WELLINGTON - New Zealand passed legislation Tuesday paving the way for the government to partially privatise billions of dollars worth of state-owned energy assets in a bid to rein in the country's debt.
Prime Minister John Key's conservative National Party and its coalition partners passed the bill in a narrow 61-60 vote, with opposition parties vowing to keep campaigning against the planned sell off.
Under the plan, the government will sell 49 percent of coal producer Solid Energy and energy companies Mighty River Power, Meridian and Genesis, while retaining majority 51 percent stakes in the assets.
It also intends to reduce its 76 percent stake in flag carrier Air New Zealand to 51 percent, although that sell off does not need separate legislation, unlike the energy assets.
In total, the sales will raise about NZ$6.0 billion (4.7 billion US), the Minister for State Owned Enterprises Tony Ryall said.
"It's part of a wider plan to reduce debt and keep investing in the New Zealand economy," he told parliament.
"There are some people who think the global financial crisis is over, they don't understand the relentlessly worsening international financial situation."
Ryall said the funds would be used to pay for schools hospitals and roads.
"It will give us cash up front in an uncertain world, when we would have otherwise had to borrow from foreign lenders," he said.
"Unless we control our debt... then New Zealand is at risk of being seen by international lenders on a par with other countries that are losing control of their destiny."
New Zealand's net international liabilities stood at NZ$143.2 billion, or 70.9 percent of gross domestic product, at the end of March this year, according to Statistics New Zealand data.
Fitch and Standard and Poor's cut New Zealand's long-term foreign currency rating one notch to "AA" from "AA+" in September last year, with both international ratings agencies citing the country's high external debt.
Opposition Labour Party leader David Shearer said there were deep misgivings in the community about the asset sales and he would do all he could to prevent them.
"The fight is not finished," he told parliament. "We will be out of here (parliament) and onto the streets, that's where we'll continue the fight to keep our assets."
Shearer said the government had no mandate for the sales but Ryall said the plan was released in January last year, ahead of a November general election where National lifted its share of the vote to win a second term.
No timetable for the assets sales has been released but the government has indicated Mighty River Power will be first on the auction block later this year.