8. Hon CLAYTON COSGROVE (Labour) to the Minister of Finance: Does he stand by his statement regarding SOE chief executive salaries that “There’s a couple of bigger pay increases, I think three with the energy companies, which will be probably related to the share float that’s coming”; if so, does he support the $451,873 pay increase for the Chief Executive of Mighty River Power whose pay is increasing from $1,317,469 to $1,769,342?

Hon BILL ENGLISH (Minister of Finance) : As the member will know from his time as Minister of State Owned Enterprises, Ministers are not involved in setting the pay. There are a number of considerations that the board of Mighty River Power would be taking into account, but we would urge the energy companies to show restraint, because that is the current mood of the country.

Hon Clayton Cosgrove: Is he aware that since Contact Energy was privatised, remuneration for the board increased from $385,000 to $1,008,000; if so, what guarantees can he give New Zealanders that the same thing will not occur on the boards of Mighty River Power, Genesis Power, and Meridian Energy after they are sold off?

Hon BILL ENGLISH: I was not aware of that.

Hon Clayton Cosgrove: What guarantees can he give New Zealanders that these substantial costs, like big pay increases to board members and chief executives and $120 million spent on merchant bankers to do the deal, will not be clawed back through higher power prices on the back of consumers?

Hon BILL ENGLISH: As has been discussed in this House over recent weeks, the improved competitiveness of the electricity market means that no company can afford to indulge in unnecessary spending and automatically get that back off customers. They used to be able to do that when Labour was running these companies, when chief executives’ salaries trebled and power prices went up 72 percent in 8 years.

Hon Clayton Cosgrove: Given that he has stated that the sale of State-owned assets is all about “reducing debt”, why is his Government doing everything it can to reduce the amount it will receive from the sales through the issuing of free loyalty bonus shares and the setting aside of additional shares for the settlement of Treaty claims, not to mention big pay rises for chief executives and boards et al.?

Hon BILL ENGLISH: Well, the Government is striking a reasonable balance between getting good value for taxpayers and achieving our objectives of 51 percent Crown ownership and widespread Kiwi ownership of these companies. I notice the member is increasingly agreeing with the policy, because now his party has promised not to buy these companies back.