Govt assessing value for sale of S.O.E.S

Press, 25 February 1988, Page 4

Govt assessing value for sale of S.O.E.S

By

OLIVER RIDDELL

in Wellington

All State-owned enterprises are being assessed by the Government to decide which ones should be sold.

On February 17 the Minister for State-Owned Enterprises, Mr Prebble, wrote to all chairmen of S.O.E.s.

He said that a programme of asset sales had been announced by the Government in its December 17 economic package. The Government was considering how to structure its relationship with each S.O.E. while it remained within the ambit of the State-Owned Enterprises Act, 1986. Mr Prebble released a copy of his letter yesterday because it was being misinterpreted.

There was no plan to sell all the S.O.E.s. as was being claimed, and no such plans had been made, he said.

, The letter was in line with one of the Government’s imperatives — to reduce the crippling burden of public debt. New Zealand faced a public debt of $42,000 million of which $22,000 million was held by overseas lenders.

“The Government is determined to pay back this debt and has made frequent statements that $14,000 million of the debt is to be retired by 1992,” Mr Prebble said. It was well known that the Government had been looking at asset sales on a case-by-case basis and Mr Prebble said that he did not regard his February 17 letter as confidential. The letter asked for re-

ports from each S.O.E. No decisions on sales had been made and the Government would collect the facts before deciding, he said.

There was very good sense in having each S.O.E. report on its potential for sale to the private sector. If a S.O.E. was not in a condition to be sold then that indicated it was not performing properly, he said. Mr Prebble’s letter to the chairmen said the Government’s target would involve an ongoing programme of asset sales, including the sale of shares and individual assets owned by S.O.E.s. The overriding objective would be to ensure the maximum continuing contribution from the businesses to national economic well-being.

He said that would involve decisions being made on the removal of statutory and other restrictions to competition, other legislative changes needed to enhance efficiency before sale and sales strategies aimed at maximising sales proceeds. The benefits and desirability of individual sales would need to be assessed on a case-by-case basis and the businesses would be managed in the meantime with a view to their subsequent sale.

The Government also wanted to discuss two other matters — the views of each S.O.E. on transfer to the private sector and the broad intentions of each S.O.E. These two points ' needed to be discussed as soon as possible, the letter said.