2 October 2001 Media Statement

Privatisation failed

New Zealand's experiment with privatisation of publicly-owned strategic assets largely failed, Deputy Prime Minister and Alliance leader Jim Anderton argues in a speech prepared for the Commonwealth Business Forum.

The Forum was to have been held in Melbourne this week, but was cancelled following the decision to cancel Chogm. Jim Anderton was to speak at a plenary session on public-private partnerships in infrastructure development.

Releasing the address he would have given at the Forum, Jim Anderton said New Zealand had tried virtually every configuration of privatisation, and had some important lessons for the rest of the world.

"In banking, electricity, telecommunications and transport, to name a few, the public sector is making a come-back," Jim Anderton said.

"Yesterday the government announced an exchange of letters with Tranz Rail over the Auckland rail corridor. Two weeks ago, the government announced a loan facility for Air New Zealand. We are setting up a people's bank. We have had major inquiries and regulatory changes in energy and telecommunications.

"New Zealand has learnt some lessons from privatisation."

Jim Anderton gave NZ Post as an example of a successful public enterprise.

"NZ Post offers the cheapest standard letter rate in the world. It is highly profitable, it has a clear strategic focus, strong management, good disciplines, and a forward strategy including moving into banking and expanding overseas.

"The lesson is that public sector is not just public – it also has to be enterprising. The public sector cannot be successful where it attempts merely to stand still and administer. It needs to be accountable, innovative and adaptable. It needs to make good investment decisions, have clear objectives and it needs to meet the market. In the case of the public sector, ‘meeting the market’ means meeting the needs of the wider public who own it."

ENDS

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