Although ruling out sweeping sales before the next election, he has left the door open to “asset recycling” – where under-utilised assets are sold or leased and proceeds reinvested into critical infrastructure.
Act leader David Seymour continues to push for a broader privatisation programme, arguing New Zealand has become overly cautious about private ownership of commercial enterprises.
Others counter that public ownership of key assets provides stability, long-term control, and ongoing revenue streams that can outweigh the short-term fiscal gain from a sale.
Treasury estimated earlier this month that the Government owned about $100b of commercial assets, with roughly $50b of associated liabilities on the other side of the ledger. This is also while the Government faces a challenging fiscal outlook: net core Crown debt is forecast to rise from around $175b to more than $230b by 2028 – roughly 46% of GDP, or about $42,000 for every New Zealander. Debt servicing already consumes a growing share of the Budget, leaving less room for investment in the likes of infrastructure, health and education.
The financial case for asset sales is arguably compelling. Funds are needed to build and maintain assets, but higher taxes or debt are politically and economically difficult. Monetising existing holdings, particularly in sectors where investors are eager to deploy capital, remains a viable alternative. The proceeds could then be redeployed into transport, housing, and energy transition projects without further borrowing. Yet many economists note that the fiscal benefits are often one-off, while the lost dividends or strategic control can have lasting consequences. Critics also argue that asset recycling may become a temporary fix if the underlying fiscal discipline or investment prioritisation does not improve.
Proponents of privatisation argue that the private sector, driven by accountability and competition, tends to be more efficient and disciplined in capital allocation. Over time, this can lead to stronger performance and productivity gains – something New Zealand also needs. Sceptics, however, point out that private ownership does not guarantee efficiency, particularly in natural monopolies or socially important services. Public operators can perform equally well when governance and performance incentives are robust.
New Zealand’s last major privatisation wave – the mixed-ownership listings of Meridian, Mercury, and Genesis Energy – demonstrated that hybrid models can balance public and private interests when structured carefully. Since listing, these companies have become more profitable and efficient under market discipline, while still maintaining strong public oversight. The model has also delivered significant value for taxpayers: the Crown’s remaining 51% stake in Meridian Energy, for instance, is now worth almost four times what it was at the time of listing.
Not every sale has gone to plan. Some 1980s and 1990s transactions were poorly structured, with assets sold too cheaply or under weak regulation. The sale of the former Government Printing Office transferred value to a narrow group of buyers. Telecom’s 1990 privatisation had both successes and challenges, and Tranz Rail’s collapse later underscored the risks of poor execution. Overseas, the financial crisis at Thames Water in the UK and issues in some Australian toll-road projects show what can go wrong when profit incentives are not balanced by effective oversight. The broader lesson is that neither state nor private ownership guarantees success – outcomes depend on design, timing, and governance.
There are ample assets the Government could consider, though some are explicitly off limits for now. The Government has ruled out selling its remaining 51% stakes (collectively worth over $13 billion) in the electricity “gentailers” and will instead explore collaboration and investment partnerships in the sector. Kiwibank also looks set to remain in public hands, despite estimates it could be worth around $3b. A partial NZX listing or minority equity partnership could eventually provide growth capital while maintaining public control.
The Crown holds a 52% stake in Air New Zealand, worth around $1b. The airline operates in a regulated but volatile sector, and while sentimentality alone is not a reason to hold an equity interest, critics warn that full divestment could reduce national resilience. Across the Tasman, Qantas’ profitability and value have increased since privatisation, though its corporate culture and service record have also drawn scrutiny.
Transpower faces significant investment requirements that some suggest could invite private co-funding. Analysts estimate the national grid operator could be worth $6-$8 billion, given its regulated asset base and monopoly status. KiwiRail (potentially worth $1-$2 billion) also requires substantial investment – roughly $3 billion for the Cook Strait ferries alone – and proponents argue that private participation could enhance commercial discipline, while others caution it might reduce service coverage or resilience.
Then there is Pāmu (Landcorp) which manages around 360,000ha across more than 100 farms, with an asset base of roughly $2 billion. As a fully commercial farming business, it’s difficult to see why the Crown needs to retain 100% ownership. Returns have been modest, and capital could be better deployed elsewhere. A partial or full sell-down (perhaps retaining some environmental or land-use oversight) could unlock significant value while preserving public interests.
Other smaller but notable state-owned entities include Quotable Value and the MetService, collectively worth around $500 million. Then there is the more contentious Lotto NZ. While many Kiwis flocked to buy tickets for the record $55 million Powerball, some have suggested the Crown could extract significant value from this asset. Still, for a business generating $350-$400 million annually for community and sports funding, this is one asset best left out of any sale discussion.
Rather than full divestments, another path is through public-private partnerships (PPPs) and long-term lease arrangements. These models, widely used in Australia and the UK, can bring in private funding and expertise while preserving public oversight. International examples – such as Sydney Metro Northwest, the Royal Adelaide Hospital, and the VINCI-led transmission partnership in New South Wales – show that success depends on contract design and governance, not ideology.
Infrastructure New Zealand and the Productivity Commission have both highlighted “asset recycling” – selling or leasing mature assets and reinvesting the proceeds into new ones – as a credible way to address the infrastructure deficit. This approach provides capital discipline without resorting to wholesale privatisation.
Some have suggested pooling capital from KiwiSaver funds or creating a state-controlled wealth vehicle to hold major assets “on behalf of the public”. While appealing in concept, such structures risk blurring commercial and political objectives and complicating governance. Private capital markets already provide a transparent and competitive mechanism for investment. Listing assets on the NZX or involving institutional investors through normal market channels ensures accountability and price discovery. Ultimately, whether a sale or partnership makes sense should depend on a clear public-interest test: is the asset genuinely commercial, can better outcomes be achieved through better execution, and how will benefits be shared?
Critics remain wary of losing control over strategic assets, but such concerns can be mitigated through legislation, governance standards, and regulatory oversight. Engaging with stakeholders – including Māori communities – is vital to maintaining public trust and ensuring that Treaty obligations and environmental, social, and governance standards are upheld. The credibility of any sale or partnership depends on the strength of these safeguards, not just the price achieved.
Any future asset transactions should prioritise New Zealand ownership and participation. That could mean offering stakes to local institutional investors such as KiwiSaver funds, the NZ Super Fund, iwi entities, or community investment vehicles. Combined with strong regulatory oversight and transparent governance, this would ensure that even where private capital is involved, strategic assets remain under enduring New Zealand control.
The politics of privatisation in New Zealand remains sensitive, but the tone has become more pragmatic than ideological. The Government has ruled out selling some assets but left the door open to flexible approaches – from long-term leases and joint ventures to PPPs and asset recycling. Opposition parties generally remain opposed, although polling suggests that targeted asset recycling (such as partial sales or long-term leases – attracts greater public support) than full privatisations.
Handled transparently, such initiatives could help reduce debt, modernise infrastructure, and give New Zealanders a more direct stake in the country’s growth. The challenge will be ensuring that unlocking value does not mean losing control. Ultimately, sound stewardship will depend less on ideology and more on rigorous, case-by-case evaluation of what best serves the national interest.
Generate is a New Zealand-owned KiwiSaver and Managed Fund provider managing over $8 billion on behalf of more than 180,000 New Zealanders.
This article is intended for general information only and should not be considered financial advice. The views expressed are those of the author. All investments carry risk, and past performance is not indicative of future results.
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