November 9, 2025 • 11 mins
There's growing calls to revisit the asset sales debate ahead of the election next year.
Chris Luxon's calling for an asset-recycling debate before next year's election, after the Treasury warned of unsustainable Crown finances.
Infometrics Principal Economist Brad Olsen joined the Afternoons team to discuss further.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks B Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Treasury is nudging the government to look at potentially selling
off some state assets that are underperforming or are no
longer fit for purpose. To discuss this further, we are
joined by Brad Olson, the CEO of in for Metrics. Brad,
could they have you back on the show?
Speaker 3 (00:31):
Good afternoon, team Brad.
Speaker 4 (00:32):
Are we currently borrowing more money from overseas to run
the basics of this country? So are we basically going
in debt just to stay to tread water?
Speaker 5 (00:43):
Yeah, Unfortunately, we are having to borrow for sort of
just the daily costs, which of course means that future
generations have got to pay that back, but they don't
get any of the benefit because it's paying for payments
that are going out one time only sort of right
the second So that doesn't make a huge amount of sense.
It's a tough one economically, but on the current forecast,
that's going to continue out until the end of the decade,
(01:05):
So it is challenging. When you're in deficit, you have
to pay for all of that sort of gap in debt,
and I think the point that the Treasury has come
out with with their investment statement is saying, look, let's
actually have a bit more of a conversation around like
why does the government own certain stuff at various points
over time. It's bought things, it's acquired things, it's held
on to things. But why should we own a TV station?
(01:28):
Should we own farms? Should we own electricity companies? Maybe
the default answer that should be maybe not instead of
definitely yes.
Speaker 4 (01:37):
So if you look at those assets though, say TV
and Z New Zealand posts, key we bank Land Corps
seems like quite a good one, but they are they
difference makers if we sold there. I mean, how much
is TV and Z worth?
Speaker 3 (01:50):
Well? All up?
Speaker 5 (01:51):
The government or Treasury reckons that the government owns about
ninety nine billion dollars worth of assets that are sort
of more commercial in nature, so they're not your vital
infrastructure like roads and similar I think that's about three
hundred and forty odd billion that you get with hospital skills,
roads all that. Talking about doing anything with them, there's
a couple I think there's nearly two hundred billion worth
(02:13):
of commercial investments, so you know, the like acc Fund,
the super Fund. Again, no one's discussing getting rid of them.
You might always change exactly what they want to do
with their money and what the government requires of those
managers to fund or to look to increase those investments.
But it's the ninety nine billion dollars worth of assets
that the effectively their companies of different descriptions, that you go, well,
(02:37):
why is the government going to be better at deciding
on how these assets play out than the private sector,
especially when some of them are you know, they're not
fully owned by the government either, and so there's other influences,
other investors that sort of want a certain return. And
I think, look, the point here is more not necessarily
just to sort of, as some people put it, you know,
you sell the family looms and then you know, you
(02:59):
just sort of spend.
Speaker 3 (02:59):
It on the day to day.
Speaker 5 (03:01):
It's more, if we want more investments into certain areas,
which apparently is a country we do. We know we've
got an infrastructure deficit, the government better to recycle out
some of the assets that they're not currently getting the
best performance from or don't think are the best things
to hold, and instead use that money to invest in
other things that they do think are more important, like
over time, you do it just you're spending an investment
(03:22):
as a household. I think that's healthy for the government
to consider too.
Speaker 4 (03:25):
Now I think most people agree that, you know, private
ownership is more efficient than government ownership. But then that
brings in the profit over public good part of it.
So what are the risks around that of selling these
assets or parts of these assets.
Speaker 5 (03:39):
Yeah, there's difficult elements, and I think you know, people
are always concerned when they start to see some of
those big profit numbers. But again that's the risk that
investors are taking around, you know, putting their money in
at some times they might not be making as bigger returns.
But importantly, remember that there's still a profit you know,
expectation from a number of New Zealand companies that are
still owned by the government, like in New Zealand TV
(04:01):
and Z all of those they are expected to turn
a profit. They're expected to make money. So the sort
of idea that you know, government owns shouldn't be making
money is actually completely wrong. It's deliberately set up to
do that. And instead you then go, well, how do
you sort of potentially make sure that there are some
elements of maybe not control, but regulation around what comes through.
(04:23):
There's still regulation, for example, around different elements of how
the media works and what things can or can't be
published and everything else, so you don't lose control of
that as a government, but you just don't sort of
have to then be playing in the ad revenue space
or anything else.
