Volume 680 Week 13 - Thursday 14 June 2012 
Text is incorporated into the Bound Volume 
Volume 680 Week 13 - Thursday 14 June 2012 
[Sitting date: 14 June 2012. Volume:680;Page:2977. Text is incorporated into the Bound Volume.] 
Thursday 14 June 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Motions 
United States Forces—70th Anniversary of Arrival in New Zealand During World War II 
Hon MURRAY McCULLY (Minister of Foreign Affairs) 
: 
 I seek leave to move without notice a motion noting the 70th anniversary of the arrival of the United States forces in New Zealand. 
Mr SPEAKER 
: Is there any objection to that course of action being followed? There is none. 
Hon MURRAY McCULLY 
: I move  
That this House note the 70th anniversary of the arrival of the United States forces in New Zealand in 1942; recall the gratitude of the New Zealand people at the protection provided by the United States while our own troops were engaged in the Middle East and Europe; and note the growing strength of political security and economic cooperation between our two countries today 
. On 14 June 1942 70 years ago today US Marines sailed into Wellington Harbour. Five US army transport ships had sailed into Auckland 2 days earlier. They came to offer protection at a time when New Zealand’s own forces were engaged in Europe and the Middle East and New Zealand was wide open to invasion. From June 1942 to mid-1944 there were between 15000 and 45000 American servicemen in camp in New Zealand at any one time.  
This week these events and New Zealanders’ enduring gratitude to the United States will be remembered in this country. Fifty US Marines and a Marine band will participate in a range of commemorative events including a wreath-laying ceremony at the National War Memorial and a sunset ceremony at this Parliament. I ask the House to join me today in recording the enduring thanks of New Zealanders as we recall these events of 70 years ago. Today New Zealand and the United States are engaged in a new chapter of economic political and security cooperation playing a hugely constructive role in our region and beyond. Today we are reminded that that relationship has deep foundations in a friendship forged at a time of great danger to our country. Seventy years may have passed but New Zealanders have not forgotten. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 On behalf of the Labour Party I would like to join with the Minister of Foreign Affairs and support this motion. It was a real privilege to be at the National War Memorial in Buckle Street this morning to commemorate the 70th anniversary and to celebrate in particular the veterans from both New Zealand and the United States who were there. Interestingly there were also protesters there and what I guess I would like to have politely said to them was that the war that we united to fight the Second World War actually made possible their right to protest. We should be grateful for the Kiwis and for the Americans who gave their lives in defence of our country in that war against Nazi Germany against the Fascist Italian Government and against the Japanese imperial forces because that was a war that was to protect our democracy and our freedoms. 
June 1942 was a dark time for the world. Nazi Germany controlled almost all of Continental Europe the Japanese army had defeated the British and Allied Forces at Hong Kong and Singapore had advanced down through Papua New Guinea as far as the Solomon Islands in the Pacific and was bombing Darwin. As the Minister said we had mobilised most of our adult male population but they were not here. They were in the battlefields of North Africa and our air force personnel were fighting in the Battle of Britain in the battle for Europe. Churchill wanted us to keep our forces in Europe and reached an agreement with Roosevelt that in return for our forces staying in Europe a US division would be posted to New Zealand. And when they arrived here we were very pleased to see them. There were 150000 overall who came in those 2 years the US Army to Auckland and the Marine divisions to Wellington. Some were on their way to the Pacific some were here on rest and recreation in between the fierce fighting in the Islands and some came to the hospitals in Cornwall Park and Silverstream to recover from war wounds. Today we pay tribute to them and their service. 
The American invasion as it was called also of course had some significant cultural impact on New Zealand. They brought Glenn Miller jazz and concerts hamburgers doughnuts and Coca-Cola. You can argue about the merits of all of those things. They frequented the pubs—the old Midland which maybe some in Wellington will remember and the St George. They went to nightclubs such as the Majestic Cabaret and I have to mention the El Rey nightclub in Hillsborough Road in my electorate which is now proudly St David’s Presbyterian Church. 
The Kiwis generally warmed to their extrovert guests. Home visits were common—my own mother’s family hosted them on many occasions—with families providing meals and hospitality. The servicemen in return appreciated that warm and friendly welcome. But there were two sides to that story; I have to be honest about that. One I was told by my mother and the other by my father. My mother said they were hugely impressive and their smart uniforms their generosity and their manners put the Kiwi males to shame. My dad used an oft-quoted comment: “Only three things wrong with the Yanks: they’re overpaid oversexed and over here.” I do not know how he felt subsequently about having an American son-in-law and four grandchildren in the American army. Fifteen hundred women went on to become war brides and returned to the United States at the end of the war. 
In fact the soldiers’ presence here helped to develop and sustain a close and friendly relationship between our two countries. There was real sadness when the news came back of those who had died in battle. The last Marine division that left Wellington went to fight in the Battle of Tarawa in what we now call Kiribati. In that battle more than 900 of those who had left New Zealand’s shores were killed and 2000 were wounded. That is on a scale similar to Gallipoli. The columns of casualty lists were published in the Wellington newspapers. It is appropriate today that we commemorate with gratitude the 70th anniversary in order to pay tribute to those who sacrificed their lives. Their presence in New Zealand and their sacrifice are part of the rich tapestry of the relationship between our two countries and their legacy was to strengthen a friendship that is enduring.  
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. I rise to speak on behalf of the Green Party and join with the Labour Party and National Party to acknowledge the 70th anniversary of US troops arriving as part of our alliance over World War II. We acknowledge the critical role US Marines played in the defence of the Pacific region against Fascist aggression in the 1940s. We remember their fallen just as we remember the fallen of New Zealanders and other allies. On 13 June 1942 a regiment of the US Army’s 37th Division landed at Auckland and on the next day the 1st Marine Division did so here in Wellington moving into hastily constructed camp facilities. All in all about 100000 US servicemen arrived in New Zealand with a peak of 48200 in July 1943. In addition many thousands of other American sailors merchant seamen made fleeting visits to the country.  
It is important to acknowledge why they were here. A month after the Americans arrived in July 1942 New Zealand’s military mobilisation—the largest in our country’s history—peaked with 159500 men and women under arms along with 100000 in our Home Guard. Unlike Australia our men based on Winston Churchill’s urging remained in the European theatre mostly in the sands of North Africa or the beaches of Fiji and were not here to protect us from the threatened Japanese invasion.  
 The threat was real and we rightly welcomed the American invasion as it was affectionately known and our guests. They may not have left the Transmission Gully motorway so often discussed but they left their marks on our culture our economy and on the hearts of those 1500 New Zealand women who married US servicemen. Interestingly as they departed between 1944 and 1946 numerous “bride ships” as they were known departed from New Zealand carrying nearly 1000 women and nearly 500 children back to the States.  
Seventy years on it is important to recognise those US servicemen and the people who can still remember it. Many of them will not be around for the 80th anniversary. Seventy years on it is important to acknowledge how New Zealand has changed. Seventy years on it is important to acknowledge that we are now a proud independent nation. Seventy years before foreign policy decisions essentially were made in London and after the War in Washington. Prime Minister Michael Joseph Savage who broadcast from his sickbed on 5 September 1939 said the immortal words: “Where [England] goes we go; where she stands we stand.”  
This year New Zealand also celebrated 25 years of nuclear-free status where we have truly become a proud independent nation. We no longer go where England goes and we no longer stand where Washington stands. We are a proud independent nation that can celebrate the fact that New Zealand refused to enter Iraq and be part of the illegal coalition of the willing in 2003 and were not privy to part of those human rights abuses committed over there. This was right that we are nuclear free and 70 years on we can celebrate the beginnings of our truly independent standard.  
Looking forward as we have built the relationship with the United States we must ensure New Zealand’s independence and urge as the Government puts it our very very good friends to abide strictly by the rule of international law in everything they do and tell them they are being closely watched.  
The Green Party acknowledges those servicemen and their families and we would like to pay our respects. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 New Zealand First endorses the sentiments behind this motion. The fact is our soldiers were in Europe and in North Africa when to our shores and to our enormous relief the Americans came and died in their thousands north of this country. Prior to that it was for months an anxious hope on everyone’s lips and it was questioned as to when the Americans would come. Many of the people in generations or decades following that time sometimes forgot to be grateful for that event.  
Although we can disagree with a country like the United States on foreign policy it is never an excuse to be straight bad-mannered about it and I think we would all now in 2012 regret a part of that difference with the United States—not that we had a difference but the way we handled it. We may not always agree with United States foreign policy but they came in the cause of liberty and freedom to our shores and north of us lost men in their thousands in the theatres of war on different islands. Those of us who have been fortunate to see some of the burial grounds offshore realise just what a tragic sacrifice they made in the interests of Pacific peace. A mature nation should always honour that country and its soldiers who did that. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Speaker. Kia ora tatau e te Whare. Me penei rawa te korero e rua etahi paku korero e pa ana ki te take nei. Tuatahi kai te tautoko ake i te motini i tona hanga ki te whakanui i te hunga i haere mai ai ki Aotearoa nei ka mutu i tae ki te mura o te ahi a i whakapau i te werawera mo te tika me te pono e ai ki ta wetahi. Pena ki te Rt Hon Winitana Pita e korero nei ehara i te mea me whakaae atu ki ta ratau i whakatakoto mai ai engari me mihi ra ki te hunga i tu ki te mura o te ahi mo te aha? Mo te tika me te pono. Tera tera korero.  
Ka rua kare to matou kaikorero a te Hon Tariana Turia i konei i tenei wa tonu nei. Engari mena i konei kua ki mai ia nona te waimaria i te mea ko tetahi wahanga o tona whakapapa heke mai ai i te hoia Amerikana i nga tau kua hipa ake. No reira ahakoa nga tautohetohe i tona mutunga mai ko ta Tariana ko te ki ka nui tana miharo ki te ahuatanga o tona whakapapa ki a Amerika ka mutu ki tona whakapapa ki a Whangaehu. No reira koinei taku i tu ake ai hai waha korero mona i tenei ra. Tuatahi ki te whakatau i te ahuatanga o te hunga mate. Waiho ratau kia moe. Ka mutu kia whakanui i te ahuatanga o te hunga ora ko Tariana tera ko tatau tenei. Huri noa kia ora tatau. 
[ 
Thank you Mr Speaker. Greetings to us the House. Let me put it this way: there are two small parts relating to this matter. First I endorse the motion in terms of celebration for those who came here to New Zealand and those who went to the battle-front to exert themselves for what is right and valid according to some. Like what the Rt Hon Winston Peters said it does not mean that we have to agree with what they put before us but we must acknowledge those who stood at the battle-front—and for what purpose? For what is right and what is valid. That is that contribution.  
