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English issues asset sales challenge

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Thu, 23 Feb 2012 1:20p.m.

Mr English says the Government is already spending and borrowing more that it can afford (file)

Mr English says the Government is already spending and borrowing more that it can afford (file)

The Government is challenging opponents of state-owned asset sales to explain why it would be better to borrow billions of dollars from overseas lenders.

Opposition parties fiercely oppose the partial sale of four state-owned power and energy companies and polls have shown an overwhelming number of voters feel the same way.

But the Government isn't backing down and Finance Minister Bill English came out swinging in a speech to Auckland Chamber of Commerce today.

"Our political opponents need to honestly explain to New Zealanders why it would be better to borrow $5 billion to $7 billion from overseas lenders at a time when the world is awash with debt and consequent risks," he said.

"Most nights on television we see the consequences in Europe and elsewhere of borrowing too much - we don't want that for New Zealand."

Mr English says the Government is already spending and borrowing more that it can afford and selling 49 percent of the shares in the companies is the best way to avoid getting deeper in debt.

"Taxpayers own $245 billion of assets and this is forecast to grow to $267 billion over the next four years," he said.

"We aren't reducing our assets, it makes sense to reorganise them and redeploy capital to priority areas without having to borrow more."

NZN

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Comments

27 Feb 2012 12:25p.m.

Mike wrote:

NZ's problem is too few paying tax for too many bludging.

In that way we are like Greece, just more like Greece about 15 years ago vs Greece today.

Labour had the best 9 years of economic times and they didn't repay debt so much as to redefine debt as % GDP so by changing the measure debt deceased without paying a cent back due to better economic times, and like Greece they spent up big increasing the size of government and the social policy costing the country billions. It is exactly policy like the 9 years of Labour that put Greece in the trouble it is in today and without their increases in government spending NZ could be much better off today.

Take Labours/Cullen direction to Kiwisaver/ACC to invest in Maddoff which with similar investments cost NZ roughly $29 billion pre-election 2008 - if we had that money then NZ would be much better off today and we wouldn't need to sell off assets either! Its never been published, but how much did NZ Superanuation lose at the same time?

Dont worry, several Labour members got to eat out at Maddoffs expense - which in turn became NZ's expense ...

24 Feb 2012 05:42p.m.

Bruce wrote:

What on earth is Bill, its just a guess English on about? no one from labour has mentioned Borrowing from overseas lenders. Or mentioned borrowing in any way, shape or form... I wouldn't mind if taxes were raised to get the economy running again. New Zealand couldn't afford the tax cuts in 2009. I believe the Looney Nats have realised that now.

23 Feb 2012 03:27p.m.

Alex wrote:

the consequences of 'borrowing too much' is exactly what the national party is doing anyway. plus, we're nowhere near the debt levels of greece or any other country in trouble. ridiculous scare mongering by national

23 Feb 2012 03:01p.m.

Robo wrote:

Q 1: Are the current assets currently increasing employment
Q 2: Would we get a better return off the money both finacially and through employment, etc, etc from the sold state assets than what they are returning now.
Reducing debt and creating cashflow with benefits is exactly what our economy requires. We would (I'm hoping this will be written in stone)retain as Kiwi's a 51% majority share-holding giving us a return.

23 Feb 2012 02:39p.m.

McFlock wrote:

Oh dear.

It appears that someone needs to explain to our minister of finance the basics of debt reduction: competent budgeting over the long term is more financially sound than hocking off the family silver every time you run short.

23 Feb 2012 02:06p.m.

Kevin wrote:

Maybe you shouldn't have given tax cuts in April 2009 costing $1.8b a year, or the so called fiscally netural tax switch of Oct 10 that costs $1b a year. Thats where your $6b of borrowing from overseas investors is coming from.