1. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he stand by all of Treasury’s forecasts for the planned sale of State-owned assets?
Hon BILL ENGLISH (Minister of Finance) Link to this
As the member will know, Treasury prepares its forecasts independently; but the answer, I suppose, is yes.
Hon David Cunliffe Link to this
Why is he promoting a policy that he described today at the Finance and Expenditure Committee as “selling hydro dams to buy prisons”, when the return on those hydro dams averaged 17 percent in the last 5 years and he himself calls prisons a moral and fiscal failure?
There seems to be some confusion about the return on State-owned enterprises. A figure of $700 million of dividends has been quoted, which is not, in fact, correct. That actually exceeds the Crown’s dividends from all sources—State-owned enterprises, Crown entities, and Crown research institutes. The true figure for dividends from State-owned enterprises is probably about $350 million, and the member might find that that changes his calculations.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. The Minister has not addressed the question, which was the comparison between selling hydro dams and purchasing prisons. That has nothing to do with the dividend flow—
Mr SPEAKERIf I remember the member’s question correctly, he did mention a figure of returns from State-owned enterprises, and the Minister disputed that figure, as the Minister is entitled to do.
Hon David Cunliffe Link to this
Why did he repeatedly claim at the select committee today that selling our public assets offshore will help reduce our international indebtedness, when his Budget—
Hon Dr Nick SmithHon David Cunliffe Link to this
—that Minister was not there—shows net international debt rising by over 8 percent of GDP in the next 4 years?
Because it helps us avoid the need to borrow. So, yes, international indebtedness is going to rise. Depending on how the mixed-ownership model turns out, we will borrow less than would otherwise be the case.
Hon David Cunliffe Link to this
Why do his forecast financial statements not fully account for reduced dividends from the assets he wants to privatise, but do fully count the revenue and interest savings from those sales?
I am not sure the member’s interpretation of the figures is correct. As I said at the select committee, the Government’s objectives in this case are not purely fiscal. However those numbers turn out, the Government wants to provide New Zealanders with an opportunity for sound investments, we want better performance from those companies, and, frankly, we would rather pay dividends to New Zealanders than pay interest to foreign lenders.
Hon David Cunliffe Link to this
Will the Minister admit that his promise to return the Crown accounts to surplus by 2014-15 is not credible, as it relies on rubber accounting of unmandated asset sales, $1 billion in cuts he has not even allocated, revenue predictions that are $4 billion more than Inland Revenue Department forecasts, and an economic growth track that nobody believes?