Secondly our spokesperson the Hon Tariana Turia is not here right at this moment. But had she been she would have said how lucky she was as one side of her family tree is from an American soldier of years past. So regardless of the disputes at the end of it all Tariana would say how she is full of admiration for the circumstances around her genealogical connection to America and those with Whangaehu. So this is why I stand to represent her today in the first instance to acknowledge those who have passed away. Allow them to rest there and then to celebrate the living. That is Tariana and us here. And so greetings to us throughout. 
] 
HONE HARAWIRA (Leader—Mana) 
: 
 A kia ora mai ano ra tatou. Tena koe e te Tumuaki to tatou Whare tatou ano ra e hui tahi nei tena koutou kia ora tatou. Tautoko ano hoki au i te kaupapa o te motini kia mihi atu ki a ratou te hunga w’eturangitia ratou e tu ana ki mua i te hoariri i aua wa. Engari e tika ana kia kaua e wareware ki wa tatou nei hoia wa tatou nei toa i haere tawhiti atu ki te tiaki i nga tangata o roto o nga whenua katoa o te ao. I aua wa horekau he hoariri kotahi i haere mai ki Aotearoa engari ko wa tatou nei hoia i tae atu ki nga wahi katoa. No reira e tika ano hoki a te Mane e tu mai nei koia te hui a-tau o te Ropu 28 tera o wa tatou nei ropu toa o te ao Maori i tae rangatira atu ki nga wahi katoa o te ao kia tu rangatira tatou ki roto o Aotearoa nei. No reira e tika ana kia mihi atu ki a ratou ki te hunga kua w’eturangitia wa tatou matua kaumatua ahakoa ko Maori ko Pakeha ko wai ranei. Tena koutou kia ora tatou katoa. 
[ 
And greetings once again to us. Salutations Mr Speaker our House and all of us assembled here. Salutations to you collectively and to us. I too endorse the tenor of the motion in that we acknowledge those who fell before the enemy at that time. But we must not forget our own soldiers and warriors who travelled afar to protect people in all countries in the world. At that time not a solitary foe came to New Zealand but our soldiers went everywhere. So it is fitting as well that next Monday is an annual get-together for the 28th Maori Battalion that gallant battalion of Maoridom that arrived tall in places in the world and that made us proud here in New Zealand. So it is right that we acknowledge them the ones who have passed away our parents elderly folk Maori Pakeha or whoever. Acknowledgments to you collectively and to us all. 
] 
Hon PETER DUNNE (Leader—United Future) 
: 
 I rise on behalf of United Future to support the motion that is before the House at the moment. On the Wellington waterfront there is a simple plaque to commemorate the arrival and the departure of the American troops in 1942. It no longer stands in its original place. For members who are familiar with the geography of the waterfront somewhere adjacent to the current cruise ship terminal would be where those ships arrived and sailed from. The waterfront has changed considerably in the 70 years; our country has changed considerably in the 70 years. But the simple legend on that plaque endures. It says: “If you ever need a friend you have one”. That was the sentiment of the time.  
I think that when we from the luxury of this distance reflect back on those circumstances and that time the poignancy of those words becomes stronger. As others have acknowledged in 1942 a large proportion of New Zealand’s defence forces was fighting for our freedom in far-off places: in Africa in parts of Europe and in parts of the Pacific. There was a sense of our exposure in this country. The arrival of the American forces—apart from any of the other variants that they may have introduced while they were here—gave our people a sense of security that our well-being was once again being looked after. It was an act of friendship. It was an act that created a bond between nations that through ups and downs has endured for the last 70 years.  
As others have acknowledged friendship is a two-way street. You show loyalty to and support for those who need it and you also have a certain ability to speak freely and to share differences. Both the United States and New Zealand in the intervening 70 years have shared occasions where they have spoken frankly and bluntly to each other in the way that only true friends can. But what does carry forth and what characterises always even at our darkest moments the relationship between our two countries is this overbearing statement of friendship: “If you ever need a friend you have one”. It was as true in 1942 as it has become today. Although none of us has direct memory of that time what we can take solace from are the events that occurred. In focusing on those few words we can understand the feeling of our country and we can see its modern translation.  
Those were very dark days for New Zealand. It was very good for this country to have the friend that it did and today it is appropriate that we commemorate celebrate and offer our respects to those who made those sacrifices.  
Motion agreed to. 
Business Statement 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. In the absence of a Government business statement at the beginning of the day it is my understanding that the intention of the Government next week to move— 
Mr SPEAKER 
: Order! The acting Leader of the House was about to make a business statement now.  
Hon TREVOR MALLARD 
: Sorry but he did not do it at the beginning. He did not stand up then.  
Mr SPEAKER 
: Order! The Business Committee had agreed that this motion would be dealt with at the commencement of today’s business. Does the acting Leader of the House wish to make a statement? 
Hon NATHAN GUY (Minister of Immigration) 
 on behalf of the Leader of the House: When the House resumes on Tuesday 19 June the Government intends to hold the combined 3-hour debate on the second readings of the Appropriation (2011/12 Supplementary Estimates) Bill and an Imprest Supply Bill and will look to progress the Committee stage of the Mixed Ownership Model Bill the Prisoners’ and Victims’ Claims (2012 Expiry and Application Dates) Amendment Bill and the Dairy Industry Restructuring Amendment Bill.  
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Can I inquire of the acting Leader of the House whether in fact it is the Government’s intention to move on the liquor reform legislation within this session? 
Hon NATHAN GUY (Minister of Immigration) 
 on behalf of the Leader of the House: It is my understanding that the Alcohol Reform Bill is making good progress and that will be indicated at the Business Committee in due course.  
Questions to Ministers 
Welfare Reforms—Role of Work and Income Board 
1. 
JACINDA ARDERN (Labour) 
 to the  
Minister for Social Development 
: Does she stand by her statement regarding her newly appointed welfare board that “I’m backing the board to guide the investment approach I’m backing Work and Income to implement it”? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 Yes. 
Jacinda Ardern 
: Given the board is part of what she has called the biggest reforms in a decade has she made simple decisions like whether the head of Work and Income will report to the welfare board or vice versa given that just a few weeks ago when asked this question in writing she replied: “While the new Work and Income Board is being established decisions on how exactly it will operate are still being finalised.”? 
Hon PAULA BENNETT 
: Yes I have. The role of the board is to advise and support the chief executive amongst other things. 
Jacinda Ardern 
: Can the Minister assure the House that the resignation of the deputy chief executive and head of Work and Income is in no way related to the appointment of the welfare board the imposition of Paula Rebstock as chair—again—and the lack of clarity around who is now responsible for what? 
Hon PAULA BENNETT 
: Yes I absolutely can assure the House of that. I think it is absolutely clear that I as Minister and the chief executive are in those top roles seeking advice and support from the board. I was saddened to hear of Janet Grossman’s resignation but I wish her well in her future endeavours.  
Tim Macindoe 
: Can the Minister explain why she backs Work and Income to implement the investment approach and welfare reform? 
Hon PAULA BENNETT 
: I back Work and Income to deliver because it has proven that it can. It has delivered on youth unemployment numbers most recently by getting them down to around only 13000 now on the youth unemployment benefit. It has delivered on Future Focus and has made savings already in that area. Last year it delivered to 82000 people who went off benefit and into work. If it can deliver all of that in a very difficult climate of course I back it to deliver further. 
Jacinda Ardern 
: What was the explanation the Minister was given as to why the head of Work and Income resigned and did it justify her handing in her notice on Wednesday last week and leaving just 2 days later rather than seeing out a notice period? 
Hon PAULA BENNETT 
: I know the member would like to see a conspiracy theory; there simply is not one. She handed in her notice because as far as I was informed her husband has had job opportunities in the UK and she wishes to return back there. That is the reason for it. It is a shame the member did not have the fortitude to actually ask these questions in the estimates hearing yesterday because she may have got a more fulsome answer as one can give at that time. 
Jacinda Ardern 
: Supplementary—[ 
Interruption 
]  
Mr SPEAKER 
: Order! I want to hear this supplementary question. 
Jacinda Ardern 
: Is she satisfied that relocation fees paid for her now departing head of Work and Income which were expected to be as high as $50000 and the recruitment costs for this significant overseas appointment represented value for money given her short stay and quick departure? 
Hon PAULA BENNETT 
: Any decisions around that are operational and are made by the chief executive. 
Mr SPEAKER 
: Question No. 2 Metiria Turei. [ 
Interruption 
] Order I want to hear Metiria Turei’s question. 
Skycity Convention Centre—Expressions of Interest Process 
METIRIA TUREI (Co-Leader—Green) 
: 
 My question is to the Minister for Economic Development and asks: does he stand by his statement that he was “not at all concerned” about signing a deal with SkyCity— 
Mr SPEAKER 
: Order! I apologise to the member. Could I ask both sides at the front here please to cease this cross-interjection. It is discourteous. The member may start again. 
2. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister for Economic Development 
: Does he stand by his statement that he was “not at all concerned” about signing a deal with SkyCity for a convention centre before the Auditor-General’s inquiry into the deal is complete? 
Hon STEVEN JOYCE (Minister for Economic Development) 
: 
 Yes I stand by my quote that I was not at all concerned about negotiations continuing firstly because there is no certainty that any deal will be concluded prior to the Auditor-General’s findings being released—and indeed as I have said a number of times previously there remains no guarantee that a deal will be concluded at all—and secondly because the signing of any deal is not the end of the matter. There would likely be legislation required to go through the House. So there is plenty of opportunity to continue to look at things on the way through and plenty of water to flow under the bridge. 
Metiria Turei 
: Does the Minister agree with the Prime Minister who today did another U-turn on a serious issue saying that he would now be pretty cautious about signing up to a deal while the Auditor-General’s inquiry is under way? 
Hon STEVEN JOYCE 
: Actually I am well aware that the Prime Minister said that he would be cautious and I looked back at my transcript yesterday and I saw that I was pretty cautious as well and pointed out that there was a whole bunch of things that would have to occur and we would just step our way quietly through it. I cannot quite see the distinction the member tries to make. 
Metiria Turei 
: How does the Prime Minister’s new cautious approach fit with the Minister’s comment yesterday—and I quote—“yes certainly we don’t see any reason to delay negotiations”; and does not his comment demonstrate contempt for the Office of the Auditor-General? 
Hon STEVEN JOYCE 
: In answer to the second part absolutely not at all. Again as I have said the Prime Minister has also said—as have I—that there is no reason for negotiations not to continue but we of course are taking a cautious approach on the way through it. 
Metiria Turei 
: What advice has the Minister received on the financial or legal impact on any deal signed with the casino should the Auditor-General find that the Government’s expressions of interest process is flawed? 
