Heather du Plessis Allan: We can't rule out asset sales

I think we’re about to find out whether this Government has got the cahones to make the tough calls that need to be made on one thing in particular: Asset sales.

If you've been reading political commentary lately, including in the weekend papers, there's been a lot of talk of the need for asset sales. Why?

Because as we said earlier, we have a structural deficit. Which is a very bad thing because it means we are, thanks to Grant Robertson, now spending more than we earn - on the regular.

Treasury's advice for how to fix it? Asset sales.

But asset sales are politically tricky because of the hangover of the 80s. So Chris Luxon's already ruled them out. But he shouldn't have, because we actually need to do this.

Not just because we need the money, but because selling them down makes them better.

Treasury basically admitted this in a report 2 years ago. The ones we own 100 percent have “underperformed their cost of capital” with “ Revenue, earnings and dividends “ all trending “down over the past five years."

The ones we own about 51 percent of have, by contrast, outperformed their cost of capital. The last lot we sold - Mercury. Meridian Energy and Genesis- are now all worth more than they were when we sold them down.

Two of them have doubled in value, which means we still own as much as we did, and they’ve paid us billions - so it’s a no-brainer on every single level.

So the Government should be looking to sell down New Zealand Post, KiwiRail, Kiwibank, TVNZ, the list goes on.

But it’s politically tricky, and Luxon said no.

So- does this Government have the cahones to actually do what it takes to get us out of this economic mess? 

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