One billion dollars of the Future Investment Fund has been earmarked for modernising and transforming New Zealand schools but National is vague about how else it might use the money.
Possible capital projects included new or upgraded assets such as hospitals, rail and public transport, public sector information and communications technology and infrastructure recovery from natural disasters.
Prime Minister John Key launched National's election campaign in Auckland yesterday, saying the first priority from the $5 billion to $7 billion in proceeds from the mixed-ownership model would be putting $1 billion into modernising and transforming New Zealand schools over the next five years.
"National is committed to investing more in our kids to build that brighter future."
The mixed-ownership model would allow the Government to increase the total amount spent on school building projects each year by more than 50% without extra borrowing, he said.
The announcement came as Labour leader Phil Goff revealed the party's transport policy to a crowd of about 120 people at Beresford Square in central Auckland.
Mr Goff said Labour would cancel the $1.69 billion upgrade to State Highway 1, between Puhoi to Wellsford, and dedicate $1.2 billion earmarked for the project to the Auckland inner-city rail loop.
That would cover half the cost of the link, with the other half to be funded by Auckland Council, he said.
Mr Goff said the city rail link was the next step in building a "decent" Auckland public transport system to deal with a population expected to double in the next 40 years.
Mr Key's address, at the Sky City Convention Centre, was disrupted after about five minutes by protesters shouting "Stop the war on the poor". About four protesters chanted as they were escorted from the building by police. They returned to a group of picketers outside the venue.
Mr Key previously announced that if National won at the November 26 election, up to 49% of Mighty River Power, Meridian, Genesis and Solid Energy would be sold to investors.
The Government would also reduce its share in Air New Zealand but retain control.
He pledged again yesterday that the Government would keep more than 50% of each company and that New Zealanders would be given priority to take shareholdings.
"We expect that Kiwis will own at least 85% to 90% of each company, including the Government's majority shareholding," he said.
That implied that "mum and dad" investors and New Zealand-based investment funds could be left with between 34% and 39%, with the remainder of the shares being held offshore. There is unlikely to be any mechanism preventing New Zealanders on-selling their shares to overseas investors.
Mr Key said he was confident New Zealanders would choose to invest.
There was more than $300 billion of investments, excluding private homes, in New Zealand. KiwiSaver providers had about $9 billion invested, New Zealand institutions had about $59 billion under management, Crown financial institutions had almost $40 billion under management and iwi had more than $10 billion of assets.
Shares in five state-owned companies would be offered over three to five years, starting next year, to maximise returns.
A maximum cap would be set for non-government shareholders - likely to be 10%. That would stop any one shareholding having undue influence.
Finance Minister Bill English said the proceeds from the partial sale would allow the Government to pay for new infrastructure without extra borrowing.
"Through the fund, the public can be assured the proceeds of mixed-ownership are not being lost. They will be used to buy new assets for New Zealanders and to upgrade and modernise our existing assets, reducing the Government's borrowing from foreign lenders by $5 billion to $7 billion."
The Government would set a high bar for projects to be paid out of the fund and the case for the projects would have to stack up.
They would have to either improve public services or deliver substantial economic dividends for New Zealanders and could not just involve the routine replacement of existing capital, he said.
Decisions on spending from the fund would be made on a case-by-case basis, by ministers, as part of the normal Budget process.
It was intended to run the fund for at least five years, but that depended on how much the mixed-ownership model raised. The higher the proceeds, the more new investments could be paid for without the need for borrowing, Mr English said.
Mr Goff asked what Mr Key would sell off next time he wanted to build a new school.
"How many times can he spend the profits from the fire-sale of our assets? First he said we needed the money to pay off the debt. Then he said we needed the money to buy new assets. Now he says he needs it to give schools a new coat of paint," the Labour Party leader said.
AT A GLANCE
• Partial sale of state-owned assets confirmed
• Future Investment Fund of up to $7 billion established from the sale proceeds
• Money in the fund will be spent on new public assets
• $1 billion earmarked for education (Investment fund from asset sales)
