17 April 2014

National gives away a further $130 million on Genesis sale

National have sold New Zealanders short by significantly under-pricing Genesis Energy, Green Party Co-leader Dr Russel Norman said today.

Genesis Energy shares immediately went up $0.26 (or 17 percent) on listing today, showing the market valued the company significantly higher than the Government’s selling price.

“New Zealand tax payers have missed out on an additional $130 million of revenue by the National Government mispricing Genesis Energy,” Dr Norman said.

“John Key promised up to $10 billion of proceeds from his asset sale programme. Total gross revenue is now less than half that at $4.68 billion.

“National's cornerstone economic policy – asset sales – has been a complete failure.

“National should have listened to the people of New Zealand and stopped selling the last of our remaining assets.

“One of John Key's legacies as a Prime Minister will be that he ignored overwhelming public opposition to pursue his economically reckless policy of selling our assets.”

The costs of selling 49% of Meridian Energy, Mighty River Power, Genesis, and Air New Zealand have been $550 million to date.

“National predicted 250,000 'mum and dad' investors for each sale, but New Zealanders refused to buy what they already own and most of the retail shares went to a wealthy few,” Dr Norman said.

“National said that asset sales would improve competition in the electricity sector; in reality, power prices have continued to rise even as demand has fallen.

“National promised we’d be better off as a result of the sales, however the lost dividends from our assets will leave a $150 million-a-year hole in the government's accounts forever.

“The truth is, National is bad with managing our money,” said Dr Norman.

ENDS

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