DAVID SHEARER (Leader of the Opposition) : We are getting to the end of what is, I think, for most New Zealanders an obnoxious piece of legislation, the Mixed Ownership Model Bill, which, overwhelmingly, people in this country oppose. In fact, consistently overwhelmingly, they have opposed the selling-off of our assets—assets that they believed were theirs, assets that they believed that their grandparents, their parents, they themselves, and their children would inherit. These are our assets, not assets to be flogged off to private interests.

What we are seeing here is a wholesale shift of property and assets in New Zealand public ownership—things that we enjoy the ownership of—into the hands of a small elite of people who are—

Hon Chris Tremain: I raise a point of order, Mr Chairperson. I raise a point of order at this point of time in the debate. This is a tight part, clauses 3 to 11. The Leader of the Opposition is taking a very wide-ranging debate. This is the Committee stage of the debate. It is a tight part and tight clauses. He needs to focus very clearly on those clauses in the Committee stage.

Hon Trevor Mallard: That would have been right if we were speaking to clause 3. We are speaking to Part 1, where there are a number of very significant amendments to the State-Owned Enterprises Act, the Ombudsmen Act, the Official Information Act, the Public Finance Act, and two parts of a schedule of the Income Tax Act. This is not a narrow debate. This is a broad part, one of the two most important parts of this bill.

The CHAIRPERSON (H V Ross Robertson): Thank you, and I recognise the contribution that the member has made.

DAVID SHEARER: As I was saying, the point about this bill is that it actually shifts ownership, through Part 1, out of the State-Owned Enterprises Act to private interests. I can tell the Committee that the bill will not be shifting ownership into the hands of ordinary mums and dads across New Zealand; it will be shifting ownership into the hands of a very small group of people who can afford to buy shares. That will not be everybody in New Zealand. In fact, it will not be anywhere close to the majority of New Zealanders—not anywhere close to those people.

The queue the Prime Minister talks about that New Zealanders will be at the front of is not the queue that I see in my electorate—people queuing to get jobs in the local supermarket. It is not that queue. That queue is for people who are desperate for jobs. They will not be trying to buy shares in these companies. They will be for a small bunch of people who have the financial resources to be able to afford them.

The undertaking in this legislation is that somehow New Zealand is going to be better off as a result—better off. Well, I can tell the Committee right now that we are not going to be better off. Actually, we are going to be $100 million a year worse off. Any of the calculations done by Treasury or done by independent consultants—whomever you want to ask—will tell you that selling off these assets will leave us in a worse financial situation than we are in right now.

Paul Goldsmith: Oh!

DAVID SHEARER: Absolutely! The other point about this is that everybody knows in New Zealand—every single New Zealander knows—that the price of electricity is going to go up. We were asking those very questions today in the House—why the weighted average of State-owned enterprises’ electricity prices across the sector happens to be 13 percent cheaper than that in private electricity company hands. The reason is that it is more expensive in private companies than it is under the State-owned enterprises. We know that as soon as the State-owned enterprises are privatised—under Part 1 of this legislation—the price will go up.

Every New Zealander whom I have spoken to around the country in the past few months has said to me that that is their greatest concern. This cold snap in the last couple of weeks has indicated to us and shown to us that people are really concerned about the price of electricity and where that price is going to go. If it stops at 13 percent, I will be absolutely surprised. We know what is going to happen with this legislation. We know that the three major power companies are actually well run and efficiently run. Treasury says that, and independent consultants say that. So the only way that you can get an efficient company to generate more profit is by putting up the price.

Hon Member: How?

DAVID SHEARER: By putting up the price, and that is exactly why everybody in New Zealand is fearful of what is going to happen.

The second thing they are most fearful of is the fact that these companies are going to end up in foreign hands. The Government says that somehow they are going to be protected, that ordinary New Zealanders are going to be at the front of the queue, and that they are always going to stay in New Zealand hands. Well, I can tell the other side that most New Zealanders actually do not believe that, and neither do we. We do not believe that, either. I can tell you what is going to happen. As soon as New Zealanders get these shares and they get an offer from a foreign company, they are going to sell them off. Where is the undertaking in the legislation, where is the undertaking in this bill, in this part of the legislation—the most relevant part—to ensure that ownership stays in New Zealand hands?

Kris Faafoi: There is none.

DAVID SHEARER: There is none. There is no undertaking there at all. As if to console New Zealanders even less than that, the Government has seen fit to take out, in this piece of legislation, any ability to look to use the Official Information Act or the Ombudsmen Act to ensure that we can see what is actually happening to something that is 51 percent, so-called, in our name.

The Crown takes on all the risk. The people of New Zealand do not get to have even a look-in to what might be going on in these companies, as a result of this legislation. The Crown takes the risk, private holders of shares get the benefits, and we, the taxpayers, do not get even a chance to have a look at what is going on in these three companies. That is a mistake. That is an absolute mistake, and it is, I believe, trampling on the rights and the responsibilities that New Zealanders should enjoy.

But not only that; let me accentuate one more thing, and that is the social responsibility clause. The social responsibility clause ensures that all the actions of these companies would be in the best interests of New Zealand—that has gone.

Paul Goldsmith: What clause is that?

Kris Faafoi: Clause 3.

DAVID SHEARER: It is actually section 4.

Kris Faafoi: It is clause 3, actually.

DAVID SHEARER: Section 4, clause 3. The social responsibility clause, which would enable these companies to take responsibility and care for the communities in New Zealand, has gone. That has gone.

So what have we got as a result of this piece of legislation? We know that most of those shares will end up in foreign hands. We know that electricity prices will go through the roof. We know that we will never get a chance to have a look at what is going on in these companies, because we have been denied that opportunity to use the Official Information Act and the Ombudsmen Act. The only sense of responsibility that this Act might give to New Zealanders, to know that power prices and communities across New Zealand are being looked out for, is gone. If that is not enough, right now the Government has no clue on how much these companies are going to be sold for—$10 billion, $7 billion, $6 billion, $6.5 billion it went up to—

Hon Member: Have a guess.

DAVID SHEARER: It is a guess, and not even a “best guess”, to quote the Minister of Finance. In the midst of a global financial crisis, this Government has seen fit to sell off our most potent assets, our most valuable assets, overseas for a price it cannot even get close to guaranteeing. If that is not a shoddy piece of Government policy, which New Zealanders will be voting down in the referendum, I do not know what is.

Hon BILL ENGLISH (Deputy Prime Minister) : It is good to speak to Part 1 of the Mixed Ownership Model Bill. What the previous speaker, David Shearer, said about prices is just nonsense. Does he seriously believe that hundreds of thousands of New Zealanders are systematically paying more for their electricity than they could?

Grant Robertson: Yes, they are.

Hon BILL ENGLISH: So most New Zealanders are stupid? That theory relies on Labour’s belief that most New Zealanders are stupidly paying 13 percent more for their power than they could if they just chose to pay less. It is just rubbish.

Through this debate and this Committee stage there is one question that the Labour Party has to answer, and until it answers that question its criticism cannot be taken seriously. It is this: if it is elected in 2014, will it borrow $7 billion from foreigners to buy the energy companies back? That is the only question that matters. You see, the question is this: can those members persuade themselves about their arguments against the sale? I know they are trying to persuade the public, but can they persuade themselves? Can David Shearer, who I think is actually not too worried about these sales, persuade David Parker, who is totally opposed to them? Can they persuade themselves their arguments are so strong that in the middle of the European crisis and global uncertainty they will say to the public that the most important thing a new Labour Government is going to do is borrow $7 billion from foreign lenders to buy back the energy companies? Because until they make that commitment, their arguments are meaningless. Until they make that commitment, their arguments are meaningless.

They can say whatever they like about power prices, but do they believe that enough to borrow $7 billion from foreign lenders and start paying them interest so that they can lower power prices? If they believe that selling these companies is fiscally bad, will they borrow $7 billion from foreign lenders—to whom we are one of the most indebted countries in the world already; we are already one of the most indebted countries in the world to foreign lenders—who are losing money all over Europe and are worried about global instability in a way they have not been in a generation? Labour gives the impression that it might, but it has not actually said so. You know what I think? I think, come the end of this debate, during the leader’s third reading speech, David Shearer is going to make a call, which will be a change. He is going to make a call in his third reading speech that Labour will buy these assets back, and if he does not say that then Labour has no credibility on this argument—

Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. This is a wide-ranging debate, but I have never heard it allowed in this or in any other Parliament with similar rules where you can get up and say the same old thing 10 times over.

Hon Parekura Horomia: That’s right—15.

Rt Hon Winston Peters: The same thing repeated 10—no, 15 times. Surely we are required to have a debate here and for him to say something new after 4 minutes.

The CHAIRPERSON (H V Ross Robertson): Order! Points of order are to be heard in silence. Can I say it is a debatable issue, and the public will judge the speech.

Hon BILL ENGLISH: At least one Labour member is unpersuaded by the argument: David Clark MP, who said on TV last week that buying these assets back is “not off the table”. So he is not persuaded by David Shearer, and I expect that not many of the others are either, actually. That is what we are waiting for at the end of this debate: Labour’s undertaking to borrow $7 billion. You see, we would rather pay dividends to New Zealanders; Labour would rather pay interest to foreign banks. We want to pay dividends to New Zealand mums and dads; Labour wants to pay interest to foreign, offshore, multinational banks. That is its policy. Well, that is its policy, until it changes. Until it changes, that is its policy. Of course, what those members could do is agree not to buy them back, which would be the logical thing to do, and I expect the ground is starting to shift now. I expect their leader will not say that in his third reading speech, and they will hope that over the next 18 months it just kind of slips away, so they do not have to commit to borrowing $7 billion from foreign, multinational—

Dr RUSSEL NORMAN (Co-Leader—Green) : I rise to speak on the Government’s Mixed Ownership Model Bill. We will be talking specifically about some of the amendments that the Green Party will be moving to this part, but here I want to talk more generally about the essence of the clauses here, which is to fundamentally change the ownership structure to remove these companies from being State-owned enterprises to essentially being mixed-ownership model, as the Government is calling them. The first thing, I think, to say about this is that the effect of taking these companies out from the State-Owned Enterprises Act will be to permanently remove the ability of the New Zealand Government to make the New Zealand electricity sector more competitive, and I think that has been a missed point in this whole debate. By removing these companies from the State-Owned Enterprises Act so that they are no longer under the control of the Government, the Government will remove the ability that it has recently exercised to force these companies to transfer assets around within the system. Because they were State-owned enterprises, the Government was able to force Meridian Energy and Genesis Power to move generating assets around in order to meet its idea of what a competitive electricity market would look like. Whatever you might think about that—and I am not convinced that it necessarily did the right thing—by doing this and moving these assets out of the State-Owned Enterprises Act, as it does in the clauses in Part 1, it permanently removes the ability of future Governments to alter these ownership structures. Once the Government is a 51 percent owner of these companies, it simply cannot direct them to sell some of their generating assets to other companies or sell others of them to buy generating assets from other companies. It is simply not possible, because the minority owners in these companies have rights, and the directors of these companies are required to consider the best interests of the company as a whole.

Once these clauses go through in Part 1 it could well be in the best interests of the company to drive up monopoly prices. In fact, that is how you maximise profit in the return to shareholders: drive up monopoly prices. If they were to do that, they would be acting in the best interests of the company, once these clauses have gone through that move the companies out from the State-owned Enterprises Act. So, in fact, what the Government is doing is locking into place the current set-up in terms of generating assets within the electricity market by going through with this. If in future we were to discover that, in fact, the arrangement that we had in terms of the electricity generating assets was not the most competitive arrangement for the electricity market, we would no longer have that ability.

And what we know about the electricity market is that it is deeply uncompetitive. The Commerce Commission in its report in 2009 came to the view that the electricity sector was essentially ripping off the rest of the economy, because the way that the market has been established in the sector is deeply uncompetitive. It is not at all surprising: we have a small number of generator-retailers who dominate the market and who have the ability to maximise the price and returns that they get. So, by the Government transferring these assets away from being State-owned enterprises and the ability of the Government to put some pressure on them, what we are guaranteeing is that these companies can freely pursue their right to charge monopoly rates and monopoly prices. That is what it means.

When we did the analysis and went through all the different lines companies’ areas and compared the prices that State-owned enterprises charge versus the prices that private companies charge, what we found was that basically the private companies are charging around 12 or 13 percent more than the State-owned enterprises. And when you look at the comments from the chief executive officers of the private companies, they are very clear that they believe that the State-owned enterprises are undercharging for electricity. When the chief executive officers from TrustPower and Contact Energy have been reported on this issue, what they have said is that the State-owned enterprises are undercutting them on price. So by transferring these companies from being in the State-Owned Enterprises Act, which is what this Part 1 does, and putting them simply as regular profit maximisers, as regular companies in the market, we remove the anchor that the State-owned enterprises currently provide to the electricity market. In the context of a market that is fundamentally uncompetitive, because it is a small market with a small number of dominant players, we are removing the anchor that these State-owned enterprises currently provide to price. That is why prices will go up.

The other argument that this Government has used repeatedly as to why it needs to move them out from being State-owned enterprises is around access to capital. The Government said: “Oh, we have to give these companies access to capital, and that’s why we have to privatise them or partially privatise them.” But this argument is fundamentally flawed. Think this argument through. What the Government is saying is they need more access to capital. Well, who gets the proceeds from the sale? It is not the companies; it is the Government—right? So then how will these companies, once they are partially privatised, raise more capital? The only way they can do it is to issue more shares. If the Government is to maintain its 51 percent ownership of these companies, then half of all the new shares issued have to be purchased by the Crown—51 percent of them have to be purchased by the Crown. Half of all the new capital that will be made available to these companies by issuing new shares has to actually be provided by the Government.

Is the Government actually going to provide half of all the new capital that these companies want? I think it is very unlikely, because the Government has gone on at great length about how it is short of capital, how the way the capital has been allocated is extremely irrational, and how it does not want to be caught up in these State-owned enterprises and the way they use capital any more. In which case what it means is that the only option is for the Government shareholdings to fall under 51 percent. So all the promises about maintaining 51 percent ownership will come up against the desire of these companies to gain access to more capital and require the Government to provide half of all the new capital, which the Government of course will not do.

The other part about this is the cost of this process, of moving these companies from no longer being State-owned enterprises. We asked the Minister of Finance about this today and basically he is saying that we are talking of an initial cost of somewhere in the order of $120 million to $140 million, if we get, say, $7 billion, as the Government is proposing. So $120 million will be paid by taxpayers for the privilege of losing control of these companies. For the privilege of giving control of these companies from all of us to a tiny minority of us, we are going to have to pay $120 million to $140 million.

Then on top of that the Government is talking about a loyalty scheme. The way loyalty schemes work is, essentially, the seller gives away free shares to buyers if the buyers meet certain conditions. In the case of the Queensland Rail privatisation done by the Labor Government in Queensland—of course, with the result it got chucked out at the next election—in that example, what the Government did was it gave the 16th share for free to those who bought 15 shares and hung on to them for 2 years. That is effectively a 6 percent cost to the seller. If there is a 6 percent cost to the seller in this example in New Zealand, if the Government decides to go down the same path, then we are talking about up to $400 million that will be forgone as a result of giving away free shares as part of this loyalty programme. When you add that to the $120 million the Government has already confirmed it is planning to spend, we are talking about spending somewhere in the order of half a billion dollars of taxpayers’ money in order to sell something that taxpayers already own, against the wishes of the vast majority of New Zealanders, who are resolutely opposed to the privatisation programme. How can that possibly be the right thing for this Government to do?

On top of that, we have the lost earnings going forward. In the Budget Policy Statement 2011, done by Treasury, and the Budget Policy Statement 2012, it said that as a result of the clauses in Part 1, the removal of these companies from being State-owned enterprises and the move to partial privatisation, the Government is $100 million a year worse off on its operating balance excluding gains and losses—that is, basically, the Budget deficit. So it will be $100 million a year permanently worse off, year after year after year, as a result of the clauses in this bill. If this goes ahead, it will add to the Government debt by $100 million a year, because the Government debt is fundamentally the result of the addition of all the deficits that this Government runs—and it is a Government that runs very, very large deficits.

So, on top of the fact that it is going to have a huge impact in terms of the first round of costs of maybe half a billion dollars of doing the privatisation programme, on top of that the Government is worse off by $100 million every year because of the privatisation programme, according to Treasury figures in the Budget Policy Statement 2011, repeated again in the Budget Policy Statement 2012. So when the Government says this is fiscally responsible, what I suggest people do who are listening to this debate is read the Budget policy statements of 2011 and 2012. Readers will see that this is the most fiscally reckless policy that you could possibly be engaged in, in terms of its impact on the Government’s fiscal position. This is really bad policy and it is driven by the fact that they have to pay for the tax cuts for upper-income earners.

Hon CLAYTON COSGROVE (Labour) : Mr Chairman—

Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. There is a bit of confusion here about the order. The last thing I want to do is stop my colleague Clayton Cosgrove from speaking, but you went from Labour to National, then to the Greens, so why not New Zealand First?

The CHAIRPERSON (H V Ross Robertson): The member makes a good point. I did actually consider that before I gave the call. I looked at the whole issue of proportionality, and I am going to call Andrew Williams immediately after Clayton Cosgrove.

Rt Hon Winston Peters: No, no, no—point of order.

The CHAIRPERSON (H V Ross Robertson): The thing is, Mr Peters, as you well know, once I have made the call, and I have called someone, I have to stick with that call.

Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. With the greatest respect, the last thing we should have is a rule where you can make an erroneous decision, and the House cannot help you to correct it. You know, the House is the master of its own destiny, and therefore you could correct it. The real point here is that I do not know how you get the proportionality of it all, but I cannot see how, in any way that it is worked out, you could come to that decision if the Greens were going third. Now, honestly, if you are going from a sequence—and I have seen the rest of the sequence with the other parts of the bill in this House—I cannot follow this one here, and I would hate you to start with a mistake that becomes a precedent, which does not serve, after all, the interests of the minority. And, after all, your No. 1 job is to look after the minority in this House.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member and refer him to Speaker’s ruling 26/4 and Standing Order 102. I accept what he says and recognise the contribution that he has made. It will certainly not be a precedent. We are in the Committee stage of the House.

Hon CLAYTON COSGROVE: Just acknowledging, I am sure, that the New Zealand First speaker to follow will make an exceedingly good contribution. Can I just say that I listened to Mr English’s speech and it was very interesting. I listened to it because I was waiting, as all New Zealanders have waited since before the election campaign, for a justification, for a rationale, for the case to be made. After all, you can spray and pray, as it were, all over every other political party in this Chamber, but at the end of the day the Government is required to make a case for its actions. And no case has been made. In fact, the case has been contradicted, and the arguments have been contradicted, day after day and month after month by this Government. All Mr English succeeded in doing was to reinforce to this Parliament and the people of New Zealand that he has failed—and continues to fail—to make a justifiable case for the sale of these assets.

