Higher fees another hidden cost of asset sales

Tuesday 26 June 2012, 12:46PM
By Green Party

Kiwis are set to face higher power prices as directors' fees double under National's asset sales policy, Green Party Co-leader Russel Norman said today.

Treasury documents reveal that the National Government has quietly given SOEs permission to spend hundreds of thousands of dollars more on directors' fees to pay for preparatory work for asset sales, and Treasury has advised that the energy companies' directors' fees would double after privatisation.

For the four state-owned energy companies, that would cost an extra $1.8 million a year, based on its expenditure on directors' fees in recent years.

"Privatisation would mean Kiwis would face higher electricity prices to pay for increased directors' fees," said Dr Norman.

"This is yet another hidden cost of National's asset sales programme that would drive up power prices.

"The cost of higher directors' fees would be in addition to $120 million in sales costs, up to $400 million in a free share give-away, and $100 million a year extra on the government deficit.

"National's asset sales would make Kiwi families pay more for power so that directors, bankers, foreign investors, and a few well-off New Zealanders can make money at our expense. That is not a plan for a more prosperous New Zealand," said Dr Norman.