Norman Russel: Questions for Oral Answer — Questions to Ministers 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Volume:678;Page:889] 
3. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Prime Minister 
: Does he stand by his statement about asset sales that it was the Government’s intention that “every New Zealander who wants shares gets them”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 That quote was attributed to me in a Stuff article but is in fact incorrect. The quote was actually— 
Hon Members 
: Oh! 
Rt Hon JOHN KEY 
: Well the quote was actually a question posed to me by Duncan Garner from TV3 to which I responded “That’s what we are working our way through”—obviously—“at the moment. But the intention is that for the retail distribution that opportunity for mums and dads to buy to be absolutely at the front of the queue.” I stand by that statement. 
Dr Russel Norman 
: How will he ensure that every New Zealander who wants shares gets them when half of all adults have an income of less than $550 a week? How will these people be able to afford to buy shares in the newly privatised companies? 
Rt Hon JOHN KEY 
: I say to the member that just because he repeats something that was a question from Duncan Garner does not mean that it was a statement from me. Secondly it is important to understand how New Zealanders might buy shares. Let me run the member through that because it will be useful for him. Firstly they could buy them through an institution like the New Zealand Superannuation Fund and on that basis every New Zealander in the New Zealand Superannuation Fund will be having shares bought on their behalf regardless of their income. That probably answers your direct question. Secondly New Zealanders may buy them through their own funds in the form of the KiwiSaver accounts of which there are 1.8 million and they are growing by a substantial amount each month. Thirdly iwi may buy them collectively through their own resources which may have come from a Treaty settlement. Fourthly we are seeing indications from community trusts that they would want to buy them; again that would probably cover off some quite low-income New Zealanders. Finally there will be a retail offering which is where a New Zealander may buy them directly either through a broker or directly with their own retirement savings. So there is quite a wide range of ways that a New Zealander may choose to buy shares in the mixed-ownership model. 
Dr Russel Norman 
: How will individual New Zealanders be able to buy shares when half of all New Zealanders have an income that is less than $550 a week? How will those individual New Zealanders be able to afford to buy shares in companies that they currently own? 
Rt Hon JOHN KEY 
: I could if the member wanted me to take him through the broad outline of how that process might work but fundamentally the way it would work would be through either a broker or a pre-allocation process and a pre-registration process where New Zealanders will be able to work out how many shares they want up to probably a certain amount. That process would work. We saw that with Contact Energy. It might see tens of thousands of New Zealanders wanting to do that. Secondly when the member says that half of all New Zealanders have an income of $550 a week he must recognise that there are an awful lot of New Zealanders who are for instance on superannuation and therefore their income is relatively low but that does not mean that it represents their asset base which could be considerably higher. Secondly it may mean that the person is at university or at school studying. Again their income levels could be low but that does not necessarily mean that their income in the future will not be high. Thirdly if one has a look at someone for instance who has a KiwiSaver account then they will be having to make investments on a weekly basis. 
Hon Clayton Cosgrove 
: If he cannot guarantee that ordinary Kiwi mums and dads will be able to afford to buy shares how on earth can he guarantee that those same Kiwi mums and dads will be at the front of the queue? 
Rt Hon JOHN KEY 
: I think we will see considerable interest from Kiwi mums and dads. That has certainly been the case when there have historically been floats from Auckland Airport right through to the Port of Tauranga right through to TradeMe which recently had the mixed-ownership model effectively applied to it and it was massively oversubscribed. There is $100 billion in deposit in New Zealand at the moment so we know that there is a considerable amount of cash sitting out there and in my view the risk to this process is not that there are not enough people wanting to buy shares; the risk to this process is that there will be quite widespread interest and making sure everyone gets his or her allocation will be the challenge. 
Rt Hon Winston Peters 
: If it is true that mum and dad iwi and family trusts may subscribe and may oversubscribe then how will corporations foreign or domestic obtain even one share under his promise? 
