7 Nov 2011

Labour says National's asset plan a fire sale

11:11 am on 7 November 2011

The Labour Party says getting lower returns than expected from partial asset sales would leave a big hole in the National Party's budget.

The party wants to sell minority stakes in four state-owned energy companies, reduce the Government's majority shareholding in Air New Zealand and use the proceeds for infrastruture spending.

National's finance spokesperson, Bill English, has conceded that raising $5 - $7 billion from the partial sales plan is not guaranteed

Labour's finance spokesperson, David Cunliffe, told Morning Report National is relying on that money in its budget.

He says National is asking voters for permission to sell down assets on an uncertain world market and that amounts to a fire sale.

Volatility won't affect long term value -Tower

The chief executive of insurance company Tower, which has emerged as a potential investor in the proposed sale, says he does not expect world economic conditions will seriously erode the value of many of the country's state assets.

Sam Stubbs says the assets are very appealing ones, which should fetch a good price.

While he says it is possible the situation with global markets could mean the assets may be sold a bit cheaper, he does not expect wild volatility in a sale price and says whatever the timing, the nature of the business would not change.