“It is particularly
disappointing that ‘asset recycling’ – the process of selling down public
shareholding in one public asset in order to invest in another more valuable
asset – has been precluded from the terms of reference.
“Asset recycling is
enabling Australia to respond faster and much more effectively to their growth
challenge than New Zealand.
“New South Wales alone
will spend AU$14.7 billion on transport improvements this year compared to
around $3 billion across New Zealand – twice what we are on a per capita basis.
It has been able to do this by selling down nearly $50 billion of
underperforming assets in the last five years and using the proceeds to deliver
heavy rail, light rail and roading, as well as urban redevelopment, schools and
“With better services
and fewer public funding constraints on development, the Aussies are addressing
homelessness and deprivation whilst investing tens of billions in road and rail
“Research has shown the
asset recycling programme in New South Wales has very high public support - 61
per cent, with only 9 per cent opposed - when people understand why the
programme is in place and where the money is going.
“High growth councils
around New Zealand would provide a much better public service by selling down
shareholdings in ports, airports or low performing assets and “recycling” the
proceeds to invest in core transport and water.
“In Auckland, partial
or full sale of Watercare would enable the Council to release billions in
capital to invest in storm water, floodwater and transport infrastructure and
would allow the company to leverage its balance sheet to invest in water
infrastructure to support growth.
“The opportunity cost
of having public money tied up in non-essential services is worse congestion
and a prolonged housing crisis.
“If, for some reason,
New Zealand is different than Australia and if advice from the OECD, World
Economic Forum and others on good capital management is misplaced, the
Productivity Commission is best placed to make that call.
“The same can be said
for the rating of Crown and Maori land. It is extraordinary that the Crown
considers councils to be core infrastructure providers, but will not pay them
to deliver services to Government assets like schools nor even take advice on
“It is encouraging that the
Government has launched this Inquiry, but given the constrained terms of
reference that the Productivity Commission has been given, the potential
outcomes of the study have been compromised at the outset,” Selwood says.
For further information and comment contact
Stephen Selwood on 021 791 209