Speaker 3 (04:38):
So look, there's a whole raft of these.
Speaker 5 (04:41):
I guess the sort of challenge in the question is
if you sort of were to get a bunch of
New Zealanders to write out a bunch of assets that
they think the government should hold and what the government
does hold, how many people are writing down what we've
currently got, and how many people have got other stuff
that they think is more important that would be better
to swap in an outfull You might well have the
same value of investments at the end, but it might
(05:01):
be in different areas, sort of more social areas where
normally the private market might not provide that sort of stuff,
be it you know, health care, BAEd, infrastructure or otherwise.
Speaker 4 (05:10):
We're talking to Infometric CEO Brad Olsen. Now, energy sector
is the one that everyone brings up. So the current
price of electricity in New Zealand, how much is partial
asset sales responsible for that price increased.
Speaker 3 (05:26):
Well, I don't think.
Speaker 5 (05:27):
I don't think a huge huge amount, because again, government
retains you know, a fear whack of those those companies.
They can you know, exert control. And I guess the point, right,
if you're the government and you own an electricity company,
but you're at the same time saying, well, the electricity
companies are not doing good for the people of New Zealand.
And that's sometimes the comments that come out from various
politicians like, bro, you own them, do something with it,
(05:49):
like either use your power or like get rid of them,
because there's sort of no point in holding something, collecting
the money that comes in from the profits and then
going oh, well, the thing that I own is not
doing the thing that I want it to make it.
Speaker 3 (06:00):
That's what ownership's for.
Speaker 5 (06:02):
And I guess that's probably the big challenge right of
the last couple of years, is that people have gone,
will hang on, we're owning these things, we're not clearly
exerting the control that we think we want to. What's
the point of that ownership again, which is why this
conversation is going up. And I guess, look, the point
really when you look at the likes of energy companies
and similar is if government hasn't made bigger calls or
(06:23):
sort of had more direction on what they want from
those energy companies, then it sort of can't say that
there's you know, that they've done anything particular to energy prices,
because clearly the lever's been there and nothing's been pulled.
So it does be the question, what's the point in
having something if you're not going to use the ownership
rights over it.
Speaker 2 (06:41):
It's very nice, you said, Brad. But the tricky part,
correct me if I'm wrong with the when it comes
to the gentailors and the electricity company is the untold
hundreds and hundreds of millions various government has pumped into
the infrastructure. Then you look at the idea of selling
them off and all that costs sunk into that, and
then to bring in an overseas owner to say, yep,
we'll buy those those infrastructure assets off you thank you
(07:01):
very much for your years of pumping millions into that.
Isn't that kind of where people get a bit concerned
is as a country, we've looked after that for a
long time, and now they're going to put it up
for sale.
Speaker 3 (07:13):
Yeah, to a.
Speaker 5 (07:14):
Degree it can be, although your sales price should include
all of that.
Speaker 3 (07:17):
Sort of sunk effort to be put into it.
Speaker 5 (07:19):
But I think, I mean again, I don't think anyone's
made the cast that it has to exclusively go to
an overseas investor. You know, if you ask people, if
you're starting to see this coming up from a few
different companies in New Zealand around using key we say
for assets to go into infrastructure. I mean, you know,
the likes of Simplicity has talked about that recently too.
So there's clearly options to try and sort of provide
(07:40):
more of a commercial directive but also sort of you know,
maybe not keep it fully and let's call it government ownership,
but at least provide the option or the opportunity for
New Zealanders to still do it. And again I guess
the challenges right, I mean, you heard from the Finance
Minister recently who said, look, we didn't think we were
being a constraint on the energy companies, but the more
and more we talk to them, the more and more
(08:01):
they say, well, look, if the government's not willing to
put money in themselves to maintain their current holdings, then
maybe as an energy company, we won't invest quite as much.
That was the point that was always made, and so
government sort of said, look, we've never held back on you.
It's just that no one's really asked the question as directly.
So the next couple of years idea expect that you
might well see the government either need to pony up
(08:23):
more investment to put more into the energy sector to
help things out. That's sort of the challenge. If we've
got pretty limited amounts of money anyway, is there a
decision that New Zealanders are okay with putting that level
of investment.
Speaker 3 (08:35):
In, Because if it is, that's.
Speaker 5 (08:38):
The compromise that you've got, and it's a very very
delicate balance.
Speaker 4 (08:42):
Now going to Keywi Bank speaking of delicate balances, and
I would say sort of a catch twenty two situation.
