Here is a presentation on partial privatisation given by economist Phil Barry to a well-attended meeting of the Law and Economics Association of New Zealand in Wellington on 21 March 2011.
Some interesting points include:
- 2009 was a record year for privatisation globally
- the international trend has been away from public floats and towards trade sales
- the under-pricing of government floats has been much less in New Zealand than the global average
- research indicates that the average gains from privatisation are large: 20% improvements in efficiency are reported, for example
- most studies also find significant performance gains from partial privatisation
- allowing foreign ownership increases the gains
- the internal rate of return for the Crown’s investment in Air New Zealand has been just 4.1% p.a. to March 2011.
Phil Barry concludes that the government’s plans for partial privatisation are a step in the right direction.