After all, as the Green colleague said, if you go through the history of this—Russel Norman is right—the first justification put up by Mr English was that these assets must be sold because in order to grow they require capital, and the Government has no capital. Then Mr English—after, I think, an interview with me—got out his School Certificate “BusCom” textbook and worked out and looked up in the dictionary a word called “dilution”. He then realised, as Tony Ryall did, that, hang on, if the minority then move to make a capital raising and the Government, because it said it had no dough—that is why it has to sell—did not move on that in an equivalent way, then its ownership would be diluted below 51 percent. And in this House, in answer to my question, Tony Ryall said that the Government would do whatever it takes—whatever it takes—to maintain its 51 percent ownership, including borrowing, including taxation, including whatever it takes. But I thought Mr English and Mr Ryall came from a position that these assets had to be sold because the Government had no money and was not prepared to borrow or tax to fund the growth strategies of the State-owned enterprises. So that is contradiction No. 1.

Then we come to another couple of key issues. The Budget Policy Statement—who in their right mind would believe it would be a good proposition to save debt-servicing costs of $266 million per annum, and give away profits of $360 million per annum, and then make a $100 million loss? Who in their right mind in this Parliament or which business people would see this as a net positive solution, a net positive strategy and proposition for a business or for this Parliament? That is contradiction No. 2.

Then, of course, we come to the issue of loyalty bonuses. Well, here is the problem with loyalty bonuses: loyalty bonuses are an admission of defeat by Tony Ryall, John Key, and Bill English. They have told us for months and months that they expect that 95 percent or 85 percent of these companies will be purchased by mum and dad Kiwis, and then they have demonstrated weasel words because they have talked about ACC, and then they have talked about superannuation funds, including KiwiSaver and other things. But, no, no, no—we know what the definition of a mum and dad Kiwi is. The admission of defeat is that if you have to give mum and dad New Zealander a loyalty bonus, you know that if they purchase at X price and a foreign interest or institution offers them a greater value to sell, then they will because Kiwis will do—and I mean no disrespect to Kiwis—what is in their interests to look after themselves.

All the loyalty bonus does, of course, is put off the fateful day, maybe by 12 months, maybe by 2 years. You get your one free share to 15, and you flog the lot off. There is no guarantee in this legislation in any part, particularly Part 1, that Kiwi mums and dads will be the first in the queue. There is no guarantee at all. The Minister for State Owned Enterprises has already said, of course, that he will not stop anybody onselling to anybody. And we know, of course, as David Shearer said, that if foreigners buy just 15 percent of these State-owned assets, then that is 100 million bucks a year, on top of the $120 million the Government is wasting on consultants and merchant bankers and on top of $100 million it is wasting because its debt-servicing costs are less than the profits they forgo. There is $300 million offshore or wasted or not put back into our communities as they are now.

Then we come to the 10 percent ownership cap, of course. Well, here is the difficulty with that. There are no penalties in this legislation. We have had submissions to the Finance and Expenditure Committee that said you could drive a bus through it. You could absolutely drive a bus through that 10 percent ownership cap.

Drawing on some specific amendments, though, David Shearer made reference to the Ombudsman and the Official Information Act. Here is the proposition that we have put; it is another contradiction for the Government. One of the alibis for selling these shares is that in selling the State-owned enterprises, somehow the metaphorical commercial sphincter muscle on certain people in the State-owned enterprises—the chief executive officers, the chairs, and the boards—will tighten, as it were, as they come under scrutiny from this thing called the market and the odd financial analyst. But let me say this to those geniuses over there. A quarterly report, an annual general meeting, and some good solid business journalism is far less superior in respect of scrutiny than being able to ask that Minister in the House every day questions on State-owned enterprises; than dragging, as we did, before the Finance and Expenditure Committee the chairs, the boards, and the chief executives of these State-owned enterprises and grilling them under financial review; than utilising the Official Information Act so that journalists, members of the public, and members of this Parliament can get information about what is going on; and than utilising the Ombudsman so that journalists and members of Parliament and the public can find out what is happening. Using the quasi-inquisitorial powers of this Parliament to haul them in, bring them before a select committee, and put their feet to the fire is gone. We cannot be told in this Parliament that somehow a little bit of market scrutiny is going to be more effective than this House.

It is interesting what Jenny Shipley, the chair of Genesis Power, said when she came in. I put a question to her. She is a person who is on boards both in the private sector and for a State-owned enterprise. Her board membership is made up of directors who are on boards in the private sector and for a State-owned enterprise. I asked whether it was conceivable that somehow in governing her State-owned enterprise she would use a second-class model. She would walk through the door of a private sector board and say “I’m going to operate to commercial world’s best practice.”, but when she walks into the boardroom of a State-owned enterprise, she will knock back a notch and operate to a lesser standard. She said no. Asked what difference it would make whether they were sold off or in public hands, she said it would make no difference at all. They will operate to world’s best commercial private sector standard. So that is yet another contradiction—yet another contradiction.

We will be proposing amendments in this debate in respect of removing those State-owned assets from the State-Owned Enterprises Act. We will be proposing amendments in this debate of making them subject to the Official Information Act, making them subject to parliamentary processes, and making them subject to the Ombudsman, so that Kiwis, even if all they are left with is the Crown ownership—owning 51 percent—will be able, as they are entitled, to get answers in a transparent and accountable way. You see, the alibi that will be used by this Minister and his Government when they are sold privately is: “Oh no, no, no—the market will sort it out. The market will scrutinise. The market will find more accountability than this Parliament can.” I cannot find too much more accountability than putting to the fire the feet of the Minister, directors, and chief executive officers before a select committee, before this House, utilising the Official Information Act and utilising, like Air New Zealand—

Rt Hon Winston Peters: Like KiwiRail.

Hon CLAYTON COSGROVE: —yes, indeed, KiwiRail—and utilising the Office of the Ombudsmen. So I challenge the Minister to tell me, and to tell this Committee, that some sort of private sector market scrutiny is going to be harsher and at a higher level than that. You have a former Prime Minister, Jenny Shipley, who was very much in favour—we did not bother asking her what her view on State-owned enterprise sales would be, given her history and lineage—and is the chairman of the board, saying it will make no difference whether it was sold, private or public. Chris Moller came in, and the only point he made—no disrespect to the good man—was that if they are private, we might be able to attract a few more highly skilled people into them. Well, I have got to say that if that is one of the justifications, that is a huge call—a huge call. That may be because the salaries are going to go up.

When we talk about price rises, here is something that Mr English never touched on before the Finance and Expenditure Committee, nor Mr Heatley today, and Mr Ryall refused. They blocked our request at the Finance and Expenditure Committee to have an analysis done on Molly Melhuish’s calculation about price rises—State-owned enterprises mark to mark to the private sector suppliers. They blocked that advice at every step of the way. They refused. Bill English said it was not worth getting the work done, and refused to get that advice. I would have thought that if we are wrong they would be racing to Treasury and to their officials, the Ministry of Economic Development and the like, to get the justification to try to knock us over. Or is it the case that we are right, and they do not want explicit advice to their Ministers saying that it is going to be a rough old winter, and a rough old winter for the next few years and beyond for the poor old Kiwi consumer? Yet again, we are blocked at every turn, and this Government, at the end of the day, must front up—

Hon TONY RYALL (Minister for State Owned Enterprises) : That was a most interesting contribution from Mr Clayton Cosgrove, and more interesting by the fact that he mentioned the words “lineage” and “history”. Well, let us look at his lineage and history in terms of his involvement in politics. He was one of the key men backing the Rt Hon Mike Moore, senior Labour MP in the Government of 1984-1990—

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. Although I share the Minister’s respect for the Rt Hon Mike Moore, I think I was about 14 years of age, and I ask what the hell this has to do with the Mixed Ownership Model Bill.

The CHAIRPERSON (H V Ross Robertson): It is hardly a point of order, but I was going to say to the member that the member is replying to a speech, and he is able to do so under Speakers’ ruling 46/2. But, of course, that goes on for only a limited time.

Hon Trevor Mallard: I raise a point of order, Mr Chairperson. He is just not allowed to blatantly mislead the Committee. I am not going to say that the member, Clayton Cosgrove, looks his age, but I think all of us know that he was not in the Minister’s office when the Rt Hon Mike Moore was a Minister, and at least for most of that time he was at school.

Hon Clayton Cosgrove: I was indeed. It’s a great school.

The CHAIRPERSON (H V Ross Robertson): A debatable issue, mind you, but I appreciate the point that has been made. I am going to call the Hon Tony Ryall. Your time will start again.

Hon TONY RYALL: He was certainly very active out there on the streets in support of Mike Moore. The point is this. Mike Moore, Annette King, Phil Goff, and Trevor Mallard all traipsed through that lobby to sell almost $10 billion of public assets during the 1980s. Mike Moore, Annette King, and Phil Goff—until recently the shining lights of the Labour Party opposite—together with Trevor Mallard, under urgency, time and time again went in and flogged off $10 billion worth of public assets.

Parliament could not be debating the Mixed Ownership Model Bill at a more important time. When you look at what is happening on our television screens every night—what is happening in Greece, what is happening in Spain, what is happening in Portugal—countries that are not in control of their debt are losing control of their destiny. Unless Governments take decisive action to control their debt, then their economic situation gets a lot worse.

It is worth reflecting on debt because this bill is about helping New Zealand control our debt. Controlling our debt becomes more important by the week when you see what is happening internationally. In 2008 when this Government led this country, when it took over, we had a national debt of $8 billion. Today it is $52 billion, as this Government has moved to soften the sharp edges of recession. In 3 years’ time it will be $72 billion—$72 billion. New Zealand cannot let its debt get out of control, and that is the reason why this Government is taking decisive action to do this. It is part of a wider plan that this Government has to help control debt and manage our economy into the future.

But over the next few hours of this debate members are going to hear a lot of disingenuous arguments from the members opposite. You are going to hear, as you did with Mr Norman, that this bill does not reduce debt. That is what he said: this does not reduce debt. Well, I would just look at the 2012 Budget Policy Statement—he did not mention that—where it says quite clearly: “The overall fiscal impact of mixed ownership is: a reduction in net debt.” So you will hear about that, but the fact is that it does help control debt. The proceeds go into a Future Investment Fund, which is used to invest in schools, hospitals, and other assets.

The second argument, which has just come up in the last few days, is that this will push up prices. But it is completely inconsistent with the speech that Mr Cosgrove just gave. Mr Cosgrove said he brought the chairmen of the boards before the powerful Finance and Expenditure Committee, and they all said they would not do anything different whether the entities were public or private. That is what Mr Cosgrove said. All three chairs said they would do nothing different whether the entities were public or private. But then, on the other hand, we have got the lefties saying that if they are privately owned the directors are going to put the prices up. So on the one hand, they say it does not matter who the owners are, and then, on the other hand, they say that if you change the ownership, up go the prices.

The fact is that there is a highly competitive electricity market in New Zealand today—highly competitive. In the last few months 420,000 New Zealanders changed power companies—420,000 people changed power companies. The Labour Party says New Zealanders are so dumb they do not know how to change power companies, and so they are all being ripped off by private electricity companies. Many of those 420,000 people changed to private companies. They changed to all sorts of companies as a result of the power switch, and that is very, very positive and a good sign.

The third thing that members opposite are going to tell you is that these shares are all going to be sold off to foreigners. Did you hear the story today? Mr Shearer said it. These New Zealanders are going to get these shares, then they are going to be offered a price, and then they are going to sell them to the foreigners. Well, I am standing on this side of the Chamber because, actually, I trust New Zealanders to hold shares. The fact is that that side of the Chamber does not think that ordinary New Zealanders are good enough to own shares. Those members opposite do not think New Zealanders are good enough to own shares. Who do they think these uppity people are who think they can own shares? Who are they—these electricians—who think they might be able to put some of their savings into shares? Who are these uppity tradespeople who may want to buy some shares? They cannot be trusted! They will flog them off at the first opportunity! We in the Government do not believe that. That is the attitude of the Labour Party and the Green Party to ordinary people: they cannot be trusted to own shares. We think they can.

We think the Port of Tauranga is a perfect example of how sensible New Zealanders make decisions. Port of Tauranga is 55 percent owned by local government, which is like central government, and 45 percent is owned on the sharemarket. Those shares were issued, generally, to New Zealanders. If you follow the Labour Party’s line, all of those shares would have been sold to foreigners, because you cannot trust ordinary people to own shares, can you? That is what Labour says. In respect of the Port of Tauranga, which is a mixed-ownership model type of company on the New Zealand Exchange, the New Zealanders are buying out the foreigners. The New Zealanders are buying out the foreigners, because we trust them.

Scrutiny of the companies is another argument that you are going to hear. The fact is that because the companies will not necessarily appear before the Finance and Expenditure Committee—Air New Zealand does; it is a mixed-ownership model company—there will not be any good scrutiny of these companies. Well, they appear once a year before the all-powerful Finance and Expenditure Committee, but, in the end, what is going to hold these companies to the fire is the continuous disclosure required by the New Zealand Exchange and the fact that very smart analysts are going to be looking at these companies to see how they are being managed and are performing and, actually, are going to be helping to improve the value of the Crown investment as well as the private investment.

So this legislation does a couple of things that these people opposite would never want to admit. It legislates 51 percent New Zealand Government control, full stop, for all time—51 percent full Government ownership for all time, full stop—and it puts a limit of 10 percent on any one shareholder. There will be 51 percent Government control, and a 10 percent limit on any shareholder. That is important, and that is what is being enshrined in this legislation.

Over the next few minutes and hours members opposite and members listening will hear a lot of arguments, but remember that they are being made by the party that sold almost $10 billion of public assets. But here is the difference: Labour never told the public it was going to do it. When Annette King, Phil Goff, and all the other members on the front bench—David Parker, Grant Robertson, and Clayton Cosgrove—were out campaigning for Labour in the 1980s, did they ever tell the people Labour was going to sell Telecom to the Americans and Fay Richwhite? No. Did they ever go to tell them that it was going to sell a whole lot of the forestry rights to foreigners? No. Did they ever tell them Labour was going to sell the Shipping Corporation to foreigners? No. Labour kept it a secret in the 1987 election—it kept it a secret that it was going to have these sales.

This Government has done the complete opposite. We campaigned on this issue. We told everybody about this plan and these five companies in January 2011. We were not like Phil Goff, Annette King, and Trevor Mallard, who kept it quiet and never got a mandate for it. This party got a mandate in the election. That party spent its entire campaign—its feckless, hopeless campaign—on this single issue, and got the lowest vote it has ever had in the history of the Labour Party. It was the lowest vote it has ever had in the history of the Labour Party. This party—

Paul Goldsmith: In 1915 it was worse.

Hon TONY RYALL: Oh, in 1915 it got lower. Right, but it was the lowest vote ever in the history of the Labour Party. This party got the highest vote ever in the history of an MMP election. So the contrast could not be more stark. When Labour sold $10 billion worth of assets it never told anyone, it never got a mandate, and it did it under urgency. This party campaigned on it for a year, we have been upfront about it, and we are not rushing this legislation through. There was a select committee process; there was no select committee process when Labour sold $10 billion worth of assets. This party has followed a very good, rigorous, publicly endorsed, open process, and the fact is that this Government is making the important decisions as part of a wider plan to help get this country moving forward.

GRANT ROBERTSON (Deputy Leader—Labour) : I seek leave of the House to table a list of the National caucus and Cabinet in the 1990s, when it sold assets including Contact Energy—including Mr Tony Ryall.

The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action being taken? There is none.

• Document, by leave, laid on the Table of the House.

Hon TREVOR MALLARD (Labour—Hutt South) : I seek the leave of the House to table the report of the select committee—I think it was the Government Administration Committee—on the State-Owned Enterprises Bill when it passed, I think, in 1988. I sat on that committee, and for the member to say it did not exist—

The CHAIRPERSON (H V Ross Robertson): Order!

Hon TREVOR MALLARD: —just would indicate that he is either mistaken or a liar.

The CHAIRPERSON (H V Ross Robertson): Order! The member knows you cannot use the last word. He will withdraw the last word that he used.

Hon TREVOR MALLARD: I withdraw.

The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action being taken? There is.

ANDREW WILLIAMS (NZ First) : I rise on behalf of New Zealand First to oppose the Mixed Ownership Model Bill, the bill that is also known as the “Flog Off the Family Silverware Bill”. Firstly, can I just put the member from Dipton in his correct place. He stated earlier, and he lay down a challenge, asking whether any of the Opposition parties would categorically assure the Committee that the State-owned assets that are sold off would be taken back under State control. Can I assure you that New Zealand First, in accordance with its past principles of being the one party that has stood up for the retention of State assets and not selling State assets, has submitted an amendment in the name of our leader, the Rt Hon Winston Peters, which provides the right for the Crown in the future to take back these assets, and gives the Crown the option to exercise its right to take back the assets—and this is the point—at a price no greater than the assets are sold at. So this is forewarning, and the Government is on notice, but the people of New Zealand, moreover, are on notice that when this Government is removed in perhaps 2 years, maybe fewer, and maybe in a very short space of time, and there are new Ministers on the front benches taking control of this country, with New Zealand First involved in that, we will assure the New Zealand public that we will move to acquire these assets back. That is an assurance we have. We have a precedent here with KiwiRail, when New Zealand First worked with Labour to buy back KiwiRail. So there is a precedent, and we have managed to get KiwiRail back on its feet as a result. Once again we will buy these assets back.

I would like to read something. I would like all members, including those on the other side of the Chamber, to listen to this very carefully and tell me at the end of it who they think may have written this. The words are: “New Zealand’s economy depends on natural resources and energy to survive and thrive.” Are you listening, Leader of the House? I want you to work out who said this. “Almost all our exports—from tourism to agricultural produce—have a major component of these in production, processing or transport. In a world increasingly starved for available, affordable energy and other commodities many countries are threatened—but our indigenous natural resources make us one of the world’s richest nations.”

It goes on to say—and I hope I have given you enough clues, and I hope the National members have had enough clues—that its leading technologies “will provide secure, affordable and environmentally acceptable energy and other important products to help make”—and listen to this important point—“our economy one of the most competitive, and to support the standard of living New Zealanders expect, for many decades into the future.” The source of that statement is Solid Energy, on its very own website. The State-owned enterprise of which this Government is about to flog off 49 percent says that for the future of New Zealanders we depend on the assurance of having them. It is amazing that one of our own State-owned energy companies, Solid Energy, would say how important these resources are to the future of New Zealanders.

