Voting papers are starting to arrive in letterboxes and we are being asked to give a verdict on the vexed matter of asset sales.

The citizens-initiated referendum asks this of the voting public: "Do you support the Government selling up to 49 per cent of MeridianEnergy, Mighty River Power, Genesis Power, Solid Energy and Air New Zealand?" Asset sales are a touchstone topic that clinically divide our political jousters. For the conservative National Party, it resonates with their inherent belief in less government control and more individual control (in this case, in the form of share ownership).

For the left-leaning Labour and Greens, it is about the government controlling assets for the benefit of all and not selling them for the benefit of a minority. For both sides the arguments are more political than financial. Those who do vote will probably be mainly opposed to asset sales and sufficiently provoked by the present Administration's course to register their disapproval.

That will give Labour and the Greens some ammunition, though National will point out they were elected with this policy in their manifesto. It's a complex issue but here's a simplified version.


Assets are a revenue stream for governments in the form of dividends. Sell them and you get cash now but your revenue stream is reduced. It's like having money in the bank - each year it adds a bit of interest.

Selling assets is taking money out of the bank and spending it and then seeing your smaller nest-egg get less interest. In short, a prudent financial adviser might say, long term, asset sales are not a good idea.

But with our triennial elections, politics is often about short-termism.

Mark Dawson is editor of the Wanganui Chronicle.