Hughes Gareth: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Hughes Gareth: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3081. Text is incorporated into the Bound Volume.] 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Chair. Nga 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.