Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Asset sales: Where the money is going

Photo / Alan Gibson
Photo / Alan Gibson

The list of projects and costs to be funded from the sale of profitable state owned power companies under the Government's asset sales programme now extends to the $40 million bill for the Mighty River share loyalty bonus scheme used to entice the public to buy shares, Treasury documents show.

Treasury's "Summary of 2013 Future Investment Fund/Capital Budget Decisions" released to Labour under the Official Information Act also shows almost $16 million of asset sales cash is to be spent on replacing refugee resettlement facilities while at the lower end of the scale $20,000 of the money is to be spent on "strengthening capability on security and risk management" in Prime Minister John Key's own department.

Labour's State Owned Enterprises spokesman Clayton Cosgrove said Mr Key had been "completely two-faced" about his use of Mighty River Power sale proceeds which were now being used a slush fund.

"He created a loyalty share scheme to convince Kiwis to invest while telling them the money would go into a Future Investment Fund to pay for schools and hospitals.

"Instead I have discovered that $40 million from the Future Investment Fund will pay for the free bonus shares. We were never told that money from the Fund would be used to pay for the loyalty scheme. It was not revealed in the Budget."

The document also lists the $100 million of asset sales cash set aside for stricken state owned coal miner Solid Energy's "recovery".

Mr Cosgrove said Mr Key accused him of making it up when he last month revealed the money set aside for Solid Energy, "but he had to back down when I showed him his own Cabinet document that he had signed off".

"Yet again National has been shown up for using asset sales money to fund projects and mistakes it never told Kiwis about. It's time they were straight up with New Zealanders."

Other items the Treasury document shows will be paid for out of asset sales cash include:

# $15.7 million on replacement of refugee resettlement facilities

# $285,000 on closed captioning Parliament TV

# $20,000 on strengthening capability on security and risk management at the
Department of Prime Minister and Cabinet

# $5.4 million on a "whole of government" radio network

# An undisclosed amount on white paper for vulnerable children start up costs at the Ministry of Social Development.

Mr Cosgrove said the items of expenditure revealed in the document released today were not what Mr Key and Finance Minister Bill English told the public asset sales cash would be spent on.

"This is not a slush fund, this is not what people expected. Most people didn't agree with asset sales and they certainly didn't agree with this sort of expenditure. They didn't expect expenditure ordinary day to day items that is normally and conventionally paid for out of the consolidated fund."

The sale of shares in Mighty River Power earlier this year raised about $1.7 billion, and the Government has now allocated $2.1 billion into the so-called Future Investment Fund which was ringfenced for capital investment projects, with the sale of Meridian Energy later this year expected to raise about $3.25 billion.

Close to $90 million of the $2.1 billion of Future Investment Fund cash has been allocated to health sector projects, while schools have so far got around $84 million of their promised $1 billion. Irrigation projects have soaked up a further $80 million

More than $900 million of the $2.1 billion cash stash has been allocated to the rebuilding of Christchurch. That includes $426 million for the redevelopment of Christchurch and Burwood Hospitals.

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