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House of Representatives
6 March 2012
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2. State-owned Energy Companies, Sales—Mixed-ownership Model


2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements on the sale of State-owned assets?

Rt Hon JOHN KEY (Prime Minister) : Yes, and in particular I stand by my statement that opponents of the mixed-ownership model need to explain to New Zealanders why it would be better to borrow an extra $5 billion to $7 billion from overseas lenders.

David Shearer: Which provisions in the Mixed Ownership Model Bill meet his commitment that “mum and dad will be at the front of the queue …”?

Rt Hon JOHN KEY: That is not necessarily in the legislation, because the Government has complete control of the book-building process. That has been the clear instruction to the investment bankers. I know why that member is asking that question. This is the reason: because he knows that it will be incredibly popular with—

Mr SPEAKER: Order! The question was a perfectly fair question and did not deserve that last part of the answer.

Chris Hipkins: He hasn’t answered it.

Mr SPEAKER: Order! We will come back to that member’s leader—the Leader of the Opposition—for a supplementary question.

David Shearer: I raise a point of order, Mr Speaker. I actually asked which provisions in the bill meet his commitment about mum and dad investors.

Mr SPEAKER: I think in fairness—[Interruption] Goodness me. I do not think we need some of these interjections when I am on my feet. What the right honourable Prime Minister said in his answer was that in his view the legislation did not require such provisions, because the Crown had control over certain events. That was the way he answered, and it was a perfectly reasonable answer to the question, I think. The last part of the question was what I was unhappy with, because the question was a perfectly fair question and did not deserve that last part of the answer.

David Shearer: Does he stand by his commitment in the Television New Zealand leaders’ debate last year that the mixed-ownership model would have “85 to 90 percent of the entire company owned by New Zealanders. That is my commitment to them tonight as Prime Minister.”?

Rt Hon JOHN KEY: Yes, that is my expectation.

David Shearer: Which provision in the bill gives effect to his commitment as Prime Minister to New Zealanders that 80 to 90 percent of State-owned enterprises being sold would remain in New Zealand hands?

Rt Hon JOHN KEY: As I said, that is not required, because the book build is the important process; that is how you determine who gets the shares or not. I would note that there is a great deal of scepticism from the Opposition that New Zealanders will want to buy these shares, despite the fact that they are actually sitting on $100 billion in deposits at the moment. Interestingly enough, Port of Tauranga, back in April 2008, had 66.5 percent of its shares owned by New Zealanders; today it is 70 percent.

David Shearer: Is it correct that under the current provisions of the bill half a dozen foreign investors could legally purchase all the listed shares?

Rt Hon JOHN KEY: No, because the limit is 10 percent, 6 times 10 is 60, and the Government is keeping 51 percent.

Mr SPEAKER: Dr Russel Norman. [Interruption] Order! Please, both front benches, I have called Dr Russel Norman and I want to hear his question.

Dr Russel Norman: Which provisions of the legislation to establish the partially privatised companies will prevent those companies from selling individual major electricity-generating assets?

Rt Hon JOHN KEY: Well, there are no provisions that do that, but, to the best of my knowledge, the last time that happened was under a Labour Government, when there was a company 100 percent owned by the Government. It was called Southern Hydro and Labour flogged it off.

David Shearer: Why does he believe he has a mandate to sell our assets, given his clear promise to New Zealanders before the election that 85 to 90 percent of the ownership would remain in New Zealand hands, yet this bill that his Government has tabled contains no provisions for that?

Rt Hon JOHN KEY: Unlike the previous Labour Government, which was not always transparent, a National Government—

Grant Robertson: I raise a point of order, Mr Speaker. Although that question had some political loading in it, I do not believe that starting an answer in the way he did fits with the rulings that you have previously given.

Mr SPEAKER: I think it is a fair point. It would be helpful if the Prime Minister did not start the answer that way. But I think the member has acknowledged that there was a bit of political loading in the question, and so some political content in the answer can be expected. I ask the Prime Minister to maybe not start the answer that way, please.

Rt Hon JOHN KEY: In January of 2011 I gave a speech outlining clearly the Government’s intention in relation to the mixed-ownership model. We then went through the course of all of 2011, and the then Labour Opposition raised the question of a mixed-ownership model during that year. We then had an election where the entire Labour Party campaign was “Don’t sell assets” under Phil Goff. To the best of my knowledge, the Labour Party campaigning against the mixed-ownership model delivered the worst result in Labour’s history. By the way, votes for the National Party, which campaigned for mixed ownership, went up.

