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How are the Government’s Commercial Businesses Faring?

How are the Government’s Commercial Businesses Faring?

Currently, the government owns or part-owns eighteen large commercial businesses with combined assets totalling $78 billion. These businesses include three electricity generator/retailers, an airline, a post/courier company, a bank and minority stakes in three airports amongst other enterprises. Together these commercial enterprises account for 10% of the government’s net worth.

The Treasury finds the financial performance of the 100%-owned government businesses has been particularly unsatisfactory. Fourteen of the eighteen companies are 100% central or local government-owned. These companies have achieved an average total return to shareholders of 6% p.a. over the last ten years, well below the return achieved by their private-sector counterparts (see the graph below). The total returns of the top 50 listed companies (NZX50) have averaged 14% p.a. over the same period.

Continue reading the full article or listen to Phil’s feature on the topic on the Taxpayers’ Union podcast.

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2022-05-09T23:17:06+00:00April 11th, 2022|Government, Investment Strategy, Local Government, Strategic reviews|Comments Off on How are the Government’s Commercial Businesses Faring?