State fire sale ignores reality for struggling Kiwis

National’s decision to sell off without mandate the state-owned power companies and a chunk of Air New Zealand flies in the face of the harsh economic realities facing Kiwi Mums and Dads, says Labour’s SOEs spokesperson Clayton Cosgrove.

“National promised it wouldn’t privatise SOEs without going to the electorate on November 26, but John Key and Bill English have broken their word again,” Clayton Cosgrove said. “They want permission in retrospect because in Budget 2011 Bill English is already spending the proceeds from asset sales.

“The Budget and Fiscal Update shows that over the next few years the Government plans to fund its new capital spending with the money it receives from selling shares in the state-owned energy companies and Air New Zealand,” Clayton Cosgrove said.

“John Key and Bill English are dressing up their ugly decision in fine words, claiming that asset sales give Kiwi Mums and Dads the opportunity to invest their cash in solid Kiwi companies. That is drivel, and they know it.”

Clayton Cosgrove said the SOE decision flies in the face of several basic realities:

• Most Kiwi Mums and Dads know that selling assets isn’t a long-term solution to paying down debt.
• Most Kiwi Mums and Dads aren’t awash with cash.
• Most Kiwi Mums and Dads don’t want to, and can’t afford to, buy back what they already own.
• Most Kiwi Mums and Dads know that there can be no guarantee they will be first in the queue if sales go ahead.
• Most Kiwi Mums and Dads are only too painfully aware that once National flogs off state assets, they will eventually find their way into the hands of foreign-owned corporates, who will demand higher returns, and that this will lead to higher power prices. Contact Energy is the prime example.

“We need to be saving more as a country, but selling our assets is short-sighted,” Clayton Cosgrove said. “It’s like selling your house to pay the mortgage, and then renting. It just doesn’t make any sense to sell off assets that have been built up by generations of Kiwis and that provide returns to the Government of $700 million.

“That’s why Labour is committed to not selling assets, but National is not on the side of struggling Mums and Dads. They are on the side of wealthy investors, foreign or otherwise, who want to piggy back off New Zealanders who are already struggling to pay their power bills.”