Government admits to guessing asset sale profits
Thu, 16 Feb 2012 6:03p.m.
By Political Editor Duncan Garner
The Government has today opened the books in advance of this year's budget and admitted it is simply guessing as to how much it will reap from the controversial sale of state owned assets.
Finance Minister Bill English says it is the only honest answer but Opposition parties say it is no way to run an economy.
In order to balance the Government’s books Mr English is partially selling state owned assets like Mighty River Power, but he has no idea how much cash the Government will get - so he is guessing.
Last year, it was $5-7 billion – and today Mr English settled on $6 billion.
“It’s not our best guess, it’s just a guess. It’s just some numbers, and that might mean they look roughly right for forecasting purposes. That’s an honest answer,” says Mr English.
But Opposition parties say it is a poor way to run an economy.
“He’s telling us they are just a guess, that’s not how to run the finances of New Zealand,” says Green Co-leader Russel Norman.
The Government's books also show selling the assets will cost the Government $360 million in lost profits over four years - which is $100 million more than the savings it makes by reducing overall debt.
“For the first time today they have had to admit that the privatisation of these assets will cost the Government huge money because the loss in profit is greater than the cost of the reduction in debt,” says Mr Norman.
All this is important because the Government is trying to get back into surplus by 2015 - a surplus it now estimates will be just $370 million, due to poorer economic conditions. A small surplus that it still may not reach.
The Government is also promising to spend $800 million in this year’s budget, but that too could be slashed.
“Of course if there is an economic meltdown in Europe, then we would need to rethink it,” says Mr English.
So while there are pockets of hope in the economy - there is also bucket loads of uncertainty too.
But the Government is determined to get back into surplus – and it is become a political target as much as an economic one - which means it will likely tighten the screws further, with less spending and widespread job cuts in the public service.
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19/02/2012 6:42:41 p.m.
@ James - Just two points. Firstly, when you're talking billions of extra revenue it can hardly be left off the books. And short of supernatural prediction of the future there is very little option but to take a very educated guess. Second point, Labour party policy was very similar in the way they were relying on Capital gain tax to balance the books, which would also have to be guessed with roughly the same margin of error.
19/02/2012 7:39:29 a.m.
This isn't about what returns we can get from the sale of assets, it's about us being owned by Asia. That is the ultimate goal towards global control. Already we see European countries formed into one nation. The US are working towards one nation being the US, Canada and Mexico. They plan to eventually have one currency for those regions which they will call the Amero. Think of the Euro for europe. Then there is us along with Australia and asian / pacific countries. It's all taking place look at the free trade agreements with Asian countries, the desire to allow Asian business to buy farmland etc. Our assets will eventually be owned by Asian interests, not Kiwi's like they want you to think. You can stick your heads in the sand and say it's not going to happen but that is just ignorance. There is plenty of info on the net pointing towards this. The US are the real problem here, working towards global domination. The terrorism act is a fine example. Slowly more and more security and control is being put in place in the states, lawmakers can now even arrest and detain civilian's without evidence, freedom is disappearing fast. The future is without doubt one of total control with all people having chips implanted to track your every move and to gain access to important daily necessities. One where if you don't obey then you're chip is switched off and there is no access to anything. You might say this is rubbish but leaked evidence has shown the truth. I don't worry about my future but I am sure worried about my children's future.
18/02/2012 2:39:20 p.m.
Everybody against it, nobody for it... why is it happening? What can we do to stop our government from simply doing as they damn well please?
17/02/2012 5:16:00 p.m.
If this was Labour saying that they did not have their figures key would be shouting"show me the money' This guessing is quite new.Initially their forecast seemed to be set in stone,according to them. English was like a possum caught in headlights. How long do they think they can get away with making stuff up and changing it as they go along. Can't be for much longer surely.
17/02/2012 1:11:57 p.m.
The revelation doesn't provide much faith in any of the other figues about the economy being touted by the Government. If the guessed numbers being quoted originated from the Treasury, then would not that be a good place to start when embarking on downsizing the public sector.
17/02/2012 10:06:28 a.m.
Another dig from the left? rubbish its their job to keep national honest by taking pot shots just like its Nationals job to keep Labour honest.
Your essentially saying "wah wah they are just sore from losing the election please disregard anything negative said about how national is running this country they should be allowed to do what ever they want with out being challenged till the next election"
Sticking ones head in the ground till the next election doesn't help matters it just makes politicians try get away with more.
Of course if it was labour doing this all you national fan boys would be lapping this up.
But since its your own party in power its ok to be a hypocrite.
17/02/2012 1:48:55 a.m.
This is a non-story... Nobody.. NOBODY can say exactly how much they will sell for. There's just too many variables. Just another dig from the left..
17/02/2012 12:12:27 a.m.
Guessing asset sales profits?, call me cynical but i think they deliberately tried to keep it vague and sneak this past us for someone elses gain and our loss.
I dont know about all nz assets but power is certainly a extremely important part of our back bone we sold off and now we are paying through the nose for power and we haven't even held anyone accountable for it.
16/02/2012 9:53:07 p.m.
fish face wrote:
Totally dumb to sell these assets in the middle of a recession when they cost stuff all...but then i guess that's all part of the plan???
16/02/2012 8:29:00 p.m.
This only further demonstrates the inability of the current govt to manage our economy without throwing people out of jobs,cutting services,selling off assets,when there is $14-$20billion going off shore in untaxedprofit,but taxing those profits is totally againsteverything key and english hold dear,so they wouldn'teven entertain the idea.These idiots should not be supported in selling off ourassets and investigations need to be initiated into theintelligence and reasoning for their questionable actions.
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