Key Takeaways
- The New Zealand Government is undergoing a "Crown ownership purpose exercise" to review its commercial assets and determine whether it is prudent to continue owning them.
- The exercise aims to identify the purpose of each asset and whether it is best served by owning or regulating the sector.
- The Treasury will provide advice on whether the Crown has a firm rationale for continuing to own an asset, but the decision to sell or retain assets ultimately lies with ministers.
- The exercise is not driven by a desire to sell assets, but rather to clarify the Government’s objectives and target monitoring efforts.
- National is likely to take a policy on selling asset sales to the election, while NZ First has been critical of the idea.
Introduction to the Crown Ownership Purpose Exercise
The New Zealand Government has initiated a review of its commercial assets, known as the "Crown ownership purpose exercise". This exercise aims to determine whether it is prudent for the Government to continue owning certain assets, and whether they provide an important public service. The Treasury has been tasked with advising the Government on the purpose of each asset and whether it is best served by owning or regulating the sector. For example, assets such as KiwiRail, which maintains the rail network, may remain in Crown ownership due to their importance to the public. On the other hand, assets that do not provide a significant public service may be considered for sale, with the proceeds invested in other areas.
The Role of the Treasury in the Exercise
The Treasury secretary, Iain Rennie, has stated that the exercise involves reviewing each entity individually to determine its purpose and whether it aligns with the Government’s objectives. The Treasury will provide advice on whether the Crown has a firm rationale for continuing to own an asset, but the decision to sell or retain assets ultimately lies with ministers. Rennie emphasized that the Treasury’s role is to provide advice, not to make recommendations on whether to sell or keep an asset. The exercise is designed to ask whether the Crown has an interest in a particular area, and if so, whether that interest is best served by owning an asset or regulating that sector.
The Potential for Asset Sales
The exercise has sparked controversy, with NZ First being extremely critical of the idea of selling assets. National, on the other hand, has ruled out asset sales for this term but has suggested that it will campaign on a mandate to sell assets if it wins a second term. Rennie stated that the Treasury has not done any work on actually selling assets, and that this would be a follow-up piece of work if ministers decide to pursue it. The exercise is not driven by a desire to sell assets, but rather to clarify the Government’s objectives and target monitoring efforts. As Snowden, a Treasury official, noted, "One option from that is you may conclude the Crown doesn’t have an ownership purpose and it’s up to ministers to decide what they want to do with that asset."
The Line between Government Policy and Party Policy
The exercise has also raised questions about the line between helping the Government formulate policy and assisting National in writing party policy to take to an election. Rennie stated that the test is whether there is a reasonable expectation that the work will go through a Government process that ultimately ends up in the Cabinet. He acknowledged that there is a "grey area" where Treasury helps on work commissioned in good faith, but it may ultimately shift onto a party track. However, Rennie emphasized that Finance Minister Nicola Willis is "very good about defending the integrity of the Treasury", and that the Treasury’s primary focus is on providing advice to the Government.
Conclusion and Next Steps
In conclusion, the Crown ownership purpose exercise is a significant review of the Government’s commercial assets, aimed at determining whether it is prudent to continue owning them. The Treasury will provide advice on the purpose of each asset, but the decision to sell or retain assets ultimately lies with ministers. The exercise has sparked controversy, with different parties having different views on the potential for asset sales. As the exercise progresses, it will be important to monitor the Government’s decisions and ensure that they are in the best interests of the public. The outcome of the exercise will have significant implications for the future of the Government’s assets and the economy as a whole.