Prime Minister Christopher Luxon is laying the groundwork for asset sales after the 2026 election if the National Party wins a second term.
He says New Zealand needs to have a sophisticated conversation about “asset recycling” or selling existing assets to help fund the purchase of newer ones.
Politicians need to question whether they are using the Government's balance sheet effectively without getting bogged down in the “dirty politics” of asset sales.
“You don't just own an asset forever without questioning why you're owning it,” he said, at a press conference on Monday.
Luxon wouldn’t comment on specific assets, as National’s caucus has not yet settled on a policy for the election, but he wanted to start the discussion.
“All I'm saying is there's a pool of capital, of cash, that can be deployed in different ways to get better returns for New Zealanders,” he said.
The statement follows Treasury’s 2025 Investment Statement, published last Friday, which advised the Government to adopt a more “formal capital recycling programme”.
The Crown’s balance sheet has grown significantly over the past decade in both size and complexity, with assets now totalling $571 billion. Net worth has risen 22% in the past three years.
Swapsies
Treasury said governments had provided “limited articulation of the rationale for ownership” for many assets in the commercial portfolio, which includes Kiwibank, the electricity generators, Kordia, Quotable Value, KiwiRail, NZ Post, and MetService.
“A formal capital recycling programme may be useful where the Government reallocates or reinvests capital from existing assets or infrastructure projects into new opportunities or projects to meet policy objectives,” Treasury said.
“This can avoid the often increased operating and maintenance costs from ongoing ownership. The goal is to enhance the use of taxpayers’ capital and support wider economic outcomes from the release of under-used assets.”
Almost $100 billion of the Crown’s balance sheet is classed as commercial assets, with a net value after liabilities of $48.9 billion. This category is most often targeted for asset recycling, though in some cases it may be easier to recycle within the $313 billion social asset category.
Commercial assets are supposed to generate dividends that offset tax revenue and help fund borrowing for social assets. Selling a dividend-paying asset to build a public one could leave the Crown in a weaker fiscal position.
Good asset management isn’t just about strengthening the Crown accounts. Treasury said it was also important for broader economic efficiency.
“The Government is the largest asset manager in New Zealand. This means that where the Government invests capital, and how it performs, matters for the country’s capital productivity and wider economic performance,” the agency said.
Open season
Luxon, National, and the Act Party are open to these ideas but have struggled to gain voter support. The Prime Minister ruled out asset sales during the 2023 campaign, but only when asked directly.
Several ministers have since signalled a desire to manage the balance sheet more actively and have been testing the waters with minor asset sales.
Kiwibank’s capital raise technically counts as an asset sale, as does the plan to sell financial securities linked to Chorus. Neither resembles what voters usually consider “asset sales”.
Treasury has been instructed to work with Crown entities to clarify the rationale for owning various assets and assess their performance. That work could support a case for an asset recycling programme.
While Luxon mostly avoided specifics, he said Landcorp Farming (trading as Pamu) was a “good example” of a state-owned enterprise without a clear purpose.
“Are we the best people to run those farms? How do those farms perform relative to farms that aren't run by the Government?”
“It may well be that they're needed for Treaty claims, or be used for R&D as model farms. There might be a real rationale for it, or there may not be a rationale for it.”
Luxon said he wanted to optimise the Crown’s balance sheet and overall fiscal performance. That doesn’t necessarily mean selling assets to reduce debt; it could also mean encouraging commercial entities to deliver stronger returns.
“As a former business guy, you just don't want lazy balance sheets,” he said.
“You want to optimize your profit and loss statement, that's strongly connected to your balance sheet, and you want to be … actually maximising your balance sheet really effectively."
30 Comments
Luxon? A former business guy? last time I checked he'd never been a director of a NZ company, unike Willis, who had been on the board of the NZ initiative and her mate's second hand clothes shop.
A greedy little accountant and a spoilt brat.
As real NZ'ers continue to flee these shores, the best these numpties can come up with is... lets sell of stuff we had no hand in creating, to people who have no interest in this country.
