English Bill: Questions for Oral Answer — Questions to Ministers 
English Bill: Questions for Oral Answer — Questions to Ministers 
[Volume:647;Page:15837] 
4.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Finance 
: What is the Government’s best estimate of the final purchase price for Toll NZ’s rail and ferry business? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 It is $665 million. 
Hon Bill English 
: Can the Minister tell the House and the public whether that figure includes the Government taking on somewhere around $100 million to $200 million of debt Toll NZ having access to rent-free depot space in prime locations for 6 years and as rumoured a special discount for Toll NZ’s own freight? 
Hon Dr MICHAEL CULLEN 
: On the first point clearly the company carries some debt. It also has a finance lease over the  
Arahura 
. The price being paid is slightly above the per share price with which Toll NZ bought out the minority shareholders so a premium was paid to obtain control. That share price of course reflected also the existence of debt and the  
Arahura 
 finance lease. On the other matters the member is free to invent what he likes for the next few weeks; the full details will be released when the final deal is completed and I think members will discover that a lot of what has been said in the public area is greatly exaggerated. 
Hon Mark Gosche 
: Has he received any reports on support for the purchase of New Zealand’s rail asset? 
Hon Dr MICHAEL CULLEN 
: Yes. I received a report last week from a Mr John Key stating that he had supported the Government’s purchase of the rail track in 2004. However at the time he said that he opposed it vehemently saying it would lead to pork barrel politics. So I am sure the report that National is opposed to Toll NZ’s rail and ferry assets being bought by the Government will be followed by an expression of support—indeed by his claiming sooner or later that the National Party was responsible for it. 
Hon Bill English 
: Can the Minister confirm that the reason he has not told the public the full price of the Toll NZ purchase is that although taxpayers are hurting he has committed well over $1 billion to investment in Toll NZ—to expenditure of taxpayers’ money for purely political reasons? 
Hon Dr MICHAEL CULLEN 
: I thought it was supposed to be for nostalgia reasons according to Mr Key who dismissed rail as a completely out-of-date mode of transport. I note also that the Opposition has committed $1.5 billion to subsidise Telecom as a monopoly provider of fibre-optic cable to the home. The cost of the rail transaction is significantly less than that and it will lead to profits—if there are any—being retained in New Zealand; it will not lead to continued demands from foreign ownership for increased subsidies which is what New Zealand was facing under private ownership. 
Hon Mark Gosche 
: Has he received any reports about New Zealanders supporting the Government’s buy-back of the rail system? 
Hon Dr MICHAEL CULLEN 
: I continue to receive correspondence from people who support the buy-back of the rail system and I have no doubt that the public understands why the rail system is so important for the future of the economy. The Leader of the Opposition however continues to accuse these people of suffering from nostalgia and keeps making silly jokes about train sets. 
Hon Bill English 
: The Minister having raised the matter of subsidies for overseas owners why did he do a deal—including secret sweeteners—that meant that Australian shareholders benefited from an increase in the value of their shareholdings of a quarter of a billion dollars? As one Australian said “You get only one Helen Clark moment in your lifetime.” 
Hon Dr MICHAEL CULLEN 
: I have many of them almost every day so that clearly is not true! The ridiculous thing about that statement is that Toll NZ was continuing to seek ever larger subsidies from the Government to operate a business from which it expected to make not a minimal rate of return but a very substantial rate of return after having received Government subsidies. Mr Key claimed that we should have a national rail access agreement; we have had one for 4 years and all we have had is endless arguments about what it means and enforcing it. 
Hon Bill English 
: When will the Minister make public the Government’s best estimates of the new subsidies that will have to apply to the rail system and its best estimate of the investment requirement that the taxpayer has now taken on or did he buy this company on a whim because he thought he would get a political headline out of it? 
Hon Dr MICHAEL CULLEN 
: Clearly from the way the National Party’s members are going on in the House this afternoon it has hurt the National Party that we have bought back the rail system. But there is no secret agreement. We are in negotiations on the final details and when they are concluded—and I assume they will be successful—we will release the full agreement and once again most of Mr English’s many claims will be proven to be wrong. 
Hon Bill English 
: Does the answer to that question mean that the Minister does not know the answer to the question I asked which was when the public will reveal the full amount of the subsidy that it will have to apply to the company it now owns and when he will reveal the full amount of the investment that he has committed on behalf of hard-up taxpayers so that we can all know how much this reckless decision will cost taxpayers? 
Hon Dr MICHAEL CULLEN 
: Let me first tell the member that taxpayers support this decision by a very clear majority; I have to tell him that he is on the wrong side of the tracks on this one. Second he did not hear what I said. I am certain that the public will not be revealing anything about this! The Government will be telling the public the full details of the agreement when the agreement is finalised. As to the future cost does the member mean the next 5 10 or 50 years of investment? One thing I am quite sure of is that the investment in the track and in measures associated with the track is actually far higher than the investment in rolling stock that is required over the next 5-year period. 
Peter Brown 
: Does the Minister agree that with the purchase of the rail system and with a positive shipping plan the Government would be in a position to make a comprehensive assessment of transport infrastructure in this country incorporating road rail sea and air transport; if he does agree would he confirm that that is the best way forward both economically and socially for this country? 
Hon Dr MICHAEL CULLEN 
: I agree with the member. The Minister of Transport will be making further announcements around sea freight issues within the near future. Clearly Government ownership of the rail system through statement of intent procedures gives a much greater chance of better integration of road rail and sea transport modes.