Asset Sell-Off Delayed

August 11, 2011 New Zealand Finance

John Key Announced Asset Sale Delay.The latest shock to international financial markets is putting fresh doubt over the feasibility of the government’s proposed state asset sell off.

Prime Minister John Key revealed this week that the current economic environment means that the planned sale of several government assets would need to be delayed, at least for several months. He said that attempting to proceed with the sale in the current level of market uncertainty will mean that the government will see a disappointingly low return.

As part of its long standing political platform, the current National-led government has endorsed the sale of non-controlling shares parcels of government run entities. The sale would be expected to raise up to NZD 7 billion for the government, with the realized profit being used for health and education improvements, along with upgrades to the national communications infrastructure. The Prime Minister added that the government will evaluate the proposed sales on a case by case basis, to evaluate the potential earnings from each asset separately.

Opposition Leader Phil Goff has already commented on the Prime Ministers words, saying that the delay is proof that the government’s plan was flawed from its very inception.

Photo by US Embassy New Zealand