6 December 2013

National needs to apologise for huge cost of asset sales

The latest Crown financial statements show that National’s failed asset sales have carved a path of destruction through the government books, Green Party Co-leader Dr Russel Norman said today.

The Financial Statements show that the sale of Meridian for below its book value wiped $378 million off the Crown’s net worth. This stands in stark contrast to the Government’s assumption that it would sell the assets for $700 million more than they were valued at on the government accounts. Additionally, the Financial Statements show that the ‘buy now, pay later’ scheme for Meridian has cost $33 million and ‘direct sales costs’ were $21 million. That is additional to more than $9 million spent by Meridian and Treasury in preparation for the sale.

“National’s failed sale of Meridian cost the taxpayer around $450 million. It’s time for National to drop its failed asset sales policy and apologise to the public,” said Dr Norman.

“Selling Meridian for a low price has wiped $378 million off the Crown’s net wealth. Add to that, $33 million for the ‘buy now, pay later’ scheme, $21 million for brokers, lawyers, and ad-men, and millions more for Treasury and Meridian staff costs. That’s $450 million lost on just one asset sale.

“The sale of Mighty River cost a further $66 million in sales costs and has so far cost the public $49 million in lost dividends.

“National said that the cost of the asset sales would be minimal and the sales would go so well that they would sell the companies for more than they were worth. The opposite has happened.

“The taxpayer has lost hundreds of millions of dollars, and so have the ordinary Kiwi families who were conned into buying these shares by National’s $8 million ad campaign.

“The only people getting rich off National’s asset sales are the brokers, lawyers, and ad-men. For the public of New Zealand, this has been an unmitigated disaster.

“The strong turnout in the asset sales referendum shows that New Zealanders are fed up with National wasting our money on its ideologically-driven privatisation agenda.

“John Key should apologise to the public of New Zealand and cancel the sale of Genesis,” said Dr Norman.

Additional information:
Costwatch – tracking the cost of asset sales

ENDS

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