Have National’s asset sales officially cost more than they’ll earn?

In a previous post at The Standard I did a wee bit of math and came to the conclusion that National has already made $5.26 billion worth of spending promises out of the Future Investment Fund, the not-actually-a-fund chunk of cash they plan to make from selling taxpayer-built infrastructure to their mates.

Things have developed.

First, there’s this post from James, noting that the sales process itself has already cost $124 million.  And this estimate from the Greens of the cost of the Government’s interest-free loans to Meridian investors.

And then there’s this acknowledgement from John Key that the original five-to-seven billion dollar estimate for the profits from the sales are pretty much shot to hell.

So now we’re left with:

  • Maybe $5 billion in income – only 2.1 billion of which has come in so far
  • $5.26 billion in promised spending
  • $124 million in process costs
  • $55 million in bribes to investors

Costs we’re still not including:

  • National’s promise to reduce our debt by $6 billion
  • Ongoing loss of profits to the Crown, as outlined in James’ post
  • The ongoing maintenance of all the projects they’re promising to fund – because shit needs to be staffed, maintained, cleaned and managed after you’ve built it or it’s a complete waste of time.

So at the most generous estimate?

We’re already in the hole for four hundred and thirty-nine million dollars.  Taking the promised spending and costs to date away from the actual funds received?

Three point three billion dollars in the red.

That’s the sound fiscal management of the National Party.

3 comments

  1. megpie71

    The even worse thing: by selling off public assets, and particularly income-earning public assets (which, by the way our State government is threatening to do here in Western Australia… hoo flippin’ ray) you actually put yourself in a WORSE position long term, because you’re foregoing the income which would have come from those assets over time. So yeah, selling off the power and water suppliers are going to make you a quick couple of hundred million – but how much revenue from those assets are you foregoing over even a five year timeframe, much less ten to twenty years?

    The only winners from privatising government assets are the business buyers who pick up public assets at what tend to be knock-down prices (because, after all, it’s pretty much a buyer’s market) and then laugh all the way to the bank on the proceeds. As per prior experience, service to consumers goes down, prices to consumers go up, and we all wind up paying more in the long run.

    • QoT

      Sometimes I think the core, worst-of-the-worst issues with modern capitalism is its refusal to think about “the long run”.

      • Miles Bloom

        The system materially rewards short term thinking. It is a beast doing its best to preserve itself #vivelarevolution