Many New Zealanders do not really realise—they hear this comment about “Oh, there’s three power companies being sold off, and Air New Zealand.”—but I want to bring it back to what these power companies actually are. Firstly, let us think about Mighty River Power. It has hydro power stations on the Waikato River, from Taupō all the way down to the lower reaches of the Waikato, including great dams like Karapiro and like Ātiamuri. Mighty River Power also has four geothermal power stations in the Taupō-Rotorua area, and we have all driven through that area of the North Island and seen the wonderful geothermal power stations that are owned by Mighty River Power. It also has a gas-fired power station. It is one of the top 10 companies in the world in geothermal energy production, and it has interests in South America, in North America, and in Europe, so it is an internationally recognised company, owned 100 percent by the New Zealand people but bringing profits and resources back to New Zealand from its international investments.

Meridian Energy has seven hydro power stations, and, again, they are iconic names such as Ōhau, Benmore, Aviemore, the Waitaki, and Manapōuri. The Manapōuri scheme was, you know, such a marvellous scheme for New Zealand. They also have four wind farms in New Zealand, one in Australia, and one in Antarctica. They also have a solar farm in California. That is Meridian Energy.

Then there is Genesis Energy, and it has three hydro power stations, including the wonderful Tongariro scheme running through the centre of the North Island, the Tekapō scheme down there at Lake Tekapō, and the Waikaremoana scheme at Lake Waikaremoana in the Ureweras. Genesis Energy also owns 31 percent equity in the Kupe oil and gasfield in Taranaki, and supplies 100 percent of the gas from the Kupe field to the New Zealand gas reticulation system. These are the sorts of incredible assets that this country has, which this Government wants to sell 49 percent of. You look at all those hydro power stations, you look at all those geothermal power stations, you look at the gas-fired power stations, the wind farms, the solar farms in California, and then that supply control, but also the major equity interest in the Kupe oil and gasfield, and this Government wants to flog those off, for between $5 billion and $7 billion for resources that will be there this month, next month, next year, in 10 years’ time, in 20 years’ time, in 50 years’ time, and ongoing. But the Government wants to sell them off now, for $5 billion to $7 billion, and that $5 billion to $7 billion, I will tell all New Zealanders, will all be gone in 6 months—gone in 6 months at the rate that this Government is increasing debt, from $52 billion to over $70 billion in the next couple of years.

So, Mr and Mrs New Zealand, if you are listening to this, tell this Government: “In 2 years’ time you will be gone. You will be replaced by responsible members of Parliament who will bring the likes of this amendment into being, the Rt Hon Winston Peters, and we will take these assets back and we will ensure that these resources and the wonderful generation of power, the gas, and the fuels that come out of these companies will be returned to New Zealanders, where they rightfully belong.”

As I said at the very beginning, this is the “Flog Off of the Family Silverware Bill”. This is a situation where in many countries this would be seen as being a traitorous act of treason on the part of the Government. To sell off your power and to sell off your natural resources is akin to treason. This cannot be condoned. I urge every New Zealander around New Zealand, if you have not yet signed the “Keep Our Assets” petition, sign it tomorrow, sign it this week, sign it in the coming week. Tell this Government. Hundreds of thousands of New Zealanders need to sign it. Tell this Government: we want a referendum on this. We want to take you to task. We want to hold you accountable, and we will not allow our precious resources and our power schemes, and also our national airline—we can throw it in the piece—to be sold off just so that these short-sighted National people can make 6 months’ profit on it.

Hon DAVID PARKER (Labour) : We heard Bill English say repeatedly that there was only one question that mattered, and the question that he kept putting to this Committee is what the Labour Party would do if we are re-elected. Not once did he address the issue as to whether this is the right thing to do, which is the question that this Government should be asking.

I am going to put a number of other questions that the Government should be answering on this, which are very important, and which the Government has not addressed. Will this increase the Government deficit? I want to ask the Minister in the chair, the Minister of Commerce, whether, on Treasury’s advice, this plan of the Government to sell off half interests in these State-owned enterprises will increase the Government’s deficit. Will it? Mr Foss is in the chair. Can he answer that question? Will it? It is a very simple question. Is it the advice of Treasury that this will increase the Government deficit, the operating balance before gains and losses, by about $100 million a year? I can tell the Minister, if he will not tell the Committee, that it will. I can also tell the Minister that that was hidden from the New Zealand public at the time of the election, because his Government and Treasury, under this Government’s watch, did not account for the loss in profits. Although it said it would bank the money from these State-owned enterprises sales, it did not calculate what the loss of profits would be that would increase the Government’s deficit.

This is another question that I want answered by the Minister in the chair: will, over time, this increase the current account deficit for this country? Will it increase the current account deficit? Again, if the Minister is willing to take a call on that, he will have to admit, if he is not going to mislead the Committee, that it will increase the current account deficit, because the interest saved on the money that is not borrowed from overseas is less than the share of profits that will go to those overseas shareholders. Indeed, Treasury says that up to 30 percent of the shares being sold—which is a total of 15 percent of the actual company, after only half of it is sold—could end up in overseas ownership.

I want to ask the Government another question that the Minister of Finance did not address. Why is it that the most important part of the Government’s economic plan for these 3 years is changing the ownership of what already exists? You know, if this is the central part of the Government’s economic agenda, what does that say about the inadequacy of its plan for our economy? The reality is that this sort of ideological burp that we got just before the election was a consequence of the Government being on the ropes and feeling the criticism that it had no adequate plan for the economy because its members are conservatives, and all conservatives generally do is trim back on expenditure a little bit, fiddle, and not really do anything progressive to change the shape of the economy. So in the face of that criticism the Government came up with its so-called plan, which is to sell the State-owned enterprises. That does absolutely nothing to improve the output of the New Zealand economy, it does not increase our exports, and it makes our current account deficit worse, as well as the Government deficit.

Now to the other question that Mr English should have been asking. Instead of the single question that he was asking, which was what the Opposition would do post the next election, he should have been answering what the effect is going to be on power prices for residential consumers. At the Finance and Expenditure Committee we had not one generator and not one electricity retailer give evidence. We did not hear from the Electricity Authority and we did not hear from the Ministry of Economic Development as to what would be the effect on power prices. The only information that we got on what would be the effect on power prices was from some of the submitters opposed to this provision—notably Molly Melhuish, who is well known to many New Zealanders as having been a commentator on these issues, whom I hear the National members slinging off about in interjection now.

Paul Goldsmith: I said she was very well known, that’s all.

Hon DAVID PARKER: What is that?

Paul Goldsmith: I said she was very well known.

Hon DAVID PARKER: You said that she was very well known. Well, thank you for that. She is part of Grey Power, and her activism in these areas and her knowledge of the electricity markets goes back many years before her involvement in Grey Power. She gave evidence to the select committee that even now State-owned enterprise power prices are $265 per annum cheaper on average for a residential consumer who gets their power through a State-owned enterprise or one of their subsidiaries, compared with those who are buying from the private sector. Mr Ryall stood a second ago and asked whether New Zealanders are so naive that they get power from people when it is more expensive from a private sector participant than a State-owned enterprise. The answer to that is, sadly, that that is the reality—that New Zealand’s electricity market is not perfectly competitive. Indeed, if it was a perfectly competitive market we would not have an Electricity Authority and we would not have rules governing the conduct of the market to at least try to make it a little bit efficient. That book of rules is thicker than the Bible. This is a very complex and uncompetitive market, and it surely is not purely competitive.

Because we did not have any evidence from a power company, a power generator, we could not ask them whether that data was correct. Because we did not have any evidence or advice from the Ministry of Economic Development to the select committee, we could not ask it whether that information was right. So the only way we could verify that information was through asking Treasury officials, and when we did that, what did National do? It closed down the select committee 5 weeks before we were due to report back so that we could not dig into that. What did we do in response? We asked the Minister of Energy and Resources in the House today whether that information was correct or not. And we asked, if it was not correct, the average price charged by non - State-owned enterprise deliverers of power to residential consumers, compared with State-owned enterprise deliverers of power or retailers. And what did we get? We got blather from the Minister. We got the Minister being criticised by the Speaker for not having answered the second part in a primary question.

Why is that question not being answered? It is because National knows that the truth is that State-owned enterprise power prices to residential consumers are significantly lower: 12 or 13 percent—$265 per annum—cheaper. And that margin will dissipate if we strengthen the profit maximisation model, if we remove the sense of community responsibility or the community responsibility obligations, and if we move to a price maximisation model. We are already seeing their cost structures increase. The increase in the salary for the chief executive of Mighty River Power this year was $400,000. That is not a salary of $400,000; that is an increase in the salary of $400,000, from $1.3 million per annum—already an incredibly high salary—to $1.7 million per annum. The Minister of Finance has already acknowledged that that is because Mighty River Power is moving to a more commercial model. Its cost structures are going to go up, and its prices will follow.

This Government is out of touch. It is out of touch on not just this issue; it has been out of touch on other issues. It has not got an adequate plan for the economy, and so it is left flailing around doing this sort of ideological thing. This is also going to increase asset inequality. Tony Ryall said: “What’s the problem with New Zealanders owning these companies?”. Well, they already do. What is wrong with New Zealanders already owning all of these assets through their Government? There are no efficiencies to be gained here, or, if there are, they are very, very minor. There are power price increases that will come as a consequence of this, and asset inequality is going to increase because the people who can afford to buy most of these shares are the wealthiest people in society. The people who cannot afford any shares are the poorest people. The wealthiest people in New Zealand, of course, are, plainly, whom this Government serves. Forty percent of the income tax cuts went to the top 10 percent of income earners in New Zealand. Those are the people who are going to be acquiring these shares, not mums and dads on average incomes. Mums and dads on average incomes do not have the money in their pockets to acquire these shares.

I think it is an outrage that we have not yet had any acknowledgment from the Government of a matter of fact, which is that the State-owned enterprises charge less, currently, for residential power than their private sector comparators, on average. I am going to give you another example of this. Alexandra is a small town. It sits on the banks of the Clutha River, right next to the Contact Energy dams on the Clutha River. There is an enormous amount of power produced in that area. Power charges for people in Alexandra are higher—this is not lines charges; this is their power charges—than people pay in Auckland and Christchurch per unit of electricity. How can that be right? How can that be right? That shows that this market is not competitive. Indeed, in that area—again, in the Alexandra area—31c or 32c per kilowatt hour is charged by Contact Energy. Meridian Energy charges about 28c, about 10 percent less, in that area. Even now—

TODD McCLAY (National—Rotorua) : What I would say to the last speaker, David Parker, who raised the issue of process through the Finance and Expenditure Committee, is that the time for crocodile tears is over. That member and other members of the select committee had eight long meetings to ask any question they wanted to. The committee gave every opportunity at every meeting for questions to be asked. And what happened? At the eleventh hour, when it was time to deliberate, they were raised. So when—

Hon David Parker: I seek leave to table the minutes of the Finance and Expenditure Committee—

The CHAIRPERSON (Eric Roy): Order! The other day I cautioned the member that he should not interrupt a member on his feet. I am not denying the leave being put; I am just saying that there is a convention.

Hon David Parker: Misrepresenting. He invites it.

The CHAIRPERSON (Eric Roy): Well, it is not for the Chair to judge the veracity of the comment. This is a debating chamber. Other members can respond, and the member can, between speeches, seek to table documents.

TODD McCLAY: I recall—and this is a part of my speech, not speaking to the point of order—that that was put up last week and members tried to table it. It is time to move on, and that was the point I was making. Members opposite are telling us about a rushed process. Well, let us put our mind back to the comments that the Hon Tony Ryall made earlier. Let us talk about a rushed process and how people change their mind about what is good one day and not good the next. We heard from Tony Ryall that Phil Goff, Annette King, and Trevor Mallard were part of this House as Ministers when $10 billion worth of New Zealand assets were sold—not partially sold, not 51 percent held and guaranteed in the Crown so that the Crown had the absolute say; no, 100 percent were sold. Of course, no member opposite who was a member of the Labour Party then or today would say that that process was changed.

New Zealand Steel was sold in 1986. What was that? It was done under urgency. Petrocorp was done under urgency. For the Post Office, the first and second readings were under urgency, and there was no select committee stage. It was all right back then, but here we are today in this Committee with members opposite saying that they did not have an opportunity to ask important questions that they needed to ask. There were more than eight meetings of the committee where Treasury, our advisers, was there. Did they raise those issues? Not on the first meeting, not on the second meeting, not on the third meeting or the fourth, or the fifth, or the sixth, or the seventh—but on the eighth meeting, when it was time for the committee to deliberate, that is when they decided to stand up and all of a sudden it was important to them.

Air New Zealand is here as part of this bill today, the Mixed Ownership Model Bill, and we considered this in the select committee. Air New Zealand—what happened there? Labour got rid of all of it way back in 1987 under urgency—again under urgency. There was not an opportunity for the New Zealand public to come before us—not an opportunity for the New Zealand public to come and have their say. It was done under urgency. And then we have the Tourism Hotel Corporation. Guess what? It was done under urgency. The only thing that was not urgent about that piece of legislation was the service you got at the time from those hotels. And can I tell you, as some of them are now in my electorate, they do very well. Does the Government own 51 percent of those? No. Labour sold all of them.

Here is the one you will hear a lot about. You will hear all about service, you will hear all about what is wrong, and you will hear all about why it should not have happened. In 1990 Telecom Corporation of New Zealand was sold under urgency—100 percent of it was sold under urgency. Can I say to the last speaker that the time for those crocodile tears, the time to pretend that you care about New Zealanders, is gone. You had an opportunity in our committee; you did not take it. The member opposite did not take it, in all of those meetings.

There is a difference between what we are doing on this side of the Chamber and what members opposite pretend they care about. And what is that? Well, it is about debt. They will tell you that this makes no difference at all, but look at what has happened in Greece over this last weekend. Look at the challenges that they face all over Europe because of debt. Members opposite will say to us: “It’s OK, let’s borrow a bit more; let’s keep investing in assets by borrowing a little bit more. It doesn’t matter.” Actually, what they will say to you is “Let’s push the age of retirement up by 2 years.” to pay for the woeful decisions they have made and will make when it comes to spending. But that is not fair to New Zealanders, and I recognise that members in other parties in Opposition also believe that it is not fair to New Zealanders to make them work harder for bad economic decisions that that party has made.

Our debt level is to peak at 30 percent of GDP. That is right—that is $72 billion of debt that New Zealand will have. Well, guess what? We heard, when we were in the select committee, about how much of New Zealand the Crown owns—$245 billion of assets all over the country. We aim to grow these over the next 4 years to $267 billion of assets. What we have also said to New Zealanders is that there will be 3 percent of those assets that we will offer you the opportunity to purchase—3 percent. Not only that but we will not do what Labour did through the 1990s when it gave away $10 billion of New Zealanders’ assets without any consideration of keeping them for themselves, without any care about—

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. As the member’s speech finished, I was going to invite him as to whether he wants to make a correction now or later as to who was in Government in the 1990s selling assets. I think it was National.

The CHAIRPERSON (Eric Roy): Order! That is a debatable point. [Interruption] Order! The member should not comment. It is not, as I said earlier, for the Chair to judge the veracity of any comment that is made in this Chamber. This is a debating chamber, and sides get equal opportunities to put things. That is how this Parliament actually works.

Dr DAVID CLARK (Labour—Dunedin North) : I seek leave to table the minutes of the select committee, which show that we sought advice from Treasury about the effect of power prices.

The CHAIRPERSON (Eric Roy): I just want to be quite clear about this, because we had some time last week ascertaining that when you seek to table the minutes of the select committee, it is pertinent only—[Interruption] So the member needs to make that clear, which I have now ensured. Leave is sought for that purpose. Is there anyone opposed to that course of action? There is.

Dr DAVID CLARK (Labour—Dunedin North) : I rise to speak to Part 1 of this bill, the Mixed Ownership Model Bill, in the Committee stage.

Mr Ryall earlier spoke of a mandate for these sales. I think that he did that wilfully, knowing that, in fact, that is not the mood of the nation. The nation is opposed to these sales, and is opposed in great numbers. More people in the election, in fact, voted for parties that opposed this legislation than parties that supported it. At the Finance and Expenditure Committee just 0.6 percent of submissions were in favour of this legislation, and we received over 1,400 submissions to that select committee. One submitter likened the selling of these assets to selling your kidneys to pay for dialysis. The mood of those submitters was very clear. They wanted to send a very clear message to the Government that the general public do not support these sales. In fact, over the weekend, somewhere between 1,000 and 2,000 people in Dunedin, the Otago Daily Times says, were out marching against the sale of these assets. So for Mr Ryall to claim a mandate is a very bold move and, I would suggest, a foolish one. People are marching in the street against this legislation.

It was a terribly rushed process. Mr Todd McClay just alluded to the process. He said there had been many, many comments about the rushed nature of the process, and that is true. Many submitters were clipped, questions were limited, and they were not allowed more than 5 minutes generally, unless they were representing an organisation.

Todd McClay: Rubbish! Young Labour had 30 minutes and I’ll never get that back.

Dr DAVID CLARK: Mr McClay now says that is rubbish. Well, I think if we ask the submitters again, many of whom complained at the time, they would restate that that process was not one that they considered desirable or sufficient in a democratic sense. Teleconferences were called at short notice, meaning some people could not attend them. And the legislation was sent 5 weeks early back to the House, as David Parker noted, without advice from Treasury on some subjects where we thought advice was warranted. These decisions should not be taken lightly, particularly where taxpayers are put at risk of additional charges for electricity, and also at risk of losing dividends, and where Treaty risks exist. These points are all relevant to Part 1 of the legislation, and I want to speak to them in a little more detail, as I go on. We had no ability to ask questions of Treasury, which had, in fact, already drafted its report before we heard all of the oral submissions. Treasury had drafted its report before we heard all of the submissions.

Hon Members: No, no!

Dr DAVID CLARK: Outrageous! That is the kind of process we have seen here. This Government is afraid that its support parties will walk away. It knows that this is not a done deal, in the pure sense of the word. It knows that some of its support parties may just walk away, because they realise that it is not a process that has been transparent and fair. The Government has put a back-down clause in the legislation, and we would say to it that there is a simpler way of doing this: it is simply to back down before the legislation passes.

