Chapter 7: Putting ‘why’ before ‘how’: evaluating the rationales for partial privatisation of state-owned enterprises in New Zealand
Some of New Zealand’s state-owned enterprises (SOEs) will almost certainly be partially privatised from 2012 onwards. The government intends to partially privatise power companies; Mighty River Power Limited, Meridian Energy Limited, Genesis Power Limited and Solid Energy New Zealand Limited, and to further reduce the Crown’s 74.32 per cent share in Air New Zealand Limited (Secretary of the Cabinet, 2011, para. 5). The government has stated that it intends to retain at least 51 per cent of each entity, initial public offerings are the preferred mode of sale, and that proceeds from SOE sales would be used through a Future Investment Fund to finance as yet unspecified capital expenditure (Secretary of the Cabinet, 2011, para. 28). Expected proceeds are between NZ$5 billion and NZ$7 billion (Secretary of the Cabinet, 2011, para. 27). The government has signalled the potential use of incentives (e.g. bonus shares) to encourage broad participation. In undertaking a privatisation programme of this sort, it is crucial that policy-makers know what they are trying to achieve in order to make rational design choices, and to be held accountable for those choices.
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