Myths About Asset Sales Exposed

If you are undecided about whether asset sales are a good idea, then I urge you to read this thorough and well-researched article by Gordon Campbell.

Campbell concludes that all the arguments for asset sales commonly cited by proponents of the plan are flawed, and he exposes eleven myths about asset sales:

1. Asset sales will reduce debt and help the government to balance the books.
2. Asset sales will create an opportunity for ordinary New Zealanders – the so- called “Mum and Dad investors” – to own a stake in some top notch companies.
3. Asset sales will help boost the appeal of the New Zealand sharemarket as a place to invest.
4. Asset sales will bring private sector disciplines and efficiencies to bear on the performance of these assets.
5. The shareholding will stay in New Zealand hands.
6. Asset sales will increase the pool of national savings and investment.
7. This is a good time to sell state assets.
8. We have to sell state assets now, to pay off debt.
9. Privatisation, either full or partial, is a driver of innovation.
10. The asset sales are consistent with the government’s energy planning.
11. Asset sales are consistent with Treaty principles. 

So it appears that the asset sales plan is more about ideology than good economic sense.

It's just a pity that National is likely to take not the slightest notice of any of these objections, if it wins another three years in office.