Asset sales: What the next generation think

Secondary school students had their say on the controversial issue of state asset sales at the 2012 ANZ Massey Economics Challenge – and officials from some key government departments were there to hear their thoughts.

The annual competition was held simultaneously on Massey University’s Albany and Manawatu campuses on Friday afternoon. Teams of three students showcased their economics knowledge in a quiz based on the NCEA curriculum, followed by a presentation on the topic: ‘New Zealand’s mounting debt: Are asset sales the answer?’ 

The Albany competition was taken out for the second year in a row by a team from Macleans College. Andy Wang, Jennifer Xue and An Ran Chen concluded that while the sale of state assets was not a perfect solution, it did offer the most suitable way of reducing the government’s debt in the short term.

Judge Dr Philip Stevens, head of economic research at the Ministry of Business, Innovation and Employment, said the Macleans team nudged out the runners-up from Westlake Boys with their strong foundation of economic knowledge.

“This year’s presentation question shows you the kind of questions we have to deal with in economics – i.e. it’s very hard and there’s no simple answer,” Dr Stevens said. “In economics we ask questions like: Why is Africa poor? Why is water, the most important thing we’ve got, worth less than diamonds? What services should be provided by the state?

“The questions are complicated, and the winning team used the economic tools at their disposal to weigh up the pros and cons, and then systematically arrive at their solution.”

The most innovative presentation of the afternoon came from Yishen Zhou, James Rankin, and Devrath Soni from Westlake Boys High School. The trio recommended selling minority stakes in state-owned power companies – and using the funds generated to purchase majority stakes in key privately-owned power companies.

Simon Chapple, principal advisor at the Ministry of Business, Innovation and Employment, said the judges all agreed the team had produced the most creative response to the question, and had come a very close second to Macleans College.

“Your solution really stood out, and economists often quite like counter-intuitive solutions,” he told the students. “However you need to be aware if you are going to go down the counter-intuitive route, if you are going to step outside the herd, then your argument has got to be doubly strong. You are going to be subject to a lot more criticism because you are not thinking like everyone else.”

The Manawatu campus competition was won by Dan Marks, James Penn, and Te Rangi Albert from Wanganui High School. Massey University associate professor Rukmani Gounder said the team gave an exceptional presentation.

"They did very well in bringing in new ideas, drawing on international comparisons, and thinking outside the square," she said.

The annual competition is sponsored by ANZ and Massey University, and the students in each winning team received a Massey scholarship of $2000 towards full-time study in the College of Business, and runner-up teams received a $1000 scholarship.

The presentations were evaluated in each location by a distinguished panel of judges made up of academics, practitioners, and policymakers, including government officials from Treasury and the Ministry of Business, Innovation and Employment.