Dean Jacqui: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeDean Jacqui: Questions for Oral Answer — Questions to Ministers[Sitting date: 08 May 2013. Volume:689;Page:9769. Text is incorporated into the Bound Volume.]1.JACQUI DEAN (National—Waitaki) to theMinister of Finance: What progress is the Government making with its share offer programme?Hon BILL ENGLISH (Minister of Finance): The Government is making good progress on the share offer programme. Last night the Government set the price for the Mighty River Power share offer at $2.50 per share. The 113000 New Zealanders were today allocated shares through the retail sales pool and by Friday night tomorrow night the Government will have collected $1.7 billion in proceeds which will be available to the Government for investing in other public assets.Jacqui Dean: How much did the Mighty River Power share offer raise for taxpayers and how will that money be invested?Hon BILL ENGLISH: There has been I think a misunderstanding that somehow in selling shares the Government and the taxpayer are losing an asset. In fact we are swapping shares for cash and by tomorrow night the Government will have $1.7 billion in its bank account ready to invest in those projects that will be outlined in the Budget through the Future Investment Fund. Future proceeds of asset sales will also go into that fund. Parties that want to buy back the assets or not sell them will have to borrow the same amount of money from foreign bankers if they want to invest in the same way this Government plans to invest in infrastructure in hospitals in schools and in better public services.Jacqui Dean: What are the benefits of the Government’s share offer programme?Hon BILL ENGLISH: There are many benefits. In the first place the Government achieved its objective of widespread New Zealand ownership—86.5 percent of this company remains owned by New Zealanders. Secondly it has provided an opportunity for New Zealand savers to invest their money in the share market many of them for the first time. Thirdly we have collected $1.7 billion in cash proceeds which are available to the Government for reinvestment in public assets. And finally it is a significant move in reinforcing our public capital markets where Mighty River Power will list as the fifth-biggest company on the stock exchange. A strong public capital market is one of the ingredients for higher incomes and more jobs.Dr Russel Norman: Is it not true that Treasury told the Government in the Budget Policy Statement that as a result of the Government’s privatisation programme the Government would be worse off by $90 million to $100 million every year on a net basis?Hon BILL ENGLISH: No that is not correct. Treasury provided a range of measures of the fiscal impact of the sales some of which were slightly positive and some of which were slightly negative. The Government has debated this issue for several years. We came to the view which I believe has been vindicated that the sale of49 percent of this company will be good for the company good for the economy and good for the Government’s books and will help us to avoid the kinds of high levels of debt that the Opposition seems to favour.Dr Russel Norman: Point of order Mr Speaker. I seek to leave—I seek leave to table—[Interruption]Mr SPEAKER: Order! I want to hear what the point of order is. [Interruption] Order! The member has called for a point of order. I want to hear what it is. It will be heard in silence.Dr Russel Norman: Thank you Mr Speaker. In light of the Minister’s denial I seek leave to table the Budget Policy Statement which shows that Treasury says—Mr SPEAKER: Order! The Budget Policy Statement is available to all members.Rt Hon Winston Peters: Will the Minister tell the country what the likely dividends are going to be from the replacement investments he has just mentioned in comparison with those dividends now lost from Mighty River Power; and if there is nothing that is—Hon Steven Joyce: It’ll be the interest on the wonderful schools and hospitals sunshine.Rt Hon Winston Peters: Oh so it is interest now is it?Mr SPEAKER: Order! Would the member please—Rt Hon Winston Peters: Well “Big Ears” keeps opening his mouth when I’m talking.Mr SPEAKER: That is true. It is not helpful for there to be interjection. Would the member please ask his supplementary question.Rt Hon Winston Peters: What will the likely dividends be from the replacement investment that he just referred to with respect to the cash he is getting from Mighty River Power as opposed to that lost from Mighty River Power; and if it is not in any way an equivalent why does he expect the public to believe the bulldust he is giving us now?Hon BILL ENGLISH: Well because it is not bulldust; it is a simple fact. The $1.7 billion collected will be invested through the Future Investment Fund and other public assets. Some of those assets will not pay dividends such as new schools new public buildings in Christchurch new hospitals and other infrastructure that the Government needs to invest in.Jacqui Dean: What reports has he received on alternative policies to the successful share offer programme?Hon BILL ENGLISH: I have seen reports—Chris Hipkins: Not to sell them?Hon BILL ENGLISH: That is right. I have seen reports of policies not to sell them and reports of a referendum to be held to try to prevent the Government from selling them which has so far failed because one in four of the signatures was dodgy.Hon Clayton Cosgrove: Will he give New Zealanders a guarantee that as a result of this float excessive power prices will not occur as Mighty River Power looks to pay out up to 110 percent of its profits as dividends to its previous owners as stated in the 2012 statement of corporate intent?Hon BILL ENGLISH: I can guarantee the member that the fact that the company has floated has no direct effect on power prices and that in fact the process of bringing it to the market has turned it into a very efficient cost-effective company that will need to compete in the market against other companies in a way that will tend to hold prices down from the very high increases that occurred under that Minister’s model for the electricity market.