So .... We should encourage government to up our mining activities?
Fact check
Luxon
"He joined Unilever in 1993 and held senior roles at Unilever Canada, becoming president and CEO of the subsidiary in 2008. In 2011, Luxon left Unilever Canada and joined Air New Zealand as group general manager and became CEO in 2013."
https://en.wikipedia.org/wiki/Christopher_Luxon
Willis
"In 2012, Willis joined dairy co-operative Fonterra in a lobbyist role.[14] She was later a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand.[14][15]"
These are really professional manager roles, and these businesses are institutions. For the most part they don't call for much dynamism or creative thinking.
Any significant changes that'd make either the nation or population much more prosperous is going to be fairly unconventional.
Exactly. That kind of thinking isn't going to come from these two, or most other politicians for that matter. They've proven that repeatedly over the years.
We have governments who are moderately competent at managing a fairly problematic model.
We've seen the results of "unconventional thinking" from ex presidents of the international union of socialist youth, student union reps & public service bureaucrats who would never be employed let alone hold responsibility for years in any private organisation facing market competition.
Disclosure: I worked at Unilever for 26 years. Dynamism & creative thinking is an intrinsic way of working when failure isn't an option.
You can have a bob each way. For centuries we were serfs lorded over by people who's legitimacy only came from the womb they fell from. Then we had some unconventional thinking throw that out the window.
Have and do work for government and large multinationals. Neither scream dynamism, they demand groupthink and adherence to bureaucracy. About the only difference is the multinational has to deliver a profit, but luckily they usually occupy a monopolistic position so as to just pass on any costs for their inefficiencies.
Govt is a funny one. They should by all respects, be flexible and adaptable with taking ideas from the ground up, however many good ideas get scuppered by middle management as everyone, despite working for the same organisation (department say) is out for their own career and relatively protective of this, claiming credit for others ideas, scuppering those at the bottom who may threaten them getting to the next step on the career ladder, and ultimately no matter how much the collective want to progress in a set direction, the govt of the day dictates from the top down and the pressure gets applied to each level of the organisation until all fall into line. Those that don't tow the line soon realise that their efforts have gone from being celebrated and respected, to being career limiting due to shifts in pressure form above and workplace culture. Baffling when you see the inefficiencies in this way isn't it?
Hi, I’m Eddie & I do things fast. I think fast. I drink my coffee fast. I read fast, blink fast, I even sleep fast. I’m a pretty fast bus-mus-um.
reference spotted
Little subtlety about this then is there. Maladroit, ineloquent attempt at softening up the electorate. Very irritating. This guy is about as convincing and credible as any boiled egg salesman on offer. Mind you, he has the head for it.
Gets Nats less votes in my book. Luxton is a globalist. Send him to the UN with Adern...This crap with see the left back. Capital Gains + it will be.
Jeez this is bad. Treasury don't know what they're doing, what they're measuring, or what happens to productivity and the cost of living when assets are sold to rentiers. Clueless. It's like we've forgotten the basics.
I'm not sure what developed economy has managed to do what you make out as being self evident.
If there was a formulaic way to ensure you had sustainable increases in living standards/incomes, whilst meeting all current and future obligations more places would be doing it.
Instead, it kinda looks like there's a ceiling to much of this, that we mighta passed decades ago.
When I hear "state asset sales" I can only think of all the huge sacrifices made by our soldiers, miners, dam builders, scientists, doctors, nurses, police, teachers etc. National and Act's narrative seems to be "the State has no loyalty to you, it owes you nothing". More and more I sense the State's tru loyalty now lies with ANZ, Blackrock and their ilk (likely on the promise of future employment for our dear "leaders"). Perhaps wrongly paraphrasing Machiavelli - the biggest national security risk for any country is a people with nothing to fight for. What are we fighting for once everything is sold? Who will send their boy or girl to die for Blackrock's profits?
The cynic in me says that Luxon and Willis are trying to find the cash to fund another round of tax cuts as an election promise. Liquidate and "return funds to shareholders".
