National selling assets returning healthy profits

The National Party is planning to sell state-owned assets (SOEs) at a time when they are returning record dividends which are likely to rise significantly over time, the Green Party said today.

Treasury's Crown Ownership Monitoring Unit released its 2011 Annual Portfolio Report today showing SOEs returned record dividends for the past five years while total shareholder returns averaged 14.5 percent over the last five years.

"Treasury have found that our SOEs are in excellent shape and, after years of high investment in new plant and equipment, are anticipating high future dividend payments," said Green Party Co-leader Dr Russel Norman.

"This is not a good time to sell some of our highest performing SOEs."

Dr Norman said John Key's plans to sell SOEs at the time when dividend payments are expected to rise was a case of repeating all the worst mistakes surrounding the sale of Telecom in 1990.

"Like our energy SOEs, Telecom invested significant amounts of capital in building a modern telecommunications network in the years before privatisation," Dr Norman said.

"Following Telecom's privatisation, dividend streams for its new private owners doubled, then tripled within six years.

"The taxpayer basically funded the construction of a state-of-the-art telephone network and foreign-owned companies reaped all the profits from that investment.

"History now seems to be repeating itself with our energy SOEs."

The Green Party outlined their different plan for our energy SOEs in the run-up to this year's election.

"We plan to retain our SOEs and refocus them towards booming export markets in renewable energy. Renewables are set to become an $800 billion marketplace by 2015. If we capture just one percent of that market, we'd create a $6-8 billion new export industry here at home, creating tens of thousands of new jobs," Dr Norman said.

"It's not smart economics to sell cash cows, like our energy companies, and lose the best chance we have to create new, clean technology jobs."

Link to Crown Ownership Monitoring Unit Report:
http://www.comu.govt.nz/resources/pdfs/apr-11.pdf

The Green Party's alternative plan for our energy SOEs:
http://www.greens.org.nz/greenjobs