2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that $360 million is “a possible number” for the cost of the loyalty scheme for asset sales?

Rt Hon JOHN KEY (Prime Minister) : I stand by my full statement, which was: “I don’t know the details because they’re not agreed yet, and what the loyalty bonus might look like, but yeah, that’s a possible number. I haven’t seen their workings, so I wouldn’t want to agree with that at this point.” Now having had a chance to look at it, I understand that the $360 million number came from Russel Norman and that there were gross errors in the way it was calculated. Officials are working through the details of the loyalty bonus with Mighty River Power, but even if there was a loyalty bonus across the entire programme, the costs would not be anywhere near $360 million, let alone the $500 million reported in the New Zealand Herald today.

David Shearer: Given that yesterday he talked about a figure of less than half of $1.3 billion, he thought that $360 million was “a possible number”, and today he is indicating $60 million to $80 million, what is the actual figure, and will it change tomorrow?

Rt Hon JOHN KEY: The final number at this stage is not known. [Interruption] The final number is not known. I did not agree with the $360 million yesterday; I said that it is—

Grant Robertson: You said it was possible.

Rt Hon JOHN KEY: —possible, depending on how it was calculated and by whom. Frankly, what we are seeing in this debate is that Labour and the Greens just make up all sorts of numbers. According to Labour, selling shares to New Zealanders is a Ponzi scheme. Well, I do not know; you know, there are certain things that are a Ponzi scheme, but selling shares to New Zealanders is not one of them.

David Shearer: Did the Prime Minister announce the loyalty scheme to the National Party conference on Sunday without actually being aware of the cost of it?

Rt Hon JOHN KEY: What I indicated to New Zealanders on Sunday is that there are a number of elements of the mixed-ownership model that we are able to get out there and confirm. One is that the minimum parcel would be $1,000. The second thing is that there would be an unscaled amount of $2,000 for direct investment, and that there would be a loyalty bonus that applied. And had I known that there were going to be only 79 protestors outside, I would have gone and had a chat to them, as well. I was expecting tens of thousands, the way the Greens and Labour were talking about it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That was a straight, direct question about whether the Prime Minister’s announcement had been costed.

Mr SPEAKER: Well, if that was the question, it is a shame that that was not what was asked. If the member had asked “Was the Prime Minister’s statement costed?”, that would have been an interesting question, but that was not what the question—

Hon Trevor Mallard: Was he aware of the costing?

Mr SPEAKER: Order! The question was not as the member indicated. Also, if questions are to be taken seriously, the level of interjection has to come down, because the Minister—the Prime Minister in this case—is able to latch on to interjections and respond. If questions are to be taken seriously, then the House has to listen to the answer.

David Shearer: Did he announce the loyalty scheme to the National Party conference without being aware of the cost?

Rt Hon JOHN KEY: I announced the intention to have a loyalty scheme. I do not know the exact cost at this point, but what I do know is that there may be no cost. I was taking this morning to listen to Morning Report. On Morning Report this morning, if I can quote a stockbroker heavily involved in the Queensland Rail float, which had the loyalty bonus, he said that the amount the Government receives for its 49 percent may actually increase, and that the incentive increase demand for the float from locals and paid by itself is driving up the price institutions may pay—

Mr SPEAKER: Order! I think, given the question asked, the Prime Minister has given sufficient answer.

David Shearer: What proportion of shares will have to be set aside for the loyalty bonus, the settlements with iwi, to pay brokerage fees, advertising, and public relations fees?

Rt Hon JOHN KEY: In terms of the first point, it will be the amount of the calculation done by those New Zealanders who buy direct shares up to the $2,000 limit applied by the loyalty number yet to be set. That will be calculable. In terms of the others, what the Government is doing is releasing capital under the mixed-ownership model to buy other assets. We have never argued that we are getting the absolute maximum price. If we wanted to do that, we would have followed Labour’s model of flogging the lot off to foreigners.

Te Ururoa Flavell: Tēnā koe mōtō karakia itēneirā. Does the Prime Minister believe it to be fair, just, and moral to be giving away hundreds of millions of dollars to investors for asset sales, when the redress to Māori for 135 or so years of Treaty breaches is capped at $1 billion, and how can he justify this?

Rt Hon JOHN KEY: Firstly, we would reject the first proposition of giving anything away. As I said, if you look at some of the financial advisers this morning, the argument is, in fact, actually that the Government’s return could increase, not decrease. Secondly, I utterly strongly, strongly reject the notion that redress for the Treaty breaches will be capped at $1 billion. That is a 1995 number. As the member knows, there is the relativity clause and others, and I would strongly suggest that the number at the end will be considerably greater than that.

David Shearer: Will the money to pay for the share loyalty scheme be coming from debt or from reduced funding available to schools and hospitals?

Rt Hon JOHN KEY: The net proceeds from the mixed-ownership model will be used to buy other assets for the development of New Zealand. So under a National Government $1 billion will be put into 21st century schools, and under Labour nothing will be put in. Under National $1 billion will be put into 21st century schools without debt. Under Labour—

Mr SPEAKER: Order! The answer is interesting, but I am not sure it is actually an answer to the question asked. The question asked whether the cost of the scheme would be picked up through extra debt, or reduction in spending on health and education, from memory, whereas the Prime Minister’s answer talked about what the Government planned to spend money on. So I bring the Prime Minister back to the question asked, and ask him whether he could focus on that.

Rt Hon JOHN KEY: There is a net proceeds number, and those net proceeds will go into schools.