Hon STEVEN JOYCE 
: I have not sought or received any advice on that at this time but again I would point out to the member that just because the Auditor-General seeks to proceed with an inquiry as of course is his right to do so does not mean that actually anything is being done wrong. In fact I would quote to the member from the  
New Zealand Herald  
today where at least three of the other tenderers are quoted. One of them Ngati Whatua felt that calling for tenders again would be “a waste of taxpayers’ money” The Edge said that the company “felt the tender process had been robust at the time.” and ASB Showgrounds said that it had no concerns about the tender process and that “We’ve been involved in a lot of tenders. This one was done with the utmost efficiency.” 
Metiria Turei 
: Is the Minister concerned that the Auditor-General will inquire into the inadequacy of his assessment of the full costs of the casino deal including the costs of increased gambling and increased gambling harm in Auckland City? 
Hon STEVEN JOYCE 
: Not at all. I am very very confident in the process and confident in the way it has been handled by the ministry. 
Metiria Turei 
: Will the Minister take the responsible course demonstrate genuine respect for the Office of the Auditor-General and fiscal responsibility for the public of New Zealand and confirm that his Government will not proceed with the casino deal until the Auditor-General has completed her inquiry? 
Hon STEVEN JOYCE 
: I am happy to confirm that the Government sees no reason why the negotiations cannot continue in parallel. They have been going on for some time. I also confirm for the Greens that we of course have respect for the Office of the Auditor-General in this regard and also that the Government is very keen obviously to progress with a range of things. I appreciate that the Greens pretty much want all of them stopped but we are continuing to progress a number of initiatives to create jobs and growth for New Zealanders. 
Grant Robertson 
: Can the Minister tell the House that all those businesses that were approached or tendered under this process were given the same information and instructions about what was required in a tender document? 
Hon STEVEN JOYCE 
: I can confirm that the Ministry for Economic Development conducted a robust process. It conducted a number of expressions of interest. I do not know the exact detail the member refers to but I am confident that the ministry conducted a robust process that was fair to all parties. 
Metiria Turei 
: Does the Minister agree that a convention centre built under any other deal would also result in more jobs for Auckland which is a good thing but without the subsequent harm caused by increased gambling from this casino deal? 
Hon STEVEN JOYCE 
: Of course a convention centre creates opportunities for jobs. In fact there was a previous one done in Auckland with the support of the Green Party which was a confidence and supply partner of Labour at the time. It was a deal that was struck under the supervision of the Labour Government back in 2001 where an organisation called Skycity was given the opportunity to build a convention centre in return for increased poker machines at the time. In fact it was opened by then Minister Mark Burton and also was supported by the then Prime Minister Helen Clark who said proudly: “In Auckland Sky City has pumped $140 million into its new Convention Centre and Auckland City has rebranded and upgraded its convention facilities … Here in New Zealand it has been pleasing to see continuing investment in the quality of our tourism infrastructure.” [ 
Interruption 
]  
Mr SPEAKER 
: Order! A point of order has been called—the Hon Trevor Mallard. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think the Minister should be warned about his answer in that that negotiation was done by— 
Mr SPEAKER 
: Order! The member will resume his seat immediately. The member will resume his seat. That is a direct abuse of the point of order process— 
Hon Member 
: Again! 
Mr SPEAKER 
: Order! And there will be no comment on my right either. I will not tolerate the point of order process being abused like that. When I get to my feet members will resume their seats. I will not tolerate that kind of abuse. 
Hon Trevor Mallard 
: Was the Minister aware that the negotiation around that was done by the chair of the Casino Control Authority the well-known Tory Judith Collins? 
Hon STEVEN JOYCE 
: I appreciate that Mr Mallard is quite tribal but she of course was doing so under the Labour Government of the time. It was in fact signed off by the acting chair of the Casino Control Authority. The point is that the Prime Minister and the Labour Government welcomed the deal welcomed the investment and thought it was fantastic and once again what they will do in Government they say in Opposition they will not do—which just goes to show it is just politics they are playing. 
Economic Recovery—Economic Programme 
3. 
MAGGIE BARRY (National—North Shore) 
 to the  
Minister of Finance 
: How is the Government assisting households and competitive businesses through these tough world economic times? 
Hon STEVEN JOYCE (Acting Minister of Finance) 
: 
 The Reserve Bank reminded us again this morning just how tough world economic times are: “Economic and political stresses in the euro area have been rising” and “the euro area [is projected to] remain in recession for the rest of 2012 and recover only modestly thereafter.” However with responsible fiscal management the Government is very focused on getting its own books in order and one of the benefits of that is the official cash rate being lower than it otherwise would be if Government borrowing was higher and debt was rising unsustainably. Lower interest rates flow through to cheaper borrowing costs for households and businesses which saves millions and millions in extra interest costs. 
Maggie Barry 
: What else is the Government doing to assist households and competitive businesses? 
Hon STEVEN JOYCE 
: The Government is implementing its comprehensive business growth agenda which the Opposition would like to stop in order to provide the right environment for competitive businesses to get ahead. The Government is working hard to make New Zealand an attractive place to do business. We have improved the country’s tax structure; we are taking steps to increase investment in science and innovation; in the skills area we are training more university students than ever before; we are investing heavily in core infrastructure like roads rail and broadband; and we are moving to provide easier access to capital natural resources and export markets. All of these initiatives are ones that are opposed the strongest by those who complain the loudest— 
Grant Robertson 
: I raise a point of order Mr Speaker. I invite the Minister to table that answer which he was clearly reading out. 
Mr SPEAKER 
: Order! The answer was somewhat lengthy. I accept that. 
Hon David Parker 
: Is it correct that the Reserve Bank has reduced its forecasts for growth in New Zealand’s GDP to an even smaller fraction of the average growth rates projected for our 16 main trading partners has decreased its forecasts of underlying productivity growth and has forecast an increased external deficit and rising net international liabilities; if so is he ready to accept that it was unwise of the Prime Minister to title his pre-Budget speech “Budget 2012—sticking to a plan that’s working”? 
Hon STEVEN JOYCE 
: I do not agree with the member at all. The last two matters that he raises have been in most of the summaries going forward. In terms of the first two I think the point that is being made once again by the Reserve Bank is just how volatile it is to do forecasts at this time. I would note that the Governor of the Reserve Bank is in the difficult position of having to produce a Monetary Policy Statement ahead of the Greek elections this weekend which could have a significant impact on the short to medium-term economic prospects for the whole world. 
Hon David Cunliffe 
: It’s all about Greece. 
Hon STEVEN JOYCE 
: I appreciate again that the Opposition likes to pretend that the world does not exist but out here in the real world it actually does exist and the Government responds appropriately to it. 
Skycity Convention Centre—Expressions of Interest Process 
4. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister for Economic Development 
: Does he stand by his statement that “the Auditor-General’s process will not impact on the Government’s negotiations with SkyCity”; if so why? 
Hon STEVEN JOYCE (Minister for Economic Development) 
: 
 Yes I do stand by that statement because there is no practical reason they cannot continue in parallel. I do appreciate that the member always wants to slow everything down when it comes to jobs and growth but we want to progress things as much as is practicable. 
Hon David Cunliffe 
: Has the convention centre tender process fully complied with Treasury’s  
Guidelines for Contracting with Non-Government Organisations for Services Sought by the Crown 
 with the Auditor-General’s  
Procurement guidance for public entities 
 and in particular with the requirements for “Clear ethical standards which address conflicts of interest and promote required standards of public sector conduct minimising exposure to the risk of litigation and meeting the overriding considerations of openness lawfulness and integrity.”? 
Hon STEVEN JOYCE 
: I thank the member for the speech. I have no concerns about the process. 
Hon David Cunliffe 
: Can he confirm that the earlier decision in 2001 was carried under the signature not of the then Minister Mark Burton but in fact of the then chair of the Casino Control Authority his very close colleague the Hon Judith Collins and can he further confirm that that decision—I am sure that the Minister will be pleased to say—involved no change in the law? 
Hon STEVEN JOYCE 
: Actually my understanding is the decision was signed by the acting chair at the time P J Dew on behalf of the Government of the day and the Casino Control Authority. 
Hon David Cunliffe 
: Oh a technicality. 
Hon STEVEN JOYCE 
: Oh it is a technicality now says the member. Oh it is a little technicality now! Having decided that he would raise it it is a technicality. I appreciate that Labour is now embarrassed not only that it allowed Skycity to build— 
Mr SPEAKER 
: Order! The Minister’s answer was fine to that point but he was embarking on a speech himself at that point. 
Hon David Cunliffe 
: Has any other party been offered a change in the law in any other commercial relationship in which he his office or his ministry have been or are involved? 
Hon STEVEN JOYCE 
: I have no idea what the member is referring to. What I can say in relation to the casino law is that it was changed after that decision the Labour Government made so it not only allowed it to occur but it then pulled the ladder up— 
Mr SPEAKER 
: Order! The Minister should be responsive when the Speaker gets to his feet. The Minister answered the question. He said he was unaware of any such circumstance and the rest was all superfluous. 
Hon David Cunliffe 
: I seek leave to table Treasury’s 2009  
Guidelines for Contracting with Non-Government Organisations for Services Sought by the Crown 
. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon David Cunliffe 
: I seek leave to table the Controller and Auditor-General’s 2008 good-practice guide 
 Procurement guidance for public entities 
.  
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon David Cunliffe 
: I seek leave to table a 2010 email from the office of the Hon Gerry Brownlee advising the makers of the  
Hobbit  
films before the public was allowed to know that the so-called positive developments in industrial laws would soon be announced by the Government. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon David Cunliffe 
: I seek leave to table a 2011 Buddle Findlay report providing information about Steven Joyce’s offer of a long-term 10-year regulatory holiday for Telecom New Zealand. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon David Cunliffe 
: I seek leave to table a 2011 Journalism Media and Democracy Research Centre report which discusses the shady Government loan to MediaWorks a company that Mr Joyce owned until recently. 
Mr SPEAKER 
: Leave is sought to table—[ 
Interruption 
] Order! A point of order is being considered and I understand the member is seeking leave to table a document that contains certain words. Leave is sought to table that document. Is there any objection? There is objection. 
Scott Simpson 
: Has he seen any reports endorsing convention centre deals in return for gambling concessions including extra machines? 
