The Government's plan to limit private shareholdings in State-owned companies to 10% has been criticised by the Labour and ACT parties.
Labour leader Phil Goff says it will not work, while ACT leader Don Brash says it is simply a political ploy to reassure people large chunks of these assets will not be bought by foreign companies.
The Government will proceed with the partial privatisation of Genesis Energy, Meridian Energy, Mighty River Power, Solid Energy and Air New Zealand if it is re-elected at the election on 26 November.
On Wednesday, it announced investors looking to buy stakes in the companies will face a cap on the size of their shareholding, likely to be set at 10%.
The Government is also expecting 85% to 90% of shares in these companies to remain in New Zealand hands, including it retaining a 51% stake.
Finance Minister Bill English says the large and growing pool of New Zealand investment funds will ensure strong local demand for the $5 billion to $7 billion worth of shares to be sold. He says final arrangements will be made next year.
State Owned Enterprises Minister Tony Ryall acknowledges that foreign investors will be able to bid for shares, but repeated National's commitment that it will sell only up to 49% of these companies if it leads the Government after the election.
Parties sceptical about cap
Labour leader Phil Goff does not believe the 10% cap will prevent a takeover of the companies.
"What that effectively means is that five corporates will be able to take over and own the 49% on the block and nobody believes for a moment that they're going to stop at 49%.
"This is just the thin edge of the wedge - it's a softening up of the New Zealand public. The whole lot will be sold."
Don Brash is also sceptical about the 10% cap - but for different reasons.
"I suspect it was put in place to reassure New Zealanders that large chunks of these assets won't be bought by foreign companies or institutions.
"I find it difficult to see why a foreign company would buy a large chunk of these assets, given the fact that the Government will retain a 51 percent majority."
Dr Brash says the Government would take an entirely different approach if it wanted to get the best price for the companies.
"To get top dollar, you'd almost certainly want to sell these SOEs as a whole - not a minority stake in them - and you'd almost certainly do a trade sale as the way of maximising the return to the taxpayer. But for political reasons, the Government's decided they can't do that."
But Phil Goff says the Government will lose income when the Government partially privatises State-owned companies.
"Bill English says this isn't about selling the family silver - he's right. It's not the family silver - it's the most profitable of family businesses that they are selling.
"In the latest report that's just come out, those companies that they're putting on the block for sale returned to Kiwi investors, the taxpayers, $900 million in dividends last year."
Mr Goff says people will have the chance at the general election to either vote for asset sales or to retain them in public ownership.
