NZ:
Assets selloff to cost $120m
The
Government expects to pay contractors about $120 million to help sell
its controversial asset sales plan message.
20
May, 2012
Finance
Minister Bill English confirmed the spend would total "around 2
per cent" of the proceeds from the partial sale of selected
state assets – up to $7 billion.
The
costs were for advertising, PR, legal, banking, call centres and
other administrative charges.
English,
responding to a written parliamentary question from Greens co-leader
Russel Norman, said the cost was "low by market standards".
But the bill was "doubly offensive", Norman said.
"It
is a huge amount, and it's money that belongs to taxpayers.
"They
are going to sell assets out from under us against our will, and make
us pay for the privilege."
The
government revealed last year it would sell up to 49 per cent of
shares in four SOEs – Solid Energy, Mighty River Power, Genesis
Energy and Meridian – and a further stake in Air NZ.
Mighty
River shares are expected to trade later this year, and Treasury has
confirmed Senate Communications has won the PR contract for the
float, and Clemenger the ad contract.
Neither
Treasury nor State Owned Enterprises Minister Tony Ryall would
comment.
Norman
said promoting the sell-off would be part of the government's
"biggest propaganda campaign", and contrasted the amount
with the "paltry" $50,000 spending cap on advertising
material promoting the Keep Our Assets petition, which needs to
attract about 300,000 signatures in its bid to force a referendum on
the plan.
The
ad campaign will have to work, after a poll of more than 2000 Fairfax
newspaper readers throughout New Zealand showed 48 per cent did not
believe partial asset sales would reduce debt.
But
30 per cent said they would rather sell the assets altogether and
lower debt, while 16 per cent favoured retaining them and having a
bigger deficit.
The
government says selling minority stakes frees up cash to invest in
schools and hospitals. The share offers are crucial to a plan to get
back to surplus by 2014-15, when public debt is expected to have hit
$72b.
Ryall
earlier said the government was considering a scheme where investors
who held their stake for a certain time received bonus shares.
Blenheim's
Robin Elder, 72, said: "Selling state assets is stupid, it's
like selling the house to pay the insurance."
Porirua
consultant Colin Bleasdale, 64, said no one could guarantee shares
staying in New Zealand ownership. "Is there no understanding
that these assets generate millions of dollars of revenue, as well as
New Zealand pride."
Aucklander
Susie Brown, 66, said assets had been sold before without the
promised benefits eventuating. "Selling our electricity
generators is an act of economic stupidity akin to a dressmaker
selling her sewing machine to a rival."
Jill
Dunphy, 74, retired of Auckland said: "I would prefer keeping
the SOE and using dividends to pay off the debt."
"State
asset sales are a farce,' said 72-year-old Glad Emirali of Auckland.
"Based on government borrowing and debit, the sale of the
proposed assets for a minute financial gain, and loss of income to
over seas investors would soon negate any short term financial
gains."
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