Hon STEVEN JOYCE 
: In fact I have and as I rise I would say that the member opposite has just illustrated all the things that he does not want to do to create jobs in New Zealand. But I have seen a report from 2004 stating: “Here in New Zealand it has been pleasing to see continuing investment in the quality of our tourism infrastructure. In Auckland Sky City has pumped $140 million into its new Convention Centre”. This of course was in reaction to Skycity’s 2001 deal with the Government of the day that resulted in 230 extra gaming machines in return for Skycity’s current convention centre. I let the members draw their own conclusions about the relationship between 2001 and today. But it might help to note that the quote was from a former Labour Prime Minister one Helen Clark. 
Employment Programmes—Job Streams Package 
5. 
Hon TAU HENARE (National) 
 to the  
Minister for Social Development 
: What announcements has the Government made today on employment assistance? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 This morning the Prime Minister and I have announced a simpler more flexible business-focused package of employment programmes called Job Streams. It takes an investment approach where the support will be individually targeted and will cost $62 million for the next financial year. We are doing more of what works less of what does not and making it easier for businesses to hire young people and others. 
Hon Tau Henare 
: Who will be able to find work using the new Job Streams package? 
Hon PAULA BENNETT 
: Rather than spread employment support thinly across all groups this new approach will target those most at risk of remaining on welfare long-term particularly young people but is also available to those on the DPB and also those on the sickness benefit. When this package comes into effect from 1 July this year priority will be given to young people who are at high risk of long-term benefit dependence. 
State-owned Assets Sales—Mixed Ownership Model Bill 
6. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister for State Owned Enterprises 
: Does he stand by all his statements with regard to asset sales? 
Hon STEVEN JOYCE (Minister for Economic Development) 
on behalf of the Minister for State Owned Enterprises: Yes absolutely within the context they were given. 
Hon Clayton Cosgrove 
: Does he stand by his statement regarding asset sales that “This legislation and debate is about debt … it is about controlling our nation’s debt.” and given that according to Treasury and the Budget Policy Statement selling assets will increase the deficit and debt in the long term leaving the country worse off will he accept Labour’s proposed amendment that prevents the sale of State-owned enterprises with control of water resources given that his Government’s own support party United Future has pledged not to sell our water resources off? 
Hon STEVEN JOYCE 
: I think there were about four legs in that question. I certainly do not agree with his characterisation of Treasury’s view of the mixed-ownership model. 
Hon Clayton Cosgrove 
: Given the deficiencies outlined in the Mixed Ownership Model Bill will he accept Labour’s proposed amendments that would make these companies subject to the Official Information Act and allow oversight by the Ombudsman in order to safeguard the public interest; if not why not? 
Hon STEVEN JOYCE 
: I do not accept the supposition in the first clause of that member’s question. 
Hon Clayton Cosgrove 
: Will he accept Labour’s proposed amendment that would prevent New Zealand - based energy-generating assets from being sold offshore; if not why not? 
Hon STEVEN JOYCE 
: It is important for the member to note that the Government at all times is going to hold on to at least 51 percent of these State-owned enterprises. I appreciate that seems to be something he is determined to miss but nevertheless it happens to be the case. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. That was an extremely straight question. It simply asked— 
Hon STEVEN JOYCE 
: I think the answer is no. 
Hon Clayton Cosgrove 
: Well if the answer is going to be given it should be given in the proper way I would put to you Mr Speaker. It asked a very straight question. It required a straight answer. 
Mr SPEAKER 
: The member’s point of order is a perfectly fair point of order. If I recollect his question correctly though he asked whether the Minister would support a Labour Party amendment that would prevent State assets from being sold overseas. The Minister answered that as I heard him. The Minister pointed out that the assets could not be sold overseas because over 50 percent of the ownership remained with the Government. So the majority ownership of the assets would remain in New Zealand hands. That was what he said—that the Government was retaining over 50 percent and therefore they could not be sold overseas. That was the problem with the wording of the question. I accept that it looked simple but it actually left an out for the Minister. 
Bail Legislation—Reform 
7. 
LOUISE UPSTON (National—Taupo) 
 to the  
Minister of Justice 
: What is the Government doing to protect New Zealanders from people charged with serious crime? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 This Government is delivering on its promises to reduce crime and protect New Zealanders from serious offenders by making it harder for those charged with serious crimes to get bail. The Bail Amendment Bill which is currently before the select committee reverses the burden of proof in bail decisions for those charged with murder serious sexual offences and serious class A drug-dealing offences. The presumption of bail for 17 to 19-year-olds will no longer apply for those who have previously been sentenced to prison and the police will have new powers to deal with under-17-year-olds who breach their bail conditions. I am looking forward to receiving the report from the select committee and moving these important legislative changes through this House. 
Louise Upston 
: How are the bail law changes contributing to the Government’s focus on putting victims at the heart of our justice system? 
Hon JUDITH COLLINS 
: We are delivering on our promise to put victims at the heart of the justice system. The changes in the Bail Amendment Bill will provide better protection for victims by requiring those charged with murder and other serious offences to be retained in custody unless they can show reasons why they should be allowed out on bail. We know that 6 percent of adults in this country experience 54 percent of all crime. There is a small group of people who are victimised five or more times. Often they are personally connected in some way to the offenders. One of the key focuses of the justice sector is on providing support for victims generally but particularly for those who are the victims of serious criminal offences. 
Schools Class Sizes—Secretary to the Treasury’s Statements and Advice 
8. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Finance 
: Does he have any concerns about the public statements of the Secretary to the Treasury; if not why not? 
Hon STEVEN JOYCE (Acting Minister of Finance) 
: Generally no because it is the job of the Secretary to the Treasury to give his best advice and the Government then considers that advice. Of course that does not mean that the Government always agrees with that advice. 
Rt Hon Winston Peters 
: Can he advise the House as to what Mr Makhlouf’s academic credentials are to lead the public on education reform such as increasing class sizes? 
Hon STEVEN JOYCE 
: I do not have the details of Mr Makhlouf’s credentials in the House today but I point out to the member as a longstanding observer of this House—as I am sure he has been from within the House—that Treasury secretaries all the time provide opinion second opinion and first opinion on Government advice and Governments choose as they do what to accept and what not to accept. 
Rt Hon Winston Peters 
: Was the timing of Mr Makhlouf’s public statements in support of larger class sizes a coincidence or was Mr Makhlouf acting as a mouthpiece of this Government? 
Hon STEVEN JOYCE 
: I think that the Minister of Finance addressed these issues in the House the other day and in particular in relation to the timing of that speech. He was asked at the time whether the Secretary advised him of his intention to give a speech. He responded that he could not recall whether he had or not but he would have given the speech on the basis of evidence that came out of educational research. 
Rt Hon Winston Peters 
: Can he not see a suspicious coincidence between Mr Makhlouf’s policy advice and the National Party’s obsession with increasing class sizes given that the previous Minister of Education touted this policy in 2009? 
Hon STEVEN JOYCE 
: I am sure that member is capable of seeing conspiracies in a number of places and I would point out that Mr Makhlouf is not the only person who has proposed slight increases in class sizes— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. A conspiracy is when two or more agree to break the law. I trust that this member does not understand what the word “conspiracy” means. It had nothing to do with this question. 
Mr SPEAKER 
: I think the member’s point of order is reasonably raised. In answering a question the Minister should not imply that the questioner has some conspiracy theory or otherwise. I do not think there is any great need to get too excited about this issue. The member asked a question that I accept had a bit of political loading in it but some attempt to answer it before alleging a conspiracy theory would be helpful. 
Hon STEVEN JOYCE 
: I raise a point of order Mr Speaker. I would just point out that the member actually asked about conspiracy in his question. 
Mr SPEAKER 
: Oh I beg your pardon.  
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. My question was as to whether or not he saw a suspicious coincidence between—[ 
Interruption] 
Mr SPEAKER 
: Order order! 
Rt Hon Winston Peters 
:  
Hansard 
 will prove— 
Mr SPEAKER 
: Order! 
Rt Hon Winston Peters 
: I have got the question written down here. 
Mr SPEAKER 
: Order! The member will resume his seat. 
Rt Hon Winston Peters 
: Well do you want to hear the full facts? 
Mr SPEAKER 
: Order! I am not going to let this carry on. What I will do to avoid any—[ 
Interruption 
] Order! The member does not grumble away from his seat like that. 
Rt Hon Winston Peters 
: Mr Speaker— 
Mr SPEAKER 
: Order! I am about to invite the member to repeat his question so I suggest he have a little more confidence that the Speaker is not unreasonable. 
Rt Hon Winston Peters 
: I am so grateful for that reassurance. My supplementary question was and is now: can he not see a suspicious coincidence between Mr Makhlouf’s policy advice and the National Party’s obsession with increasing class sizes given that the previous Minister of Education touted this policy in 2009 sans the word “conspiracy”? 
Hon STEVEN JOYCE 
: No I cannot see a “suspicious coincidence”. The reality is that any number of people have suggested that a small increase in class sizes is something that might be appropriate and the example I would give the member is that in fact Professor Hattie was on  
Q+A 
 just this last weekend I think saying exactly that. 
Rt Hon Winston Peters 
: Does it concern him that the secretary has publicly dismissed the findings of a report by the Attorney-General into his department’s mismanagement of the Crown Retail Deposit Guarantee Scheme and then refused to conduct or request an inquiry into this mismanagement; if not why not? 
Hon STEVEN JOYCE 
: I do not know that I accept the member’s characterisation of what Mr Makhlouf has done. I think Treasury takes very seriously its role under the deposit guarantee scheme. What the member does not seem to understand is that once the rather drastic decision had been taken in late 2008 by the previous Government to have the deposit guarantee scheme— 
Rt Hon Winston Peters 
: Not the extension. 
Hon STEVEN JOYCE 
: —it was quite a fraught process. Well if the member thinks that not having an extension would have been the answer I think that probably what would have happened is that automatically a lot of finance companies would have gone bust at that time. 
Trans-Pacific Partnership—Investor-State Dispute Provisions 
9. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Trade 
: Will New Zealand follow Australia and refuse to sign up to the investor-state dispute provisions of the Trans-Pacific Partnership agreement; if not why not? 
Hon TIM GROSER (Minister of Trade) 
: 
 The New Zealand Government will obviously make up its own mind about what it signs and what it does not sign at the end of this negotiation when all the facts are on the table when and if the Trans-Pacific Partnership negotiation reaches a successful conclusion.  
Dr Russel Norman 
: I raise a point of order Mr Speaker. My question was not whether New Zealand would make up its own mind; I am sure it will. My question was “Will New Zealand refuse to sign up to the”— 
Mr SPEAKER 
: Order! I accept that my eyesight is not great without my glasses but if I see the question it says “Will New Zealand follow Australia and refuse to sign …” and the Minister answered that.  
Dr Russel Norman 
: Why is his Government willing and open to signing investor-State dispute provisions in this trade agreement when Australia refuses to do so because as it says these provisions “constrain the ability of Australian governments to make laws on social environmental and economic matters ...”? 
