Sale of assets likely to grow

Press, 27 July 1988, Page 1

Sale of assets likely to grow

By

BRENDON BURNS,

political reporter

Another State asset, Government Property Services, Ltd, was yesterday nudged towards privatisation, an announcement being possible in tomorrow’s Budget.

But as the list of assets likely to be proposed for sale widened, hopes of any Budget reversal of plans to tax superannuation were being whittled away. The Minister of Finance, Mr Douglas, reportedly defended his December 17 proposals to wipe tax exemptions for superannuation when speaking to a Wellington meeting of accountants. His closest Cabinet ally, the Minister for State-Owned Enterprises, Mr Prebble, yesterday continued his week-long round of advocacy for further State asset sales.

He said the sale of Government Property Services was being considered. The annual report and statement of corporate intent for the State’s property development and rental company was tabled in Parliament yesterday. It has assets of more than $5OO million.

Mr Prebble said the question had to be asked why the Government was in commercial property dealing. “In these times of crippling public debt, the Government would be irresponsible if it did not consider divesting itself of ownership of Government Property Services,” he said. During the last week, Mr Prebble has promoted the sale of Air New Zealand, New Zealand Post and the Bank of New Zealand.

Tourist Hotel Corporation hotels and blocks of Forestry Corporation land should be leased, he said.

Mr Douglas addressed Wellington accountants at a meeting on Monday evening. He was said to have told them that removing tax concessions on superannuation contributions was designed to eliminate favouritism of one form of saving against another.

“I think that form of neutrality is worth keeping,” he was quoted as saying. “There is some argu-

ment about how to get there.” For more than a month, Mr Douglas has been sitting on the report of the Brash committee which considered the implications of the December 17 announcement on superannuation tax changes. The committee is chaired by the incoming governor of the Reserve Bank, Dr Don Brash. The Opposition spokesman on social policy, Mr Simon Upton (Raglan), said yesterday that the Government was going to preempt public debate on superannuation with tomorrow’s Budget. He said the Budget would spell out the Government’s plans for all tax and spending. “Any tax concession for retirement savings will have to be budgeted for, so we will know on Thursday what the Government’s response will be.” ■ Mr Upton said that by failing to publish the Brash committee report on superannuation and allowing the public to respond, the Government was acting unilaterally. It was making a farce of its promised consultative process and was harming any chance of a national consensus on superannuation. The Audit Office report yesterday on the Public Accounts showed how a likely element of Budget cost-cutting has already been drastically reduced in recent years. Capital development — the money spent on buildings, investment projects and infrastructure — is now less than 5 per cent of total Government expenditure. In 1984 it was about 10 per cent, and in 1978 was 20 per cent. Suggestions have already been made (“The Press,” June 28) that the Budget’s cost-cutting axe will fall more heavily on capital development than any other area of Government spending.