22 Jun 2011

Meridian profits draw questions about state asset sales

10:07 pm on 22 June 2011

The Opposition says the Government's figures for partial privatisation of some state-owned assets are not stacking up and it needs to be more transparent about them.

Treasury has confirmed that the rate of return on Meridian Energy is about 15%, rather than the 3% suggested in Budget documents.

The higher commercial return includes retained earnings and the increased value of assets.

The Labour Party says the Government is trying to suggest such state assets are rubbish and should be sold, but they are actually highly profitable.

The party's finance spokesperson, David Cunliffe, asked the Minister, Tony Ryall, why the Budget did not reflect the total loss to taxpayers if Meridian and other state-owned power companies are partially privatised.

Mr Cunliffe says it's possible the Government will make a loss on selling the assets, compared with what it might earn in the future by holding on to them.

Mr Ryall, was unable to explain the discrepancy in the figures, but denied that the Government was trying to make partial privatisation look like a better deal than it actually is.

Meanwhile, the committee was told that advisers on the sales could be in place by early August.