Ardern Jacinda: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Ardern Jacinda: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3109. Text is incorporated into the Bound Volume.] 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to take a call on Part 2 of this bill the Mixed Ownership Model Bill. In particular I would like to speak to my Supplementary Order Paper 44 on this part of the bill. I have to say I was disappointed that the Minister for State Owned Enterprises when he took his last call rather than focusing on Part 2 of the bill and the questions that we raised instead decided to go back through the 1980s and dwell instead on other issues. He seems like most of the National Party members over there to have an obsession with the 1980s and says that members on this side of the Chamber have forgotten our own history. 
We know our history; we do. I do not often quote Winston Churchill—I do not—but I will. Winston Churchill once famously said: “When the facts change I change my mind. What do you do sir?”. Well the facts are on the table when it comes to asset sales. We learnt our lesson. We have moved on from our alternative position of the 1980s. We learnt our lesson and now we are challenging the National Government to learn that lesson also rather than repeat the errors of old. 
So I will ask again in lieu of Mr Ryall having picked up on the questions that we asked to be addressed: why is there no penalty for exceeding the 10 percent cap? That was not covered by Mr Ryall. Also Tuwharetoa’s concerns—which are extremely legitimate and which were raised at the Finance and Expenditure Committee—over their rights not being protected by the changes that the Government has made within this bill were not addressed by Mr Ryall as the Minister in the chair. So I ask instead whether Minister Tolley would please address for this Committee those two very legitimate concerns that are being raised—in particular on behalf of the people of Tuwharetoa. 
But I would like to speak to the Supplementary Order Paper in my name which refers to the way in which the companies in question will be referred to or characterised in this bill. That is particularly relevant to Part 2 which even begins with the heading “Ongoing provision for mixed ownership model companies”. My Supplementary Order Paper changes that title changes the reference to “mixed ownership model companies” and instead proposes that that be replaced in all areas in which it is referred to with the title “privatisation of public property company”. The reason for that is that we want to bring some transparency to this bill through the way that some of these companies are referred to because we believe that the use of the word “partial” is quite misleading. I want to delve into why that is in my address. 
First of all the use of the words “partial mixed-ownership model company” implies a retention of the status quo and that somehow the use of “partial privatisation” will still lend itself towards the outcomes that we already have. I think a lot of the debate in Part 1 lent itself to suggesting why that will not be the case for those companies that are addressed in Part 2. Why is that? It is because mixed-ownership models—which of course include partial privatisation—by default can often equate to the whole. Changing partially the way something operates can in effect change the way the whole beast operates. It does not matter whether it is 40 percent 51 percent or 100 percent that can be the case. 
We have some historical examples where that certainly has been the case. I want to reflect on what happened for instance with the way that over time the old Forest Service was altered in the way that it operated. The Forest Service obviously had been around for some time when in the 1980s it was transferred to the Forestry Corporation. When it was transferred to the Forestry Corporation which had a different set of objectives that again tried to create a bit of a mixed model in a sense it abandoned the objectives that were set in 1976 which were around the environment the economy and employment. In 1976 those were some of the extra things that were added to the old objectives from I think something like the 1930s. 
But then in the 1980s all of that was dumped. It was dumped for the pure notion of a profit imperative. At that point the partial really overtook the whole in the way that that was going to be managed. Contractors were brought in in place of those who were full-time employees and assets were sold off. In fact it gets very very interesting when we see a debate that happened during this sort of mixed-model event when debate ensued—and I believe that this was in the very late 1980s and early 1990s—between the newly formed Forestry Corporation and the Government over the value of the forestry on its books and over the value of the land. 
You will be interested to know Mr Chair and members of the Committee that the way that the Forestry Corporation with its pure profit imperative decided to resolve this dispute it was having with the Government over the value of this land was to just sell it. It was to just sell the land—that was the way that that dispute was resolved. There we had an attempt to bring together some different ways of operating—some different modi operandi. At the end of the day the overriding imperative at that time was profit. The partial became the whole. That is why we believe that the use of this “mixed ownership model company” turn of phrase implies something that is actually very difficult to achieve. 
In the same way we pointed out that the removal of the Official Information Act provisions is also very difficult to achieve because even though there is still a State interest in these companies the overriding interest of shareholders has taken over the way that it will operate. For instance also you could potentially get sued if these companies do not pursue the singular goal of the shareholder which will be profit again proving that “mixed” does not mean that the imperatives of the State will override the interests of shareholders. It is again implying that a mixed-ownership model is very difficult to operate. 
If we look into the way that “partial” is referred to in the dictionary—and I thought this would be an interesting exercise; no one else may agree with me—and at people’s common understanding it says “affecting only a part.” Can you affect only part of a board? Can you affect only part of a dam? It is incredibly difficult to do. I did in fact see an example of the use of the word “partial”. Here is a quote to explain the way that partial can be used: “The plans called for the partial deployment of missiles.” I quite like that. How do you partially deploy missiles? How do you partially privatise an asset? Either you privatise or you do not. I think that that has been the point to argue which is why my Supplementary Order Paper amends— 
Hon Members 
: A little bit pregnant! 
JACINDA ARDERN 
: A little bit pregnant yes. That is why my Supplementary Order Paper makes the amendment to replace “mixed ownership model company” with “privatisation of public property companies”. Because there is also an irony in the fact that “partial” of course is also a reference to favouring one person or side and I think that is a point that we have made very strongly in this debate. 
But the notion of privatisation which is what we intend to replace the references to “mixed ownership model companies” in Part 2 with—with “privatisation of public property companies”—is because that plays very much to the understanding of the public over the meaning of privatisation and that is of course the process of transferring ownership from the public sector to the private sector. It does not quibble over the proportion by which you do that whether or not it is a mixed model or whether or not there is a partial profit imperative or a complete loss of social responsibility imperatives. It is the notion of whether or not something is being transferred from one form of ownership to another. That is privatisation and that is what this bill does. So if we are truly being transparent to the public over what this bill put forward by the Government does then we should surely enact that transparency over the way that these companies are referred to in Part 2 by no longer referring to them as “mixed ownership model companies” and replacing that with “privatisation of public property companies”. 
In fact I would like to extend a challenge to the Minister in the chair that if in fact she stands by these companies still being called mixed-ownership model companies then give us the difference in definition between the way that a mixed-ownership model company will substantively operate that is different from the way that for instance those private electricity retailers currently operate. For example can she give us the substantive differences between the ways that this model will operate versus those current private electricity retailers in New Zealand? I would be very interested in those differences. If the Minister in the chair cannot demonstrate to us that there are any substantive differences then my Supplementary Order Paper should stand and that is for the renaming of the mixed-ownership model companies.