National hedges bets on asset sales

Asset sales policy has been thrust on to the election agenda - mainly thanks to a blunder by Don Brash in the TV3 leaders' debate.

The National leader reluctantly admitted - after Prime Minister Helen Clark's timely interjection - that he would look at selling Landcorp farms and part of Solid Energy.

The worm, an audience reaction device, plunged when Dr Brash agreed that the Prime Minister was "quite correct".

It looked like he did not want to say what National's policy was, cutting across the party's efforts to be upfront about its intentions when the history of state asset sales has been littered with surprise sales and consequent voter disenchantment.

Dr Brash also fudged in a recent Listener article, stating: "We won't sell TV2. We won't sell Kiwibank."

Readers could conclude that National did not intend selling Kiwibank. But that is not the case. The party's state assets policy - released with little fanfare earlier this year - says it would retain Kiwibank for at least the first term in office so "any final decisions can be made with the benefit of full and complete information". That indicates they may well sell it later. Previous National leader Bill English went into the 2002 election wanting to sell the bank.

Other planks of National's state assets policy are to gradually sell Landcorp farms and part of Solid Energy, while retaining TVNZ, NZ Post, the rail tracks, the electricity companies and Transpower. But the policy also hedges, leaving open the chance of sales or part-sales in future by not ruling out either option.

National finance spokesman John Key adds another plank not mentioned in the policy: while it was not looking for changes to the mixed ownership of Air New Zealand, if a "cornerstone partner" such as Singapore Airlines came along, it might sell a stake while retaining majority ownership.

Mr Key likes to paint himself as the pragmatic face of National's new approach to state assets. Gone, he says, are the ideological days of large-scale asset sales like the 1980s.

"There's strong public opposition to asset sales and I think our policy reflects that. We've moved a long way from where we would consider wholesale asset sales to a point where we are advocating long-term ownership."

Labour is attacking Dr Brash in billboards which state: "Brash on Asset Sales: 'I'm not willing to say'." At the same time, Helen Clark has warned of National's "hidden agenda" for privatisation.

But Labour is not pure either, even though it has a "long-term hold" project and a policy of not selling. It has already sold some Landcorp farms and NZ Post has sold half its courier business to German firm DHL for $80 million.

On the other side of the ledger, the Labour Government has been buying furiously. It bought a controlling stake in Air New Zealand, as well as the rail tracks network.

The Government has also allowed Meridian to buy into Australian generation, purchasing Southern Hydro in 2003 for $630 million after Finance Minister Michael Cullen gave the go-ahead for foreign investments. Another obvious foray is the creation of Kiwibank in Labour's first term.

The party's softly-softly approach to state assets has earned little negative reaction from voters, who appear to have long memories on this issue.