1 00:00:00,040 --> 00:00:02,320 Speaker 1: More insight this morning into the crown's assets and whether 2 00:00:02,320 --> 00:00:04,400 Speaker 1: they're worth owning, whether we should be in a discussion 3 00:00:04,480 --> 00:00:06,880 Speaker 1: again about selling them. State owns about half a trillion 4 00:00:06,880 --> 00:00:09,200 Speaker 1: in assets, five hundred and seventy one billion to be precise. 5 00:00:09,200 --> 00:00:11,119 Speaker 1: So here's the rub. The returns don't cover the interest 6 00:00:11,160 --> 00:00:13,760 Speaker 1: costs on money borrowed to own them in the first place. 7 00:00:13,840 --> 00:00:16,440 Speaker 1: New Zealand Initiative they've done the report in Bryce Wilkinson 8 00:00:16,600 --> 00:00:17,919 Speaker 1: is with it's a very good morning to you. 9 00:00:18,600 --> 00:00:19,120 Speaker 2: Good morning. 10 00:00:19,160 --> 00:00:21,119 Speaker 1: Make the amount of interest that we now owe in 11 00:00:21,160 --> 00:00:23,800 Speaker 1: every dollar? Do you reckon people? Get that? Understand that 12 00:00:23,960 --> 00:00:24,160 Speaker 1: or not? 13 00:00:24,239 --> 00:00:30,280 Speaker 2: Really? No? So in the report we identify the net 14 00:00:30,320 --> 00:00:34,080 Speaker 2: interest feed on government borrowings is about three point seven 15 00:00:34,680 --> 00:00:38,360 Speaker 2: cents and every dollar collected in taxes, and that's about 16 00:00:38,360 --> 00:00:41,160 Speaker 2: three times higher than it was a few years ago 17 00:00:41,640 --> 00:00:44,440 Speaker 2: when interest rates were very lower and the debt was lower. 18 00:00:45,080 --> 00:00:46,400 Speaker 1: What would you sell if you could? 19 00:00:48,360 --> 00:00:52,960 Speaker 2: The literature empirical workers overwhelming that governments are not good 20 00:00:52,960 --> 00:00:59,320 Speaker 2: at running commercial assets, so you'd start there. Also, the 21 00:00:59,320 --> 00:01:02,640 Speaker 2: government owned an enormous amount of real estate in New 22 00:01:02,760 --> 00:01:06,800 Speaker 2: Zealand and dark owns about thirty percent of New Zealand 23 00:01:06,840 --> 00:01:10,679 Speaker 2: And it's never going to be funded well enough to 24 00:01:10,840 --> 00:01:14,600 Speaker 2: enhance the amenity value of that for New Zealand as 25 00:01:14,680 --> 00:01:19,040 Speaker 2: much as other people could. So Idle Land, which is 26 00:01:19,120 --> 00:01:21,280 Speaker 2: not using well, should also be looked at. 27 00:01:22,280 --> 00:01:25,680 Speaker 1: You've already enraged people, and this is where the debate 28 00:01:25,720 --> 00:01:27,840 Speaker 1: gets interesting, isn't it. Do you think we're up for 29 00:01:27,880 --> 00:01:30,040 Speaker 1: the politics of this discussion. 30 00:01:30,880 --> 00:01:36,000 Speaker 2: Yeah, the report acknowledges people's concerns about selling assets. We 31 00:01:36,200 --> 00:01:39,280 Speaker 2: use the analogy of what a household does when it's 32 00:01:39,280 --> 00:01:42,640 Speaker 2: in trouble with the level of its borrowings. You've either 33 00:01:42,680 --> 00:01:45,800 Speaker 2: got to cut back and spending or raise income somehow. 34 00:01:46,160 --> 00:01:49,000 Speaker 2: The government could raise tax rates, but it's also got 35 00:01:49,000 --> 00:01:52,960 Speaker 2: a productivity objective, so that doesn't help. The other thing 36 00:01:53,000 --> 00:01:56,200 Speaker 2: the report a knowledge is is that any assets sales 37 00:01:56,280 --> 00:01:59,240 Speaker 2: process has to be pretty squeaky clean. It's got to 38 00:01:59,360 --> 00:02:03,640 Speaker 2: be getting a good price and no sort of hidden deals. 