Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

English: Asset sales' proceeds may need to be revised

Finance Minister Bill English. Photo / Glenn Taylor
Finance Minister Bill English. Photo / Glenn Taylor

The estimated proceeds from partial sales of state-owned enterprises of $5-$7 billion may have to be revised downwards in the Budget, Finance Minister Bill English conceded today, and sales were still contingent on getting the green light from the Supreme Court this week.

Prime Minister John Key would not say what would change if the proceeds were lower - the Government postponing some of its capital spending plans or departing from its debt track and increasing debt to fund capital expenditure.

Mr English said the float of Mighty River Power would be underway within three weeks if the Government gets the go-ahead after a challenge to the process by the Maori Council in the Supreme Court, the result of which is expected any time now.

Information from the Mighty River Power float could lead to a revision of the overall estimates of proceeds, he said.

"It's possible the numbers will move around."

The $5-$7 billion figure was the estimate given in the May 2011 Budget for the sale proceeds of up to 49 per cent of four state-owned enterprises (Mighty River Power, Genesis, Meridian, Solid Energy) and Air New Zealand.

Solid Energy is in talks with Macquarie Bank to avoid receivership and is no longer on the sales agenda - but the Government is not yet offering a view on how much to discount its estimated proceeds because of that.

Mr English told reporters at Parliament this morning that he might get to float Mighty River Power before the Budget on May 16 and that would give him good information about the market value of the other enterprises.

Until now, there has been no basis on which to change the estimated proceeds.

"It may well change when we've got more information about how the market values the existing companies.

"The more information about Mighty River, we can revise whatever the expectations were about Solid Energy."

The $5-$7 billion was the best estimate a couple of years ago.

The Government has been planning to fund any increase in capital expenditure over the next four Budgets from proceeds of the sales.

Mr English said he hoped the sales figures would hold up ``because we have got big commitments in Christchurch, to upgrade our schools across the country, build more hospitals and these proceeds will help us do that.''

Mr Key said at issue was "whether we ultimately spend as much as we receive from those companies and that can obviously vary depending on what we achieve from the sell-downs, presuming they are possible at the end of this week".

"In the perfect world we would prefer to match the release of capital from those SOEs into the purchase of other assets on behalf of New Zealanders."

He would not comment on whether the Government would rule out an early election if its flagship policy were overturned by the Supreme Court.

"I think it would be foolish for me to engage in that kind of discussion," he told reporters.

"The Supreme Court is the highest court in the land. They are about to deliver a judgment in relation to the water case and for me to answer that question would be to invite criticism of me that I was somehow being disrespectful to whatever decision they might make - in other words if I don't like it, I'll do something about it. I think we would be better to wait just until we find out."

- NZ Herald

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