Telecom woes 'lesson in selling off assets'

Progressive MP Jim Anderton pointed to Telecom's recent misfortunes as a lesson to National as it considers whether to change its policy of no state asset sales going into next year's election.

Finance Minister Bill English turned attention away from his Budget last week to asset sales when he raised the issue of a partial share float of KiwiBank to give so-called "mum and dad investors" an alternative to invest in.

Mr Anderton said yesterday the decline in value of Telecom had been a direct result of a monopoly that was privatised. It had blocked innovation and was unable to adapt when its monopoly position began to unwind "because its monopolistic behaviour was hard-baked into the company."

He said most financial commentators had supported the sale of Telecom but it had been a disaster for New Zealand.

The same commentators, such as investment banker Rob Cameron, now supported the privatisation of successful businesses such as KiwiBank.

The value of Government-owned KiwiBank has been estimated at $800 million by banking studies director David Tripe, of Massey University.

Mr Anderton, as leader of the Alliance, established the state-owned Kiwibank in coalition with Labour.

Labour leader Phil Goff, who was a minister in the Fourth Labour Government that began the asset sales programme, also criticised National yesterday for not learning lessons from his own experience.

"Haven't the National Party learned anything from history?"

"We sold off KiwiRail - it was asset-stripped and run into the ground. Air New Zealand was sold off; it was run into bankruptcy by its private sector board."

Mr Goff continued the theme in question time in Parliament yesterday asking Prime Minister John Key if he had considered the result of past privatisations.

Mr Key said Mr Goff had a fair point.

"Maybe the Minister of Finance and I should have a chat with the Leader of the Opposition, because that is the man who sold Telecom, the State Insurance Office, the Post Office Bank, Air New Zealand, the Tourist Hotel Corporation, New Zealand Steel, Petrocorp, the Government Printing Office, the DFC, the National Film Unit, the Rural Banking and Finance Corporation, the Shipping Corporation, New Zealand Liquid Fuel Investment, Maui Gas, SynFuels, forest cutting rights, Health Computing Services and Communicate New Zealand.

"If there is ever a man who knows ... about privatisation, it is that one."