Hon TIM GROSER 
: I can assure the House that the Government will sign an agreement that makes sense and that agreement will be following very carefully the very sensible provisions of the previous Government aided by the same advisers who are advising me as the Minister for clauses that will protect New Zealand from illegitimate use of such a clause.  
Hon Clayton Cosgrove 
: Can I take it from that answer for clarity that he will assure the House that any concluded Trans-Pacific Partnership agreement will include safeguard provisions that will protect New Zealand’s sovereignty similar to those Labour negotiated as part of the New Zealand - China free-trade agreement which ensures New Zealand can legislate and regulate for the public good?  
Hon TIM GROSER 
: Absolutely.  
Dr Russel Norman 
: Why is the New Zealand Government and why was the previous Government so confident that they can negotiate clauses that will protect their ability to make laws on social environmental and economic matters when the Australian Federal Government has made a very clear statement that it believes that is not possible with investor-State dispute mechanisms and the Department of Foreign Affairs and Trade of the Australian Federal Government has made exactly the same statement?  
Hon TIM GROSER 
: Because I have great confidence in the professional ability of our negotiators and because our negotiators on the question underlying the issue did not make the same tragic error as Australian negotiators made many years ago in the Hong Kong - Australia investment treaty.  
Dr Russel Norman 
: Why is it that the Australian Federal Government has stated publicly in April 2011 that it will not sign up to investor-State disputes provisions because these provisions “would confer greater legal rights on foreign businesses than those available to domestic businesses.” while the New Zealand Government continues to go down this track?  
Hon TIM GROSER 
: Well I cannot speculate on what the member’s ultimate political ambitions are but my ambitions do not include speaking for the Australian Government.  
Dr Russel Norman 
: I raise a point of order Mr Speaker. I just do not believe the Minister addressed the question.  
Mr SPEAKER 
: The dilemma is that if I recollect the member’s question correctly it asked the Minister why he thought the Australian Government took a certain approach to investor protection clauses and agreements. The Minister said in answer that he did not pretend to be able to explain why the Australian Government chose to do things and that is an absolutely reasonable answer to the question. If the member thinks about it—and I am very happy to check the transcript to make sure that I am not in error—I think that is what the member will find.  
Dr Russel Norman 
: What position if any does the New Zealand Government have on the Australian Federal Government’s refusal to accept investor-State dispute settlement provisions within the Trans-Pacific Partnership? 
Hon TIM GROSER 
: Well I have already answered that question in the previous supplementary answer but let me just say for the House that this Government as I am sure many other members of this House do stands solidly behind the Australian people and the Australian Government in protecting themselves against what we think is an unwarranted claim.  
Mr SPEAKER 
: Order! This was a rather different question. This question asked how the New Zealand Government would approach the Trans-Pacific Partnership if the Australians refused to have an investment protection clause in the Trans-Pacific Partnership agreement. That is something that does affect the New Zealand Government. That is not an unreasonable question to be asked. I invite the Minister to answer it.  
Hon TIM GROSER 
: The New Zealand Government will make up its own mind about what is in the balance of New Zealand’s interests when all the facts are on the table and we are far from that point. 
Dr Russel Norman 
: Will the Government release the text of the Trans-Pacific Partnership or release New Zealand’s negotiating papers that it circulated to the other Governments in the Trans-Pacific Partnership negotiations prior to signing up to the Trans-Pacific Partnership so that the New Zealand public can see what is in the agreement and can see the positions that the New Zealand Government has taken in the negotiations? 
Hon TIM GROSER 
: No and certainly not without the consent of our negotiating partners. 
Early Childhood Education Teachers—Funding 
10. 
SUE MORONEY (Labour) 
 to the  
Minister of Education 
: Do any of the thousands of reports she referred to in Oral Question No 8 yesterday support the Government’s decision to cut funding for 100 percent qualified staff in early childhood education as a means of lifting student achievement and if so what are the names of five of these reports she has read? 
Hon HEKIA PARATA (Minister of Education) 
: 
 The thousands of reports I referred to yesterday testify to the effect of quality teaching on raising student achievement. One commentator whom we have heard quoted a lot is Professor John Hattie— 
Visible Learning 
. This book summarises 800 meta-analyses and 52000 studies. Ben Levin talks about 5000 different ways to change schools. However within the international research literature I understand there is no evidence to support the premise of that member’s question that 100 percent of the staff in early childhood education services must hold a tertiary qualification in teaching as the single determinant in raising achievement. I have here eight reports by the New Zealand Education Review Office which indeed discuss what the range of contributions are to quality education and the diverse provision that New Zealand parents have come to expect. Moreover I am not sure that “student achievement” is an appropriate framing for early learners. Our Te Whariki curriculum which is itself a world-leading approach ushered in by a former Minister of Education sets out that what we want for our early learners is that they are confident competent communicators who are eager to learn and student achievement is more appropriate for the next parts of the education system. 
Sue Moroney 
: I raise a point of order Mr Speaker. The question was on notice and it specifically asked whether any of the reports she had referred to supported the Government’s decision to cut funding for 100 percent qualified staff in early childhood education. That question was not answered. 
Mr SPEAKER 
: Order! [ 
Interruption 
] No I do not think I need any assistance on this at all. I looked into this question very carefully prior to question time today because I found the question quite difficult to understand. I went back to the transcript of question No. 8 yesterday to make sure I did understand the question. Given the transcript of the answers to oral question No. 8 yesterday and today’s question on the Order Paper it is my view the Minister answered this question. 
Sue Moroney 
: When she said on 16 May 2012: “our National-led Government is committed to improving the quality of teaching …” had she forgotten that it was the National-led Government that had cut funding for qualified staff in early childhood education in 2011? [ 
Interruption 
] 
Hon HEKIA PARATA 
: As I answered in the primary response in the case of early childhood education international research— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It probably should not be necessary for me to come to your defence but to have the Minister for Social Development saying that you are so far out of touch— 
Mr SPEAKER 
: Order! The member should not be interjecting that “you” are anything. I fully accept the point made by the Hon Trevor Mallard. The Speaker may well be out of touch but that is not relevant to these proceedings. [ 
Interruption 
] No no. Order! I do not think we need to waste more time on this. I call Sue Moroney. I beg your pardon—the Minister was answering the question. 
Hon HEKIA PARATA 
: As I said in my answer to the primary question in the case of early childhood education international research literature does not support the premise of that question that 100 percent of the staff in early childhood education services have to hold a tertiary qualification in teaching in order for student achievement to be lifted. 
Sue Moroney 
: I raise a point of order Mr Speaker. The question—[ 
Interruption 
] 
Mr SPEAKER 
: Order! A point of order has been called. 
Sue Moroney 
: The question was very straightforward and it did not make any reference to 100 percent qualified staff. The Minister just answered a question that talked about 100 percent qualified staff. The question— 
Mr SPEAKER 
: Order! Given the gap that occurred between the member asking the question and the answer given I cannot be clear in my own mind now exactly what the member asked. I invite her to ask her question again. 
Sue Moroney 
: When she said on 16 May 2012: “our National-led Government is committed to improving the quality of teaching …” had she forgotten that it was the National-led Government that had cut funding for qualified staff in early childhood education in 2011? 
Hon HEKIA PARATA 
: Yet again in the case of early childhood education there is no international research that supports the premise that 100 percent of staff in early childhood education services have to hold a tertiary qualification in teaching. 
Sue Moroney 
: Will she give parents an assurance that the $114 million hole created in the education budget from her proposal to increase class sizes will not be taken from early childhood education funding? 
Hon HEKIA PARATA 
: First of all can I clarify that actually our proposal was to change the funding formulas because class sizes are actually set by the schools. Second of all can I say—[ 
Interruption 
] It is a little technicality that may have passed you by. As I have answered before the $114 million as a last resort will be a pre-commitment against Budget 2013 but in the meantime we will look for savings within Vote Education from those things that are not giving us as much value as others. [ 
Interruption 
] Well I am answering the question. 
Mr SPEAKER 
: Order! The member did ask whether or not the seeking of savings to cover a $114 million alleged hole in the Budget would come from early childhood education. The question was a fairly straight question asking that. I accept that from the Minister’s answer one could possibly derive an answer to the question but I may be wrong and I think the Minister should clarify for the Minister’s own safety.  
Hon HEKIA PARATA 
: The answer is no and that reflects—[ 
Interruption 
] So we will not be making cuts just in case the members did not understand that. It actually reflects this Government’s continual raising of the investment in early childhood education. It has risen threefold in the period that we have been in Government. That is a 32 percent increase and in fact if I had quickly to hand— 
Mr SPEAKER 
: Order! I think the Minister has now answered the question quite clearly.  
Sue Moroney 
: In response to that last answer then does she see the continual raising of funding as being the funding freeze that was put on all subsidy rates in early childhood education in Budget 2012 which will mean increasing fees for parents? 
Hon HEKIA PARATA 
: Any decision that an early childhood education centre makes in response to the reprioritisation is essentially up to the centre itself. We have targeted equity funding at priority groups. This will encourage participation from groups less able to afford it. Early childhood education fees remain about 25 percent lower in real terms than they were in June 2007—and I am happy to show members that graph—and that is based on affordability calculated by comparing early childhood education fees with average earnings. Recent research has shown that the current 20 hours’ early childhood education rates more than meet the average cost of delivering high-quality early childhood education.  
Cybersecurity—Cyber Security Awareness Week and Contract with Huawei Technologies 
11. 
IAN McKELVIE (National—Rangitikei) 
 to the  
Minister for Communications and Information Technology 
: What action has the Government taken to raise awareness of cyber security risks? 
Hon AMY ADAMS (Minister for Communications and Information Technology) 
: 
 This week I launched New Zealand’s first ever Cyber Security Awareness Week which was developed by NetSafe in partnership with the Government. More than 2000 New Zealanders are affected by cyber-crime every day in the form of computer viruses and malware credit card fraud online scams phishing and identity theft. It is estimated that cyber-crime costs this country around $625 million a year. The week is designed to raise awareness amongst New Zealanders and small businesses of the simple steps they can take to protect their personal financial and business information online.  
Ian McKelvie 
: What are some of the steps that New Zealanders can take to improve their cybersecurity? 
Hon AMY ADAMS 
: Well actually there are some basic things that everyone can do to greatly improve their cybersecurity and these are the messages that are being highlighted through Cyber Security Awareness Week. These include having good anti-virus programs and updating them regularly having proper password protection ensuring important data is regularly backed up and securing wireless connections. It is important that we make sure that New Zealanders are aware of the dangers but equally important that they know about the simple precautions that will allow them to connect with confidence and enjoy the full potential of the digital world.  
