Early sale of Workscorp hinted at

Press, 8 April 1988, Page 1

Early sale of Workscorp hinted at

By

OLIVER RIDDELL

in Wellington The early sale of the Government’s newest State-owned enterprise — the Works Corporation — has been hinted at by the Minister of Finance, Mr Douglas. He was speaking at a function in Wellington at the winding-up of the old Ministry of Works and Development and to launch the Works Corporation. j 1 The Government’s approach to its debt burden was to look to the businesses which it owned and which were important enough to retain in State control. Mr Douglas then urged Workscorp staff to conduct their business in such a way that it was of real commercial value.

“If you do that, you are going to win either way,” he said. "Whether you stay in the Government stable as a full contributing member of the team or ultimately take the other route

as a successful private business, the performance of Workscorp will be every bit as good as its rivals in the private sector. i “Some of the most vocal opponents of asset sales in fact represent vested interests in State enterprises which remain a very long way from efficient!” Mr Douglas said. The Opposition spokesman on State-owned enterprises, Mr lan

McLean, urged the Government to be more forthcoming about its ; intentions for Workscorp. ( “If the intention is privatisa- -Q tion, the Government < 1 should ' have avoided; all the chaos of corporatisation and' moved straight to privatisation,” t e said.! ! Many of the old : Ministry’s j staff would have been interested ) in buying a part of thelbusiness. 1

“Now, with the Government desperate for cash, secret deals with overseas firms are likely,” Mr McLean said. ' ■ T ,

The people who had built up a strong Ministry of Works and. Development would have nd say in their own future as a result of corporatising before privatising. Mr Douglas said Workscorp would soon be learning about -the implications (of New Zealand’s debts as it came into direct■ competition with Bechtel, Becca; Carter, Citoh and Mitsubishi.

The high cost of raising capital for New Zealand business was a continuing handicap, he said. Between 1974 and 1987 Government debt had risen from 10 per cent of gross domestic product to 41 per cent, which did not include contingent liabilities such as superannuation for public servants and rises in the cost of national superannuation.

Mr Moore, page 7