Rt Hon JOHN KEY 
: Again I would not want to get in front of a process that has not even started yet but if we were to take a hypothetical example I think from memory Contact Energy had about 100000 individual retail investors. I might be wrong but it was in that order of magnitude. Again if you sat around and said that—off the top of my head—they bought up to about $5000 that is normal for a retail offering. I am sure the member can do the maths. Basically 100000 people at $5000 each is $50 million. That is relatively small when you consider that as an example Mighty River Power has a value of about $3.5 billion and the overall offering therefore at 49 percent would be about $1.5 billion. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I have listened to all the permutations but the fact is I have asked him how if the three categories he has outlined oversubscribe any corporate will get even one share because they after all—the three groups— 
Mr SPEAKER 
: The member’s question was perfectly understandable and the Prime Minister was answering it in what I perceived to be a perfectly rational way explaining how many shares might be sought by different sectors and the overall availability given the size of these assets. It seemed to be a perfectly rational answer to the question. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. My question simply is if a certain circumstance happens then how an overseas or domestic corporate can get even one share. That is the thrust of this question. 
Mr SPEAKER 
: The member may have asked a question that he wishes to get a particular answer out of but there is no guarantee he will get a particular answer out of a hypothetical question. The Prime Minister was answering the question in a perfectly rational manner. 
Dr Russel Norman 
: Does the Prime Minister accept that the vast majority of mums and dads—New Zealanders—will not be able to afford to buy shares in these partially privatised companies? 
Rt Hon JOHN KEY 
: I think it depends on how you define “vast majority” because if you take for instance KiwiSaver accounts there are 1.8 million and that tells you that an awful lot of people actually have a KiwiSaver account. If you consider that the New Zealand Superannuation Fund and ACC are buying on behalf of all New Zealanders then no I do not accept that logic. So it depends on where you are going. But let me raise this one point. It is important that New Zealanders understand what the member is advocating. Russel Norman is saying he wants the New Zealand Superannuation Fund to invest in the Australian economy and not in the New Zealand economy— 
Dr Russel Norman 
: I raise a point of order Mr Speaker. There was nothing in that question that was about Russel Norman. The Prime Minister simply introduced that. It had nothing to do with the answer. 
Mr SPEAKER 
: The member in fairness though has kept repeating—I have listened carefully to his questions and the theme of the questions has been pretty similar right the way through. The Prime Minister has tried to explain in response to the member’s questions the way he sees access to these shares being available to New Zealanders. In that last answer there the Prime Minister went a bit further to explain how he sees the outcome of the implication in the question. I would not let him go on for too long but I think the risk when members keep asking the same question over and over again is that when it is being answered a Minister is going to say—and I cannot stop them from going that step—that the implication of the question is this. I would have stopped the Prime Minister had he gone on for too long but I do not think it was totally unreasonable. 
Dr Russel Norman 
: Does he accept that what John Key is saying is that he will take the assets away from all New Zealanders who currently own them against the wishes of the majority of New Zealanders who oppose the privatisation scheme and when you take property from people against their wishes it is called raupatu? 
Rt Hon JOHN KEY 
: This may come as a huge relief to the member but I am not about to start talking about myself in the third person. I will leave that for other Prime Ministers who used to have that affliction. 
Hon Bill English 
: And thank God for that! 
Rt Hon JOHN KEY 
: And thank God for that yes exactly. Secondly no I do not accept that. Majority control of these companies will be held by New Zealanders. I think the vast bulk of the shares will be bought by New Zealanders and we will be purchasing on behalf of New Zealanders an additional $22 billion approximately of assets over the next 5 years. What the member is saying is he wants New Zealand to go into deeper debt. What the member is saying is he wants to limit the opportunities for New Zealanders to invest in New Zealand. I think on that basis the member is misguided. 
Dr Russel Norman 
: Is it an accurate description of his policy to say that he cut taxes on upper-income earners resulting in an increased Budget deficit and he then used the deficit to justify the privatisation of public infrastructure which will then be sold to the people who can afford to buy it—the very same people whom he gave big tax cuts to? 
Rt Hon JOHN KEY 
: No.