Clare Curran 
: Is she aware of concerns raised by members of the United States House of Representatives Intelligence Committee this week regarding the possible national security threat posed by the potential expansion of Huawei into the US telecommunications infrastructure; if so has she received any reports about the national security implications of the all-of-Government mobile phone procurement contract recently signed by Steven Joyce which includes services provided by Huawei? 
Hon AMY ADAMS 
: As that member is well aware we do not comment on matters of national security but I can assure her that we take network security very seriously. 
Clare Curran 
: I seek leave to table an article published on 13 June in  
Computerworld 
 titled “US lawmakers quiz ZTE Huawei over spying concerns”. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Clare Curran 
: I seek leave to table a media release by representatives from the US intelligence committee about concerns about the investigation of Huawei and ZTE.  
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection.  
Clare Curran 
: I seek leave to table the correspondence between the US House of Representatives select committee on intelligence and the chairman and senior vice-president of Huawei Technologies. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection.  
Document by leave laid on the Table of the House. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. You would have heard the Minister’s answer. She said: “we do not comment on issues of national security”. However the very point that the member is asking about is that given Steven Joyce has signed a document that says it is not a matter of national security why then can the Minister not answer the question? Mr Joyce and National have assured us that Huawei’s involvement is not a matter of national security. Therefore why can the Minister not answer the question she has been asked? 
Mr SPEAKER 
: Order! I have got to think back now to the answer given by the Minister and the question that was asked but if I recollect correctly—and I do not claim to have this absolutely right—the member first referred to whether the Minister had seen a report from the US committee and whether she had concerns about this security matter. That is why in answering she said she does not comment on security matters. I cannot second-guess a Minister on an issue like that. If a Minister says that it is not their practice to comment on matters of national security and she sees this as being in that category as Speaker I cannot second-guess that and say that I disagree with the Minister and I think she should answer. I cannot do that; it would be most unreasonable.  
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. But you see our quandary here. We have had a series of questions on this before and we have been assured by the Prime Minister and Mr Joyce that there is no issue of national security involved here. So our quandary is that when any of us raise questions we are stopped by a statement that she will not comment on issues of national security. That is the issue. We are assured that there are no such issues in the involvement of this Chinese company and that is why the question is being asked of that Minister.  
Hon AMY ADAMS 
: Mr Speaker. 
Mr SPEAKER 
: I will hear the Hon Amy Adams briefly. 
Hon AMY ADAMS 
: If the members wish to ask questions of the responsible Ministers around that particular contract they are welcome to do so. They have directed it to me in my capacity as the Minister for Communications and Information Technology and I am responding in that capacity—that I do not comment on matters of national security. That has been the longstanding practice of this and many previous Governments.  
Hon Trevor Mallard 
: Mr Speaker. 
Mr SPEAKER 
: I will hear the Hon Trevor Mallard briefly. 
Hon Trevor Mallard 
: I think that generally we defer to you on memory of questions but I think on this particular one it was not a matter of whether the member asked whether the Minister had concerns but only whether she had received reports on it. That I think is different. 
Mr SPEAKER 
: I will check it out because that is not my memory. I fully accept I may have it wrong but I will check that out. I think we cannot take this matter any further today because I think the Minister’s contribution to the discussion on that point of order was a reasonable point the Minister made. We cannot take it further today but I will check to see whether I got that wrong because I suspect that it went beyond just whether or not she had received reports. It certainly started that way. 
Clare Curran 
: I raise a point of order Mr Speaker. My question was whether she was aware of concerns and then asked whether she had received—if so had she received any reports. I am happy to table— 
Mr SPEAKER 
: The member acknowledges that she asked whether the Minister was aware of concerns around security issues and she said—[ 
Interruption 
] Order! I think we cannot take that one further today.  
Accident Compensation Corporation—Inquiry into Release of Personal Information 
12. 
ANDREW LITTLE (Labour) 
 to the  
Minister for ACC 
: What meetings or discussions did she have with the Chair or Chief Executive of ACC between receiving the 16 March report relating to the Pullar affair and ACC laying a complaint with the Police and did she in any of these meetings or discussions either suggest encourage or agree to ACC laying the complaint? 
Hon JUDITH COLLINS (Minister for ACC) 
: 
 The question is misconceived as the matter was referred to the police on 13 March which was 3 days before the 16 March report. The 16 March report clearly states on page 3 that the matter was referred to police on 13 March the same date as the story appeared in the  
Dominion Post 
. I called a meeting of the chair and the chief executive on 14 March to be briefed on what was known about the privacy breach a day after the matter was referred to police.  
Andrew Little 
: What discussions—[ 
Interruption 
]  
Mr SPEAKER 
: Order! The member has a right—[ 
Interruption 
] Order! I apologise to the member. The member has a right to ask supplementary questions and I want to hear them. Ministers should not be interjecting so much. 
Andrew Little 
: What discussions did she have with the chair or chief executive officer of ACC between seeing the media reports which started on 12 March relating to the Pullar affair and ACC laying a complaint with the police and did she in any of these discussions either suggest encourage or agree to ACC laying the complaint? 
Hon JUDITH COLLINS 
: The member is again wrong. The story was on Tuesday 13 March. The first time that I knew about the issue was when I opened up my emails and found that there was a story in the  
Dominion Post. 
 I had a text from Mr Ralph Stewart telling me there was a very bad story on the  
Dominion Post  
front page and asking could he ring me and he advised me that there was this situation. That day Mr Stewart referred the matter to the New Zealand Police. I had no discussions with him about referring it to the police. It was his decision. And in fact to say otherwise is quite wrong. 
Andrew Little 
: Did she in a conversation with the ACC chair or chief executive officer describe the conduct of Ms Pullar and Ms Boag as extortion or blackmail? 
Hon JUDITH COLLINS 
: I do not believe I did. I can tell that member though that the actions were referred to the police before this matter was discussed with me as to what had actually happened. Mr Stewart on Tuesday morning 13 March knew only a little bit more about the matter than I did. He was the new chief executive officer. He had not been involved in all the many actions with Ms Pullar all the way through for years and years and years as previous ones had been. He had to find out the facts and he had reports from the senior managers.  
Andrew Little 
: What was the nature of the comments she made about referral of the matter to the police in any discussions she had with the chair or chief executive officer of ACC up to the time the complaint was laid with the police? 
Hon JUDITH COLLINS 
: I have made it perfectly plain. The matter was referred to the police without reference to my input. And the fact is—I have said it so many times now—I think that member should stop coming down to the House with his pre-prepared questions.  
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The question was not whether it was referred without taking consideration of the Minister’s input. The question was what was the Minister’s input. 
Mr SPEAKER 
: Order! I think the Minister has made it pretty clear she had no input. That is what I understood she has told the House. That brings to a close questions—I beg your pardon. Supplementary question the Hon Winston Peters. 
Rt Hon Winston Peters 
: Hold the phone! 
Mr SPEAKER 
: My apologies. 
Rt Hon Winston Peters 
: Being that she is a trained lawyer is she aware of the crime of unlawful possession which is the exact position of Brownyn Pullar not in receiving the information but in remaining in unlawful possession of it and what is she going to do about that given that her friend Michelle Boag and she had obviously raised this with ACC? 
Hon JUDITH COLLINS 
: Look as Minister for ACC I have no responsibility for the actions of either of those two persons referred to by the member. That is simply not something that I can comment on. 
Rt Hon Winston Peters 
: Is she aware of the similar or analogous case of a man called Gao who received $9.9 million too much in his Westpac account and then remained in unlawful possession of it and dealt with it— 
Hon Steven Joyce 
: What’s this got to do with ACC? 
Rt Hon Winston Peters 
: Well I used the word “analogous” which means I am giving you an identical case of unlawful possession— 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! I am on my feet. I need to hear from the member the start of a question of some relevance to the Minister. The Minister has no responsibility whatsoever for the law surrounding unlawful possession and no responsibility whatsoever for a man whom Westpac may have inadvertently given money to. I accept the member may have a question there but I do want to hear the question.  
Rt Hon Winston Peters 
: Well perhaps I could help if I ask why all number of heads in ACC are rolling when you have a case so analogous to Gao’s case of receiving legally but remaining in unlawful possession of $9.7 million and also Justice Young’s decision regarding the same thing—receiving a document from ACC and not dealing with it properly—when in fact it is clear from this letter that Michelle Boag wrote that they intended to use it against ACC to bring things to a satisfactory conclusion. Is the Minister prepared to see these heads roll— 
Mr SPEAKER 
: Order! I will invite the member to have one more go but I have heard clearly two questions there and only one supplementary question can be asked. The member started with a supplementary question and that was fine but then he proceeded to make another statement and then commenced another supplementary question. Members cannot do that. I will invite the member to please ask one supplementary question and give the Minister a chance to answer it. 
Rt Hon Winston Peters 
: Well given the circumstances—now that you know what it is about—of someone receiving documents legally but thereafter retaining those documents in an unlawful way why is she prepared to see ACC officers’ heads roll and not go for the person who is acting illegally namely Bronwyn Pullar? 
Hon JUDITH COLLINS 
: In terms of ministerial responsibility I can advise the member that of course if he reads the report which is on the ACC website as to the actions that they took around the privacy issue they actually referred that matter to the New Zealand Police. 
Mixed Ownership Model Bill 
Second Reading 
Hon STEVEN JOYCE (Minister for Economic Development)  
on behalf of the  
Minister for State Owned Enterprises 
: I move  
That the Mixed Ownership Model Bill be now read a second time 
. This bill—and this debate—is about three things: it is about controlling our nation’s debt it is about strengthening New Zealand’s capital markets and it is about providing funding for new high-priority infrastructure projects. 
No nation can afford to let debt get out of control. Huge debt is at the core of why countries like the United Kingdom Ireland Spain Italy and Greece are being forced to impose tough measures on their citizens. We do not want that for New Zealand. I ask those on the other side of the Chamber why they would seek to expose this country to more risk and more debt than we need to in volatile world markets. The National-led Government is committed to getting on top of debt protecting and growing our economy and keeping it safe for New Zealanders from the debt-ridden troubles plaguing other countries. Our mixed-ownership policy is part of a wider economic programme to reduce debt increase savings and get our country through one of the worst economic crises the world has seen in 100 years. It is also a key part of our post-election plan and our business growth agenda. 
 It is very important to point out that we have guaranteed that the Government will always own at least 51 percent of these companies and will prevent any other shareholder from owning more than 10 percent. That will ensure widespread New Zealand investment. It is written into this bill and all of the Opposition approach on this is to ignore those simple facts—at least 51 percent Government ownership and no other shareholder able to own more than 10 percent. It is written into the bill. This partial share Government float programme will also help reinvigorate New Zealand’s capital markets and bring stronger commercial disciplines to each of the mixed-ownership model companies. 
