Oliver Hartwich: NZ Initiative Executive Director suggests the government look into asset recycling

It's expected the government could find more savings by selling state owned assets. 

The Government's scraped the bottom of the barrel to find more money for the upcoming Budget. 

Prime Minister Christopher Luxon's promising an extra $400 million for maintaining and upgrading assets, on top of the already projected $3.6 billion. 

New Zealand Initiative Executive Director Oliver Hartwich told Ryan Bridge they could go into a process of asset recycling. 

He says selling some existing assets would give the government more room for new ones. 

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Episode Transcript

Speaker 1 (00:00):
Now, the Prime Minister yesterday you'll know this, announced an
extra almost half billion bucks in capital spending in the
upcoming budget. The net capital allowance is now four billion.
That's up from three point six billion that they signaled
in the budget policy statement. Health, education, defense, transport. Those
will be the focuses for them. That'll be the focus
for them. Oliver Hartwich, New Zealand Initiative Executive Director, with

(00:20):
me this morning.

Speaker 2 (00:20):
Olive, A good morning, good morning.

Speaker 1 (00:23):
What did you make of this?

Speaker 2 (00:26):
Well, I think it's a relatively minor announcement because okay,
capital spending was up by ten or eleven, but really
we're only talking about less than five million dollars precisely.
And then the grand scheme of things, that's actually a
drop in the government's orce.

Speaker 1 (00:43):
You have advocated quite strongly for changing up our assets
and the ownership of our assets. This obviously does nothing
to deal with that. But what do you think we
should get rid of?

Speaker 2 (00:55):
Well, I think obviously we've got a few stay on companies,
especially in energy for example. It also government owns a
huge chunk of air New Zealand. That is where you
could start quite easily if you want to sell state
owned assets. But altogether we have a huge state portfolio
of assets that deserves a bigger discussion. For example, kind
of aura, how much should the government be invested there?

(01:17):
The question is actually what to do with that? And
we think one of the ways to deal with state
owned asset is actually to go into a process of
so called asset recycling where the government sells some of
the assets to have some more room for manoeuver when
it comes to investing in new state owned assets.

Speaker 1 (01:35):
And just finally on the business front, where they're going
to keep the research and development tax incentive, there is
talk that potentially they will look at doing more incentives
for business to invest to buy you manufacturing in particular
to buying new equipment. Do you think that's a good idea?
Do you think that's worthwhile?

Speaker 2 (01:53):
Well, the way I read the retention of the I
and D text credit is actually that it provides some
certainty for business is already investing under that scheme. I
mean that was introduced by Labor in twenty nineteen. To
be clear, Luxon didn't change it. He didn't extend the
IMD credits. He basically keeps it where it is. So
I think that's more pragmatic solution.

Speaker 1 (02:12):
All right, Thanks for you, Tom Oliver, I appreciate Oliver
Heartwatch New Zealand Initiative executive directed.

Speaker 2 (02:17):
For more from early edition with Ryan Bridge. Listen live
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