The government is quietly laying the groundwork for a future conversation about selling state assets, writes Catherine McGregor in today’s extract from The Bulletin.
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Government warns SOEs to lift performance
A suite of letters sent to state-owned enterprises (SOEs) has brought simmering privatisation tensions to the fore, reports the Herald’s Jamie Ensor (paywalled). Released this week, the correspondence reveals government concerns over poor returns across the Crown’s commercial portfolio, and directs company boards to deliver improved performance, greater cost control and higher dividends.
While the letters were framed as routine oversight, their tone was notably stern. State owned enterprises minister Simeon Brown told entities including NZ Post, Landcorp and Kordia that failure to meet their cost of equity was unacceptable, demanding “bold and challenging” turnaround plans. Deputy prime minister David Seymour, a long-time advocate of asset sales, was more explicit. Speaking to the Herald, he suggested that the government’s role as owner was being reassessed. “The time of asking hard questions is approaching”, he said, adding that he was confident that “sooner or later that basic message of the Act Party will be vindicated”.
Luxon leaves the door open for 2026
While Seymour has made little secret of his ambitions, the prime minister remains more cautious – at least for now. With a coalition partner like Winston Peters, whose career has been defined by efforts to keep public assets in public hands, that’s hardly a surprise
However Luxon has signalled that the National Party could campaign on asset sales once the coalition is no more. “I’m open to the idea of asset recycling and the best use of capital,” he said in January. That sentiment was echoed by finance minister Nicola Willis, who suggested the government needs to ask whether its billions in assets are “in the right place”. While no decisions have been made, the political groundwork for 2026 is clearly being laid.
QV, Landcorp and Kordia among potential targets
If privatisation is back on the table, which entities could be up for sale? According to parliamentary insiders, Quotable Value (QV) is an early contender, writes Stuff’s Glenn McConnell. Seymour has questioned why the Crown needs to own a property valuation firm, especially one that makes modest returns.
More pressing are the commercial underperformers. Landcorp, the state’s farming enterprise, has failed to meet its cost of equity for over a decade. In his letter, Brown criticised its low returns and called for reduced corporate overheads and the sale of underperforming non-land assets and ventures. Kordia, the communications and cybersecurity SOE, received a similar warning about its disappointing performance. Brown has made clear that these companies must now prove they can deliver value, or face deeper questions about their future ownership.
Decline of mail delivery raises fresh questions for NZ Post
NZ Post’s transformation from a mail delivery service into a parcel logistics company has also attracted scrutiny. Its commercial metrics remain weak, with a 1.2% return on equity and shrinking mail volumes that undermine its core business. As Maria Slade reports in BusinessDesk (paywalled), the promised update to its deed of understanding, which sets out its obligations to the government, has still not materialised. It’s been six months since consultations closed on proposals including dropping urban mail deliveries from three days a week to two and cutting the number of postal outlets from 880 to 500. The government says an announcement is coming “soon”.
Whatever the result, NZ Post is already acting less like a public service and more like a commercial operator, and is “starting to look like a sitting duck for privatisation”, Slade writes. With Seymour now deputy prime minister and National softening its stance, the 2026 election may well bring this debate to a head.
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