December 19, 2013 12:00pm by David Farrar

Sell, sell, sell

State-owned enterprises’ performance has been “mediocre” in the last year, the Treasury says.

The Crown Ownership Monitoring Unit (Comu) today released the annual report of its portfolio, which reviews the performance of 49 government-owned enterprises that have full or partial commercial objectives.

All up, the enterprises employ more than 40,000 people, holding $125 billion in assets and $52b in investment funds at the end of June.

While the performance of the investment funds, mainly ACC and NZ Superannuation was strong, returning over 25 per cent in the year to June 30, the report was less kind about the other companies.

“While some State-owned enterprises have performed well, overall performance of the Crown’s commercial portfolio has been mediocre, with poor performance by Solid Energy, KiwiRail and Learning Media,” the Treasury said in a statement.

“Total shareholder return across the wholly owned commercial priority companies was 3 per cent,” the Treasury said, adding that this did not include KiwiRail because of the change in its structure at the start of 2013.

The number of companies the Crown should own is very few – there is a case for the odd utility monopoly like Transpower, but the rest should be owned by he private sector who are better suited to balance the risks and rewards.

Solid Energy almost went bust, as it is highly vulnerable to the global coal price. Kiwirail is a dog. NZ Post is profitable but in a dying industry. TVNZ has a business model that will also disappear in the not too distant future. We should sell them all while we can get some money for them.