[Sitting date: 20 June 2012. Volume:681;Page:3123. Text is incorporated into the Bound Volume.]
Dr RUSSEL NORMAN (Co-Leader—Green) to the
Prime Minister: In relation to the Government’s asset sales policy, does he stand by his reported comments that he has yet to see any official advice on a so-called “bonus scheme” for people who buy shares?
Rt Hon JOHN KEY (Prime Minister)
: Yes, I have seen advice very generally that mentions a range of possible incentives, but bonus shares have not been the subject of any specific advice to date.
Dr Russel Norman: Does the cost of a such a loyalty scheme, which could be up to $400 million, appear in the Budget that his Government presented to Parliament less than a month ago or in his Government’s asset sales legislation?
Rt Hon JOHN KEY: It appears in the Budget insomuch that the Budget documents showed the indicative range of returns that the Government was likely to receive for the mixed-ownership model. In terms of the numbers they are making up, the member is continually demonstrating to the public of New Zealand that he knows absolutely nothing about the capital markets.
Dr Russel Norman: I raise a point of order, Mr Speaker. My question was about whether the costs of the loyalty scheme appeared in the Budget. The Prime Minister talked about the revenue in the Budget—
Mr SPEAKER: No, order! I beg the member’s pardon, but I clearly heard the Prime Minister say yes, it was included in the Budget.
Hon Clayton Cosgrove: Is his so-called bonus or loyalty scheme not simply an expensive scam designed to keep Kiwis holding on to their shares until some time after the next election?
Rt Hon JOHN KEY: No. A scam was Labour’s economic policies that we inherited.
Rt Hon Winston Peters: If these asset sales and selling shares to mum and dad New Zealanders is such a wonderful idea and a great investment for them—
Hon Dr Nick Smith: Tell us about Auckland!
Rt Hon Winston Peters: Well, what happened to the Auckland Airport—
Mr SPEAKER: Order! The member will just ask his question, please.
Rt Hon Winston Peters: I was just talking to the—
Mr SPEAKER: No, no. Order! The member will now resume his seat. Can I say to some of the National backbenchers that some interjections can be unhelpful.
Rt Hon Winston Peters: If these asset sales and the investment made by mum and dad New Zealanders—or the few of them who get it—is such a good idea, why on earth would they need a bonus scheme?
Rt Hon JOHN KEY: What we have seen around the world is that loyalty schemes have been effective in providing a reason to engage for people who might otherwise not have chosen to buy shares. But New Zealand First does not have to worry about that, because as Andrew Williams told us last night, if it gets half a chance it will be raising $7 billion to $10 billion—
Mr SPEAKER: No, order! We do not need that last part.
Dr Russel Norman: Does the Prime Minister accept that a bonus scheme, in which those who buy shares are given extra shares for free, will be a cost on the Crown?
Rt Hon JOHN KEY: No. I think it is quite interesting that the member is now starting to talk about where the Crown might be prepared to forgo a part of the sale proceeds to ensure that New Zealanders are at the front of the queue, with the maximum distribution for the right range of New Zealanders. If the Government simply wanted to maximise its return, it would sell 100 percent of the assets to whomever came first, like Labour did with the 15 assets it sold.
Michael Woodhouse: What are the benefits of the Government selling minority shareholdings in four energy State-owned enterprises?
Rt Hon JOHN KEY: The benefits are very clear. Firstly, it helps us to control Government debt, which is a huge problem around the world. The Government will reinvest the expected proceeds of between $5 billion and $7 billion into things like modern hospitals and schools, without having to borrow more from overseas lenders. Secondly, there will be widespread New Zealand ownership, with Kiwis at the front of the queue for shares in big New Zealand infrastructure companies. Thirdly, it will help invigorate our capital markets and build stronger commercial disciplines in each of the companies involved.
Dr Russel Norman: Is the Prime Minister aware of the document by the Australian Taxation Office regarding the Queensland Rail bonus share issuing, which states very clearly that the state will transfer loyalty bonus shares to the retail investor from its retained holding of shares; and how is transferring free shares not a cost to the Crown?