39 00:02:03,680 --> 00:02:05,880 Speaker 2: It's got to be transparent, it's got to be an 40 00:02:05,880 --> 00:02:09,640 Speaker 2: option sort of process. So the report is very conscious 41 00:02:10,080 --> 00:02:13,280 Speaker 2: of the people's concerns about government as at sales. 42 00:02:13,600 --> 00:02:15,280 Speaker 1: If this was the first time we were ever having 43 00:02:15,360 --> 00:02:18,359 Speaker 1: the discussion, would it be completely different from the reality 44 00:02:18,440 --> 00:02:20,200 Speaker 1: of what we're doing and we've seen key we rail 45 00:02:20,240 --> 00:02:21,799 Speaker 1: and all the other problems. You look at Wyala in 46 00:02:21,840 --> 00:02:23,760 Speaker 1: South Australia at the moment you look at Thames Water 47 00:02:23,800 --> 00:02:27,320 Speaker 1: in Britain. Saying you sell something well and it actually 48 00:02:27,360 --> 00:02:30,239 Speaker 1: being sold well are often two different things. And that's 49 00:02:30,280 --> 00:02:31,080 Speaker 1: a problem, isn't it. 50 00:02:32,000 --> 00:02:34,960 Speaker 2: Yes, that's right, and to some extent there are report 51 00:02:35,120 --> 00:02:38,800 Speaker 2: emphasizes so that that so much so it is a 52 00:02:38,800 --> 00:02:41,520 Speaker 2: bit of a warning sign to the government that you 53 00:02:41,560 --> 00:02:43,959 Speaker 2: should be looking at doing this. You need so much 54 00:02:44,040 --> 00:02:49,960 Speaker 2: money for infrastructure, for maintenance, hospitals, schools and the like, 55 00:02:50,080 --> 00:02:53,639 Speaker 2: and now with the Chinese wake up are more on defense, 56 00:02:54,240 --> 00:02:56,280 Speaker 2: so should be looking at whether the country should be 57 00:02:56,360 --> 00:02:59,000 Speaker 2: prepared to look at all the options and have an 58 00:02:59,000 --> 00:03:03,400 Speaker 2: adult conversation about them and not let fears shut it down, 59 00:03:03,919 --> 00:03:05,960 Speaker 2: but insist on good process. 60 00:03:06,280 --> 00:03:09,040 Speaker 1: You're only Bryce appreciated as always, Bryce Wilkinson, New Zealand 61 00:03:09,040 --> 00:03:12,480 Speaker 1: Initiative senior fellow Mike Transpowers not for sale WELP. According 62 00:03:12,520 --> 00:03:14,520 Speaker 1: to Greg Smith at Devon Funds, it should be that's 63 00:03:14,560 --> 00:03:16,200 Speaker 1: one and a half billion, I think from memory, and 64 00:03:16,240 --> 00:03:17,560 Speaker 1: then you get rid of the rest of the other 65 00:03:17,760 --> 00:03:20,200 Speaker 1: power companies going and then you can sell various airports 66 00:03:20,200 --> 00:03:22,800 Speaker 1: and ports, and so the debate begins what will be 67 00:03:22,800 --> 00:03:24,800 Speaker 1: interesting The next step required as a party to come 68 00:03:24,840 --> 00:03:26,480 Speaker 1: forward and go yep, that's us. And so we already 69 00:03:26,520 --> 00:03:28,560 Speaker 1: get David Seymour at the Act Party thinking that could 70 00:03:28,560 --> 00:03:31,160 Speaker 1: be something you get campaigned on. And the other interesting 71 00:03:31,200 --> 00:03:33,800 Speaker 1: thing is do national go down that same route. For 72 00:03:33,919 --> 00:03:36,960 Speaker 1: more from the Mic Asking Breakfast, listen live to news 73 00:03:37,000 --> 00:03:39,920 Speaker 1: talks that'd be from six am weekdays, or follow the 74 00:03:39,960 --> 00:03:41,400 Speaker 1: podcast on iHeartRadio.