21 May 2012

Asset sales will leave Govt and economy worse off

The Green Party today released the detailed findings of a new report that shows the Government and the economy will be permanently worse off if asset sales go ahead.

BERL’s chief economist, Dr Ganesh Nana, was commissioned by the Green Party to investigate the long term impacts of the Government’s signature asset sales programme.

“BERL have found that a programme of asset sales leaves the Government accounts permanently worse off in terms of Government debt, debt ratio, net worth, and total assets,” said Green Party Co-leader Dr Russel Norman.

“Not only is the news bad for the Government’s books, the effect of asset sales on the wider economy is even worse.

“BERL have found that the flow of profits to foreign buyers will result in ‘a permanent deterioration in the external deficit and the level of external debt’.

“Even Bill English accepts that our high levels of indebtedness to overseas lenders is our number one economic vulnerability.

“His programme of asset sales would make that worse.”

Dr Ganesh Nana’s report concluded that, “It would be unwise from an economic perspective to embark on a policy that risked increasing external payment obligations.”

“The National Government has dug itself into a hole with poor economic management and poor choices; asset sales would only make it worse,” said Dr Norman.

“National has borrowed around $2 billion to finance their 2010 tax cuts, has increased ETS subsidies to polluters, and is spending $14 billion on uneconomic motorways.

“Now we are all going to have to pay for National’s poor economic choices with higher charges on prescription medicines, cuts to the number of school teachers, and cuts to affordable housing.

“National’s record debt can be brought under control with smart green economic choices promoted by the Green Party, without punishing families on tight budgets.”

Link to BERL Report on Asset Sales: http://www.greens.org.nz/misc-documents/berl-report-asset-sales

ENDS

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