Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 20 February 2013. Volume:687;Page:8015. Text is incorporated into the Bound Volume.] 
8. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister for State Owned Enterprises 
: What contingency plans if any does the Government have in place regarding its asset sale programme should the Tiwai Point aluminium smelter reduce production? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 The Government contingency is that the minority share sale is and always has been subject to market conditions. The New Zealand electricity market is well experienced in factoring in production fluctuations at Tiwai—for example aluminium production was cut by 10 percent in 2008 and the market adapted to that. The Government share offer programme aims to raise between $5 billion and $7 billion to help control debt and invest in important social infrastructure in the future like schools and hospitals. 
Hon Clayton Cosgrove 
: What effect would he expect a reduction in national electricity demand by 14 to 15 percent to have on the value of State-owned electricity generators? 
Hon TONY RYALL 
: Well of course that is hypothetical but what I would say is that our electricity markets in New Zealand are able to price in uncertainty. I think the current situation in respect of negotiations at the smelter is well known by the electricity market and certainly has been priced into the publicly listed electricity companies already on the New Zealand sharemarket. The member can be assured that any offer document for any of the Government’s share offers will disclose the risks and issues that potential investors need to consider before participating in any such offer. 
Hon Clayton Cosgrove 
: By acknowledging the issues with Tiwai Point and its potential effect on the electricity industry is he admitting that an uncertainty discount will be priced into the shares by purchasers and that the Government will be accepting a lower price for the power companies than it otherwise would if it maintained its current asset sale schedule? 
Hon TONY RYALL 
: No I am not saying that. I would have thought the company most affected by the uncertainty is Contact Energy and its share price has gone up. 
Hon Clayton Cosgrove 
: Was the chief executive of Contact Energy wrong when he said that “electricity demand is weak” was Statistics New Zealand wrong when it said this morning that “The input price of electricity for producers declined 5 percent in the past year.” is the New Zealand electricity futures market wrong in showing that wholesale electricity prices will increase below inflation through 2015 and is PricewaterhouseCoopers wrong when it says that electricity “demand growth is stalling. Generation development programmes are being delayed or put on hold.”; and if these entities and people are in fact correct why is he selling State-owned power companies when electricity supply is high and demand is low? 
Hon TONY RYALL 
: All those matters are factored into the price that the Government will get but the fact is that our nation’s debt is growing significantly as the Government has sought to take the sharp edges off the recession and protect New Zealanders from some of the significant cuts that we have seen elsewhere. By selling these assets minority stake and freeing up cash we continue to invest in our growing economy and important social infrastructure like schools and hospitals. I must say it is very odd that that member opposite is advocating for higher power prices.