and institutions, which will quickly grab control".

Meanwhile, iwi have been urged to consider investing in SOEs if they were partially floated in the future.

Ngai Tahu leader and member of the Maori economic development taskforce Mark Solomon said they could become "state-iwi-owned" companies.

"I think they could get involved, not to take over, but I think they could invest," he told the Sunday Star Times.

He also suggested iwi pool their Treaty settlements to invest in public-private partnerships (PPP) with the Government.

The Government has said they will build Wiri prison under PPP and have signalled similar structure for a new school and broadband.

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