Friday, December 06, 2013

Asset sales make us all worse off

What was the cost of selling Meridian Energy? Over half a billion dollars:

The latest Crown financial statements show that National’s failed asset sales have carved a path of destruction through the government books, Green Party Co-leader Dr Russel Norman said today.

The Financial Statements show that the sale of Meridian for below its book value wiped $378 million off the Crown’s net worth. This stands in stark contrast to the Government’s assumption that it would sell the assets for $700 million more than they were valued at on the government accounts. Additionally, the Financial Statements show that the ‘buy now, pay later’ scheme for Meridian has cost $33 million and ‘direct sales costs’ were $21 million. That is additional to more than $9 million spent by Meridian and Treasury in preparation for the sale.

“National’s failed sale of Meridian cost the taxpayer around $450 million. It’s time for National to drop its failed asset sales policy and apologise to the public,” said Dr Norman.

Imagine if Labour had botched a government contract and wasted half a billion dollars in the process - the right would be incandescent with rage. But when National does it, they think its "better economic management". Bullshit. It has made people worse off, not better. And National needs to be held to account for that.