National may plough back cash raised from the partial sale of assets into Kiwibank, Prime Minister John Key says.
Party leaders were addressing the Deloitte-Business NZ election conference in Wellington today.
Explaining plans to use funds raised from selling minority stakes in Meridian Energy, Genesis, Solid Energy, Mighty River Power and Air New Zealand, he told the audience the state-owned bank could benefit.
This isn’t a bad idea. Kiwibank needs a capital injection to grow its commercial business, and you can’t raise the money from the private sector. I don’t have a problem with minority sales of one type asset if it goes to fund the expansion of a second, more profitable asset. But . . .
At the party’s campaign launch in Auckland yesterday, Key announced National would spend $1 billion raised from the sale to transform schools over the next five years. The cash would be ring-fenced in a fund.
This is just the dumbest idea ever. There’s a hundred billion dollar hole in superannuation funding, Key and English have suspended contributions to the Cullen fund, and now they want to sell profitable assets and set up another fund to pay for core infrastructure spending – that they can borrow cheaply to pay for? Will any party – Mana included – propose a less credible policy than this?
But all this is beside the point. The funds from the asset sales are already in the bank. Treasury factored them into the budget and the PREFU – even though the assets haven’t even been sold yet. That’s how the government pays down the deficit so quickly. Now Key is spending that money a second time. So when he announces that he’s going to spend a billion dollars on a fund to transform schools, funded by the asset sales, what he’s actually saying is that he’s going to borrow an extra billion dollars to pay for his election promises. It’s the tax cuts scam – (‘we’re not borrowing for tax cuts, we’re borrowing for the spending from the shortfall from the tax cuts!’) all over again.