I want to speak specifically about the removal of the social responsibility clause from the governance arrangements for these companies. This will have a chilling effect, I would suggest, on the way these companies operate. No longer will the Crown be able to investigate in the same way any poor practices, anything that puts lives at risk, in terms of the management of electricity. If brownouts or blackouts affect people in their homes, if, as we heard one submitter from Grey Power suggest, people freeze to death because of this legislation, there will be no comeback. In the past, when issues have been raised—and I think of the terrible Muliaga situation, where a person’s life-support went off with the power—there has been an accountability. The Government was called to account on that matter. That is removed with this change in legislation. There will be no social responsibility clause that says that the Government should be answerable for the power staying on, for making sure that people do not freeze to death in their homes.

It is also true that Treaty obligations are being removed from private investors. Currently, the Treaty obligations in the State-owned enterprise legislation apply to the Crown. The Crown has to take Treaty matters into account, as it considers its actions, as it buys and sells parts of the operation. The risk is that with the sale of individual assets made more possible with a large private stake in these things, future settlement options may be sold off. Māori interests have raised this concern with the Government. The Government is putting all of the obligation for these Treaty risks on the taxpayer, but it is actually taking away its ability to manage and control them by leaving the private shareholders without that risk open to influencing the decision-making process. Of course, there are concerns about kaitiakitanga, along with those other concerns about assets being sold off.

One of the other frightening aspects of the proposed changes is the removal of Official Information Act oversight. The reason given for this by the Government is that these operations should be able to operate commercially as other private, commercial operators do. Well, they do, actually, now, and the fact is that they have been running and returning good dividends to the Crown, with no impediment caused by the Official Information Act. There are, indeed, commercial protections in that legislation that make sure that the operations are protected in terms of any commercial risks that may otherwise be disclosed through the Act. So we have that protection there already.

The Ombudsmen took the unusual step of appearing before the select committee, to outline the risks of removing the State-owned assets from that legislation. They said that they believe in fair, just, and transparent scrutiny of majority publicly owned companies, and they believe that this should continue. There is no evidence that commercial interests will be harmed by not removing these assets from the Official Information Act. In fact, what we heard from several submitters is that there are, indeed, risks that go along with removing these operations from the Official Information Act. One of those risks is that the companies will act in a way that is not transparent and fair. We will not be able to research as easily as we have been. Members of the public will no longer be able to put in Official Information Act requests to find out how decisions were made, even when those operations are majority public-owned. This seems a strange way of going, particularly when there are Treaty risks, as I have just outlined, and social responsibility risks that go with the changing of this legislation.

So it was a very rare submission from the Ombudsmen, and one that expressed a great degree of concern at the changes. If I quote from the Ombudsmen’s submission, the Ombudsmen said: “In our view, any possible advantage that may be seen in the [mixed ownership model] companies being removed from the Ombudsmen’s jurisdiction under the OA and OIA appears to be minimal, if not illusory, and needs to be balanced against the public interest in maintaining their accountability to the public of New Zealand, so long as the Crown retains a majority interest in them. We see no reason in principle for their removal, particularly given the potential removal of other accountability requirements.” It does not get much stronger than that in terms of the Ombudsmen’s willingness to step in and speak at a select committee process. We heard further from the Ombudsmen around the risks of profitability or otherwise. There just seems to be no reason for doing this.

We also heard concerns about cronyism in terms of board appointments and the processes that sit behind the board appointments no longer being able to be examined. We also found many researchers willing to say that they were concerned about these changes.

These are strategic assets that are being sold off. Mr Key gave his personal commitment to keep 85 to 90 percent New Zealand - owned, and I will quote him. He said: “We are giving people a commitment that 85 to 90 percent of the entire company will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” He said that in the leaders’ debate in November last year. Well, there is no provision for that in the legislation. So not only do we have these concerning removals of social responsibility, of Treaty obligation steps, and of Official Information Act oversight, but we have a commitment from Mr Key that is not worth the words that make it up, because there is no mechanism there to ensure that these strategic assets remain in New Zealand ownership. The mechanism simply is not there.

The Government has inserted the back-down clause, and, as I said earlier, I hope that it uses it. We know that power prices will go up. The private companies have significantly higher power prices, and, as I said earlier, Treasury was not given time to—

EUGENIE SAGE (Green) : The finance Minister said earlier today that many New Zealanders do not know about Mighty River Power and its business. That is enormously patronising. Thousands of New Zealanders understand about the sale of State assets, because thousands of New Zealanders are signing the referendum petition. I would like to comment specifically on the removal of the mixed-ownership companies from the purview of the Ombudsmen and the Official Information Act. That is because the Government does not trust its own mixed-ownership model, by removing the scrutiny of the Ombudsmen. Clause 6 of the Mixed Ownership Model Bill takes Genesis Power, Meridian Energy, Mighty River Power, and Solid Energy from under the application of the Ombudsmen Act, while clause 7 removes Solid Energy from the application of the Official Information Act. The other companies come out from under the Official Information Act by virtue of the fact that they are removed from the State-Owned Enterprises Act.

This is a major loss of accountability for these new entities. That is particularly because the bill also removes the ability of the Minister of Finance and the Minister for State Owned Enterprises to direct these companies to get information from them, and because it means that the social responsibility and good-employer provisions of the State-Owned Enterprises Act will no longer apply. The combined effect of these changes will be to substantially diminish both ministerial and public oversight of the mixed-ownership model, and that is totally at odds with New Zealanders’ interest in these companies as the majority shareholder. We have had the Ombudsmen as independent Officers of Parliament, separate from the executive, having a vital constitutional role for nearly 50 years. They have been a watchdog and a check on the abuse of power by Government departments and State-owned enterprises, and they have been a mechanism by which citizens can seek redress against overbearing power and make the State-owned enterprises accountable. They have investigated complaints under the Official Information Act and they have helped improve the way in which State-owned enterprises have dealt with those and with public information requests.

There was a strong and thoughtful submission from the Office of the Ombudsmen, which Mr Clark has referred to, opposing the move to remove their oversight. That means that the public will be largely impotent in terms of the accountability of these mixed-ownership companies, and so will the Crown. It is very ironic that the role of the Ombudsmen is being removed when, in the private sector, similar ombudsman roles have been set up in both banking and insurance for the very reason that they are seen as cost-effective and affordable when compared with the cost of litigation in the court. We have a previous major State-owned enterprise, Timberlands West Coast, where the Official Information Act and the Ombudsmen were both absolutely essential in providing oversight and scrutiny of that organisation. It was because of the information that members of the public and conservation and environmental organisations were able to get using the Official Information Act that there was a major change in Government policy and a cessation of beech logging on the West Coast. Without the Ombudsmen’s involvement, without the Local Government Official Information and Meetings Act, the public would not have got information on the royalties being paid by Timberlands, about the cross-subsidy of its pine business from the logging of rimu forest. The public would not have been able to flush out the detail of the beech logging plans. It would not have got that body of information that was able to achieve a change in Government policy and the protection of those native forests by the direction of the Minister of Finance and the Minister for State Owned Enterprises.

So it is absolutely critical, with these mixed-ownership companies, that that role and oversight of the Ombudsmen be returned. That is why the Greens will be supporting a Supplementary Order Paper in the name of Russel Norman to put that oversight back in. It is also inappropriate that that oversight is removed, because local authorities’ council-controlled organisations are subject to the Official Information Act and the scrutiny of the Ombudsmen. They are commercial entities. So why is the Government wanting to remove this check, this accountability mechanism? Is it because the Government plans to sell off the remainder and to increase the 49 percent to more than 51 percent? If the Government was so confident in this mixed-ownership model, it would retain these key constitutional checks and balances, these key safeguards, instead of doing what it is doing in removing these entities from the oversight of these Officers of Parliament. So this bill is bad. Again, the lack of accountability in the mixed-ownership model for these companies is bad.

The CHAIRPERSON (Eric Roy): I call Iain Lees-Galloway.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : Thank you very much, Mr Chair. It was a big call, I know. Tau Henare thinks that was a pretty good call.

Brendan Horan: I raise a point of order, Mr Chairperson. This was brought up earlier—

The CHAIRPERSON (Eric Roy): Yes. Well—

Brendan Horan: —by the Rt Hon Winston Peters—

The CHAIRPERSON (Eric Roy): Please sit down. We are not going to have a debate every time I make a call. I am keeping a score of everybody who is here, and proportionate to the number of members in the Chamber. The member will see that I deliberated long enough. I saw both members. We are not going to get into points of order in this regard about who gets the call.

IAIN LEES-GALLOWAY: Thank you very much, Mr Chair. [Interruption] What was that, Mr Henare? Would you care to repeat that one for the record? No. Mr Henare, I am sure, will take a call on National’s asset sales bill, the Mixed Ownership Model Bill. That is what we are debating this afternoon—Part 1 of National’s asset sales bill, the bill that is robbing the future by selling off something that was paid for in the past. That is what Part 1 of this bill does. It robs future generations of their birthright by selling off the effort of past generations of New Zealanders. That is the one and only thing that this bill does. It is the implementation of National’s irrational, ideological obsession with asset sales. It is the one policy that comes up time and time again, whenever National is in charge. The only thing it can think to do is to flog off the assets, mostly because it is bereft of good ideas, but, it has to be said, also because it has some people in its pockets who will do very well out of the sale of State assets—the taking away of the dividends from those assets that go to all New Zealanders and concentrating those into the 1 percent, the few who will actually be able to afford to buy these shares that the Government is putting up for sale.

Mr Henare has been told off by the whip Louise Upston. He is in a bit of trouble. Louise Upston is a sensible member. She has got Tau Henare under control. That is good to see.

I would like to address clause 6 of the State asset sales bill. Clause 6 is, of course, the clause that removes the former totally State-owned enterprises from the purview of the Ombudsman by removing them from the schedules in the Ombudsmen Act. Of course, the result of doing this is to remove from New Zealanders the ability to refer concerns they have with these companies to the Ombudsman—to an impartial and independent investigator who will be able to look at any concerns that New Zealanders have with these companies. So not only is the Government taking away New Zealanders’ birthright by giving its mates the opportunity to suck up all the dividends from these assets but also it is removing New Zealanders’ democratic right to have a right of referral to the Ombudsman of any concerns that they might have with these organisations, which will now have an element of private control as well as State control.

The intention of the Crown is that although it is retaining 51 percent of the voting rights—let us be clear about that; no part of this legislation actually ensures that the Crown retains 51 percent of the ownership rights of these companies, but it does ensure that the Crown retains 51 percent of the voting rights—this Government thinks that it is appropriate to remove the New Zealand public’s right to refer these companies to the Ombudsman, and, indeed, to apply the Official Information Act to those organisations, as well. This diminishes the oversight, the public scrutiny, and the consumer protection that the Ombudsmen Act and the Official Information Act currently allow for. It makes it impossible for ordinary New Zealanders, for members of Parliament, and for interested community organisations to hold those organisations to account, to monitor the practices of those organisations. For example, if they show the same behaviour that we have seen from every privatised organisation—from every privatised power company—and put their prices up in an unreasonable and unjustifiable way, the public has no right to refer that issue to the Ombudsman. That is what this Government is taking away from New Zealanders—their democratic rights. That is what is being removed under clause 6 of this bill.

Of course, what we know is that the Government is also taking away the application of the Treaty of Waitangi to the private shareholders in these companies. How that is going to be discerned, between the activities of the private shareholders and the activities of the Crown, I do not know. But maybe—maybe—one place that you could take that question is the Ombudsman. No! That right is being taken away. So although we look at the application of the principles of the Treaty of Waitangi and look at the requirement for these companies to act in the social good interests of New Zealand, there is no option for us to refer questions about those requirements back to the Ombudsman. The Ombudsman is an independent investigator who could have investigated complaints about these companies.

Those two Acts, the Ombudsmen Act and the Official Information Act, are the sole security nets, or information conduits, that are currently available to ordinary New Zealanders in situations where there is concern about the activities or actions of Government organisations or local government organisations. I would point out that the other mixed-ownership model companies that are out there, and that this Government has been so pleased to promote, actually fall under the purview of the Office of the Ombudsmen, as council-controlled organisations. So, on the one hand, we already have a good example of how the Office of the Ombudsmen could still have jurisdiction in the realm of mixed-ownership model companies, but not for this Government. It does not want this scrutiny. It does not want this scrutiny. It is the kind of lack of scrutiny that we see in fully privatised companies. One has to suspect that that is actually where this Government is taking these former State-owned enterprises—to full privatisation. That, in fact, must be the only reason why clause 6 is sitting inside this bill.

The Chief Ombudsman, Beverley Wakem, does not think this is a good idea. She says it is unjustified on commercial grounds and will see a valuable part of the democratic process lost. The sale of a minority shareholding in these companies does not affect the reasoning for their being subject to the independent oversight and accountability provided through the Ombudsmen Act and the Official Information Act. Even Ms Wakem says that there are plenty of safeguards already within the Official Information Act and the Ombudsmen Act to make sure that any issues of commercial sensitivity and disclosure around those Acts can be mitigated. I certainly know this from having tried to get commercial information out of KiwiRail. It constantly cited the clauses of the Official Information Act that said that they were not able to provide that commercially sensitive information. These mixed-ownership model companies would be able to do the same.

There is no reason, no justifiable reason, for clause 6 to remain in this bill. Partially privatised council-owned businesses have already proven that ongoing obligations under the Local Government Official Information and Meetings Act and the Ombudsmen Act did not put them at a commercial disadvantage when compared with fully private companies. Ms Wakem says there is no evidence that continued coverage under the Official Information Act would place these companies at a competitive disadvantage.

So we come back to the question of why clause 6 is even in this bill. It is purely—purely—about removing people’s democratic rights and the right of referral to an independent investigator so that the public has the right to continue monitoring these companies. These companies are still 51 percent owned by the public. These companies will have a huge impact on people’s daily lives, due to their ability to set the price of electricity. This will have a massive impact on people’s day-to-day lives. New Zealanders deserve the right to have an independent arbitrator that they can go to to refer any issues that they might have with these companies. The sole reason National is so hell-bent on having clause 6—

TRACEY MARTIN (NZ First) : Kia ora. Firstly, can I acknowledge my fan club on the other side of the Chamber. I thank them very much for their support! I rise to speak on Part 1 of the bill, and to acknowledge that we have heard an awful lot about mum and dad New Zealanders, so I thought it might be a good time to actually hear from one.

I would like to respond to Minister Ryall’s statement where he said that New Zealand must take this action. So here we go again—New Zealanders must take this action. We have heard this before. It was called the “tina” theory—there is no alternative—once before. This is the only way forward, according to National. Back in the 1980s, Roger Douglas said the same thing. Back in the 1990s, Ruth Richardson said the same thing.

I notice that both sides of the Chamber have been batting back and forward as to who sold what back in the 1980s and 1990s. However, all I can say about that is that they are both as bad as each other. This country needs a New Zealand First - led Government to actually come up with something different—something different, something vital, and something that recognises that New Zealanders own this nation. They own these assets. They have worked for these assets, and it is their interests and all New Zealanders’ interests that should be put first.

So that is what we are being told. We are being told there is no alternative. That is what the National Government wants us to believe. It wants us to believe that this is not a philosophical stand. This is a philosophical stand, because there is always an alternative. You make a decision and then you find a way to bring that decision to fruition.

If this Government wanted to make a decision to save those assets, it could do so. If this Government wanted to sit down and actually work with others to find another pathway to prosperity for this country, it could do so. But philosophically it is starved for ideas. This is as good as it gets, unfortunately. It has been brought forward by a finance Minister from a previous age, and that is a shame. We had an opportunity in this country. We had an opportunity to recognise the faults from the past, come up with a new way forward, join together, and take this nation on that pathway. But that Government refuses to even think outside that box. What a shame.

As a mum New Zealander who lived through those times—who lived through the damage that was done, with no trickle-down, with no opportunity for mum and dad New Zealanders, like myself, to buy anything—this is a farce. This conversation is a farce, because no mum and dad New Zealander anywhere near where I live will be able to buy anything from these shares.

Let us just talk about that—about mum and dad New Zealanders buying back 49 percent of what they already own. I mean, the thing is a joke. How can you try to sell that to the people? The people know they own it. The people know they own it now. Yet your spin doctors, your marketing, are attempting to tell them it is a good thing to buy back your own product. They own it, they have always owned it, and when New Zealand First repurchases it after National has gone, then they will own it once again.

But let us just ignore that fact. Let us ignore the fact that somehow the Government is trying to convince the New Zealand public that they need to buy 49 percent of something they already own. Let us just try to ignore the fact that, actually, the Government is now handing 49 percent of the profits from those assets to whoever it is who buys them, with no safeguards that they will stay in the country.

Let us just go there before Mr Henare stands up and decides to have a go about New Zealand First policy about a partial float of Kiwibank to New Zealanders only so that that bank could grow its business to handle the Government’s business, thereby bringing back millions upon millions of dollars’ worth of banking fees currently going offshore to Australia, so that we could have that money back in circulation here.

Let us just get that out of the way, shall we, Mr Henare, so that you cannot bring that up and twist it into something that looks like this model you are trying to sell to the New Zealand public. But let us just ignore all those obvious little things. Let us actually talk about—and I am stunned that the Labour Opposition has not talked about it—the fact that these assets are to serve the New Zealand people. That is what they were built for. They were built to serve the New Zealand people, not to provide a profit into a general coffer for funds to be flitted away somewhere else. What would happen if we in this Chamber decided that that was our philosophical stand?

PAUL GOLDSMITH (National) : Look, I think it is worthwhile as we are working our way through Part 1 of this Mixed Ownership Model Bill just to step back and take a look at the broader context. The European debt crisis remains the biggest threat to the New Zealand economy by some margin. [Interruption] Well, aside from the Labour Party and the Greens, actually, in combination—you are quite right. In particular, we are vulnerable to shocks transmitted from Europe through China and Australia and through any tightening of financial markets. So what goes on in Europe is not an isolated event happening on the other side of the world but is highly relevant to us.

So if I could speak generally, this is a very uncertain time for New Zealand, New Zealand businesses, and New Zealand households. No one is quite sure what is happening in Europe. No one is quite what it means for China and Australia, and confidence levels are quite low, which reinforces how important it is for us to stick to our economic plan. We need to continue to manage Government spending, limit debt, and maintain the confidence of financial markets. That is what this legislation is all about. It is about enabling this Government to continue on with its Future Investment Fund, and its investment in growing this economy, without adding another $5 billion to $7 billion to our overall levels of debt.

I suppose the question we have to ask the Opposition parties is what they are going to do to get the money in order to make these same sorts of investments. I suppose they do have the option of not spending that $5 billion to $7 billion in capital investments. I suppose they could just not invest in irrigation, not put money into the high-tech Crown research institutes, and not put money into building new schools, or I suppose they could raise the money from elsewhere. They could stick up a capital gains tax, but, of course, that does not give us any money in the next 10 years. They could put up taxes on entrepreneurs, but that never works very well, or they could make us work longer for our superannuation. Or they could just add more debt. They could go out on to volatile international markets and increase the pool of debt that New Zealand already has, and none of those options seem to be very good ones.

