David Farrar: The stupidity of Labour on assets

The Herald reports:

Opposition leader Chris Hipkins is dismissive of Prime Minister Christopher Luxon saying the country needs a “mature” conversation around the potential sale of state-owned assets.

“What would this government do when they’ve run out of things to sell?” Hipkins said, after Luxon spoke positively of a new Treasury report that calls for better management of the country’s $571 billion portfolio of assets.

Treasury said the Government couldn’t grow its way out of a fiscal deficit, so future governments should consider selling assets that are no longer fit for purpose and reinvesting that money into new assets.

It is pretty sensible stuff – selling some assets so you can buy other assets. It is what every business and household in NZ does.

“Your KiwiSaver account, Super Fund – they all cycle assets in and out. We have other governments that do it in that way as well.

Again, just common sense.

Hipkins responded by saying that although he hadn’t read Treasury’s report, released on Friday, Labour wouldn’t sell state assets if elected to govern.

He appeared unaware Kiwibank’s parent company sold Kiwi Wealth to Fisher Funds for $310 million under the previous Labour Government.

Exactly. And Housing NZ sold some state houses so it could build new ones.

Singapore’s Temasek investment company is an example of a “formal capital recycling programme”.

While Labour compared its proposed “Future Fund” to Temasek, the fund would achieve the opposite by preventing, rather than supporting, asset recycling.

Hipkins is basically saying that the state can only acquire assets, and never ever sell any. That of the $571 billion of assets held by the state, not a single farm or a single house or a single share in a company should be sold. It’s economic lunacy.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.