Published in The New Zealand Herald (Auckland), 20 August 2026
A fortnight ago, the Government agreed a sale worth $702 million. Nicola Willis and Chris Bishop sold the loans the Crown made to Chorus to help build the ultrafast broadband network, for $60m above book value.
The money, we were told, will go to the Cambridge to Piarere expressway, hospital upgrades and new classrooms.
It was strange that the Chorus sale got hardly any coverage. Because this swapping of old assets for new is an issue on which this year’s election could be fought.
On November 7, New Zealanders will choose between two stories about what the state owns and what to do with its holdings. Christopher Luxon wants a “mature conversation” about selling assets the Crown has no reason to hold. Chris Hipkins promises to sell nothing, and to try to lock public assets away in a new Future Fund.
However, a comprehensive, bipartisan strategy on asset management is still missing. The Chorus sale was an isolated incident and, after a change of government, the $702m could still be used for something else.
No matter who wins in November, they will face the same challenge. Net debt is heading for a peak of 46% of GDP in 2028, close to the 50% Treasury calls prudent and well above its 40% target. Surplus arrives in 2029 at best. But the longer view is even worse: Treasury projects that debt will reach 200% of GDP by 2065 as the population ages, unless superannuation and health settings change.
The allowances for new capital spending, $3.5 billion a year, stand against an infrastructure shortfall the Infrastructure Commission has put in the tens of billions.
The next Finance Minister cannot borrow the gap away. And increasing taxes would be the surest way to choke whatever green shoots growth we might get.
But the next Finance Minister will have a substantial portfolio of assets, about $600b worth. It includes some the Crown never needed: 112 farms, a postal service, a television channel and some $15b of shares in four listed companies.
For now, the law forbids the Crown from falling below 51% of the three power companies; the airline is held there by policy. When one of them needs fresh capital, taxpayers should have the option of diluting the Crown’s stake.
Selling assets the state does not need, and investing the proceeds in new infrastructure, is called asset recycling, as opposed to selling to repay debt. My colleague Roger Partridge made the case in Renovating the Nation, published in February. The Crown has no particular reason to own farms, and every reason to want hospitals that work.
The honest objection is that selling assets means giving up their dividends. Treasury’s own Investment Statement provides half an answer: the Crown’s listed companies have beaten their cost of equity, while its wholly-owned ones have not. But past returns are no reason to keep carrying risks the Crown need not hold.
I was in Sydney when New South Wales started asset recycling. The idea appeared sensible yet politically bold and risky. It required political leadership, and New South Wales was lucky to have it.
Between 2012 and 2024, the state raised more than A$50b selling and leasing assets, its electricity network among them. Sydneysiders watched the old poles and wires turn into a driverless metro. Support grew once people could see what the sales had built.
Of course, it was not a clean run: WestConnex and the metro blew their budgets, and the union campaign against the electricity lease was ferocious.
Still, three disciplines held. The proceeds went into a fund protected by statute, a locked box ministers could not raid. Canberra paid a bonus only for proceeds spent on new projects. And an independent body ranked what got built.
New Zealand has tried the other way. The partial floats of the three power companies, and a sell-down of Air New Zealand, raised $4.7 billion for a Future Investment Fund in 2013 and 2014. But that fund was a label, not a lock. The money went out through ordinary budgets, mixed in with everything else the Government was buying. Nobody could point at a single project and say the sales built it.
Test the Chorus deal against those three disciplines and it fails two at once. There is no locked box, only an assurance. And the projects it names were promised long before the sale, so the proceeds confirm the Budget rather than add to it. That is 2014 in miniature.
Labour’s Future Fund comes with its own issues. Ten months after the announcement, Barbara Edmonds, citing commercial sensitivity, has not said which assets would go in, how big the fund would be, how much it could borrow or what return it should earn. Voters are being asked to approve a box without being told what is in it.
One thing we do know: assets placed in the fund would be protected by law from ever being sold. A fund that can never sell is not an investment fund but a museum. Its real purpose looks like the opposite of asset recycling: locking the status quo in place.
The public seems readier for this conversation than the politicians. In fact, Freshwater Strategy polling for Infrastructure New Zealand found in January that 49% would support selling a state-owned company if the money were locked away for hospitals, schools and infrastructure, against 19% opposed. Selling majority stakes in the power companies found 34% in support and 40% opposed, with the rest undecided.
Building Nations opens in Christchurch today. Somebody should ask Willis and Edmonds: would they be willing to sit down together to find out whether bipartisanship on asset management is possible? And would either of them, or better both, learn from the leadership New South Wales showed over the past 15 years?
Because it can be done. New South Wales pressed ahead against every warning of political suicide and was rewarded with re-election and a transformed state. New Zealand could write a similar success story. It just needs leaders willing to start.
