KEY POINTS:
Prime Minister Helen Clark has firmly ruled out any asset sales and says the National Party is looking for ways to finance tax cuts.
The National Party is considering going into next year's election with a policy to partially sell some of the country's state-owned assets - and its deputy leader, Bill English, is confident the idea will not provoke a voter backlash.
National has talked openly about the merits of partially selling state-owned enterprises before, but Mr English's comments yesterday have provoked a fierce response from Labour and effectively reopened the political debate about the future of SOEs.
Miss Clark said there would be no sales, whole or partial, under a Labour-led government.
"I simply cannot see that it is any step forward for the people of New Zealand to see our public assets put on a rolling fire sale in order to enable the national party to creatively account for its tax cuts," she said at her post-cabinet press conference today.
"Why would we want to go from having very successful state-owned companies returning a dividend to every Kiwi, to some Kiwis getting the chance to get a lot more from them than others?"
Asked whether she considered there were any SOEs that could be partially sold down, Miss Clark replied: "No."
Mr English on Sunday said National - which is still working through its policy on SOEs - was considering selling up to 50 per cent of some SOEs to help fund infrastructure spending and to provide more investment opportunities for the growing amount of money pouring into savings schemes.
There were no assets that National felt should be sold "holus bolus", the MP said, and his party accepted the public did not want that.
Mr English made his initial comments on TV One's Agenda programme and later told the Herald he did not think the policy would necessarily frighten voters.
"I think the environment's changed now, where people can see the Government's got the New Zealand Super Fund there, they know it would be good to have more savings, and they want to save more," he said.
"I think the public is thinking more about investment now than about ideology."
The partial selldown of an SOE could be done in a variety of ways, such as something like 25 per cent of one being floated on the local stock exchange.
Local mums and dads could be given an opportunity to buy shares, while the Government would - as long as it sold less than 50 per cent of the company - retain control.
Or the stake could potentially go to an overseas owner or to a pension fund.
Selling SOEs is a political hot potato, and full sales have proved very unpopular with voters after a string of poor outcomes for locals.
Labour, clearly sensing an opportunity to claw back some ground in the polls, yesterday launched a furious attack on Mr English's comments and warned that National could not be trusted to stop at a partial sale.
"This is just a slow-burning fire sale," Acting Finance Minister Clayton Cosgrove said. "You can only partially sell something once, and then you lose the dividend stream."
Mr Cosgrove said today, referring to Mr English: "He says that he wants Kiwi mums and dads to own and invest in this. The problem with that is that Kiwi mums and dads already own these assets and are getting the dividends through Working For Families tax credits, through health funding.
"So what in effect Mr English is saying is Kiwi mums and dads, you own them already, we're going to flog them off - and you can only flog them once and you lose the dividend stream - and then you have the privilege Kiwi mums and dads in spending your money yet again buying the investments you already own."
But Mr English said the "only hysterical reaction" was coming from the Government and he did not think there would be a great deal of political concern about the issue.
National's deputy leader pointed to estimates of infrastructure spending over the next 10 years of something near $30 billion.
His party went into the 2005 election with a policy to gradually sell farms owned by Landcorp and to consider selling part of Solid Energy.
- Additional reporting NZPA