I would like to debunk some of the comments that have been made about power prices. We hear again and again that somehow privately owned power companies are charging more. Well, it depends how you slice the figures. Certainly Treasury advises that there are 21 regions listed on Consumer New Zealand’s Consumer Powerswitch website. In 14 of those regions the cheapest electricity company is privately owned, in one the cheapest company is owned by the council, and in the other six the State-owned enterprise is the cheapest. So it is hardly the most convincing argument that I have heard. When we have got 422,256 customers changing electricity retailers in the annual year, that shows that there is a huge amount of market flexibility going on.

I also just wonder about the Greens’ objection that once the Government sells a minority stake in these companies, a Government will not be able to fiddle with those companies quite so easily. It will not be able to get these companies to invest in its pet projects around green technology or something like that because minority owners might object. Well, that is about as good a reason I can think of to actually go down this path. It seems like an eminently good, sensible reason to be selling partial ownership in these companies to stop people like Russel Norman fiddling with these companies and making them ineffective and inefficient. That is one of the main benefits of having a minority stake owned by the private sector, as it will bring private sector disciplines and good governance to these organisations.

So I am not worried about not having access to the Ombudsman. I would far rather have access to the signal sent by market prices in an open market through the continuous disclosure requirements and from market analysts analysing these companies than I would have access to the Ombudsman. That is why that is a far more effective way of doing things. It is far better than having Mr Cosgrove and his colleagues in the Finance and Expenditure Committee asking the odd question. I would far rather have access to continuous disclosure requirements through the stock exchange and the signal that the market price delivers to the quality of these assets.

I am also interested that Mr Parker suggested that the cost structure would be going up under partially privatised companies. I would love to see some evidence from Mr Parker that shows that State-owned companies have lower cost structures than privately owned companies. I would love to see some evidence from those members to back that claim up. And then we have heard from New Zealand First—

GRANT ROBERTSON (Deputy Leader—Labour) : Thank you very much, Mr Chair—

Paul Goldsmith: Oh, hang on—the next Prime Minister’s speaking.

GRANT ROBERTSON: The member who will resume his seat in a minute—thank you—the member who just resumed his seat, Paul Goldsmith, tells us that we live in uncertain times, and that there are things to be concerned about and worried about coming from Europe. I know, that is the perfect time to hock off a whole lot of assets! That is a brilliant, brilliant economic lesson from Mr Goldsmith, to stand up in this Chamber and say: “In the middle of a global financial crisis, here’s the bright idea.”

Hon Member: “Mr Sachs”.

GRANT ROBERTSON: “Mr Goldsmith Sachs”. Here is the bright idea from the National Government: let us sell off assets into the most uncertain market we could possibly have. No wonder Bill English can only guess at the price it will get for the assets, because he wants to sell them into a market where New Zealanders’ future will be put at risk not just by selling them off but also because the price they will get will be appalling.

We also heard from Mr Goldsmith the importance of using the money that is gained from these sales for the Future Investment Fund—you know, the sort of Logan’s Run - style future that will be brought to the world. Well, the problem with the Future Investment Fund is that the Future Investment Fund involves selling off revenue-generating assets to invest the money in schools and hospitals. These are things that are important, but they are not revenue generating—or perhaps that is how the National Government sees them, as revenue-generating schools and revenue-generating hospitals.

We have been there before with National, but the logic fails for Mr Goldsmith. Sell off efficient, profitable organisations and claim a hoax on the country by saying: “We are going to reinvest that money in schools and hospitals.” Mr Goldsmith, it is your Government’s job to invest in schools and hospitals no matter what, not just on the basis of selling off things that have been built up by past generations of New Zealanders. The National Government side of this Chamber should take some responsibility and actually invest in schools and hospitals. Do not try to put a cruel hoax on New Zealanders that you are going to transfer this money across. Make the investment because it is worth doing; do not sell off future generations’ revenue-generating assets just to make that kind of hoax.

The other element of Mr Goldsmith’s presentation that I would like to mention is the question of the efficiency of the private sector in running some of these organisations, and the fact that there is just no way that a State-owned outfit could possibly be able to run at the level of efficiency that Mr Goldsmith’s mythical private sector outfit could. Well, need I remind Mr Goldsmith of KiwiRail and Air New Zealand, the companies that actually had to be bailed out by the Labour Government because the private sector boards failed to run them efficiently? The evidence does not really work for Mr Goldsmith on this one. It does not really work for him.

Also, we have heard from the Auditor-General and we have heard from Treasury that these State-owned enterprises are currently run efficiently. They are currently well run. Why is it that Mr Goldsmith wants to take something that is currently well run, is efficiently run, and is generating revenue for New Zealanders and hock it off? It is because of ideology and because of failed economic policies from this Government. Make no mistake, this bill is a testimony to the failure of this Government. It is a testimony to the failure of this Government to come up with any ideas to actually grow the economy. So having got no ideas to grow the economy—

Hon Tau Henare: That’s why a million people voted for us.

GRANT ROBERTSON: Mr Henare wanted that mining in national parks. That is what he wanted, but the Government did not want to go ahead with that, so that idea went out the window. Then the economy was going to be grown by turning us into one big call centre for financial services. That idea went out the window. We had the Job Summit. There were more people at it than jobs created by it, but that does not matter. Mr Henare’s Government ran out of ideas completely and said: “All right, we’ll hock off the family silver.” Well, the problem with that argument, Mr Henare, is that it is “sugar hit” economics. One sugar hit of somewhere between $5 billion and $7 billion and then the assets are gone. It is “sugar hit” economics from that side of the Chamber. It has no economic plan. It is trying to find a way of generating a bit of money for a year—$5 billion to $7 billion—and then the assets are gone, and control of those assets is gone.

Part 1 of the Mixed Ownership Model Bill actually puts in place the system to make sure that these assets can be sold. But what this Government does not want to talk about today is that by taking these sections out of the State-Owned Enterprises Act, they take away from New Zealanders the control that New Zealanders expect to have over core infrastructure companies—over things that are absolutely vital to the future of our economy. By taking them out of the State-Owned Enterprises Act, that removes a number of key provisions. Firstly, it removes the social responsibility provisions that are in the Act. Members on the other side of the Chamber have said: “Well, that’s not really relevant. That is not that important.” Yes, it is. The whole point of having these companies as State-owned enterprises is the notion that they will be working in the interests of New Zealand, and that the revenue will come back to all New Zealanders.

Tony Ryall stood up in this Chamber in this debate and said that this side of the Chamber does not have confidence in New Zealanders, because we do not want them to be able to buy into these assets. Well, Mr Ryall, we are the ones with confidence, because we want these assets to be 100 percent owned by New Zealanders. That side of the Chamber are the people who have lost confidence in New Zealanders, because they want to hock off the shares to foreign buyers. This side of the Chamber is the one that is backing New Zealand 100 percent.

The reason why taking these sections out of the State-Owned Enterprises Act is a problem is that by removing those social responsibility provisions we actually have a situation whereby the things New Zealanders think are important—the security of our infrastructure and the fact that there might actually be a social purpose for having electricity, for instance, provided in this way in New Zealand—are gone. They are undermined by this bill and they are gone. That social responsibility section will not be there, nor will the requirements for good-employer provisions. That is actually covered by a number of amendments that have been put up by the Labour Party to try to remove these companies from this bill and to put them back into the State-Owned Enterprises Act. The good-employer provisions in the legislation are very important. They are missing now. In clause 3 in Part 1 of this bill, they are now missing.

Section 4(2)(c) currently in the State-Owned Enterprises Act says: “the impartial selection of suitably qualified persons for appointment;”. That is a key provision, because these are agencies that should be working on behalf of New Zealanders, and by removing that by the bill—

Hon Trevor Mallard: It’s a crony clause.

GRANT ROBERTSON: That is right, Mr Mallard, it is the “crony clause”. It is taken out by this bill to enable the National Government to ensure that the agenda of privatisation can carry on, and to ensure that the interests of the private shareholders in this company are going to be what really matters, not the New Zealand shareholders. At the moment, under the Act, we know that there are good-employer provisions and there are social responsibility provisions. New Zealanders can have confidence that these entities are being operated in the best interests of all New Zealanders. Under this proposal, by not having those clauses in the bill, we no longer have that confidence. What we have is a situation where the National Party’s cronies will be able to be appointed, and the privatisation process will go on.

The other impact of clause 3 of this bill relates to the question around the Treaty obligations. The Government has tried to come back on this. The Government has tried to say: “We made a mistake, and we’re now going to be coming back.” But this bill does not protect Māori interests. Mr Henare might want to take a call on this. Get up and tell the Committee—

Hon Tau Henare: Why?

GRANT ROBERTSON: Why? Because he might actually be interested, as the chair of the Māori Affairs Committee, to get up—

Hon Tau Henare: Oh, OK, because he’s a Māori.

GRANT ROBERTSON: No, as the chair of the Māori Affairs Committee, he might actually be able to get up and tell this Committee how the future interests of Māori will be protected in this bill, because the section that sits there today is not in the bill. By taking it out of the State-Owned Enterprises Act, by taking it out of the provisions that New Zealanders know will actually protect them—

Hon Tau Henare: Listen, mate, Māori were sold down the drain in 1984 when your lot sold everything.

GRANT ROBERTSON: No. Mr Henare says that. What we learnt during this debate was that John Key did not even understand how section 9 made it into the State-Owned Enterprises Act. He did not even understand the importance that that section has had for protecting Māori interests and what New Zealanders own. There is nothing in this bill that will protect the future interests of Māori in these assets.

Throughout Part 1 of this bill what we see is the taking away from New Zealanders of all the protections that they have had for these assets that are meant to work on their behalf. What we see in this bill—

Hon Tau Henare: What a shocking performance.

GRANT ROBERTSON: Mr Henare would quite like to take a call and stand up, rather than shouting continuously. He could stand up to take a call and say how it is that New Zealanders are losing something that they 100 percent own, and something that has been built up by past generations, for an ideological, “sugar hit” piece of economics. This is a shameful bill from the National Government, because it undermines core infrastructure. It takes away, in Part 1, everything that it means for a piece of infrastructure, an asset, to be in New Zealanders’ hands. It takes it away, and says it can be sold offshore. There is nothing in Part 1 of this bill that justifies selling these assets. There is nothing in Part 1 of this bill that actually says that New Zealanders can keep their birthright. It is a shameful piece of legislation.

MOJO MATHERS (Green) : I wish to speak to clauses 3, 4, and 5 of Part 1 of the Mixed Ownership Model Bill. I am concerned by these clauses because they remove the four energy State-owned enterprises from the State-Owned Enterprises Act and put them in a new schedule under the Public Finance Act. I am particularly concerned that this is being done without replicating the social responsibility clause that all State-owned enterprises are legally bound by. This clause requires State-owned enterprises to show a sense of social responsibility by having due regard to the interests of the community in which they operate—that is, all New Zealanders—and by endeavouring to accommodate and encourage these when able to do so.

Among other things, what this clause does is it means that they have to consider the impact of raising the price of power on consumers and acts as a shield to the push to maximise profits, because without these clauses they become legally bound to maximise profits. So, even if the Government retains a 51 percent majority, the risk is that, by removing the social responsibility clause, if it then tries to stop the minority shareholders from going in and maximising their profits, it could get sued. And we already know that this is going to very likely see an increase in the cost of power, because private companies at the moment have, on average, 12 percent higher power prices than the State-owned enterprises.

What this is going to do is impact most severely on vulnerable New Zealanders. Vulnerable New Zealanders are the elderly, the sick, the disabled, those with young families, and those with insecure incomes. Disconnection of power means that these people end up with no heating, no hot water, no ability to have showers in their homes, no cooking, no lighting, and no internet connection to the world outside. These are very extreme measures and they impact on the health of our vulnerable. We already have fuel poverty in New Zealand. Consumer New Zealand did a survey and it says that last year more than 30,000 households were disconnected; 9,000 were disconnected during the winter months when they were unable to pay the power bills.

In addition to these disconnections, more than 37,443 households were given hardship grants by Work and Income in order to help them pay their power bills. That is a huge number of New Zealanders affected, and it is only just the tip of the iceberg because before you get to disconnection there will often be a cutting back on those using the power, in a very extreme way, such as not heating their homes. I know because I have been one of these families with young children, unable to keep my children warm in my house because I just could not afford the power.

So what we want to see is clauses 3, 4, and 5 deleted so that they remain bound by social responsibility. The Green Party will be supporting the Supplementary Order Paper by Russel Norman to delete these clauses. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn) : There is an old rule in politics that says that when we politicians are sick of saying something for the umpteenth time, the folks out there in the real world are only just starting to pick up on it. I was reminded of that this week when I was going to my child’s school, and a teacher grabbed me by the arm and said: “Have you heard what that Government is doing? They’re planning to sell off our energy companies. How can they possibly do that? Most people don’t want that to happen.” I said: “You’re absolutely right.” But there is no surprise on that one, because that lot have had that evil plan in their minds for some time. This is a very bad idea for a number of reasons: firstly, it makes no financial or economic sense; secondly, it makes no strategic, economic development sense; thirdly, it is absolutely rubbish social policy; and fourthly, ultimately, the politics will come back and bite this Government where it hurts—in the ballot box.

The essence of this Mixed Ownership Model Bill is, in fact, contained in the title to Part 1, “Provisions for companies to cease to be State enterprises and to become … companies”. These will not be State-owned enterprises any more. They will not have the social obligations. They will not have the Treaty obligations. They will not have the same obligations to be good corporate citizens. They will not have a no-surprises rule for the smiling Minister in the chair, the Minister for State Owned Enterprises there, who knows what he is doing to the public of New Zealand. They will not have the power to direct, the reserve power that Governments use in extreme circumstances to put the national interest first. Do we believe that these companies should be sold? No. Do we believe that the Government has an obligation to the people of New Zealand to put their interests first? Yes. Why does this not make sense? Well, the first reasons are so obviously financial. Privatisation makes the Government’s fiscal deficit worse. Let us say that again: it makes the fiscal deficit worse, not better. Why? Because the Government saves about $260 million in borrowing costs and it loses $360 million in dividends on average. That is minus $100 million. What is hard for people to get about that? It is minus $100 million a year. That is how much the fiscal deficit will worsen as a result of this bill.

But it is not as if the fiscal deficit is the biggest problem in the first place. The OECD, the IMF, and the rating agencies have all told us the same thing: it is private debt that is high, not public debt. That shows up in the current account deficit and it shows up in our net international liabilities. So, as a fair question—and I see Mr Ryall smiling to himself because he thinks he might know that answer to this one—what happens to private debt? Well, it goes up. It goes up because there will be borrowing from foreigners who are investing in these companies to buy up their share of it, and the dividends to those new owners will add to the current account deficit each and every year. So this is a lose-lose. Not only is the Government’s deficit worse; the country’s deficit is worse. There is no financial reason to sell. The third fact on the finance line is that the rate of return on the three energy generators is averaged around 15 percent per annum on a total shareholder basis. That is dividends plus capital gains at 15 percent, which is pretty tidy. Mighty River Power is 43 percent, which is wonderful. The Crown cost of capital is only 5 percent—probably lower at the moment and closer to 4 percent. Why would you sell an asset that is averaging 15 percent when you are borrowing at 4 percent, keeping the difference, and not having to tax people? The answer is that it has never been a financial decision.

This is a political decision, because the National Party is linked to people who will get very rich out of this: the ticket clippers, the merchant bankers, the lawyers, and the accountants—the vested interests who are snuffling at the trough of the National Party. This is jobs for mates, and it is wrong. It is wrong. It makes no financial sense. It is explainable only in terms of who gets what. Ah, that brings us to the famous mum and dad provisions. Am I free to dine at the Ritz? That is one of the oldest issues in economic philosophy. Well, if you are not regulated, technically you are, but not if you have no money! Mum and dad already own these shares. They are being asked to pay again for what they already own, when they have no money. People in our constituencies are having trouble feeding their kids, and there are 200,000 children growing up in poverty. Will those families be able to go and buy a slice of Mighty River Power? Not on your nelly. Not on your nelly. This is not a privatisation to Kiwi mums and dads; this is a privatisation to some rich Kiwi mums and dads in the pocket of the current Government, which is selling the birthright of all of us for its political gain. It is wrong.

From an economic development point of view, has nobody told these clowns we face a fossil fuel crisis in the next few years? Has nobody told them the price of oil will go up 50 percent in the next 3 or 4 years? And has nobody told these people that climate change is happening, and that the price of carbon will rise? And was there ever a more stupid time to sell a controlling interest in your own energy system? You know, we are blessed here. We have 70 percent of our energy produced by hydro. We have a 90 percent renewable energy profile, on its way to 95 percent, and I hope one day it is 100 percent. I hope one day that we will be able to stand up and say that we are carbon-neutral. Why would we prejudice that strategy by flogging off the engines of development to overseas shareholders, who care nothing for “New Zealand Inc.”, but care a lot about the dividends they can extract? Why would we do that? What value does it add to take perfectly well-run State enterprises and turn them loose as mixed-ownership companies?

My colleague Clayton Cosgrove repeated the testimony of the chair of one State-owned enterprise—I think it was Joan Withers—who said: “We will not change behaviour if we are governing a partially privatised entity; we do best practice directing now. That is our legal obligation.” For there to be an upside the Government would effectively be saying that the current directors are not doing their job and are therefore culpable. That is rubbish. These are well-run companies. They turn a tidy profit for the taxpayer. It makes no strategic sense whatsoever to sell them. The counterfactual is Norway, a country about our size. It created a future fund for its oil deposits. It has kept its State assets, and it has become one of the wealthiest countries in the world. It would not be doing what this Government is doing. Nor would the Danes, nor would the Finns, whom Gerry Brownlee is so fond of. They invest in innovation, they build their assets, and they keep them. This makes no social sense; I will close with that.

We have already noted that New Zealanders already own these companies. We have already noted that most New Zealanders cannot afford to buy them twice. We ask the question of why, then, is this happening. It is explainable only for the saddest of reasons. National went out on a limb to please what is politely called one of its own core constituencies, in the language of the streets—their rich mates: the lawyers, the accountants, the Goldman Sachs and the Merrill Lynches of the world. Heard of them before? I wonder why that is. They are the people who describe their customers as muppets. This Government is selling New Zealand down the river—down the river—with an irreversible change, because it has mistakenly thought that they would harbour a bit of money. But it will lose more dividends than it saves. The Government is creating a fiction out of a Future Investment Fund, when we all know it has got capital, anyway. One of the members opposite—I think it was Mr Goldsmith—asked how Labour would fund capital investment, and the answer is that Labour’s last fiscals had net debt paid off before the Government’s own debt. We did it through tax reform that was pro-growth and fair, and that plan would work.

