Prime Minister ignorant of costs of flagship policy

National's asset sales policy is descending into a shambles with the Prime Minister today admitting he doesn't know the Government is planning to spend $56 million on share-brokers, Green Party Co-leader Russel Norman said today.

Today in Question Time, Prime Minister John Key said he didn't know what the Government is planning to pay brokers as part of its asset sales policy. Budget 2012 contains a $56 million multi-year non-departmental appropriation for "direct sales costs" of asset sales. In answer to questions from the Finance and Expenditure Select Committee, Treasury advised that "The non-departmental appropriation relates to the direct selling costs of shares in each company, most of which relates to the fees paid to the selling syndicate."

A selling syndicate is a group of brokers selected to sell shares to retail investors during a share float. Treasury announced its retail selling syndicate for the Mighty River sale on Monday.

Broker's fees were paid by the Government during the privatisations of Contact Energy and Auckland Airport.

"This is just another example of John Key not knowing basic information about his flagship policy", said Dr Norman.

"How can Mr Key retain any credibility on asset sales when doesn't know how much his share give-away would cost and he doesn't know how much it would cost to pay share-broker's fees?

"Any responsible government would be fully aware of these costs because they affect the logic of going ahead with the sales.

"The bill for asset sales is racking up fast: $200 million plus for the share give away, $56 million to share-brokers, and $100 million a year, every year, on the deficit.

"There is no sense in wasting all this taxpayer money on a policy that would take New Zealand backwards and increase power prices.

"The truth is that the Key Administration has decided to sell our assets come hell or high-water.

"Mr Key doesn't know the costs and he doesn't care. That's not good enough. New Zealanders deserve better.

"Having failed to convince New Zealanders of the wisdom of the asset sales program, as evidenced by many opinion polls, John Key is now trying to force it down New Zealanders throats and denigrating anyone who dares to disagree with him. Muldoon would be proud," said Dr Norman.

Further information:

Treasury's answer to a question from the Finance and Expenditure Select Committee -

Vote Finance: Mixed Ownership Model Multi-year Appropriations (MYAs)

Question: Please provide further information on the two Mixed Ownership Model MYAs that were created during the 2011/12 financial year.

Both MYA appropriations (Implementation of the Mixed Ownership Model and Direct Sale costs for Implementing the Mixed Ownership Model) fund the work required to implement the Government's partial share sales programme. The departmental appropriation funds costs associated with the Treasury's administration of the programme, including staffing, the Crown advisors and other professional services. The non-departmental appropriation relates to the direct selling costs of shares in each company, most of which relates to the fees paid to the selling syndicate.