The Government has been up front with New Zealanders over our decisions in this matter. We have talked about it for 18 months. We took it to the country last November. We sought and we obtained a mandate. The consultation process that has happened since then has included 10 hui which were held around the country earlier this year. The Finance and Expenditure Committee travelled to hear submissions and all submitters have had their views considered. 
The opponents claim this legislation will increase power prices. Well under this Government there is now a more competitive electricity market than ever before. In the 7 months to February 306000 customers switched providers to get cheaper prices. That market regime is in place and it is not affected by the minority ownership of these mixed-ownership companies. 
This Government and this Parliament have a duty to future generations to control our debt which is projected to increase to about 30 percent of GDP in the next few years. This programme is expected to raise between $5 billion and $7 billion to invest in high-priority infrastructure that will help grow our economy important social infrastructure like schools and hospitals. That is $5 billion to $7 billion we would otherwise have to borrow from overseas lenders. These share floats will provide a minority stake in some of our State-owned enterprises to enable the investment and to enable this country to go forward. This is good economic management. 
The four energy State-owned enterprises’ dividends—because this will undoubtedly come up—have averaged about 4.1 percent over the last 5 years which compares with the cost of new debt for the same period of around 5.2 percent. That is the reality. This arrangement makes strong fiscal sense. The future profitability of these companies which some private shareholders will get to participate in through their dividends will be captured in the eventual sales price. So the country gets the cash up front which makes a lot of sense in these difficult times. 
This Government understands the fiscal risks the world is facing. We are not afraid to make the right decisions to protect New Zealand from the world’s financial crisis. Opposition members will now posture they will exaggerate and they will claim that it is rushed that it is happening too quickly that it is losing money and that it is not needed. They are all wrong on all counts. They are politically posturing and not thinking of the long-term future of this country. Unfortunately—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! I will stand. Can I just remind members on my extreme left that they should look at Speakers’ ruling 60/5(1) which states that interjections are to be rare and reasonable. 
Hon STEVEN JOYCE 
: They are politically posturing and not thinking of the long-term future of this country. Unfortunately it is entirely consistent with their approach where they oppose any move including this one to strengthen the New Zealand economy. They oppose moves to strengthen the country’s accounts and to invest in New Zealand’s future. They oppose the mixed-ownership model. They oppose frankly not just our investment in schools and hospitals; they have opposed broadband investment they have opposed our transport investment they have opposed the irrigation investment they have opposed the new convention centre they are opposed to oil and gas they are opposed to foreign investment and they are opposed to the  
The Hobbit 
 movies. They oppose everything that will give the New Zealand economy an opportunity to get ahead. They are playing politics with New Zealand’s security. They are playing politics with New Zealand’s future. 
This Government has its eye on the ball. This Government is focused on jobs on growth on the financial security of New Zealanders and on investing in our future. Over the next few weeks the Opposition will continue to see how challenging the world is financially. The Mixed Ownership Model Bill is a part of this Government’s wider economic programme which will help to control debt increase savings control spending strengthen our capital markets and get our country successfully through the worst financial crisis the world has seen in nearly a century. I would like to acknowledge the fine and sterling work of the Finance and Expenditure Committee and I would like to commend this bill to the House. 
Hon CLAYTON COSGROVE (Labour) 
: 
 That speech by Steven Joyce was the “offensive” being put into the “charm offensive”. That is what it was. I sum up New Zealand’s feelings by reading from the editorial of the  
Sunday Star-Times  
of 10 June. The editorial reads: “There is no good argument for asset sales. They make no difference to the Government’s net debt. It is flogging off assets for ideological reasons not economic ones.”  
Let us just deal with the debt argument for a moment. What New Zealanders were not told before the last election was that the deficit would worsen. It was hidden by Treasury of course which allowed the Government to book the proceeds of the asset sales in the pre-election fiscal update without disclosing the loss in profits. So here is the real story as we know around debt and deficit. The Budget Policy Statement shows that Treasury estimated that the Government saves $266 million in borrowing costs per year yet loses $360 million a year in profits. That is the deal. So all the smoke and mirrors in respect of debt and deficit are the reverse of what that member says.  
This is a dark day for New Zealand and it is a dark day for a number of reasons. Some of us in this Parliament—in fact on both sides of this Parliament—on the asset sales debate have some regrets in respect of our political history. But some of us in this Parliament went down that track and when we were elected to Government some years later we learnt from our experience and we actually bought assets back. We knew that the experiment did not work. That crowd over there of course—the lineage of the Bolger Government—got back into office under Mr Key and did not learn. Here is the deal. This is another example of rushed ad hoc legislation that has not been thought through. I say it is rushed because they insulted submitters. I say it was rushed because the select committee process was pre-ordained. We had the absurd illogical act whereby Treasury was instructed by the chairman of the Finance and Expenditure Committee under the stewardship of the Minister to write a report analysing the public submissions—all 1489 of them only 9 of which out of 1489 supported the bill—before the submissions were actually completed. That is shameful. The report was pre-ordained in the face of 80 percent of New Zealanders opposing the bill: 80 percent before it was written 80 percent when it came out of the select committee and 80 percent as we sit and stand in this Parliament today.  
I say this: selling assets is not a plan for New Zealand. It is not a plan. It will not put food on the table of the lost and lonely of our society it will not get the 87000 young people languishing on the dole back to work and it will not help those who languish outside our health system or outside our ACC system. No it will meet the ideological requirements that that Government has because its only sort of strategy is to flog off assets that New Zealanders already own. It justifies this policy by saying what were originally the words of Mr Key: “We want these assets to grow. In order for these assets to grow they must have capital.” “We have no money” said the Government “ and we can’t afford to put any money into it.” That is why it said it had to flog them off.  
Then the Government was faced with the dilution argument. Bill English woke up read his form 5 “BusCom” textbook and realised what the definition of “dilution” was. Then Tony Ryall got up in this House and said that in order to avoid dilution below 51 percent we will borrow we will tax and we will do whatever it takes to adhere to that position and solidify that position. But did not those members tell us that the reason for the sale was they had no money to spend on the growth and the capital of these companies?  
This is wrong. This is rushed shonky legislation that will sell out. It will sell out assets sell them back to New Zealanders back to generations of New Zealanders who built them and back to generations of New Zealanders who already actually own them. I put this question to the Minister and his ilk: show me the thousands of mum and dad Kiwis in our society who have bucketloads of cash—maybe in Epsom possibly but apart from that—who can afford to go down to the stock exchange spend money with or without a loyalty bonus and buy back what they already own. These are New Zealanders who are struggling to make ends meet today. Show me the New Zealanders who have money—the mum and dad Kiwis.  
Look at this bill. There was talk about an ownership cap. There is nothing in this bill in respect of penalties for breaches in that ownership cap and we were told by submitter after submitter—not just Joe Public but technically professionally academically qualified submitters—that you could drive a bus through the 10 percent ownership cap rules. In fact I recall the officials saying to me that if you had foreign owners perhaps mum dad and son and if the son was under 18 then he would fall under the influence of his parents and that is a sort of related party transaction. But if he turns 18—or 21 depending on the jurisdiction—he is his own man and he can go away and buy 10 percent if he wants to as well as well as mum and dad. You could drive a bus through this—you could absolutely drive a bus through it.  
Eighty percent of New Zealanders are opposed to this bill. There was talk about power prices. We had an Oxford PhD economist come before the select committee—and other technical experts—who told us that consumers purchasing electricity and energy from State-owned enterprises were paying on average $265 less per annum than if they acquired those energy resources from the private sector. We asked the officials in the select committee hearing whether they had done any work on this and could they provide us with any advice on this. That was refused by Todd McClay and his ilk and Maggie Barry whose only contribution to the process was to demand unbelievably and insultingly that a submitter tell her how he had voted because he was anti - asset sales.  
We asked Bill English in the Finance and Expenditure Committee yesterday whether he would provide us with advice—if he had not asked for it which he had not. We asked whether he would instruct Treasury to provide us with advice on the electricity price issue and whether he would make it public to either prove us wrong or reassure New Zealanders. He said no. He would not do it. We asked Phil Heatley the Minister of Energy and Resources whether he would instruct his officials to do it. Oh no—hear no evil see no evil. That is what National does not want to tell New Zealanders because prices will go up.  
We are going to propose a number of amendments. Outside this place mum and dad Kiwis all over the country are signing a petition to trigger a referendum. This is not a group of people or a coalition that is made up of just New Zealand political parties like Labour New Zealand First the Greens and others. Oh no. This is Grey Power this is the New Zealand Council of Trade Unions and this is a large number of community organisations that are galvanised by giving people a formal say. I say this to the National Party members: they are a bunch of poll-driven fruit cakes. That was demonstrated of course by the Hekia Parata reversal. It seems the criterion for reversing policy is getting one of Steven Joyce’s polls and over a large whisky or bourbon one night saying: “Hey the people don’t like it.” That is the reason they gave for the Parata reversal: the people will not wear it the people will not tolerate it; it was not because National members thought it was wrong of course. No they read a poll. If the criterion is that the people do not like it and will not wear it and they did it with education then I say to colleagues that they should do it with State-owned enterprises.  
Once these assets are gone they are gone. National members try to bluff people by saying that they are going to buy other assets. They are going to buy schools and the odd bridge. Here is the problem with that of course: you sell a revenue-generating asset you buy a non - revenue-generating asset and at some point the money runs out. Then the question is this: what do you do? We are borrowing $300 million per week and they have disposed of all the surpluses that Labour created over 9 years. National is borrowing $300 million per week so the people at the top get a massive tax break. So what is left? Flog off the family silver. The Government has no plan and it has no strategy but flogging off the family silver. What do you do after you have flogged off the energy State-owned enterprises and Air New Zealand? You still have no plan—it has no plan. It is still borrowing. It is still not generating exports. There is no growth plan. So what will the people be faced with? Selling more assets—selling more assets.  
Future generations—sold out. Past generations—sold out over these asset sales. Those members can do their usual and sort of grin and grip as it were but I say in this House that we are going to fight right through this process. We are going to take it outside of Parliament after this process and even if they get one away the people of New Zealand will have an opportunity to stop the rest—the second the third and any more. I say that we should boot them out in 2014. 
Hon CRAIG FOSS (Minister of Commerce) 
: 
 I acknowledge the call Mr Assistant-Speaker Robertson and you have obviously been a very busy Speaker as the previous member told us you were very busy doing things with assets etc. I am sure he was not really intending to impinge upon you like that.  
