INCREASED RISK FOR TAXPAYERS

State Owned Enterprises Minister Tony Ryall told a breakfast meeting in Orewa today that many SOEs faced increasing competition and the possibility of reduced market share within their industries.

Mr Ryall said a number of SOEs also required significant capital investment to expand and maintain their competitiveness.

The Government is reluctant to fund these investment demands ? some of which amount to several hundred million dollars. We would rather invest in new hospital wards, new schools, and fighting crime,? he said.

We don?t think taxpayers want to see SOEs borrowing extensively from the private sector to finance business ventures that could fail -- leaving taxpayers to foot the bill.

Yet without capital investment, or the ability to expand their businesses to meet increased competition or technological advances, the competitiveness of many SOEs may well be eroded, reducing the value of taxpayers? investments.

Just as parents come to the realisation that some day they must let their children find their own way in life, taxpayers may have to accept that the future success of many Government businesses lays in private, not public ownership.?
Mr Ryall reiterated that the six SOEs listed as ?strategic assets? in the Coalition Agreement will not be sold.