Opportunity knocks - the case for further asset sales.

By Greg Smith, Head of Retail at Devon Funds

The debate about asset sales has recently been thrust into the political limelight, with David Seymour vocalising the need to reconsider privatisation. This is while Christopher Luxon has stated it will not happen in National’s first term, but an election win in 2026 might give him the mandate to do so. Therefore, the discussion over if and what could be sold is likely only to intensify, and rightly so. Willing buyers are waiting in the wings.

In addition to helping plug a gaping debt load and reducing the interest burden, one of the arguments for asset sales is that New Zealand should make far better use of its assets to drive economic growth. The argument is highly pertinent to the Kiwi economy, which is experiencing the worst recession in over 30 years.

The debate over whether we should engage in further asset sales is multi-faceted and involves philosophical, economic, and practical considerations. There is also the school of thought that it should not be discussed, given the risks of selling off more “crown jewels” too cheaply, losing effective control and creating societal risks.