So the idea of key Wei Bank is compete with
the Aussie banks and so not so much money is
going overseas because we feel like we might have sold
off bn Z and such back in the day for
a bargain and then get got absolutely rinsed on that.
But for key We Bank to compete, then we need
(09:04):
to bring sort of sell off a large percentage of
it and then it becomes the same thing as the
Aussie banks. So do you think that that is a
solvable problem? And do you think there's enough money in
New Zealand for if you you know, you owning New Zealanders,
we're allowed to buy into Kiwi Bank, do you think
that is a possibility to make a competitive bank in
those in that regard?
Speaker 3 (09:24):
Look, I think that one's tricky.
Speaker 5 (09:25):
One of my greatest challenges just conceptually with that one
is that if you're going to own a bank as
a government, but you're not going to use that bank
to do your own banking, If you're not going to.
Speaker 3 (09:34):
Back you the thing you own, why should anyone else
like that? It becomes a real challenge.
Speaker 5 (09:40):
And so again, if it's not making you know, the
difference that it was intended to, if it's not providing
that sort of you know, huge difference that people expecting
when it was set up, you do I think have
to ask do we keep doing the same thing and
not getting what we want? Or do we need to
change tech either by yep, changing the investment levels or whatever,
but sometimes by saying is is this still you know
(10:00):
the top priority for what we're doing with our money?
Are we better to let other people own it? And
I mean, like there's a lot of talk of the
likes of the profits and there going offshore. I mean
there's a little bit of there's elements of that all
the time and different investments that we make. But at
the same time, there's also the advantage of well, the
banks still provide a pretty important service when it comes
(10:21):
to mortgages and otherwise there's still a lot of people
that are employed to hear domestically buy those operations. And
a lot of the time those higher profits are also
over time at least have been funding those higher capital
buffers that the banks have been required to hold by
the Reserve banking case things go wrong. So yes, some
big numbers and we saw some more I think out today,
But that also means that if things went in the
(10:42):
wrong direction, you hope it never does. You hope the
regulations there, but if it ever does, there's still protections
in place because of those higher numbers that have been
coming through. So Catch twenty two in multiple different ways.
Speaker 3 (10:52):
On the banking front.
Speaker 2 (10:53):
Yeah, Bread, always fantastic to get your thoughts and analysis.
Thanks so much for coming back on the program. Thank
you having me feisty, love it. That is, Brad Olsen's
CEO of Informetrics.
Speaker 1 (11:04):
For more from news talks that'd be listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
You're listening to a podcast from News Talks B Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Treasury is nudging the government to look at potentially selling
off some state assets that are underperforming or are no
longer fit for purpose. To discuss this further, we are
joined by Brad Olson, the CEO of in for Metrics. Brad,
could they have you back on the show?
Speaker 3 (00:31):
Good afternoon, team Brad.
Speaker 4 (00:32):
Are we currently borrowing more money from overseas to run
the basics of this country? So are we basically going
in debt just to stay to tread water?
Speaker 5 (00:43):
Yeah, Unfortunately, we are having to borrow for sort of
just the daily costs, which of course means that future
generations have got to pay that back, but they don't
get any of the benefit because it's paying for payments
that are going out one time only sort of right
the second So that doesn't make a huge amount of sense.
It's a tough one economically, but on the current forecast,
that's going to continue out until the end of the decade,
(01:05):
So it is challenging. When you're in deficit, you have
to pay for all of that sort of gap in debt,
and I think the point that the Treasury has come
out with with their investment statement is saying, look, let's
actually have a bit more of a conversation around like
why does the government own certain stuff at various points
over time. It's bought things, it's acquired things, it's held
on to things. But why should we own a TV station?
(01:28):
Should we own farms? Should we own electricity companies? Maybe
the default answer that should be maybe not instead of
definitely yes.
Speaker 4 (01:37):
So if you look at those assets though, say TV
and Z New Zealand posts, key we bank Land Corps
seems like quite a good one, but they are they
difference makers if we sold there. I mean, how much
is TV and Z worth?
Speaker 3 (01:50):
Well? All up?
Speaker 5 (01:51):
The government or Treasury reckons that the government owns about
ninety nine billion dollars worth of assets that are sort
of more commercial in nature, so they're not your vital
infrastructure like roads and similar I think that's about three
hundred and forty odd billion that you get with hospital skills,
roads all that. Talking about doing anything with them, there's
a couple I think there's nearly two hundred billion worth
(02:13):
of commercial investments, so you know, the like acc Fund,
the super Fund. Again, no one's discussing getting rid of them.
