Auchinvole Chris: Questions for Oral Answer — Questions to Ministers Questions to Members 
Auchinvole Chris: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:675;Page:21045] 
1. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
 to the  
Minister of Finance 
: What steps has the Government taken to make better use of its balance sheet to boost growth and jobs? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has a very substantial balance sheet with total assets currently at a value of around $220 billion. In the last few years the Government has undertaken a range of carefully selected capital investments including an infrastructure programme with significant investment in roads and in KiwiRail as well as investment in schools hospitals and commercial assets. The first Investment Statement shows that these substantial investments will add up over the next 5 years to increasing State assets by $34 billion much of it through expenditure on property plant and equipment which will generate jobs and a long-term boost in productivity for the economy. 
Chris Auchinvole 
: What independent assessments has he seen of the benefits of the Crown using its capital better? 
Hon BILL ENGLISH 
: When the Government is making very substantial new investments it needs to be careful how it finances those investments. Last week I saw analysis by the New Zealand Institute of Economic Research of the mixed-ownership proposal that the Government has put forward. It concluded that the proposal makes sense that a partial sale would allow the Government to share the financing of major future investments with other investors and that the proposal will reduce the Government’s future borrowing needs. 
Chris Auchinvole 
: Did the New Zealand Institute of Economic Research analysis also cover what impact mixed ownership would have on Government finances? 
Hon BILL ENGLISH 
: Yes it did. It noted that the return on the equity that the taxpayers have invested in these assets is less than the interest costs of holding the assets. The institute calculated that the annual gain to the Government from selling 49 percent of these companies could be close to $250 million. This seems reasonable though the Government’s own projections are more conservative. 
Chris Auchinvole 
: Has he seen other examples of New Zealand businesses redeploying their capital for better use? 
Hon BILL ENGLISH 
: Yes I have. I have noted that the Tower Investments chief Sam Stubbs has said it is likely to sell assets it owns overseas in order to be able to buy these assets in New Zealand. That would follow the pattern of shareholders of Port of Tauranga Ltd where New Zealanders are buying out foreign ownership of Port of Tauranga Ltd shares listed on the stock exchange. I have also seen reports that Fairfax intends to float part of TradeMe on the New Zealand sharemarket—a model similar to the one the Government is proposing and similar to that of Air New Zealand which was set up as a mixed-ownership company by the previous Labour Government. 
Hon John Boscawen 
: How would growth and jobs have been affected if the Government had implemented a tax-free threshold on income of $5000 a year taken GST off fresh fruit and vegetables and restored the research and tax development credits as proposed by Labour? 
Hon BILL ENGLISH 
: Thankfully we did not get to find out because the Labour Government was thrown out and did not have the opportunity to put that package together. But it would almost certainly have been as bad for jobs and confidence as the policies of that party were when it was in Government. 
Hon John Boscawen 
: How would growth and jobs have been affected if the Government had reduced spending to 29 percent of GDP and reduced the top company and income tax rate to 21 percent as proposed by ACT last month? 
Hon BILL ENGLISH 
: Well it is a bit hard to tell because those measures may have ended up with the Government slashing the support that many New Zealanders have relied on through the tougher times of the recession. I am sure the member’s party believes those measures would have been better for growth and jobs. We believe we struck about the right balance between building confidence and the opportunity for there to be more jobs and higher incomes in the future while protecting New Zealanders through the tough times of a recession.