Election on the line with asset sale plan - Key

Prime Minister John Key has acknowledged that he is putting his political career on the line with a proposal to partially sell-off state assets.

In his first major speech of this election year, Mr Key announced yesterday that power companies Mighty River Power, Meridian, Genesis and coal company Solid Energy were being looked at for partial sale -- up to 49 percent, and advice was also being sought on reducing Crown shares in Air New Zealand from 75 percent to 51 percent.

The National government has promised no asset sales in its first term and the issue is sensitive after unpopular sell-offs in the 1980s and 1990s. Mr Key said decisions would not be made until advice was provided but he wanted the public to know the direction.

Opposition parties were quick to condemn the proposal, saying it would drive up power prices and cost ordinary New Zealanders. Both Labour and the Greens said the plan showed National's true intentions for the country.

Speaking to Radio New Zealand this morning, Mr Key acknowledged the proposal could affect his party's election chances.

"It's of course our political future, in the sense that every three years politicians go to the people and test their views," he said.

"We said that we would get a mandate before we changed our policy in this area and that's what we're seeking to get, subject to the advice from Treasury."

In his speech, Mr Key said the partial sales would help fund a forecasted $33b of new assets over the next five years, meaning the Government would not have to borrow more and pay more interest.

Labour Leader Phil Goff said the plans were a recipe for disaster and foreigners would end up owning the assets.

"It doesn't have an economic plan so it's simply rehashing the failed policies of the past."

Mr Goff said National had mismanaged the economy and was now crying poor and trying to convince people asset sales was the way to fix the economic situation.

"John Key told the country we'd come aggressively out of the economic recession. We haven't. Unemployment is up and wages are stalled. He said he wouldn't increase GST. He did. He said he wouldn't sell off state assets. He now says he will. This is a man who can't be trusted."