Opponents of the government and the partial sale of a few state assets have taken great delight in the delay in the partial float of Mighty River Power.
. . . However, one thing that is completely missing from any of the arguments for and against the sale is the ongoing programme the Government has to pay down debt and return the country’s fiscal accounts to surplus.
Without the proceeds of the partial sell-down, previously set at between $5 billion and $7 billion, the Government will need to continue borrowing to fund the planned improvement in health services, education, welfare reform and employment growth.
Put simply, this country cannot afford to borrow more than it earns. It did previously and the results are still visible. Economic growth, while strong compared with some other parts of the world, is not sustainable based on borrowing.
If the Government cannot use the proceeds of the sale process to pay down debts, New Zealanders might need to get used to further slimming down of the public service, less welfare and higher living costs. It is a choice not many will want to consider.
We can’t have everything.
More debt when it’s already too high and the global financial situation is so uncertain is not an option.
The Opposition would be first to complain about more cuts to the public service and services but that’s the alternative to the partial floats.