Kerre Woodham: What have we got left to sell?

You may have heard, the 80’s are making a comeback. Lookout for denim on denim, bubble skirts, and asset sales. David Seymour is stepping up his campaign to sell state assets and privatise public services.  

In his State of the Nation speech last week, the ACT leader said we should be continually asking ourselves do we own the right stuff? NZ First, Labour and the Greens have all pinned their respective colours to the mast and said they are dead against the sale of any state-owned assets under their watch. NZ First and Winston Peters, of course, famously, long-standing opponent of the sale of state-owned assets. Prime Minister Christopher Luxon has done what he does best and equivocated. Oh sure, I'm open to the idea, open to having a discussion, but if anything were to happen, not that I'm saying it will, but if anything were to happen, if the for sale signs were to go up, it wouldn't be until the 26th election. So, he hasn't committed either way, just waiting to see which way the wind blows.  

The fourth Labour Government was the government that really sold off the silverware. New Zealand changed fundamentally as a society as a result of the economic reforms driven by Roger Douglas and his cabinet. David Lange, he might have been the Prime Minister, but it was Roger Douglas who was the driving force behind the economic reforms. One of those within the cabinet, Richard Prebble, argues it was the right thing to do in today's Herald. He says that they had huge debt, and they had to resolve that somehow. He says New Zealand's privatisation was extraordinarily successful. The investors provided much better services and lower prices. Only profitable businesses pay company taxes. The privatized businesses are paying every year in company taxes more than they ever did in dividends. In contrast, he says, the history of state-owned enterprises retained in government ownership is abysmal. Solid energy went from a valuation of $3.5 billion. To being worthless, that it's $390 million debt. He said his office valued TVNZ in 1990 at around $2 billion, $4.3 billion in today's money. The station now runs at a loss, he says.  

Brian Gaynor argues that the asset sales were not a success, that the prime pieces of silverware were sold off and overseas investors made an absolute killing from them. There is a counter to what Richard Prebble claims. John Key brought back the prospect of state asset sales in 2010 with a deeply unpopular promise to privatise state-owned electricity companies such as Meridian. But he told Mike Hosking on the Mike Hosking Breakfast this morning there are better ways to improve the economy faster than by selling off what remains of New Zealand’s state-owned assets.  

“In the scheme of things, we want the boat to go faster. There's a million things you can do, from cutting bureaucracy and taxes, and you know, making a more permissive society, better foreign investment, all those kinds of things. If you want my view, they'll make the boat go a lot faster than a few asset sales because, frankly, there ain't a hell of a lot to sell.” 

And there isn't. What would we sell? We've got Quotable Value, which David Seymour quoted as being an example. It values property, it doesn't receive any taxpayer money. But it provides a dividend of between half a million and one million a year, which is the sort of chump change that Grant Robertson used to find down the back of the couch. So that's not going to save New Zealand. Anyone interested in buying a television station? Could chuck in a video store as well as a sweetener on the deal? Anyone? No? Because that's the thing, too, for a successful state asset sale, you have to find buyers. Anyone for a couple of clapped-out ferries? Anyone? No? There’s sort of plans for a kind of port infrastructure that's really expensive and hasn't been costed properly, that we could chuck in for free. No? Nobody?  

State housing. Does the government have a responsibility to house vulnerable Kiwis? Which means owning a huge portfolio of properties and more to the point, maintaining that huge portfolio of properties. From what trades people have told us, anytime they know it's a job for Kianga Ora, everything gets inflated. The cost of the products that are going in there, the carpets, the door, the joinery, the electrics and the cost of the labour. And then, of course, there's Kainga Ora buying up houses at far more than their value and distorting the property market during the post-Covid boom. But I mean really, when you look at what's left after the fourth Labour government did the massive clean out in the 80s... Do we need to own homes to house people, or should that be left to charitable organisations and private individuals?  

I suppose the only thing left is health, maybe? Hospitals? I mean, let's face it, it is a huge cumbersome beast. With the best will in the world, the changes to the Ministry of Health and to the hospitals that it oversees as part of its job, the changes are not going to be made within the next 10 years. Bringing everything together under one roof, all of the different hospital boards merged together as one operating unit across the country. And there's no guarantee of success. Do you put health out, privatise that? Still free to the taxpayer but not governed by the government. I don't know. I think most of it's gone. I think John Key is right, there are other, better, faster ways to improve the economy. The only thing I can see, and this is just looking at it theoretically, the only thing I can see that we've got worth selling is the property portfolio and is that what we really want to do? 

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