Mallard sees place on NZX for SOEs

Trevor Mallard

State-owned enterprises may be allowed to set up subsidiary companies in private-sector joint ventures and partially float them on the stock exchange, SOE Minister Trevor Mallard says.

Mr Mallard made the suggestion on TV One's Agenda show as he elaborated on possibilities under the new SOE policy to encourage expansion into new business areas.

Mr Mallard also made it clear he hopes to succeed Michael Cullen as Finance Minister whenever the incumbent relinquishes the post.

"I'm trying to do the understudy role," he said.

This month, Mr Mallard announced a policy change that would allow SOEs to expand beyond their core businesses, funded either by greater borrowing, reducing the dividend paid to the state or getting an injection of equity from the Government.

Last night, he said there was a lot of discussion at present about the New Zealand stock exchange and the lack of listings on it.

What he was proposing could be a short-term way of helping.

"It can give a temporary boost to the investment culture for New Zealanders but it is not on its own a long-term answer."

He said he would not rule out SOEs forming joint ventures with foreign companies to advance prospects of developing a particular foreign market.

"That could be the case, or there could be other cases where you wanted to do some rapid expansion in a New Zealand market of something that looked good and there was some private sector capital willing to come in.

"It might be that at that stage the SOE diluted its shareholding [in the subsidiary]."

Mr Mallard also raised the possibility of subsidiaries being completely privatised instead of the SOE keeping a minority stake.

He singled out on Agenda several SOEs for particular mention, including New Zealand Post, the energy companies except Transpower, and Learning Media.

But yesterday he said nothing should be read into that. Any expansion would be at the companies' initiative.

National Party finance spokesman John Key said Labour campaigned against state asset sales at the last election but was now advocating them.

He asked what the difference was between floating a subsidiary and floating part of an SOE itself - which was what National had promoted at the last election.

"It will be Michael Cullen, an academic, and Trevor Mallard, a unionist, who will be signing off on these risky ventures."