OK - if it's limited to New Zealand citizen buyers only.
I am a patriotic nationalist.
The debate on asset sales needs to be balanced with is the what is the alternative ?
Either more debt for you grandchildren because govt keeps borrowing to fund current expenditure levels
or a reduction is state expenditure with the corresponding lower living standards
or substantially increased taxation
or a considered asset recycling
In all of your scenarios, the youth lose, and I have a feeling they are realising this.
What is the alternative?....I guess that depends upon whether you wish the debt to be held by the state or private individuals, either way it will exist, unless you wish a financial collapse.
Your view may be coloured by your ability to access/service that credit which is by no means a given.
The guy uses 1 example of a high performing asset and business (Pamu) as the justification for asset sales.
Try harder Luxon.
Also, some assets don't have direct income streams but are strategically important like conservation land for tourism and recreation. We need leadership that thinks beyond today's balance sheet. Although I'm not convinced these lot even think about today's balance sheet given their track record
Pamu is not a high performing business
it has a poor history for lack of return on equity
I support national party policies, and Luxon is a good duy, but this messaging is very bad. Coporate speak. Where is the emotional buy-in for the voter, sell the sizzle mate! Why do we need to do this?? Dont give me lazy balance sheet, recylcing assets etc. this is such a turn off. Tell me about a brighter tommmorow! Honestly. 11/11/25 is the day he lost the election by speaking over the heads of the middle. We need good government, if this is the campaign then its over.
National and Act are behaving like the third and fourth generation in families-
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China: "Wealth does not last beyond three generations." (富不过三代)
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United States: "Shirtsleeves to shirtsleeves in three generations."
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Japan: "Rice paddies to rice paddies in three generations."
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England: "Clogs to clogs in three generations."
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Scotland: "The father buys, the son builds, the grandchild sells, and his son begs."
Conditioned by redundant ideological dogma, ignorance, easy inherited wealth, unearned capital gains in real estate and share markets for decades, they simply don't know what to do, don't know how to build an entrepreneurial culture, don't know what hard work and risk taking sacrifice of time and money to in innovations is, and especially don't understand that 'Necessity is the mother of invention.'. They shouldn't be in government as they fail to adequately serve the nation in its needs. There is a profound failure to understand 'Love thy neighbour as thyself' in all ways as it applies to a government in regards to a nation. A nation is not built on the self interest one one group of people set against another. They should deeply reflect on the Gospel of Matthew (13:1–23) The Parable of the Sower, and Matthew 25:14-30 The Parable of Talents.
There are many areas in which NZ can develop new businesses and export existing and new products wanted and needed by the world. I for one have done more than 3 decades of feijoa breeding and have quite a few plants with superior fruit flavours and storage life (both chilled and non chilled), but I can't make decisions for others about their land use, opportunities and risk taking, or their willingness to cooperate to form large commercial entities to meet business and export market needs.
Lets chop up the kitchen table and chairs to heat the house.
Nigel,
It's easy to throw eggs at our politicians-and well justified, but we must also acknowledge the failings-or just simple lack of ambition-of too many of those in business. Let me illustrate what I mean. In the CPA Australia Asia-Pacific Small Business Survey 2024-25, NZ small businesses ranked lowest in almost all indicators of technology uptake. it found that innovation levels remain low among NZ small businesses, while a risk-averse mindset prevails. The reports other findings are equally depressing.
I could offer you more in the same vein. There are glaring exceptions like Halter, but just not enough of them.
While praising our own 'number 8 wire mentality' and ignoring what you have pointed out while, with an accompanying complacent sense of self security. Why the risk averse mindset?
Nigel,
Why the risk averse mindset? I don't know but when I came to live here in 2003, I regularly heard that the ambition of many businessmen was to achieve the three Bs- the BMW, the bach and the beach. I think that might contain a grain of truth.
It's really not the balance sheet that's lazy.
The standard of thinking from luxton is positively comatose.
Humpty Dumpty has just handed NZ First another 1-3% of the vote. Labour may benefit as well.
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