You might always change exactly what they want to do
with their money and what the government requires of those
managers to fund or to look to increase those investments.
But it's the ninety nine billion dollars worth of assets
that the effectively their companies of different descriptions, that you go, well,
(02:37):
why is the government going to be better at deciding
on how these assets play out than the private sector,
especially when some of them are you know, they're not
fully owned by the government either, and so there's other influences,
other investors that sort of want a certain return. And
I think, look, the point here is more not necessarily
just to sort of, as some people put it, you know,
you sell the family looms and then you know, you
(02:59):
just sort of spend.
Speaker 3 (02:59):
It on the day to day.
Speaker 5 (03:01):
It's more, if we want more investments into certain areas,
which apparently is a country we do. We know we've
got an infrastructure deficit, the government better to recycle out
some of the assets that they're not currently getting the
best performance from or don't think are the best things
to hold, and instead use that money to invest in
other things that they do think are more important, like
over time, you do it just you're spending an investment
(03:22):
as a household. I think that's healthy for the government
to consider too.
Speaker 4 (03:25):
Now I think most people agree that, you know, private
ownership is more efficient than government ownership. But then that
brings in the profit over public good part of it.
So what are the risks around that of selling these
assets or parts of these assets.
Speaker 5 (03:39):
Yeah, there's difficult elements, and I think you know, people
are always concerned when they start to see some of
those big profit numbers. But again that's the risk that
investors are taking around, you know, putting their money in
at some times they might not be making as bigger returns.
But importantly, remember that there's still a profit you know,
expectation from a number of New Zealand companies that are
still owned by the government, like in New Zealand TV
(04:01):
and Z all of those they are expected to turn
a profit. They're expected to make money. So the sort
of idea that you know, government owns shouldn't be making
money is actually completely wrong. It's deliberately set up to
do that. And instead you then go, well, how do
you sort of potentially make sure that there are some
elements of maybe not control, but regulation around what comes through.
(04:23):
There's still regulation, for example, around different elements of how
the media works and what things can or can't be
published and everything else, so you don't lose control of
that as a government, but you just don't sort of
have to then be playing in the ad revenue space
or anything else.
Speaker 3 (04:38):
So look, there's a whole raft of these.
Speaker 5 (04:41):
I guess the sort of challenge in the question is
if you sort of were to get a bunch of
New Zealanders to write out a bunch of assets that
they think the government should hold and what the government
does hold, how many people are writing down what we've
currently got, and how many people have got other stuff
that they think is more important that would be better
to swap in an outfull You might well have the
same value of investments at the end, but it might
(05:01):
be in different areas, sort of more social areas where
normally the private market might not provide that sort of stuff,
be it you know, health care, BAEd, infrastructure or otherwise.
Speaker 4 (05:10):
We're talking to Infometric CEO Brad Olsen. Now, energy sector
is the one that everyone brings up. So the current
price of electricity in New Zealand, how much is partial
asset sales responsible for that price increased.
Speaker 3 (05:26):
Well, I don't think.
Speaker 5 (05:27):
I don't think a huge huge amount, because again, government
retains you know, a fear whack of those those companies.
They can you know, exert control. And I guess the point, right,
if you're the government and you own an electricity company,
but you're at the same time saying, well, the electricity
companies are not doing good for the people of New Zealand.
And that's sometimes the comments that come out from various
politicians like, bro, you own them, do something with it,
(05:49):
like either use your power or like get rid of them,
because there's sort of no point in holding something, collecting
the money that comes in from the profits and then
going oh, well, the thing that I own is not
doing the thing that I want it to make it.
Speaker 3 (06:00):
That's what ownership's for.
Speaker 5 (06:02):
And I guess that's probably the big challenge right of
the last couple of years, is that people have gone,
will hang on, we're owning these things, we're not clearly
exerting the control that we think we want to. What's
the point of that ownership again, which is why this
conversation is going up. And I guess, look, the point
really when you look at the likes of energy companies
and similar is if government hasn't made bigger calls or
(06:23):
sort of had more direction on what they want from
those energy companies, then it sort of can't say that
there's you know, that they've done anything particular to energy prices,
because clearly the lever's been there and nothing's been pulled.
So it does be the question, what's the point in
having something if you're not going to use the ownership
rights over it.
Speaker 2 (06:41):
It's very nice, you said, Brad. But the tricky part,
correct me if I'm wrong with the when it comes
to the gentailors and the electricity company is the untold
hundreds and hundreds of millions various government has pumped into
the infrastructure. Then you look at the idea of selling
them off and all that costs sunk into that, and
then to bring in an overseas owner to say, yep,
we'll buy those those infrastructure assets off you thank you
(07:01):
very much for your years of pumping millions into that.
