However, the debate is not really about balance sheet separation – at least not as the term is generally understood. Normal meaning of balance sheet separationLet’s start with the normal meaning of ‘balance sheet separation’. The government of NZ owns Transpower, but its balance sheet is separate from the government’s balance sheet. It turns out ‘balance sheet separation’ is a code for a more difficult question: “What kind of credit support should local councils or the national government offer to local-government-owned water utilities?”When WaterCare’s chief executive says, ‘We need balance sheet separation’ [2], he doesn’t mean that literally: WaterCare’s balance sheet is already separate from the Auckland council’s. Balance sheet separation means the water utility’s balance sheet is separate from the balance sheet of its owner.

Source: Stuff December 14, 2023 16:06 UTC