GARETH HUGHES (Green) : Kia ora, Mr Chair. Ngā mihi nui ki a koutou. Kia ora. It is good to follow that fiery speech from David Cunliffe. I rise with some pride that the Green Party is probably the only party in this Parliament that has not been involved in asset sales. We saw the Labour Party, and we saw New Zealand First along with the Bolger-Shipley National Government, sell the assets. We know the Nats have done it. The only person in this Parliament, however, who is going to be part of two Governments that sell the assets is Peter Dunne. I would like to point out that both United Future—sorry, unfortunately not United Future—both the New Zealand First Party and the Labour Party have seen the errors of their ways. We have learnt from history. The only parties in this Parliament that are not learning from history are the National Party, United Future, and the ACT Party. We know the errors of our history. We saw $7 billion worth of State assets sold, and in the preceding years we have seen $21 billion in dividends not returned to the taxpayer, where they should have gone, but returned to those private shareholdings.

It is a privilege to take a call on this bill—this unpopular bill, this ideological bill, this controversial bill. Let us just look at Part 1, which removes Genesis, Meridian Energy, Mighty River Power, and Solid Energy from numerous legislation—from the State-Owned Enterprises Act, the Ombudsmen Act, and the Official Information Act. It is a key plank in the Government’s agenda. The Government has got the drill-it plank, the mine-it plank, and the frack-it plank. We know a lot about the cut-it plank from the Budget last month, and here we have got the fifth plank—the fifth plank of the Government’s entire economic plan for the next 3 years, which is to sell it. Those are the only ideas it has got.

But the question is why we are doing this. Why, in Part 1, are we having to remove these companies from Official Information Act scrutiny, from the important transparency role of the Ombudsmen, and from the social responsibility clause? Is it ideological? Is it because the Government has not learnt the lessons from history? It brooded for the 9 years it was in Opposition, in part because the decisions it made in Government to flog off BNZ and to flog off Contact Energy earned it such unpopularity with the New Zealand constituency that it was out of Government for 9 years. Is it ideology or is it because the Government has got itself in a fiscal hole with its poor management of the economy?

We know that the Government has got money to throw at problems. It has got $14 billion to throw at motorways, $1.5 billion to subsidise polluters under the amended emissions trading scheme, and $2 billion to throw at the wealthiest New Zealanders, who got tax cuts that they did not need and that the Government could not afford. The Government has got itself in such a fiscal hole that the only option it has got left is to flog off these assets now. The Government knows it is deeply unpopular. That is why we are seeing this Mixed Ownership Model Bill, which does keep 51 percent as the Government’s share. It is called the “MOM Bill”, the Mixed Ownership Model Bill—mom. Government members talk about mums and dads, but it is not mums and dads who are going to be buying shares; it is those Goldman Sachs bankers whom David Cunliffe was talking about. It is those people who benefited the most from the Government’s tax cuts. It is the mums and dads to whom these assets already belong. They already belong to us as Kiwis. It is their assets, their treasures, their taonga, which we have built up over generations, which Kiwis and successive Governments have contributed to, and from which we now derive such healthy dividend streams. That is what the Government is quite happy to flog off.

So in clauses 3, 4, and 5 we see these assets, built up over generations, taken out of the State-Owned Enterprises Act, and the crucial part of this is the social responsibility clause in the State-Owned Enterprises Act. The question for the Minister in the chair, and I do not know whether Minister Heatley is able to take a call on this, is why does the Government need to take the social responsibility clause out of the Act? The Greens do not think there are any good reasons why this should be removed. The Government says there is still going to be majority ownership—51 percent of the shareholding will be controlled by the Government—so what is wrong with social responsibility? We are facing a huge number of problems with these assets as we are at the moment. We have seen electricity prices rise around 70 percent in the last 2 years. We have seen a Government that cannot even argue or answer questions in the House today on the difference between the weighted average between private and public generators and retailers. What we know, though, from that analysis, which the Government cannot critique, and to which the Government cannot even provide an answer, is that it is crucial to maintain the social responsibility clause, because we do want to see cheaper electricity. Around 15 percent of New Zealanders, I understand, are classed as being in energy poverty. It is a huge cost, when you put in the galloping rate of inflation and the rising energy bills that come from oil imports. It is important that we keep this clause.

It was refreshing to listen to the Hon David Cunliffe talking about climate change and talking about the end of cheap oil. It is good to hear a Labour MP talk about these crucial issues, and what we need to do is keep—

Hon David Cunliffe: It’s even in our manifesto, Gareth.

GARETH HUGHES: In your manifesto? Well, congratulations. It is not the Labour Party of 5 years ago, but it is good to see the Labour Party of 2012 talking about these real-world issues. We need to have this social responsibility clause so we can actually do something about it. But I want to know from the Minister what the plan is and what the problem with it is. Is it because business has gone to the Government and said: “Look, this contributes to such uncertainty. We don’t want to focus on social responsibility. We want to focus on getting every drop of profit, no matter where it comes from, so we can increase the dividends for our shareholders.”? What is wrong with social responsibility? Why will the Government not be voting for Russel Norman’s amendment that would take these four assets out of clauses 3, 4, and 5?

When we look at clauses 6 and 7, which remove these assets—Solid Energy in particular—from the Official Information Act and the Ombudsmen Act, again we have to ask what the Government’s rationale is for doing this if it is going to be keeping 51 percent majority control. If the taxpayer—if the country—is keeping control, what is wrong with having Ombudsmen oversight? What is wrong with having everyday Kiwis being able to lodge an Official Information Act request to find out what is happening with their majority control? When you look at the Ombudsmen’s submission to the select committee, you will see that they made the very salient point that in this context it seems highly desirable for the Ombudsmen Act to continue to apply, for a number of reasons. They pointed out that there appears to be no necessity for companies currently subject to the Act to cease to be so subject, apparently solely on the grounds that up to 49 percent of the shares in those companies are proposed to be made available for the sale to private sector interests. The Ombudsmen came to the committee and said it was a bad idea. They said that they should have control. If we are keeping 51 percent, as the Government and United Future reminds us, why on earth do we not have Ombudsmen and Official Information Act oversight over the majority of these State-owned assets?

The fact is we know that this Government’s agenda in respect of asset sales is just so unpopular. There is no sense. We know it is going to cost more. We know that the bills are going to be in the order of $120 million from the taxpayer to subsidise the public relations selling job, the spin job. There is likely to be $400 million from loyalty schemes. There may be $100 million in lost dividends in the first year. That is around $600 million that the taxpayer is either forking out or missing out on. In a time of austerity it is outrageous that the Government is going to be wasting our money on asset sales that no one from the whole of New Zealand is going to benefit from.

It makes no sense, because in the long term we will be losing out on the dividend stream, which has been healthy and a good rate of return. It is a lot greater than the cost of borrowing. We know that it is not supported. The Government does not have a mandate. Just because the Government continued to talk about a mandate, it does not mean that it has one. The only way it can argue convincingly that it has a mandate is if it puts it to the people. That is why we saw such a rushed select committee process. The Government is scared. It is scared of the massive mobilisation that is happening right now with the citizens initiated referendum petition. What we know is the results. Kiwis are missing out on these intergenerational treasures built up over generations. We are going to see higher electricity prices, and that is what the evidence says. We are going to see a loss of social responsibility from these very large, very influential former State-owned enterprises, and we are going to see electricity price rises.

There must be a better way. Instead of flogging off these assets, we could be using them. We could be utilising that capital invested, and utilising that experience, that expertise, and that export stream that is already contributing to our economy. We could be using these assets to drive growth in a green economy. We could be using them to drive exports in clean-energy expertise, technology, and manufactured exports. There has to be a better way that we can run our country for the sustainable long term, so that we can actually contribute to dealing with the challenges, as David Cunliffe talked about, and deal with the significant fiscal hole we see at the moment. This is no way to run a country. This is no way to run an economy. There is a better way.

Hon PHIL GOFF (Labour—Mt Roskill) : I wonder whether I could begin by giving my young friend Gareth Hughes a gentle reminder about history. From 1999 to 2008 there was something called the fifth Labour Government. That Labour Government sold no assets. That Labour Government created Kiwibank because we had had a gutsful of $2.5 billion of money from our banking sector going across the Tasman to Australia. That Labour Government bought back Air New Zealand because the so-called very efficient private board had bankrupted Air New Zealand. We bailed it out and got it back on its feet. And that Labour Government bought back KiwiRail because the so-called efficient private sector had asset-stripped New Zealand Rail, run it into the ground, and made it impossible for it to fulfil its role as part of the transport sector. That was the fifth Labour Government.

Mr McClay had a problem with amnesia, as well. He forgot it was the National Government in the 1990s that sold assets. You know, the difference between us and them is that we learnt the lessons of history and we are getting it right now. I remember Bill English as the Minister of Finance who sold Contact Energy in 1999. I have been in this place long enough to know the time when we passed legislation under the Muldoon administration to build the Clyde Dam. Bill English and the National Party flogged Contact Energy off, and what were the consequences of that? The consequences were that over $1.5 billion in dividends went out of New Zealand and across the Tasman to the Australians, once again. The consequences were that Contact Energy charged more for electricity prices—higher prices. But this National Government has learnt absolutely nothing.

The first thing is that this National Government has no mandate for this Mixed Ownership Model Bill—no mandate at all. If it had the courage of its convictions, it would take this to a citizens initiated referendum. Why do I say that? I say to the National Party members: these are not your assets to sell. They are not yours to sell. These assets were built by our parents’ generation, and our obligation in this House is to pass on our most successful, our most efficient, and our most valuable assets for our kids, and their kids after that. I say to this National Party here: when you flog these assets off, what are you left with? Nothing—nothing. You know, in 10 years’ time the dividends from those power companies would be the same as the price that you get from flogging them off, but the difference in keeping them is we would still have the assets and they would still be providing the dividends, year after year, for our kids and our grandkids.

Maggie Barry: So will you buy them back, Phil?

Hon PHIL GOFF: I say to Maggie Barry, you know, if flogging off your most valuable assets was a great idea, why have the Norwegians not sold their oil wells? Because they are a bit smarter—and the Finns too, Mr Brownlee. They are a bit smarter than this thick National Government, which thinks it is a great idea to hock off our most valuable assets.

You know, even Treasury, God bless it, gave that advice in the Budget Policy Statement. What did it say? It said that the cost of keeping those assets is around $266 million a year but the dividends you get from them are $100 million more than that. I ask the National Party members which one of them, if they were faced in their family or their business with a difficult economic challenge, would decide that the answer to that challenge was to flog off the best assets that they had, and the most remunerative. Well, maybe Tau Henare would—maybe Tau would. But actually none of them would do that, because it simply does not make sense to sell off the assets that are so valuable to us and keep producing dividends for us.

I remember the time when John Key on the other side of the House was asked the question—I asked it—where the money from our State-owned enterprises goes. He said: “Why, it goes to pay for our hospitals and our schools.” Well, I say this to Mr Key. First of all, it is going to cost him $120 million to flog the assets off. That is the fee we pay to the fat cats and the banks. You know that $120 million? Mr Key, that would actually pay for what you were going to spend the money saved from increased class sizes on. We could use that money, instead of tipping it down the drain and giving it to the banks—$120 million.

But I come back to it: there is no mandate for this legislation. There were 1,421 submissions heard by the Finance and Expenditure Committee that were opposed to this legislation. Does anybody from the National Party know what percentage of the submissions they were? It was 98 percent.

Hon Clayton Cosgrove: Phil does.

Hon PHIL GOFF: Phil Heatley knows. He is good at maths. He could tell us the weighted average—he could tell us the weighted average. Ninety-eight percent were opposed, and, do you know, there were nine submissions in favour—0.6 percent. There has not been a public opinion poll in this country that has ever shown less than a 2:1 ratio for New Zealanders’ opposition to the sale of these assets. National members are flogging off something that is not theirs, without the mandate to do so.

And then they have the effrontery to say that these assets are going to go to the mums and the dads. You know what I like about our power stations? It is that 100 percent of them are owned by the mums and the dads and everybody else in this country—100 percent. Do you know who National members want to flog them off to? They want to flog them off to a few wealthy mates, some big corporates, and overseas interests. You know, John Key said this during a debate that we had during the election: “We’re giving people a commitment that 85 percent to 90 percent of the entire company”—he means all the power companies—“will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” I say to John Key: where in this bill tonight is anything at all to back up that commitment? New Zealanders will be at the front of the queue, National said. Where is there anything in this bill to say that that will be the case?

The losers in this legislation are all New Zealanders. The winners are a few wealthy people and the foreign investors who will jump at buying these shares up. This is typical of a National Government that governs for the few and not the many. I am proud in this Committee tonight to be standing here with the Labour Opposition standing up for the many New Zealanders who are opposed to the outrage of what this bill intends to do. It will make our internal deficit worse. It will make our balance of payments deficit worse, as the money flows out of this country. It will push up the price of power—and New Zealanders will be thinking about this right now. The average cost of power, because of the sell-off of these assets, for a New Zealand family will go up between $200 and $300 a year. Maybe that is not much to John Key, or Steven Joyce, or the people who sit over there, but it is a hell of a lot to the people I represent in this House, who tonight will be sitting there with their overcoats on because they are looking at the cost of the power that they are paying for.

It was our parents who built those assets, our parents who got those dividends that can be returned to New Zealanders, and that can ensure that in a market that is not competitive there will at least be reasonable prices for power. [Interruption] Tau Henare can say what he likes. He used to be part of New Zealand First, and now everything he says in this House is the exact opposite of what he said once in this House. So, Mr Henare, you be quiet and I will give you the charity of my silence.

There is another question, and that is about accountability. This bill takes away the accountability of the power companies to the Ombudsmen, and the Ombudsmen said there is no argument for doing that—no argument at all. It takes away the accountability of the Official Information Act. If it is commercial and secret, it is covered anyway under the Official Information Act. But this bill removes accountability from New Zealanders. It removes—

DAVID BENNETT (National—Hamilton East) : That previous speaker, Phil Goff, said: “These are not your assets to sell.” Those were his words. Well, remember the history of the Labour Government. Remember Phil Goff’s history in this Parliament, when he came in here and sold asset after asset after asset. At any point during that time, Phil, did you stand up and say to yourself that these were not your assets to sell? Look at us, Phil. Do not look at your papers. Look at the people. You said you were talking about the people and representing the people. Well, look at what you said in the past.

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. Forgive me, I know you were distracted—appropriately. It is appropriate that members are addressed by their correct name, and I invite you to instruct—

The CHAIRPERSON (Lindsay Tisch): I am sorry. I was distracted. Members know that courtesy prevails.

Hon Phil Goff: Since we are interrupting the debate, I seek leave to table this list of all of the assets that were sold under the last Labour Government. For those who cannot see it, it is blank.

The CHAIRPERSON (Lindsay Tisch): Order! Leave is sought for that purpose. Is there any objection? There is objection.

DAVID BENNETT: We will come to that list, Mr Phil “Past leader of the Labour Party” Goff. But first of all let us go through what you sold—

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. With respect, I make the same point again. All members are honourable members.

The CHAIRPERSON (Lindsay Tisch): I heard him say Mr Goff, the former leader of the party. [Interruption] Well, the member must address people by their correct names. If it happens again, the member will be in trouble.

DAVID BENNETT: Remember when Labour sold New Zealand Steel to Equiticorp Holdings for $327 million? Remember when Labour sold Petrocorp in 1988 for $801 million? Remember when Labour sold the Post Office Bank to ANZ Banking Group for $665 million? And who was there, voting on those? Mr Phil Goff voted on those. Mr Phil Goff came into this House with his mates and voted on those. It is a bit rich, coming in here now, Phil, and trying to—Mr Goff—oppose these bills.

Hon Clayton Cosgrove: He did it again.

DAVID BENNETT: I corrected it.

Hon David Parker: I raise a point of order, Mr Chairperson. Again the member transgressed your earlier ruling.

The CHAIRPERSON (Lindsay Tisch): The member will sit down now. He has lost his right to the call. I am going to call Charles Chauvel. [Interruption]

CHARLES CHAUVEL (Labour) : I am astounded by the acclaim that the decision to give me the call is met with from my own colleagues, particularly as I am about to praise some of the Supplementary Order Papers that they have lodged in respect of this part. What we have heard in the debate so far is some very good points about what this legislation will do to the carefully calibrated accountability regime that exists in respect of State-owned enterprises. It will do away with that regime completely, and it will replace it with something that is untested and about which much concern was expressed at the Finance and Expenditure Committee, as can be seen from the report back.

Let us start with clause 3. Section 4 of the State-Owned Enterprises Act is of cardinal importance to the way in which that legislation is put together. It is the one that requires companies to act in a socially responsible manner. Well, every member of this House has to ask why it is that we would have a bill, the Mixed Ownership Model Bill, before the Committee tonight that removes that obligation—the obligation to act in a socially responsible manner in respect of four major companies in New Zealand. These companies are no longer going to be required to act in a socially responsible manner, and that is something that all New Zealanders should be concerned about.

The other problem with exempting these companies from section 4 of the State-Owned Enterprises Act is that they are not going to be required to be good employers. So not only will they not be required to act in a socially responsible fashion, but they will not have any good-employer obligations placed on them either. It pays to remember that in particular the energy companies are amongst the last remaining New Zealand - owned companies of any scale operating in New Zealand. They are some of the few places where clever Kiwis can go and get managerial jobs in businesses that are of an international scale. Why on earth would we take away from them the obligation to be good employers to our clever Kiwi managers, who are using their ability to work in these companies to get valuable commercial experience? It just beggars belief.

Then there are the obligations to Māori that are taken away by this legislation. I know that my colleague Parekura Horomia and others will be addressing the Committee on this crucial point. You see, the Crown cannot rely on sections 27A to 27D of the State-Owned Enterprises Act to meet its Treaty obligations, because the specific rights protection regime outlined in those sections does not impose the obligations imposed by section 9 of that Act; nor does it protect any of the future or existing Treaty rights of Māori. The partial sale of these power companies will make the prospect of securing a section 27B resumption of any of the assets of the power companies highly unlikely, and the question arises, just as obligations to act socially responsibly and obligations to be a good employer are removed by this the Mixed Ownership Model Bill, why the legislation would seek to diminish the rights of iwi that have been established over time, under jurisprudence relating to the State-owned enterprises. The only thing that Māori will be able to do, if they suffer a Treaty breach as a result of the actions of what will be partially Crown-owned companies, is seek a monetary claim for damages. There will be no ability any more to seek the return of land or assets in the event of a breach. This is yet another removal of the rights of New Zealanders, cherished and carefully established over time.

