1 March 2012

Dunne & Key at odds over asset sales

The Government needs to clarify whether it will include explicit restrictions on partially privatised state-owned enterprises selling strategic assets like dams given the apparent conflict between statements from Revenue Minister Peter Dunne and Prime Minister John Key on the issue, the Green Party said today.

Peter Dunne reportedly said yesterday that he may not support partial privatisation if there were no safeguards to stop the subsequent sale of individual electricity generating assets. John Key has said there will be no restrictions.

“The Government must clarify whether there will be legislated restrictions on newly privatised energy companies from selling strategic assets like dams or wind farms,” said Green Party Co-leader Dr Russel Norman.

“Without those protections, Peter Dunne is right to back away from the Government’s proposal to partially privatise state-owned energy companies. Strategic energy assets are simply not secure under Key’s plans.

“Key will however be reluctant to include such clauses as they will push down the value of the companies being sold. He’s likely to fudge this issue in order to retain the confidence of Peter Dunne and the last remaining shreds of public support he has for his privatisation agenda.”

Under the Government’s proposed mixed ownership model, shareholding Ministers have to manage their 51 percent shareholding in energy companies according to best commercial practice as legislated by the Companies Act. If it makes commercial sense for a partially privatised power company to sell a dam, the Government will no longer have any ability to stop it.

“The 2015 New Zealand China Strategy actively promotes China taking a stake in our infrastructure. They will be first in the queue to purchase New Zealand power generating assets,” Dr Norman said.

“A smarter alternative is to keep our state-owned enterprises in public ownership and refocus their largely domestic operations towards booming renewable energy export markets abroad.

“We can create tens of thousands of new, clean technology jobs here at home if we’re smart.”

The Green Party's alternative plan for our energy SOEs: http://www.greens.org.nz/greenjobs

ENDS

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