Nick Leggett: Infrastructure NZ Chief Executive on asset sales

Prime Minister Christopher Luxon has suggested National may take asset sales to the next election but denies there are any immediate plans for a sell-off.

Act’s David Seymour says it’s time to debate whether some government assets should be sold off if they aren’t delivering returns.

Economic Growth Minister Nicola Willis on Monday said Treasury had identified some areas where entities were not delivering “as well as it should” and more would be said in the future.

Infrastructure NZ Chief Executive Nick Leggett says New Zealand is falling behind on infrastructure and asset sales are needed to bring us back in line with other countries and improve assets we currently have.

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Episode Transcript

Speaker 1 (00:00):
Privatization is the hot word of the day and Prime
Minister Christopher Luxon has floated taking asset sales and privatization
and asset recycling to next year's election to get a mandate.
He said this just days after athleader David Seymour suggested
the idea during the State of the Nation speech. We're
all talking privatization. Treasury has pointed to some government agencies

(00:21):
that aren't performing as well as they should. We're looking
at UQV and this they could potentially be the first
to be sold off. So Infrastructure New Zealand chief executive
Nick Leggand joins me now on the program. Hella, Nick, hello,
in your opinion, how would the economy benefit from asset sales?

Speaker 2 (00:38):
Well, how was the country benefit? And I think what
we've got to do is take this discussion back at
that because it's not just about hawking off assets and
running away with the money. It's about what can you
sensibly build if you release funds in a different way,
and so that whole I think the idea of Asset

(00:58):
Partnership's asset recite, where the government takes a look at
it all the asset assets it owns and says right,
we can release the money here, we could perhaps have
a joint ownership with the private sector, and we're going
to build a school, a hospital, a light rail or
a road. And this is how New Zealander's lives are
going to be improved and how the economy is going

(01:20):
to be improved for the long term. New South Wales
did this. It was taken to the state election I
think about twelve years ago and it was sold to
the electorate and surprise, surprise, there was actually I don't
say that in any sarcastic way, but actually the government,
the state government delivered and you're still seeing the benefit

(01:41):
of that and the regeneration of Sydney, of regional New
South Wales. If you think about the light rail and
those really exciting public spaces in central Sydney, associated uplisted
housing and other economic improvements. All that happened because the
state said, how can we be use our balance sheet

(02:01):
for the benefit of social and economic progress. And that's
the discussion this country has to have. It's not about
this binary yes we should sell or no we shouldn't
sell an asset. It's what that improves for people and
jobs and growth over the long term and that's the
question New Zealand needs to ask itself. We are slipping

(02:22):
behind internationally. The amount of money that we earn from
exports is pales in comparison to some countries of similar
size in the OECD. We know we've got to kick
start our education and health systems if we want to
retain the kind of country that I think probably people
have come to expect. And it's about doing things differently.

Speaker 1 (02:45):
Okay, and of course everyone goes well overseas capital. But
of course there is a possibility of Kiwi Save It
or the New Zealand Superfund or any New Zealand EWE groups.

Speaker 2 (02:55):
Look, this doesn't have to be This is not about
a foreign grab. The other point of about it is
we have a pitiful reputation and record of managing the
assets we actually build and own. Look at roads, look
at schools, look at hospitals. When you get some private
sector discipline into these assets, you actually improve that long

(03:18):
term life because you can build maintenance and renewal into
the contracts.

Speaker 1 (03:24):
The problem, I say, the problem though, Nick, is of
course everyone looks at Kiwi Rail where we sold it
and then they stripped it and then and then we
had to buy it back and they think, well, that's so.
Sometimes it's not that private is always perfect. But you know, hey,
but he's going with.

Speaker 2 (03:38):
Your eyes wide open, Andrew, you can build those sort
of things and protect the asset and build long term
maintenance and prevent assets stripping in the contracts that you're right,
these things are you can overcome them. And I just
think we need to really ask ourselves the kind of
country that we want to build and become. What do
we build into wards and then we can decide how

(03:59):
we deliver that. Because we can't keep writing checks that
the public can't cash. We have to think of different
ways of funding things. And it's not about selling everything
and building in this way. It's about can we do
things better in some areas. And I think a more
balanced approach one that where people understand what we're going
to actually get, recognizing that when you sell something you've

(04:20):
actually still got to service the costs, so it's not
this perfect, wonderful world. We have to ask ourselves these questions.

Speaker 1 (04:26):
Nick, I thank you so much for your time today.
Neck is the Infrastructure New Zealand CEO. Remember the government
apparently we'll be seeking a mandate in twenty twenty seven,
So this is not something that's happening tomorrow. For more
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