16 Dec 2009

Govt taskforce wants partial sales of state assets

10:17 pm on 16 December 2009

A taskforce advising the Government on ways of developing the sharemarket is recommending partial sales of state assets.

The Government has ruled out sales before the next election, but the Capital Markets Taskforce says it should consider sales in the medium term.

The taskforce says partial sales of state assets would give investors more choice and encourage them to invest in the share market.

Chairman Rob Cameron, an investment banker, says electricity generators and Transpower are obvious candidates for sale.

Commerce Minister Simon Power says the government will respond to the taskforce's report early next year, but it has already been an enthusiastic supporter of the taskforce previous recommentations to strengthen capital markets.

He reiterated that the Government would not sell any assets in its first term.

The taskforce also recommended the consolidation of regulatory bodies overseeing the capital markets.

Mr Cameron says this will give investors the confidence to invest in firms and increase economic growth.

The recommendation is one of 60 the taskforce says could double the sharemarket's size within four years.

As well as partial floats of Crown-owned companies, it recommends partial floats of the New Zealand arms of the main Australian-owned banks, greater protection for small investors and merging a number of regulators into one, effective body.

Labour's State Owned Enterprises (SOEs) spokesperson Clayton Cosgrove says the Government has a privatisation agenda.

He says partial sales would inevitably lead to full privatisation of SOEs.

The Prime Minister will respond to the recommendations in February.

Govt rejects first term claim

Meanwhile, the Government has rejected Opposition suggestions it intends selling state assets in its first term.

Labour MPs questioned Finance Minister Bill English in Parliament on Wednesday after he made comments about poorly run government-owned businesses on Tuesday.

Labour used comments Mr English made about the Budget Policy Statement to raise the suggestion National really is considering privatisation.

Its finance spokesperson David Cunliffe asked Mr English why he had singled out Television New Zealand, Kordia, New Zealand Post and KiwiRail if he had no intention of selling them.

Mr English says he had singled those companies out because they were failing network businesses.

He says under the previous Labour-led Government taxpayers had lost money in state businesses.

But he repeated assurances there would be no asset sales in National's first term.