State-owned energy companies Mighty River Power, Genesis, Meridian and Solid Energy are still earmarked for a partial sell-down by the Government, which is also considering reducing its stake in Air New Zealand.
No sale will take place before the election but Finance Minister Bill English said the mixed ownership model freed up crown capital, opened up new investment opportunities, provided the companies involved with wider access to capital and imposed greater transparency and commercial discipline.
A stake of up to 49% stake of the crown companies will be for sale, with the proceeds expected to reach about $7 billion. The energy companies would increase the capitalisation of the NZX by up to 10%.
The proceeds would also allow the Government to pay for about one-third of the expected increase in core crown assets over the next five years without adding to Government debt, he said.
The sell-down and reduction in the Air NZ shareholding was expected to take place over three to five years from 2012.
Mr English said New Zealand investors would be at the "front of the queue" for shareholdings and the Government was confident of widespread and substantial New Zealand share ownership.
However, brokers had earlier warned that the Government could only guarantee New Zealand ownership once. If shareholders chose to sell to institutions, which would need the shares for their NZX-50 weightings, the shares could end up in overseas hands.
Mr English said the Government was satisfied that industry-specific regulations would adequately protect New Zealand consumers.
There was substantial capacity between KiwiSaver funds, other managed funds and retail investors, the Government's own investment arms and iwi to suggest substantial New Zealand ownership, he said.
Deloitte Dunedin partner Steve Thompson said National had put the partial asset sale process up as a key plank for re-election.
"It is saying we need this money to fund infrastructural growth - unlike Labour, which previously retired debt from asset sales.
"Borrowing to do this is not an option. Accordingly, voters will decide if this is the right approach.
"This is the biggest Budget announcement and the one that has the highest risk for National."
The good thing was that National was "front footing" the issue, Mr Thompson said.
The mixed ownership model proposed did raise the questions of whether the Government needed to own the majority of the companies it was partially floating or whether it could afford to have that amount of capital tied up in assets that could be 100% investor owned.
New Zealand was well behind other countries in infrastructure development, he said.
Selling down
• Energy companies for sale.
• Up to $7 billion will be raised.