There are a number of Supplementary Order Papers on the Table of the House in the names of colleagues of mine that deal with this part, and I want to speak to some of them because I think they are worth consideration. I hope that we will hear from the Minister in the chair, the Minister of Energy and Resources, as to the Government’s response on these Supplementary Order Papers because they are put forward in the spirit of attempting to remedy some of the more egregious omissions that this legislation will enact if it is passed in its current form.

I want to start with Supplementary Order Paper 46, in the name of Chris Hipkins. It is a Supplementary Order Paper that would basically make these mixed-ownership model companies subject to the Official Information Act, and it is mirrored by Supplementary Order Paper 54, in the name of my colleague Iain Lees-Galloway.

The power companies that are subject to this bill are core strategic assets. It is important for the public to be able to continue to have access to information about them. I have sat on the board of Meridian Energy. I know the power of the Official Information Act when it comes to one of these companies. Boards and management take great care about the transparency of their decision-making processes—not because, as Mr Goldsmith said, of the continuous disclosure obligations that the companies could be subject to if they were listed on the open market, because, frankly, the Official Information Act provides a much more immediate remedy than that. It is backed up by the powers that are provided for in respect of the operation of the Office of the Ombudsmen. But this legislation would take away the application of the Official Information Act to the entities to be privatised. I think, for the reasons that we have heard from a number of speakers, that that is a retrograde step. It is not going to enhance their accountability—quite the reverse: it is going to limit it. I commend both Supplementary Order Paper 46 and Supplementary Order Paper 54. These would enact improvements to the model that is being proposed to the Committee, and they ought to be considered carefully. I think it would be a real shame if we did not hear anything from the Minister in the chair in response.

The other Supplementary Order Paper that I think is worth mentioning is Supplementary Order Paper 47, in the name of David Parker. This would delay the implementation of the Mixed Ownership Model Bill in order to give sufficient time for the public to actually appreciate the consequences of the legislation and prepare for its consequences. We have heard from speaker after speaker who sat on the Finance and Expenditure Committee about the difficulties they experienced in terms of process: the rushed hearing at the select committee and the fact that Treasury had prepared the departmental report before the public submissions had even closed. This Supplementary Order Paper, if accepted by the Committee, would, in fact, remedy that to some extent. It would provide for some proper consideration by the public of what is at stake here.

It is mirrored, in many ways, by Supplementary Order Paper 58, in the name of Grant Robertson. That Supplementary Order Paper would send the bill back to the select committee in order to ensure that it has been thoroughly checked for mistakes. How many times have we rushed legislation through the Committee or through the House, only to find that a patch-up job is needed in a Statutes Amendment bill, or, worse, some sort of urgent, specific legislation? I just do not believe, given the speed of the process, that that will not be the case here, and that it will not be necessary at some point for the House to come back and look at the legislation in detail to ensure that mistakes have not been made. So I think the contents of Supplementary Order Paper 58 are well worth some thought. Again, it would be useful to see the Minister in the chair get to his feet and respond to the contents of that Supplementary Order Paper.

There is another excellent Supplementary Order Paper, Supplementary Order Paper 45, in the name of David Clark. That Supplementary Order Paper would alter the title of the bill from the “Mixed Ownership Model Bill” to the “State Asset Privatisation Bill”. If we are after plain language in legislation—legislation saying what it actually means to do—then this would be a very, very good Supplementary Order Paper for the Committee to look to with favour. That Supplementary Order Paper would bring honesty to the naming of this legislation, and it would call the bill a name by which it can be recognised with some honesty by the public, because that is actually the purpose of the legislation.

There is another very good Supplementary Order Paper, Supplementary Order Paper 53, again in the name of Chris Hipkins. What that would do is it would require a 75 percent majority vote in the House before one of these entities could actually be privatised. We have entrenchment provisions in our law; we have them in the electoral legislation. I think it is time for us to consider whether or not in other areas where there is a clear, important public interest we should look at the entrenching power that this Parliament undoubtedly has. This must be an occasion, given the strength of public opinion, where that possibility ought to be contemplated very seriously.

TIM MACINDOE (National—Hamilton West) : I move, That the question be now put.

STEFFAN BROWNING (Green) : I rise to talk on Part 1 of the Mixed Ownership Model Bill. The Green Party certainly opposes this bill. I have been out on a number of occasions getting signatures, with the volunteers, for the petition against this bill. My experience with those volunteers is that the public are very deeply concerned about this bill. You can arrive at a market, aim to walk through the market to get signatures, and you barely move a few metres, because people are coming in their droves, wanting to sign that petition—even, I note, at the Fieldays. It was interesting to walk past the National Party’s stand and there were people coming up to me there, wanting to sign the petition because they are so angry and, in fact, even disgusted with the way this bill and this Government is going in trying to flog off the assets that they really recognise as their own assets.

For a bit of background on why these people are so angry, what they refer to so often is the history of sell-outs, and the history of breakdown, of stuff that they consider their own. They go right back to Bill Birch’s day and Doug Kidd’s day. In my area, a local power company was forced to sell off its own generation plant when the Electricity Corporation was split up in a way that we all know made prices rise and took it away from people—in a way, setting up for this craziness that is in front of us now.

Those same people bring up the issue around the railways—what has happened with the railways and what happened with Petrocorp. Those people of New Zealand eventually got the railways back, in a dilapidated state. Then we saw it with Telecom, with Fay Richwhite, when that disappeared. Was it to mum and dad investors? Well, not for too long. But the power companies will be even harder to get back than the railways, because we are heading into an era when energy is even more precious. The rewards of keeping it would be much, much greater. Energy is becoming constrained, Petrocorp is gone, and we need to retain our power.

I notice that TrustPower and other generators are holding back on developing their consent approvals for new generation—no doubt waiting for some gifts from National in cheap, cheap energy generation, but it is actually very good energy generation that we should be holding on to—so that they can sell New Zealanders their own energy back at a much increased rate than the Kiwi mums and dads, whānau, elderly, and community are actually purchasing it at currently, but from their own generation.

There are other aspects of this ownership that we will cover in the later parts of the bill, but that is the background: the volunteers and the people of New Zealand racing to fill those petitions. They want this Government to put the brakes on, to hear them, and to give them a chance so that they can have an opportunity to convince the Government, which has not listened and which has not got the mandate—no matter what it says about the mandate—that there were more people voting against asset sales than for. These people want another go at that, at convincing the Government. They are going to sign the petition all the more. We will get there, and we will be back. I am looking forward to speaking to the other parts.

Hon TREVOR MALLARD (Labour—Hutt South) : I want to focus on some of the amendments that are sitting to Part 1 of the Mixed Ownership Model Bill—in particular, the amendment in my name that will take out Genesis Energy and that in my colleague Chris Hipkins’ name that will take out Solid Energy from the group of assets that are up for sale. The reason I would like to focus on these is that these are the two dirty companies. Genesis Energy is certainly the dirtiest generator around, and it is one where it is very important that we get a shift in its attitude and its production over time, as far as possible, towards renewables. It is part of, in the end, social responsibility, which is another clause that we will be debating by way of amendment in order to keep it in and keep it applying to these companies, if, in fact, my amendment and that of my colleague are unsuccessful. Genesis Energy’s, frankly, appalling annual report—if one goes to the chairman information it says “A word from the top”, and it has a picture of Jenny Shipley—is not quite the image that some of us think is appropriate for a State-owned enterprise, but—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

• Sitting suspended from 6 p.m. to 7.30 p.m.

Hon TREVOR MALLARD: Before the dinner break I was speaking on my amendment, which is set out on Supplementary Order Paper 65. The objective of it is to—within clauses 4, 5, and 6 of Part 1—delete Genesis Energy, known as Genesis Power Ltd, from this piece of legislation. The point that I was making earlier, and it is something that I am sure the Leader of the House is aware of from his previous responsibilities, is that Genesis is really the Crown’s dirty energy company. It has the Huntly power station. It is one that, I think it is fair to say, over the 1990s, and, one could say, even into the 2000s, had a focus more on non-renewables than was desirable. And it was the one that had the furthest to go. I know there has been some asset swapping around the place, with the intention of getting more energy for Genesis in the South Island. But that is not something that, from my perspective, means that this company is one that should be allowed to go out into the private sector and take its relatively dirty methods further out into the commercial world. I was also associating that with the Supplementary Order Paper from my colleague, the intention of which is to take Solid Energy New Zealand Ltd out. I want to try to link these two points, which my colleagues, I am sure, will speak to, going forward.

I was for a period of time the Minister for State Owned Enterprises, I think for 3 years. When I got my punishment at one stage, I had a number of portfolios that I liked taken off me, including sport and Rugby World Cup. I note my colleague smiling there. I was left with the State-owned enterprises portfolio, because like the environment and labour portfolios it was seen as a punishment. And dealing with Solid Energy, I think, was one of the harder jobs, but there were some really big decisions.

One of the decisions, which I know my colleagues in the Greens disagreed with, but I think was something that was really important, was the purchase of the farms with the lignite under them in Southland. My view is that there is a pretty clear choice there around the ownership of those, and whether we should have a State-owned enterprise involved in whatever development happens, and whether the Government should have influence over that as an owner as well as a regulator. My view has always been that at some stage in the future the energy that is there—there will be the methods developed in order for it to be used in an environmentally sustainable way. It might be 20 years away, it might be 40 years away, but if we left it to the private sector, and if it is privatised in this way, what will happen is it will be done on a strictly commercial basis, it will be mined very, very soon, it will be burned in pellets, and it will be outrageous.

We have some choices to make, and I disagree with both sides of the House. The Greens say: “Leave it to the private sector to own it and to use it.” The National Party says: “Sell it to the private sector and let them use it.” I disagree with both of them. What I wanted to see was us get to the point where that energy can be taken out, and where the emissions can be held underground. There are a number of loose heads in the Greens shaking around. There are a number of loose heads flapping. It is something that may be able to be done in the future, but if we do not own it, our ability to control it is removed only to the basis of our regulatory ability, and that is something that is pretty hard. That is what my amendment is about, and that is what my colleagues’ amendments are about. It is about the role of the State in the energy companies, and my view is that that is a role that goes well beyond the role of the regulator.

The other point that I now want to make is that there is on the Table a group of amendments that are what I would describe as fundamental or substantive. They are really big amendments from the Labour Party. They have to do with the Ombudsmen, they have to do with individual companies, and they have to do with Treaty issues—there are lots and lots of issues there. They are what I call substantive. But I want to say that the member in charge of this bill, the Hon Tony Ryall, has done a shocking job on the drafting—a shocking job on the drafting of this bill. I think the Attorney-General should be talking to Mr Ryall and trying to get—or Mr English; whose name is the bill in?

Chris Hipkins: Ryall.

Hon TREVOR MALLARD: He should be talking to Mr Ryall and getting him to sort out the drafting. The Labour Party has found hundreds—hundreds—of drafting errors in this bill. There are hundreds of drafting errors, bad English, English that is not plain, things that create doubt. We have mixed feelings on this. Should we help the Government tidy up its legislation, by moving a number of amendments to clarify the purpose, and to make it clear, or should we leave it to stew in its own bad drafting? I am a parliamentarian—a parliamentarian first. Some of these amendments are clearly matters of policy difference, and very big policy difference. But, as a parliamentarian, I cannot let legislation go through the Committee that is so badly drafted, and around which the Government is so disorganised. So it is the reverse of the normal saying; it is normally “I’m from the Government, I am here to help.”, but in this particular case we are here from the Opposition and we are here to help. That is why my colleague Chris Hipkins has, on behalf of the Labour Party, tabled a number of amendments. I take some care at letting one clerk carry them. There are copies of each of them there. We are doing that in order to make clear to the Government that it is important, not only as a matter of principle but also as a matter of proper parliamentary drafting.

ALFRED NGARO (National) : I move, That the question be now put.

BRENDAN HORAN (NZ First) : I rise on behalf of New Zealand First to utterly oppose this bill. If we look at the definitions of stupidity, or at one of them, it is doing the same thing over and over again and somehow expecting a different result.

Hon Simon Bridges: That’s what you did on the news every night.

BRENDAN HORAN: As I was saying, a perfect example of the definition of stupidity—right over there. You will notice that the speeches coming from members on that side of the House have been utterly unconvincing and entirely dull, because they realise that they are flogging a dead horse, that this did not work in the 1980s, that it did not work in the 1990s, and, with the benefit of hindsight, that it is criminal.

This piece of legislation, the Mixed Ownership Model Bill, removes the social responsibility clause that currently governs State-owned enterprises. This means that mixed-ownership companies will be driven entirely by the pursuit of greater profit margins. There will be a lack of public scrutiny because this piece of legislation removes the provisions for members of the public to access information that they previously had access to, such as the Official Information Act and the Ombudsmen Act. A person, in a legal sense, can also mean any trust or company. There is every possibility that an individual person can indirectly own far more than 10 percent of any mixed-ownership company, as all they need to do is set up a few trusts.

This Government has spoken about having a mandate by the people of New Zealand. We constantly hear those members in the House saying that 1 million people voted for them. Well, what about the 3 million who did not? I understand that those members on that side of the House have a little bit of difficulty with simple mathematics, but they should understand that 3 million is greater than 1 million. I ask where the fiscal responsibility is, because we hear them speaking about fiscal responsibility. It is quite an interesting perception, is it not? Here we have a National Government that got in 4 years ago, and Mr Ryall told us tonight that there was an $8 billion deficit. Somehow, these financial geniuses have turned it into a $64 billion deficit. How about that? How does that work? Can you get that maths right there? And it was approximately $17 billion in the past year. I ask, if they get $6 billion for these assets, which is the figure they have been touting, what are they going to do with it? How is it suddenly going to solve the economic problems we have? There is only so much you can blame on the Labour Party and on the economic mess that is happening all over the world today, and in Greece. You can try blaming Finland again, but that did not work for you.

When we take a look at these companies, and if we consider, say, Genesis, I ask who the chairperson of Genesis is. I googled it—I did not really need to google it, but for the benefit of some members I did—and there we see a lady. I saw her a few weeks ago, actually, over at the Bolton Hotel when John Banks was in trouble, and I wondered, is that who I think it is? It looks like a cross between a cougar and a dinosaur, and I thought “There’s a cougar-saurus!”. But, no, it was not. Then I found out that this person is also the chairperson of the Financial Services Council of New Zealand, and I thought: “We’ve heard from that person today.” Then, when I scrolled down, it said: “Independent executive director of the China Construction Bank”, and I am thinking, is there possibly a conflict of interest here? Is there a conflict of interest? I ask whether this is the same person who is getting $1,200 a day for the rebuild of Christchurch, because I would have thought that that alone would have been a 40-hour-a-week job. But, no, there seems to be no limits to which this Government will stoop to look after its mates.

PHIL TWYFORD (Labour—Te Atatū) : I want to speak to the fact that section 4 of the State-Owned Enterprises Act is missing from this bill. That is the section in the State-Owned Enterprises Act that requires the four energy companies that we are talking about to behave with the principles of social responsibility in mind. That is one of the criticisms that we have of this bill. By removing the energy companies from the principles of social responsibility, this bill and this National Government are doing a terrible disservice to New Zealanders all over the country.

In fact, everybody who pays a monthly electricity bill will pay the cost of this privatisation exercise. There have been a number of statistics discussed in the Chamber today that show the weighted average charge for domestic electricity users buying from State-owned enterprises is $265 a year less than the average for non - State-owned enterprise suppliers. We know, and the entire country knows, that once you hand over 49 percent of the ownership of these companies to private investors—most likely foreign investors—there is only one direction electricity prices will go, and that is up.

I want to tell the story of someone I know very well who lives in one of the coldest cities of New Zealand. This person lives on an invalids benefit. They rent a flat and pay $40 a fortnight in electricity on a top-up with the local electricity retailer. I visited the person last week, living in a one-bedroom flat, in freezing conditions at the bottom of the South Island, and this person lives with one electric heater in their flat. They do not use that electric heater, because the price of electricity is too much to pay because they cannot afford, on an invalids benefit, to even pay the cost of heating a one-bedroom flat, in freezing conditions, in a city that you know well, Mr Chairperson Roy. That is an unacceptable way for anybody to live in this country, but we know that the impact of this privatisation of these companies can only mean that power prices will go up. It is the inevitable consequence of what this National Government is doing, and it will mean that the price will be paid by New Zealanders in their electricity bills every single month.

We know that public ownership keeps prices down. These are natural monopolies we are talking about. They are a licence to print money, and if a half-share in these companies is handed over to private ownership, it is inevitable that the profit motive will drive up electricity prices. If National had even given consideration to retaining the social responsibility clause in this legislation so that these companies would have to ask themselves, before they put up prices, whether or not this was a socially responsible thing to do, and whether or not it was in the interests of the people of New Zealand, then that would have been a good thing, but that is clearly so far from being a consideration for National and for this Government.

The chief executive officer of Contact Energy recently told commercial investors that they should not invest in energy projects until prices rise, because a 6 percent return is not enough to cover the desired 8 percent return on capital. Well, there are two options. If the Government wants to make sure that this share float is profitable for private buyers, it has only two options: it can either raise power prices, and boards will be legally obliged to raise power prices, if they can, to make larger profits, or the second option is to discount the shares and get a lower price for the asset, and let buyers make a profit on the gains in the share price.

It is a very simple choice, and I submit to you that this Government is doing a grave disservice to New Zealanders by exempting these companies from the social responsibility clause. If they had, they might have spared New Zealanders the worst of what is surely to come, and that is rocketing electricity prices—

Hon Gerry Brownlee: Why didn’t the member stop the putting up of prices during the 2000s?

PHIL TWYFORD: Every New Zealander knows that power prices have gone up too much—every New Zealander knows that. No one is disputing that. Everyone in this Committee has acknowledged it, but if you think that—

Dr CAM CALDER (National) : I move, That the question be now put.

KEVIN HAGUE (Green) : I appreciate the opportunity to make my first contribution in this debate on Part 1 of the Mixed Ownership Model Bill. There are several more specific points that I will be wanting to make later on in the debate, but I thought I would begin by just reminding the Committee about this basic point: opinion polls consistently demonstrate that the vast majority of New Zealanders oppose the bill that the Government has in front of the Committee tonight. That is not only New Zealanders in general but also the majority of National Party supporters. So the claim of a mandate is tenuous, at best. I think the last opinion poll result that I saw was that 80 percent of people are opposed to this, as were 98 percent of the submissions received by the Finance and Expenditure Committee, and, by now, there are many, many signatures on the petition—over 80,000 already, I am told—to try to force a citizens initiated referendum on it.

