National adds another $30 million to asset sales bill

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Source: Green Party – Press Release/Statement:

Headline: National adds another $30 million to asset sales bill



Spending more than $100 million is an enormous cost for asset sales that the vast majority of Kiwis don’t want and very few Kiwis will buy into

National has forked over $30 million of public money to Rio Tinto to clear the way for its plan to sell down more public electricity assets, Green Party Co-leader Dr Russel Norman said today.

The National Government has announced today that it will pay Rio Tinto $30 million as part of the re-negotiation of the electricity contract between Meridian Energy and Rio Tinto for the Tiwai Point Aluminium smelter. Rio Tinto sought re-negotiation of its electricity contract with Meridian after the National Government announced its plan to sell shares in the publicly-owned power companies. The uncertainty over the future of the Tiwai Point smelter contract was a serious roadblock to the privatisation agenda.

“Once again, John Key has painted himself into a corner when negotiating with a major corporation and it is taxpayers who pay the price,” said Dr Norman.

“If it weren’t for National’s asset sales obsession, we wouldn’t be handing Rio Tinto $30 million today. Mr Key locked himself into selling our assets no matter what. That put him over a barrel when Rio Tinto predictably turned the situation to its advantage by casting the future of Tiwai Point and its huge electricity demand into doubt ahead of the planned sale of Meridian Energy and Genesis Energy. Now, the Key Government is forking over $30 million of public money to Rio Tinto so that the asset sales can continue.

“The cost of National’s asset sales is now well over $100 million and will only climb higher.

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“Spending more than $100 million is an enormous cost for asset sales that the vast majority of Kiwis don’t want and very few Kiwis will buy into.

“While there may have been a case for government involvement in negotiating the future of Tiwai Point, Mr Key put himself in such a weak position that it was inevitable the taxpayer would end up footing an unjustifiably large bill.

“It’s far from the first time that we’ve seen National pay corporates large sums of public money as the price of their political commitments. Warner Bros managed to wring an extra $30 million out of Key. Treasury told National it had put itself in a very weak position in bargaining over the pokies deal, which resulted in a sweetheart deal for the casino.

“Now, John Key and National have proven once again what terrible negotiators they are. The public is $30 million poorer so that National’s asset sales can go ahead and all the smelter workers get is a temporary reprieve with no long-term job security,” said Dr Norman.

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