Crown concedes water rights debacle would hurt asset sales

The Crown has conceded that the debacle over water rights would create risk for investors in asset sales, resulting in lower sales revenue, Green Party Co-leader Russel Norman said today.

The admission came at the Waitangi Tribunal hearings on water rights, during Crown questioning of BERL economist Ganesh Nana on his study, commissioned by the Green Party, which shows that asset sales would be bad for the Government's books and bad for the economy.

"The Crown has admitted that the uncertainty over water rights creates risk for investors, which would lead to less revenue from selling our assets," said Dr Norman.

"The current debacle around water rights, which has National and the Maori Party fighting in public, would force investors to seek a large risk discount before buying shares in these companies.

"Any sale in the context of the current uncertainty over water rights would result in the Crown getting much less money for these assets.

"Maori rights to water need to be considered by the Waitangi Tribunal and negotiated in good faith between the Crown and Maori separately from the assets sales debate.

"The asset sales programme needs to stop in order to create the space for this negotiation to occur in a measured way because asset sales would potentially prejudice the negotiation.

"Moreover, if asset sales proceed before the water rights issue is settled, it will create uncertainty that will drive down the price of the assets.

"The National Government knows it can no longer hope to get a good price in asset sales and it should drop this ideologically-driven policy now," said Dr Norman.

The BERL study shows that asset sales would leave "the Government accounts permanently worse off in terms of Government debt, debt ratio, net worth, and total assets" and result in "a permanent deterioration in the external deficit and the level of external".

"The report the Greens commissioned from BERL clearly shows that, even before the water rights issue is taken into account, going ahead with asset sales would leave the Government's books in worse shape and deepen New Zealand's international debt,' said Dr Norman.

"Why is the National Government forging ahead with a policy that would leave the country poorer?

"Asset sales don't add up.

"The Prime Minister needs to do the smart thing and call off the asset sales before he costs New Zealand a fortune," said Dr Norman.