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Key defends the $100m cost to sell state assets

Published: 2:15PM Monday February 18, 2013 Source: Fairfax

The $26 million bill for the state asset sales programme is the cost of doing what the Government wants, Prime Minister John Key says.

New figures released by the Treasury show the Government spent more than $16m in preparations for asset selldowns, while the state-owned enterprises set to be partially sold have spent another $8.4m between them.

The Green Party said once the cost of the fighting a legal challenge over water rights, and a $500,000 bonus due to Mighty River Power's chief executive for executing the sale, were included, the total was more than $26m.

More than $100m has been budgeted for the entire sales process, which aims to raise up to $7 billion by selling up to 49% of Mighty River, Meridian, Genesis Energy and possibly mining company Solid Energy.

Greens co-leader Russel Norman said the spending came in the face of obvious public opposition.

"This is an extravagant waste of taxpayer funds from a government whose constant refrain is that there is not enough money to pay for desperately needed policies," Norman said.

But Key said the sale would net "billions and billions of dollars" pending the High Court decision on water rights.

"It's the cost of doing what we want to do, which is build a lot of assets, buy a lot of new assets for New Zealand, and do that without putting more debt on the Government's books," he said.

The asset sales programme was about reducing debt, he told RadioLive.

Opponents to the sales, including the Greens, the Labour Party and Grey Power, are pushing for a referendum on asset sales and hoped to reach the 400,000 signatures over the weekend.

While the legal minimum is 309,000, organisers have decided to continue until they secure at least 25% more, because of the risk of people signing more than once, and the scrutiny it will be under.

Norman said that assuming the target was reached during the weekend, it could take until the end of the month for the forms to be collected, before submitting them to the Clerk of the House for scrutiny.

However, time was of the essence, with the Government planning two sales this year.

"We're in a bit of a race with the Government in a way," Norman said.

"The last thing they want to do is face the voters on this issue, because they know how unpopular they are."

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