Rt Hon JOHN KEY: What I said earlier was that it has an impact on the maximum return that the Government has, but the Government is not looking to get the maximum return possible, because if it was it would sell 100 percent of the assets to a trade buyer, almost certainly from overseas. That was the model set up by Labour and it did it very effectively in the late 1980s. But that is not what this Government is trying to do. It is going to have majority ownership, it is going to transfer shares to New Zealanders, who will be at the front of the queue, and it may choose to give some retail investors in New Zealand the opportunity to have a slightly better deal than others.
Hon Trevor Mallard: Further to his comment about Labour’s sales, does he accept that that occurred not this decade, not last decade, not the decade before that, but the decade before that; that as a result of that, the Hon Phil Goff, I, and the Hon Annette King all lost our seats; that Labour did not get back into power for 9 years; that we now understand—
Mr SPEAKER: Order! There will be no more interjections when I am on my feet. I think that was heading somewhat into a speech. I think the gist of the question got through, though. I call the right honourable Prime Minister.
Rt Hon JOHN KEY: Mr Speaker—
Hon Trevor Mallard: I did not ask the question at all, Mr Speaker.
Mr SPEAKER: Order! The Prime Minister will not answer it yet. I apologise, I did call the Prime Minister, but the member argues that he had not finished asking his question. But I clearly heard him at the start. I think he said at the start: “Is it correct?”—I think he said that at the start—and that is the question, then he added a whole lot more to it. I think the Prime Minister can answer at least whether part of it is correct.
Rt Hon JOHN KEY: Yes, I accept that it happened quite a long time ago. Yes, I accept that Trevor Mallard was in Parliament then. All that process shows is that for Labour it is a hell of a lot easier to get rid of assets than it is Trevor Mallard.
Rt Hon Winston Peters: Was the Prime Minister’s statement that Dr Russel Norman did not understand capital markets made because Dr Norman fails to grasp the
shonky, corrupt practices of Merrill Lynch, which brought the American economy and the Western World’s economy to their very knees?
Rt Hon JOHN KEY: I have absolutely no responsibility as Prime Minister of New Zealand for Merrill Lynch. But all I can say is it was a bloody good company when I was there.
Hon Trevor Mallard: Has the Prime Minister briefed his backbenchers on the fact that New Zealanders like asset sales less now than they did in the 1980s, and that they are likely to lose their seats and will not be back for 9 years?
Rt Hon JOHN KEY: And, yes, they like Trevor Mallard less now than they did in the 1980s.
Dr Russel Norman: What right does his Government have to give away up to $400 million of taxpayer wealth in the form of free share give-aways without parliamentary authority, and has he not read the Constitution Act, which states: “It shall not be lawful for the Crown, except by or under an Act of Parliament, … to spend any public money.”?
Rt Hon JOHN KEY: For a start-off, there is legislation going through Parliament that gives the National-led Government, with the support of its partners, the right to go through the mixed-ownership model. Secondly, if it comes to giving away money, maybe the member should go and talk to his caucus. All I ever hear it wanting to do is give away taxpayers’ money to other New Zealanders.
Dr Russel Norman: Can the Prime Minister—[Interruption]
Mr SPEAKER: Order! I want to hear Dr Russel Norman’s question.
Dr Russel Norman: Can the Prime Minister point to any clauses in the Mixed Ownership Model Bill or any lines within Budget 2012 that authorise the Government to spend up to $400 million on giving away free shares in the mixed-ownership model companies?
Rt Hon JOHN KEY: The Government is not giving away $400 million and it is not giving away free shares of the order of magnitude that the member has claimed. We may or may not have a loyalty bonus; we will see. But the Government, all the way through, has said it will not be maximising its return. If we were to do that, we would follow the Labour model of selling 100 percent and selling it to foreigners.
Dr Russel Norman: When will he be seeking legal authority from Parliament to spend money in the form of a share give-away?
Rt Hon JOHN KEY: If the member wants to go to the Budget, he will see quite clearly laid out the Government’s programme, the anticipated return that the Crown will get, and the costs likely to be associated. That gives the Government, from everything that I can see, the authority.
Dr Russel Norman: I seek leave to table the document from the Australian Taxation Office that indicates that the state will be giving away shares, as far as the Australian Taxation Office is concerned, in the Queensland model.
Mr SPEAKER: Leave is sought to—[Interruption] Order! This is a point of order. Leave is sought to table that document. Is there any objection? There is objection.