Dr Russel Norman: Does the Prime Minister accept—[Interruption]

Mr SPEAKER: Order! I want to hear Dr Russel Norman’s question.

Dr Russel Norman: Thank you, Mr Speaker. Does the Prime Minister accept that election campaigns are fought on a multitude of issues, that parties win or lose votes on a multitude of issues, and that every poll done on this specific issue shows that the majority of New Zealanders do not support the plan to partially privatise the assets?

Rt Hon JOHN KEY: I accept that voters’ votes are for a variety of different reasons. I think voters who voted for National in the last campaign did so because they knew that we could manage the economy better than Labour and the Greens, they knew that we would have a better jobs programme than Labour and the Greens, they knew that we would run the health system better than Labour and the Greens, they knew that we would run the police force better than Labour and the Greens, and they knew that we would look after education services and demand standards better than Labour and the Greens. So I accept that there is a multitude of reasons, but you would have to say election 2011 was very much on the mixed-ownership model, and, on that basis, more people voted for National than in the previous election.

Rt Hon Winston Peters: If the Māori Party is against these sales, and if the United Future party campaigned in its television and other advertising on water being sacrosanct and kept in the hands of the public, where does he get his majority from?

Rt Hon JOHN KEY: We get that from the parliamentary majority: 59 plus 1 plus 1 equals 61. But there have been a variety of times in our history when we have looked at selling assets under the mixed-ownership model. For instance, in 1998 here is the prospectus for Auckland Airport, signed off by the then Deputy Prime Minister and Treasurer, the Rt Hon Winston Peters, who sold Auckland Airport and who in 2008 campaigned—

Mr SPEAKER: Order!

Dr Russel Norman: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I want to hear Dr Russel Norman’s question.

Dr Russel Norman: Thank you, Mr Speaker. Does the Prime Minister accept that the polls that have been done, which show 60-plus percent opposition to his partial privatisation plans, are accurate, or does he believe that there is some mistake and he actually has a mandate for his privatisation plans?

Rt Hon JOHN KEY: I think there is a difference between an electoral mandate and what a poll might say. I accept that on a variety of different issues there are strongly held views. I remember the Green Party being strongly in favour of changes to the smacking legislation in New Zealand, and the polls being vehemently opposed to that change.

Dr Russel Norman: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I want to hear the supplementary question.

Dr Russel Norman: Thank you, Mr Speaker. Does he believe that it is short-sighted to deal with the Government’s current Budget issues—in part of the Government’s own making—by privatising assets that have been built up by generations of New Zealanders, and that this Government is just a guardian of, before passing them on to the next generation?

Rt Hon JOHN KEY: No. The mixed-ownership model is there for a variety of extremely sound reasons. For a start-off, it is to give New Zealanders an opportunity to have some quality assets to invest in. This is actually what opponents of the mixed-ownership model are saying: they are saying it is OK for the New Zealand Superannuation Fund to be the custodian of $17 billion worth of New Zealanders’ assets, and to invest in just about every single Australian energy company, but it is not to be allowed to invest in New Zealand energy companies, with the exception of Contact Energy. Secondly, the Government wants to expand the balance sheet, not contract the balance sheet, and in 5 years’ time we will have $22 billion more of assets. Thirdly, I do not know whether the member watches TV, but if he does he will see countries that are highly indebted, like Greece, and realise that that is not the right way to be going.

Rt Hon Winston Peters: I seek to table two reports. One is to do with Auckland Airport, which National sought to sell to foreigners, and we forced—

Mr SPEAKER: Order! The member will resume his seat for the moment. The member must identify the source of the document before describing what is in it.

Rt Hon Winston Peters: Mr Speaker, can I ask you: is it not the rule that you can, before the close of day, provide the evidence? And this evidence is the New Zealand Herald of that time.

Mr SPEAKER: That is quite correct. The member would have until the close of today’s sitting day to table the documents, if the House were to grant leave, but before members describe the contents of a document, they are to describe the source, in case the source is not the kind of source of documents we put before the House. So the member is perfectly at liberty to seek leave, but we must know the source of the document first.

Rt Hon Winston Peters: The source of the document is the New Zealand Herald the day after the sale.

Mr SPEAKER: No. We do not table newspaper clippings.