As far as I can tell, National only has one policy at the moment [Update: When I wrote this on Wednesday morning this felt like the case – now I see they are talking about the ETS … I will get to that another time]. That is to sell down part of the governments stake in assets, and use that money to build schools.
Now, I hope that since they have no other policies they don’t intend to really do anything during the next three years. For the sake of it, I’ll assume this is the case.
On the note of their policy, I have to say I have no real problem with asset sales as long as:
- The country has a good legal system (CHECK)
- The country has clear and consistent competition policy (CHECK)
- The asset is sold for at least fair value.
So, if they are going to do this we have to make sure there is a fair price. Excellent. [Update: Here is a good piece from Rob Salmond on why the price issue can be a difficult one]
Now, if this was the whole policy we could end there – but it isn’t. They then want to invest this money into schools.
Is this really the best use of the funds? Is the rate of return on new schools high enough to justify the sale of assets? If New Zealand had an undersupply of school space then this could make sense to me – but I was under the impression that our schooling infrastructure was actually pretty good. As a result, why the hell are the funds being invested there?
So when looking at National’s policy, we have to ask:
- Are they going to get a fair price
- Are they investing the funds in the right way.
Hopefully they can achieve the first criterion, but currently it doesn’t seem that they are really willing to meet the second criterion. If National is just going to waste the funds that come in from assets sales I would prefer them to just not do it.