Isn't that kind of where people get a bit concerned
is as a country, we've looked after that for a
long time, and now they're going to put it up
for sale.
Speaker 3 (07:13):
Yeah, to a.
Speaker 5 (07:14):
Degree it can be, although your sales price should include
all of that.
Speaker 3 (07:17):
Sort of sunk effort to be put into it.
Speaker 5 (07:19):
But I think, I mean again, I don't think anyone's
made the cast that it has to exclusively go to
an overseas investor. You know, if you ask people, if
you're starting to see this coming up from a few
different companies in New Zealand around using key we say
for assets to go into infrastructure. I mean, you know,
the likes of Simplicity has talked about that recently too.
So there's clearly options to try and sort of provide
(07:40):
more of a commercial directive but also sort of you know,
maybe not keep it fully and let's call it government ownership,
but at least provide the option or the opportunity for
New Zealanders to still do it. And again I guess
the challenges right, I mean, you heard from the Finance
Minister recently who said, look, we didn't think we were
being a constraint on the energy companies, but the more
and more we talk to them, the more and more
(08:01):
they say, well, look, if the government's not willing to
put money in themselves to maintain their current holdings, then
maybe as an energy company, we won't invest quite as much.
That was the point that was always made, and so
government sort of said, look, we've never held back on you.
It's just that no one's really asked the question as directly.
So the next couple of years idea expect that you
might well see the government either need to pony up
(08:23):
more investment to put more into the energy sector to
help things out. That's sort of the challenge. If we've
got pretty limited amounts of money anyway, is there a
decision that New Zealanders are okay with putting that level
of investment.
Speaker 3 (08:35):
In, Because if it is, that's.
Speaker 5 (08:38):
The compromise that you've got, and it's a very very
delicate balance.
Speaker 4 (08:42):
Now going to Keywi Bank speaking of delicate balances, and
I would say sort of a catch twenty two situation.
So the idea of key Wei Bank is compete with
the Aussie banks and so not so much money is
going overseas because we feel like we might have sold
off bn Z and such back in the day for
a bargain and then get got absolutely rinsed on that.
But for key We Bank to compete, then we need
(09:04):
to bring sort of sell off a large percentage of
it and then it becomes the same thing as the
Aussie banks. So do you think that that is a
solvable problem? And do you think there's enough money in
New Zealand for if you you know, you owning New Zealanders,
we're allowed to buy into Kiwi Bank, do you think
that is a possibility to make a competitive bank in
those in that regard?
Speaker 3 (09:24):
Look, I think that one's tricky.
Speaker 5 (09:25):
One of my greatest challenges just conceptually with that one
is that if you're going to own a bank as
a government, but you're not going to use that bank
to do your own banking, If you're not going to.
Speaker 3 (09:34):
Back you the thing you own, why should anyone else
like that? It becomes a real challenge.
Speaker 5 (09:40):
And so again, if it's not making you know, the
difference that it was intended to, if it's not providing
that sort of you know, huge difference that people expecting
when it was set up, you do I think have
to ask do we keep doing the same thing and
not getting what we want? Or do we need to
change tech either by yep, changing the investment levels or whatever,
but sometimes by saying is is this still you know
(10:00):
the top priority for what we're doing with our money?
Are we better to let other people own it? And
I mean, like there's a lot of talk of the
likes of the profits and there going offshore. I mean
there's a little bit of there's elements of that all
the time and different investments that we make. But at
the same time, there's also the advantage of well, the
banks still provide a pretty important service when it comes
(10:21):
to mortgages and otherwise there's still a lot of people
that are employed to hear domestically buy those operations. And
a lot of the time those higher profits are also
over time at least have been funding those higher capital
buffers that the banks have been required to hold by
the Reserve banking case things go wrong. So yes, some
big numbers and we saw some more I think out today,
But that also means that if things went in the
(10:42):
wrong direction, you hope it never does. You hope the
regulations there, but if it ever does, there's still protections
in place because of those higher numbers that have been
coming through. So Catch twenty two in multiple different ways.
Speaker 3 (10:52):
On the banking front.
Speaker 2 (10:53):
Yeah, Bread, always fantastic to get your thoughts and analysis.
Thanks so much for coming back on the program. Thank
you having me feisty, love it. That is, Brad Olsen's
CEO of Informetrics.
Speaker 1 (11:04):
For more from news talks that'd be listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
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