[Sitting date: 09 May 2012. Volume:679;Page:2079. Text is incorporated into the Bound Volume.]
Hon CLAYTON COSGROVE (Labour) to the
Minister for State Owned Enterprises: Does he stand by the Prime Minister’s statement regarding asset sales that “We are not going to do anything tricky there”?
Hon TONY RYALL (Minister for State Owned Enterprises)
: Yes, I agree with the Prime Minister’s statement. This Government campaigned up front on the policy of the mixed-ownership model, which includes the pledge that the Government will maintain majority ownership of these companies. This promise stands, despite the unlikely theoretical scenario some members opposite keep raising.
Hon Clayton Cosgrove: Why, then, does the Mixed Ownership Model Bill specifically allow him to “do something tricky” and sell off the vast majority of the affected companies through the issue of non-voting shares?
Hon TONY RYALL: Well, first of all, there is nothing tricky in any of this, because there is a bill and the Government has been completely up front about it. The fact is the member is creating what I think can only be described as an uncommercial fantasy in respect of the issue of these shares. It may theoretically technically be possible if you are looking at a textbook that that could happen, but we have looked back at the New Zealand stock exchange and not one company has issued shares in the form that that member is suggesting.
Hon Clayton Cosgrove: If the Minister truly does intend to retain 51 percent ownership of the equity and company dividends, why is there no written guarantee in the bill, which instead allows him to dilute the Crown’s equity and dividend rights to essentially zero through non-voting shares and other loopholes; and if he believes it is a technicality, why does he not rule it out and amend the bill?
Hon TONY RYALL: Because it is simply not necessary for that to happen. The fact is that we have done quite a lot of research, which shows there is no company on the New Zealand Exchange that has issued shares in that format. We do believe that these companies will provide real benefits for New Zealand as part of the mixed-ownership model, as part of helping us deal with debt in this country.
Hon Clayton Cosgrove: Given that the bill does not require the Crown to retain 51 percent of shareholding, but only 51 percent of voting rights, does it meet the promise made in the agreement with United Future, which calls for the Government to “Introduce statutory limits on the sale of public assets to no more than 49 percent of shareholding”?
Hon TONY RYALL: It is completely consistent. What New Zealanders want to know is that this Government will maintain 51 percent of the control of these companies, and that is what is in the legislation, and that is what will be in the companies’ constitutions. Over the next 3 years, debt in this country is going to grow from $50 billion today, to $72 billion. It is imperative that this country takes action to control its debt.