The partial sale of state owned assets makes sense, writes Owen Glenn in the fifth part of a series leading up to the election
Private and public partnerships certainly stir debate. Especially when the "private" side encroaches on what is deemed public property.
This sentiment is being stoked in the context of a partial sale of SOEs. If selling the "family silver" produces gold, and a continuing return on investment, then it makes sound economic sense.
Playing on these fears is providing one of the pillars of Labour's attempts to shore up a constituency in the elections.
Legitimate concerns about selling strategic assets aside, tugging the heartstrings for a knee-jerk reaction does nothing to address the issue which is this: New Zealand is up to its eyeballs in debt - drowning, in fact.
On top of the impact of the global downturn we are faced with a blowout in the reconstruction of Christchurch after the earthquakes, leaky home payouts, a large and growing welfare system, an ageing population which will drive up the cost of the superannuation system and $1 billion in Treaty settlements, with more in the offing.
Little wonder then that the Government's debt mountain up to the end of April has grown to $71.6 billion ... and rising. This figure doesn't include private debt - add that in and the mountain grows even higher.
According to some calculations New Zealanders might even owe more than the albatross per capita of US$47,568 ($57,072) around the neck of each and every American.
Unquestionably, leadership, fresh thinking and practical steps are needed to overcome this untenable and unsustainable situation.
Labour's solution is more taxation without yet any announced plausible means of how to increase productivity to counterbalance this extra burden.
One of National's ideas is the partial sale of some SOEs with safeguards against loss of New Zealand control.
State Owned Enterprises Minister Tony Ryall has described the tension he'll face in creating the compromise between getting the best price for the assets versus achieving a level of New Zealand ownership which will provide opportunities for Kiwis to become individual shareholding investors.
I think partial privatisation is a good idea although I would rather see this money reinvested to drive growth in productivity rather than simply paying off debt. The bigger issue is the SOE model is past its use-by date mainly because the shareholders are politicians not investors.
They may have a portfolio but that doesn't mean they, or their nominees, have the appropriate business skills to look after an investment. Regardless of ownership they need to be properly managed.
Enduring partnerships are those that make measurable and lasting differences. Rather than a one-off handout the structure must be based around a "return" on investment - whether that is economic, social or philanthropic.
My investment in the University of Auckland Business School was to help build something that would endure and inspire. I left research and curriculum development to the experts.
With the AUT-Millennium Institute and New Zealand Hockey the investment is focused on getting more of our children, youth and their families involved in sport.
I'd challenge others to contribute in a similar way but not as a handout but a hand-up.
Look for opportunities where an investment in New Zealand will directly help individuals and the country overall and then get behind them.
Owen Glenn is a New Zealand businessman and philanthropist and Officer of the New Zealand Order of Merit.By Owen Glenn