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Selling Chorus securities is 'hocking off' debt not assets, Finance Minister says

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  Published in Business and Finance on Friday, October 10th 2025 at 3:48 GMT by rnz
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Selling Chorus securities is hocking off debt, not assets – Finance Minister says

When the government announced that it would sell “Chorus securities” later this year, the headlines were immediately laced with the familiar headline: “We’re putting our future on the line.” In a statement to the House on Thursday, Finance Minister Grant Robertson clarified the nature of the deal, insisting that the sale is not a divestment of the country’s telecommunications infrastructure, but a carefully calculated step to shrink New Zealand’s debt burden.

The phrase “hocking off debt” may sound ominous, but Robertson explained that it simply means the government is turning a financial instrument into cash that can be used to pay down the national debt. The sale is scheduled to take place on June 12th, 2025, and will involve a 10‑year, 4.5% coupon bond that has been held by the Crown as part of its stake in the company that owns the nation’s wholesale broadband and fibre-optic network, Chorus Limited.

What are “Chorus securities”?

Chorus Limited was spun off from Telecom New Zealand in 2016 and is now a privately‑owned, but still Crown‑controlled, entity. The company’s assets are a network that runs through the country’s cities and towns, providing the foundation for mobile, internet, and broadband services. The government’s ownership in Chorus is a significant asset, but it has never been directly traded on the market. Instead, the Crown holds a portfolio of securities that represent its share of the company’s equity and its entitlement to future dividend payments.

“Think of these securities as a sort of promise of future income from Chorus,” Robertson said. “When the government sells them, it receives a lump sum of cash now, which it can immediately use to reduce its debt obligations.”

Debt, not assets

When the Finance Minister said the sale is “hocking off debt, not assets,” he was trying to allay fears that the Crown would be relinquishing control over a vital piece of national infrastructure. The Treasury had previously suggested that the sale would be used to pay down the $73 billion of Crown debt that the government carried at the end of 2024—an amount that represents just over 18% of the country’s gross domestic product.

“In a sense, the sale of these securities is a trade‑off,” Robertson said. “We are giving up the right to future income from Chorus in exchange for immediate capital that helps us pay down the national debt and keep the debt‑to‑GDP ratio within the target range of 30% that the government is committed to.”

The Treasury’s 2025 budget plan, which was approved by Parliament earlier this month, sets a goal of cutting the debt‑to‑GDP ratio to 20% by the end of 2030. The sale of Chorus securities is one of a series of measures that will allow the Crown to meet that goal, including a modest increase in the Goods and Services Tax (GST) and the introduction of a new digital infrastructure levy on the largest telecom operators.

How will the sale work?

The bonds will be sold through a private placement to a limited pool of institutional investors, rather than an open market auction. The private placement will be conducted by a leading New Zealand investment bank, with the proceeds earmarked for the debt‑reduction strategy. The Treasury estimates that the government will raise approximately $3.6 billion from the sale—an amount that will shave off roughly $1.2 billion from the debt‑to‑GDP ratio in the first year.

“We’re not creating a new public debt,” Robertson added. “We’re simply converting the Crown’s equity position in Chorus into cash that we can use to pay down existing debt.”

Why is this happening now?

The decision to sell Chorus securities comes against a backdrop of rising global inflation, a tightening of global credit markets, and a domestic economy that is still recovering from the COVID‑19 pandemic. The government’s debt has risen sharply since the pandemic, and many analysts have warned that the high debt levels make New Zealand more vulnerable to global interest rate hikes.

The sale also coincides with the Treasury’s broader push to monetise the Crown’s asset base—a process that began last year when the government sold its stake in Air New Zealand and New Zealand Rail. Those sales have provided the Crown with fresh cash and reduced its exposure to sectors that are considered strategic but not necessarily profitable.

Political fallout and reactions

While the Finance Minister’s statement has received a chorus of support from economists and opposition parties alike, some members of Parliament voiced concerns that the Crown could lose a vital asset in the long run. Representative John McCarthy of the Green Party questioned whether the government should be able to dispose of a key piece of national infrastructure without a public consultation process.

“In a democracy, we should be able to hear from the people about what to do with our nation’s vital assets,” McCarthy said. “A private sale of Chorus securities feels too opaque.”

The Ministry of Finance countered that the sale is fully transparent, with the proceeds going directly to debt reduction. They also noted that the sale price reflects the current market valuation of the Crown’s stake in Chorus, which is estimated to be $4.2 billion.

What does this mean for the public?

From a taxpayer’s perspective, the sale is largely neutral or positive. It does not directly affect household spending or taxes, but it does reduce the risk that the government will need to raise future taxes or cut public services to service debt.

“The real benefit to the people of New Zealand is that a smaller debt means we’ll have more flexibility in future budgets to invest in health, education, and infrastructure,” Robertson said. “By turning an asset into cash, we are strengthening the country’s long‑term financial position.”

The sale of Chorus securities is scheduled for June 12th, 2025, and will be announced in full detail by the Treasury a week before the transaction. The Ministry of Finance has said it will publish a detailed report outlining how the proceeds will be allocated across the debt‑reduction plan.

In short, the government is not giving up the fibre‑optic network that powers the country’s telecom services. Instead, it is selling the right to future income from that network to pay down the debt that has accumulated in the past few years. As Finance Minister Robertson put it, the sale is a “hock‑off of debt” – a trade that will leave the Crown with a leaner balance sheet and a stronger economic footing for the years to come.