Hon Gerry Brownlee: The taxpayer paid a dollar each for those signatures.

KEVIN HAGUE: The Leader of the House makes an interesting point that the Green Party has invested in enabling New Zealanders to have access to their democratic rights. The small amount of money we have spent to ensure that that occurs pales against the, at least, $120 million that the Government is spending to promote the asset sales agenda. I would like to offer a more precise figure for the Government’s spending to promote the asset sales agenda to New Zealanders. Sadly, I cannot, because the Minister of Finance repeatedly refused to answer the questions in the House today.

I have advanced data for New Zealanders who oppose the asset sales agenda, and the Government responds to those numbers by saying: “Well, look, we’re the Government. We’re the Government, and therefore we have the mandate.” That is kind of a logical flaw, is it not? What the Government intends to do is essentially to use the election result—and it is the party, I concede, with more votes than any other party—as, effectively, a referendum on every single issue. Well, actually, that is not how it works. That evidence from the opinion polls, which says that even the majority of those who voted for that party actually oppose its asset sales agenda, gives the lie to National’s claim. If we actually look at the reasons why people voted for that party, there are many different ones.

I want to come back to Part 1 of the bill, because I appreciate that I am speaking in quite a general way. I want to look at what the reasons are for those New Zealanders who oppose this agenda and oppose this bill. The first one, which I hear again and again at public meetings up and down the country, is that New Zealanders understand that what the Government proposes here is economic nonsense. It is just stupidity. It is a move that, by the Government’s own account, will actually worsen its fiscal position by approaching $100 million a year. That is right. It does not make any sense, does it?

I campaigned in the campaign last year with Chris Auchinvole from the Government side. He tried to explain the Government’s economic thinking to audiences in this way: he said that as a former business person himself, his practice was to get assets to a point of maturity where they were generating really good profits, and that was the right time to sell them off. Well, I have been in business myself, and that is kind of the polar reverse of the business strategy that I pursued. If I had assets generating good returns, as these are for the New Zealand taxpayer, selling them off is the very last thing I would want to do. I would want to focus on the bottom line: how can I actually get the best return for the New Zealand taxpayer? The best return is generated by retaining these assets.

New Zealanders also know that the hole that the Government says it is trying to fill by this strategy—a strategy that, in fact, makes the hole deeper—is actually one of the Government’s own making, as well. It is a hole that is caused by the Government’s tax changes in 2009, where those wealthiest New Zealanders got tax cuts.

MICHAEL WOODHOUSE (Senior Whip—National) : I move, That the question be now put.

KRIS FAAFOI (Labour—Mana) : It is no surprise you have given me the call, Mr Chair. As we peruse Part 1 of the Mixed Ownership Model Bill, there are a plethora of points in this proposed legislation that we could poke holes in. We could look at whether or not this legislation takes power companies and Air New Zealand away from the purview of the Ombudsmen Act or the Official Information Act. But I want to look at clause 3, where this bill before us takes the power companies that we are talking about in this bill away from the State-Owned Enterprises Act, and takes away their responsibility to act in a socially responsible manner.

I think when you get to the guts of why Kiwis are so enraged that these asset sales are going ahead, and why they are quite openly coming up to us when we are out in the streets and signing the petition that we are taking around to try to force a referendum to try to stop these asset sales, this is really what upsets them about the fact that these assets are being sold. At the moment our State-owned enterprises and State-owned assets, our three power companies, have to act with a dual motive. Yes, they have to make some money, but they also have to act in the best interests of the New Zealand people, and this bill removes that responsibility from our three power companies. What does that mean? I think this is what upsets Kiwi people so much, because Kiwis care about Kiwis. They know that when these power companies get sold off, the motivation of these companies changes from people and profits to purely profits.

A number of arguments have been made already in the Chamber this evening and this afternoon about how much power prices will go up—somewhere around roughly 12 percent. The difference in the amount that Kiwis pay if they are with a private energy company or with a State-owned enterprise energy company is, I believe, on average—

Hon Gerry Brownlee: What? You mean they are choosing to pay it?

KRIS FAAFOI: —a weighted average, Mr Brownlee—$256 per annum. Kiwis know that when the motivation of these energy companies becomes profit, one thing is certainly going to happen, and that is going to be that our power prices for our average Kiwis—our mum and dad investors, as the Government likes to say—are going to be going up. Whom is that going to affect? Whom is that going to affect? It will be the most vulnerable Kiwis in our country, who at the moment cannot afford to pay even their power bills, let alone buy a stake in their State-owned enterprises. They are struggling to pay the bills to turn the heater on, as we speak, this winter. This Government wants to sell our assets off so it can make life harder for those vulnerable Kiwis and can put their power prices up.

This Government, ideologically, wants to go ahead and say that it is OK to sell our State-owned assets. What is happening here is that our energy companies get hocked off—to mum and dad Kiwi investors, this Government says, but nowhere in this legislation does it protect our State-owned assets to stay in New Zealand. And our power prices will be going up. The present in this bill for all Kiwis around the country who right now are struggling to pay the bills is higher power prices. There will be higher power prices, so it is going to be harder for our elderly and our poor to keep themselves warm in winter, as it is now.

Hon Gerry Brownlee: Labour policy.

KRIS FAAFOI: Gerry is fine. He is nice and warm. He is snuggly over there. He is fine. Sorry, I should correct myself. Mr Brownlee is nice and snuggly and warm in his seat right now, but Kiwis out there who do not have enough money to be watching this tonight, so they are probably listening to it on their transistor radios, are going to be struggling to pay the bills. They are going to be struggling to pay the bills, and this Government wants to put the power prices up.

These companies are already owned by Kiwis, and that is what Kiwis love about them. They are owned by Kiwis, so there is social responsibility on those companies to make sure that everyone can afford to pay their power bills—everyone, not just those who can afford it but all Kiwis, who have a stake in these companies. But with this bill that is going to change. Thank you very much to the National Government for selling our State-owned assets for all our vulnerable Kiwis! It was not enough to whack our elderly and our young in the Budget; the Government is also going to put the power prices up for our elderly and young, with this bill.

I ask that we have a look at a Supplementary Order Paper put in by my colleague Clayton Cosgrove, which makes sure that the companies that are in this bill do have to have some form of social responsibility about them.

JONATHAN YOUNG (National—New Plymouth) : I move, That the question be now put.

DARIEN FENTON (Labour) : Thank you very much for the opportunity to have a call on Part 1 of this asset sales bill, the Mixed Ownership Model Bill. I particularly want to support amendments in the names of various of my colleagues that will remove these assets from the bill. We are totally opposed to them being included in this bill; in fact, we are totally opposed to the bill. As many of my colleagues have said, there are a number of problems with Part 1. One is the removal of access to the Ombudsman and the Official Information Act. The other one, as my colleague Kris Faafoi was talking about, is about the social responsibility clause.

But also the requirements to be a good employer will no longer have to be met by any person—any employer—who buys these assets, and the Government will have no responsibility. Let us talk about what “the responsibilities of a good employer” actually means. First of all, it means that there have to be good and safe working conditions. That is gone, gone—ditched—from this bill.

Hon Tau Henare: Who said they’re gone? What are you talking about?

DARIEN FENTON: Well, Tau Henare, perhaps you should read the bill. Perhaps the member does not understand exactly what his Minister for State Owned Enterprises is doing. The removal of those companies from the State-Owned Enterprises Act means that the employers no longer have to be good employers. It will also remove the need for an equal opportunities employment programme, for the impartial selection of suitably qualified persons, and for opportunities for the enhancement of the abilities of these individual employees.

I just want to go back a little and talk about why these assets were built in the first place. They were not built by private corporations and private companies. The State actually developed the electricity companies—in actual fact, the State coalmines, as well—because of the inability of the private sector to actually be able to provide low-cost electricity for residential consumers and to support the industry. As my colleagues have said, electricity is a fundamental and basic right. It is a basic right to be able to have electricity in your home. It is essential for householders, and its price is a significant factor in New Zealanders’ health and their living standards.

These assets that we are talking about in Part 1—Genesis Power, Meridian Energy, Mighty River Power, and Solid Energy—are assets that not only were bought and paid for by our forebears but also were built by our forebears. They were built and paid for by the sweat and hard work of New Zealanders, who thought they were going to be preserved for their children and grandchildren. But the assets in this bill on the chopping block are dams, wind farms, mines—

Hon Gerry Brownlee: Not on the chopping block.

DARIEN FENTON: They are on the chopping block.

Hon Gerry Brownlee: No, they’re not.

DARIEN FENTON: Absolutely on the chopping block, and it is very interesting when you look at some of them. Waitaki dam, for example, is described as the birthplace of the world’s first social welfare system. Manapōuri dam is also described as the birthplace of—according to Meridian Energy—our environmental awareness. It took 1,800 workers to build that, and it was a huge job. It took 1,800 workers to do that.

Hon Tau Henare: Oh, wowee! Whoop-de-doo!

Hon Trevor Mallard: Lots of them died.

DARIEN FENTON: And lots of them died. It is very interesting here, because the other day I dug out a little book here, a little book—

Hon Trevor Mallard: Is it the union book?

DARIEN FENTON: It is the union book. It is called The Determination Order for the New Zealand Workers’ Industrial Union of Workers. What is fairly interesting—apart from the fact this was 1960s and 1970s industrial relations, when these workers actually got penal rates—is that they had to have allowances for a whole range of things. They lived in camps, like I hear they are proposing that the construction workers of Christchurch live in. They lived in camps and they had to have things like separation allowances for married people, because they were separated from their families.

Some of the things that they had to be paid allowances for are horrific, when you read them. When you look at the things that they were paid allowances for under this award, it gives you some idea of what those builders, the people who constructed our dams and our mines, actually went through. They got allowances for things like poisons. They were given an allowance for someone actually mixing and applying poisonous spray.

Hon TAU HENARE (National) : I move, That the question be now put.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) : Mr Chair—[Interruption] Thank you, thank you. I listened to Dave Currie—I have just come back from the Olympic function—and it is very interesting what he said. He said we go on to the world stage and we utilise our cultural partnership. This legislation, the Mixed Ownership Model Bill, that is moved in this House tonight is one of the worst pieces of legislation in this country’s history as far as I am concerned as a Māori. It is not just about selling off the State’s assets, but it is the cunning little games that are built into it, like removing the Treaty rights. That is the constitutional document that agrees that there is a partnership in this country, and just in case Gerry Brownlee is short of history, I will tell him. In 1832 a Māori carried the Olympic flag.

Hon Gerry Brownlee: 1832?

Hon PAREKURA HOROMIA: In 1832. In 1840 the other people came to this nation, and they ripped the land off. They took the land. There were actually wars over it. [Interruption] No, no, no—this is the truth. There were actually wars over it. People fought, and there were dastardly things done. Most Kiwis are of a natural conscience.

Hon Member: Fair people.

Hon PAREKURA HOROMIA: Fair people who have tried to reconcile and go forward together. This legislation undermines the whole ethos of that.

We listened to the Minister of Finance this morning talking. He said 15 times—15 times—“Will you borrow $7 billion to buy them back?”. If that is all this is about—“We will sell the State assets, na-na-na-na, to see whether you will pay to buy them back when you get in.”—go suck on it. This is outrageous. And as for the Māori Party members, in relation to my ex - Minister of Māori Affairs colleague, the chair of the Māori Affairs Committee, letting this rubbish go into this document in Part 1, what are they thinking? What are they thinking? This is a disgrace. The Māori people respect the Treaty. You have removed it—you have removed it. It is really, uncannily, very quiet. How the hell can you have a partnership document that is sanctioned in this land, that is recognised and etched into this country’s history, apply to only 51 percent of the actions? How can you do that?

Hon Gerry Brownlee: What about the Foreshore and Seabed Bill?

Hon PAREKURA HOROMIA: Pardon?

Hon Gerry Brownlee: What about the Foreshore and Seabed Bill?

Hon PAREKURA HOROMIA: Well, that is right. But it is still there, Gerry. The foreshore and seabed is still there, Gerry, and that was about protection. That was about protection, Gerry. That was about protection. Mr Brownlee, it is still there. These assets are going to go. They are going to go with foreigners.

Hon Gerry Brownlee: No, they’re not.

Hon PAREKURA HOROMIA: Yes, they are. This about the rich pricks. This is about—

The CHAIRPERSON (Eric Roy): Order!

Hon PAREKURA HOROMIA: —everybody else.

The CHAIRPERSON (Eric Roy): Order!

Hon PAREKURA HOROMIA: Yes, it is. Yes, it is, Mr Chair. This is a disgrace.

The CHAIRPERSON (Eric Roy): No. Order! Order! No, that is not acceptable. I will terminate that speech.

Dr PAUL HUTCHISON (National—Hunua) : I move, That the question be now put.

The CHAIRPERSON (Eric Roy): The question is that the question be now put. Those who are of that opinion—

Hon CLAYTON COSGROVE (Labour) : I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): A point of order, the Hon Clayton Cosgrove.

Hon CLAYTON COSGROVE: I will wait for you to sit down.

The CHAIRPERSON (Eric Roy): Yes.

Hon CLAYTON COSGROVE: Sorry, I do not want to break the rules. I just want to bring to your attention a number of issues before you put the question, in your deliberations that you should put the question. There are a number of people on this side who have had no call at all, and you have seen the enthusiasm, I think, on all sides to take the call. The second thing I want to put to you—and this is with no disrespect to the Greens—is that because people on this side of the Chamber have been taking many, many calls, and people on the other side have not been taking calls, the calls have simply bounced, in many respects, between the Greens and Labour and, to some extent, New Zealand First. That has created a disproportionate—

The CHAIRPERSON (Eric Roy): Order! I have got the message. [Interruption] Order! I am standing. I have taken into consideration all the factors surrounding why the Committee should choose whether this is the time to terminate the debate on Part 1. I have taken all those things into consideration. It has been over 3 hours. I very carefully tried to measure out the speaking calls to as many as I could. I have listened to the substance of the debate and its relevance. I have considered all those factors. The question now is that the question be put.

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): I have ruled on this, and if the member is trifling with me he will spend some time out of the Chamber.

Hon CLAYTON COSGROVE (Labour) : I raise a point of order, Mr Chairperson. I do not wish to trifle, and I will not trifle with you, but I think I am entitled to make this point. You will be aware that this is an extremely—

The CHAIRPERSON (Eric Roy): Order! The member will sit. I do not think you are raising any new material. You have had your caution.

The CHAIRPERSON (Eric Roy): The questions will now be put. We have some amendments. Members, I am guided by new Standing Order 303, particularly paragraph (4), which—

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. Before you do that, I think there is an obligation if the Minister is in the Chamber for him to be in the chair, even while you are—

The CHAIRPERSON (Eric Roy): The member is correct. Thank you for that. The member is correct. To précis it, Standing Order 303(4) allows the grouping of a member’s amendments where it does not detract from the intent of the amendments.

• The question was put that the amendments set out on Supplementary Order Paper 68 in the name of Dr Russel Norman to Part 1 be agreed to.

The CHAIRPERSON (Eric Roy): Dr Russel Norman’s amendment to delete clause 6, as set out on Supplementary Order Paper 67, is now out of order, as it is inconsistent with an earlier decision of the Committee. The Rt Hon Winston Peters’ typescript amendment to delete clause 6 is out of order, as it is inconsistent with an earlier decision of the Committee.

• The question was put that the amendment set out on Supplementary Order Paper 46 in the name of Chris Hipkins to clause 7 be agreed to.

The CHAIRPERSON (Eric Roy): At 7.33 p.m. a large number of amendments to Part 1 were lodged in the names of various members of the Labour Party. These amendments seek to alter words or the order of words contained in the part, but make no substantive change to the meaning, as required by Speaker’s ruling 115/5. Because they do not meet that standard, they are ruled out of order.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. I want just to seek your assurance that you have read them, and that that is your decision for each of those amendments.

The CHAIRPERSON (Eric Roy): Yes. I have certainly read them. I may well have skim read them, but if the member would be aware, I did extend the debate for quite a period of time, not only to let me have a look at them but also to let the staff have a look at them, and I am very confident in the ruling I have just made. Therefore, the question is—

CHRIS HIPKINS (Senior Whip—Labour) : I raise a point of order, Mr Chairperson. Can I just check that it was Speaker’s ruling 115/5 that you were referring to?

The CHAIRPERSON (Eric Roy): Correct. I think I have quoted that correctly.

CHRIS HIPKINS: Speaker’s ruling 115/5 talks about the need for amendments to be “drafted with some precision,” and I think you will find that our amendments were drafted with some precision; “in a form of words that may be embodied in law.”, and I think you will find they meet that criterion; “must offer a serious alternative form of words.”, and I think you will find they meet that criterion—

The CHAIRPERSON (Eric Roy): No, they do not.

CHRIS HIPKINS: And “An amendment that is merely an attempt to criticise the provision will not be accepted.” Well, they do not do that. So they meet the criteria.

The CHAIRPERSON (Eric Roy): My ruling is essentially on the basis that they do not offer a serious alternative form of words.

Hon Trevor Mallard: They certainly do.

The CHAIRPERSON (Eric Roy): No, it is my ruling that they do not.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. These amendments have been very carefully drafted. A lot of them make a lot more sense and, in fact, are better drafting. I do not think it is on for the Chair to say that drafting improvements are not serious alternatives. These amendments in each case—sometimes minor, sometimes more significant—make a difference to the meaning. I now want to ask you whether, in fact, as you have looked at the amendments you have also looked at the Mixed Ownership Model Bill and seen the changes that occur for each of them.

The CHAIRPERSON (Eric Roy): I have made a ruling and I am standing by that ruling. The amendments that were tabled at 7.33 p.m. are out of order. The question is—

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. Are you saying they are out of order or they are to be grouped? Are you saying that the Opposition cannot even offer a drafting amendment to a bill and get a vote on it? That would just be an absolute outrage. If you are ruling that—that where there is a realistic change, a significant change, albeit minor, this Committee is not allowed to vote on it—that would be the first time that I have ever heard anything like that in the Committee. And doing it on this legislation makes it worse still.

The CHAIRPERSON (Eric Roy): It is my ruling that they do not offer a serious alternative to the words contained in the bill. Therefore I shall put Part 1.

Hon TREVOR MALLARD (Labour—Hutt South) : I move, That the Chairperson report progress to obtain the Speaker’s ruling on the admissibility of amendments that do not offer a serious alternative proposition.

• Motion agreed to.
• House resumed.