Treasury: State ownership shouldn't be 'default'

File photo / NZ Herald

Treasury is questioning the way the Crown manages its assets, suggesting the default setting of state ownership of social assets such as schools and hospitals may not be the most efficient use of government money.

Treasury this afternoon released its investment statement, a snapshot of the Crown's assets and liabilities.

The Crown's total assets of $244 billion and liabilities of $174 billion as at June 30 last year had been previously reported in the Crown Financial Statements.

The statement said the Government's balance sheet would continue to grow along with the wider economy.

The Crown's financial assets such as ACC and the Super Fund would grow particularly quickly and increase as a proportion of total assets due to the aging population.

However the document emphasised that Governments "need to be efficient and effective in the use of resources".

"Public ownership needs to be assessed against its ability to deliver on outcomes and value for money, and should not be seen as the default setting", it stated.

"Alternative methods of delivery can have benefits over ownership for attaining optimal value for money.

"An area of focus for Crown agencies to consider was to explore how capital could be recycled to meet changing demands and priorities without incurring unnecessary costs."

The statement discusses divestment of assets to fund new investments and also New Zealand's approach to public private partnerships (PPPs).

But Treasury Secretary Gabriel Makhlouf denied there was an ideological slant in favour of greater private sector involvement in the provision of services, or in other areas traditionally handled by the Crown.

"What we're focused on here is value from the balance sheet and massive investment that the Crown has made over the years and into the future."

With regard to public private partnerships, "we've been very clear that the way we approach this is to absolutely make sure we get value."

"From a Treasury perspective, that will continue to be our focus. We're not pushing for a particular ideology but looking for best value."