The mixed-ownership model is empowering for our families for our capital markets and for keeping our debt under control across New Zealand. It will also help increase net savings within New Zealand now tomorrow and into the future. This Government continues to manage our economy and the balance sheet on behalf of all New Zealanders—those who are with us now and future generations—in the most prudent way possible particularly in the context of the financial crisis around the globe that we are in the midst of right now.  
The mixed-ownership model helps encourage the payment of dividends to Kiwis rather than interest to overseas lenders. It empowers New Zealand families. It can enrich New Zealand as a whole because dividends will be paid to New Zealanders rather than furthering debt as the other parties propose which would require interest rate payments overseas.  
New Zealand is vulnerable. New Zealand is incredibly vulnerable right now to the state of the global financial system. All eyes are on Europe southern Europe in particular. That is a good wake-up call. We should be thankful that all eyes are not on us because unless the Government keeps our balance sheet our finances and most particularly our debt and our ability to fund our debt under control we could sadly see what is playing in Europe happen here in New Zealand.  
We must remember that New Zealand owes the world $180 billion. We must maintain the most prudent management possible in terms of our accounts our balance sheet and our assets across New Zealand because the issues that are playing out in Europe are a result of not managing balance sheets appropriately ongoing increases in spending promises reprioritisations not happening and no accountability.  
New Zealanders can judge for themselves when they watch what is happening on their TV screens when they see yet another €100 billion given to the Spanish banking system and when they watch what plays out with the Greek elections this weekend. They can judge for themselves—and I back them to do that—whether they would like to see in New Zealand what they see there if we do not make some of the calls that are necessary. In fact that same public gave this National Government and its coalition partners permission to implement a well-flagged policy.  
I note still that this is about managing the balance sheet. I know Mr Parker is tired of hearing about the impact of the Christchurch earthquake which is about 10 percent of our GDP and Mr Parker was quoted as saying that. I know Mr Parker the Labour finance spokesman is tired of hearing about the excuse of the global financial crisis and its impact on New Zealand. Well because New Zealand must owe pay and fund $180 billion of debt to the rest of the world actually those who also funded the European situation are also keeping an eye on how things are going back here. 
So even though the Labour Party or Mr Parker is tired of hearing about it the fact is that we had a terrible tragic earthquake in Christchurch that affected us socially in humanitarian terms and also economically. The fact is that the global financial crisis has been with us for quite some time and this Government is still dealing with the remnants of the economy that we inherited which was not particularly flash.  
This proposal was flagged over 1 year ago. Over 1 year ago the previous National Government 2008 to 2011 flagged this as one of the options it would take to the electorate on 26 November and it did. We campaigned on it and of course the largest Opposition—they were somewhat larger at the time—campaigned on it last year. That was the basis of their campaign. Our vote the National Party’s vote went up from about 45 to 47 percent and the Labour Party’s vote went down to about 27 percent. So when people talk about referendum permission or mandates we must note that. That was a key issue. If it was not a key issue I do not know why Labour spent so much of its campaign money on those various ads it ran.  
Here is what is proposed and it is somewhat different from history particularly the Labour Party’s history. We told New Zealand what we were going to do. We asked for their judgment about 1 year ago—we asked them to make a judgment on our policy at the election. We have explained the model—how it will work—to New Zealand and they understand it. We told New Zealand what we intended to do with the proceeds if in fact they gave us permission to pursue this policy—the Future Investment Fund.  
We put caveats around the sale—if in fact it is to proceed—of the various mixed-ownership models being proposed here. We told them about the caveats around that. Mr Speaker we told them that no one would have a shareholding of more than 10 percent. We told them Mr Speaker that we targeted 85 to 90 percent of New Zealanders as being first in the queue. We told them we committed to 51 percent at least of Crown ownership remaining Mr Speaker. So Mr Speaker that is somewhat different from previous examples such as no asset sales from the Labour Party when I measure it against what they have done— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I am sorry to raise this but unless you are thinking of leaving the Chair why are we having in this speech a barrage of references to a person called “Mr Speaker”? You are staying there. The sentence starts with your name and ends with your name. Frankly it is boring and the member should be asked to desist from his constant reference to you. You are not part of the debate for goodness’ sake. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Well that is true but often members do refer to “Mr Speaker” as a way of helping with their speech. 
Hon CRAIG FOSS 
: Thank you Mr Speaker. Mr Speaker I suggest that member take a cup of Horlicks and put a rug over his knees and I look forward to his speech Mr Speaker. So in contrast to what we have proposed to New Zealand and what we have gained permission on in recent history there were wholesale trade sales of New Zealand assets initiated by the Labour Party—and many of the members of those Cabinets are still in that party right now—with no protection. The wholesale sales were mostly to offshore.  
In the 1980s there were many many assets sold. In recent history going back as recently as 2007 Spring Creek was sold offshore for multimillions without any of the caveats that we are putting in place and which are described in this mixed-ownership model right here. In recent history as recent as the 2005-08 Labour Government State-owned assets were pledged to debtors offshore and in proposed mergers—for example Air New Zealand and Qantas. That is what that previous Government when it was looking at the balance sheet decided to do. We note that it put its model before the public of New Zealand and was thrown out.  
The mixed-ownership model—I tell Mr Peters and all other members—allows the building of billions of dollars of assets for New Zealand. Therefore those who vote against this are voting against a billion dollars of 21st century schools. Those who vote against this are voting against modern learning environments. Those who vote against this are voting against water storage irrigation projects—you name it. Those who vote against this are voting against those things that have a direct impact on export growth and jobs for our families. That is what they are voting against. It is clear and it is as crisp as that.  
Keeping the New Zealand Crown balance sheet under control prudently as much as possible keeps interest rates down for our families and their mortgages and keeps inflation down. If members are wondering what the other side of that is they just need to look at where interest rates were and where inflation was in 2006-08 under the previous administration. There is some criticism from the other side which is very ill-informed. There is confusion of dividend yield versus total return. There is confusion of one-off payments versus ongoing cash flows. I am sure other speakers will play out those other issues.  
If the members opposite are saying you should not sell something because it is profitable they are therefore saying that you should sell everything that is not profitable. So I am interested to hear that members opposite want to put up KiwiRail schools and the police for sale. And given their history in this space it would not surprise me at all. 
Hon DAVID PARKER (Labour) 
: 
 The first thing I will say to the prior speaker Craig Foss is that we in the Labour Party do not take advice on fiscal responsibility from the National Party. During the last Labour Government Government debt was reduced from 38 percent gross to 17 percent gross and net debt went down to 0 percent—it went down to 0 percent. And every one of those Budget surpluses that Labour ran in a time of surplus was opposed by National. When John Key was finance spokesperson he opposed them. When Don Brash was finance spokesperson he opposed them. And when Bill English was finance spokesperson he opposed them. Those are the reasons that New Zealand has got low levels of private debt now.  
We have a few Keynesians in the National Government now but we never have proper Keynesians over there who put money away in a time of plenty in order to keep the economy going when times are tough like they are now. We hear comparisons to Greece—what a nonsense! New Zealand is not even in the position of Greece. It never has been. Maybe it would have been if National had been in charge of the Treasury benches and we had not run Budget surpluses during the 2000s. But Labour did and as a consequence even now New Zealand has amongst the lowest rate of Government debt in the Western World.  
This Parliament is faced with this legislation as being the biggest part of the Government’s economic agenda for our country. This is on the very day that the Reserve Bank downgraded New Zealand’s growth forecasts. New Zealand’s growth forecasts are so bad that New Zealanders are leaving for Australia at the rate of 1000 people a week. And they are not leaving because of Greece’s problems; they are leaving because of New Zealand’s problems. In fact the Reserve Bank today told us that the average growth rate of New Zealand’s 16 largest trading partners this year is three times New Zealand’s growth rate. It predicts our growth rate is going to be 1.1 percent— 
Paul Goldsmith 
: Because it’s China. 
Hon DAVID PARKER 
: —and it says that for the rest of the world for the 16 largest trading partners—it does include China. It includes Australia. These people are our trading partners. Greece is an irrelevance to us in the sense of trade flows. The growth rate of our trading partners is three times that of New Zealand. At the same time the Reserve Bank said that New Zealand’s productivity growth rate is being pruned back. That is even worse news for New Zealand—that we will not have as much growth as we thought we would in the future because our productivity is growing at such a miserably low rate.  
We even had the Minister of Finance concede at the Finance and Expenditure Committee yesterday that New Zealand’s economy has not rebalanced and it will not rebalance even by 2016. We hear talk about government debt. Between last year and 2016 New Zealand’s net international liabilities—that is what we owe net in the world—will go up from $130 billion to $200 billion. Just about all of it is private debt.  
This Government is so out of touch with New Zealand that it thinks that the major part of its economic strategy should be changing who owns what already exists. That is what this legislation is about. It is changing who owns these power companies. It is not increasing the output of those power companies. It is not increasing New Zealand’s export earnings. It is changing who owns what already exists which does nothing to grow the economic output of New Zealand.  
We heard the Prime Minister give a speech just before the election and he called it “sticking with a plan that’s working”—sticking with a plan that is working. 
Hon Dr Nick Smith 
: It is absolutely. 
Hon DAVID PARKER 
: He has it endorsed by Dr Nick Smith the ACC bomb. National’s plan is not working. Growth forecasts keep getting put down. The only thing that goes up is the current account deficit and net international liabilities. This is the central part of the National Government’s economic agenda for this 3-year term and it is wrong. Even if it was right it would not grow our exports and it would not improve the productivity of the New Zealand economy.  
I want to come back to the question of mandate. The National Government claims a mandate. National and Treasury under the governance of this Government—National last time and this time—abused the fiscal responsibility provisions in the Public Finance Act by booking the proceeds of sale from these State-owned enterprises and not accounting for the loss of profits that they suffer when part of those assets is sold to a new owner. How bad is that! Treasury was the lapdog of the National Party. When we estimated those losses of dividends the Government used Treasury to criticise our estimation of those revenue losses and it claims that it has a mandate!  
What National told people at the election was that the pre-election fiscal update was accurate when it was not and it was not until we had dug down into this and the pre-Budget fiscal forecast came out that it finally acknowledged that this increases the government deficit by $100 million per annum—$94 million to be accurate but it goes up thereafter. The government deficit is $100 million per annum worse off because National is selling these assets and it is obvious that the Crown’s cost of funds is less than the return on these assets and less than the rate of the return that it will sell these assets for. So this is lunacy. It increases the government deficit. It increases asset inequality. Is the same range of people who are taxpayers going to end up owning these assets? No. Predominantly they will be owned by the people whom the National Government gave most of its income tax cuts to 40 percent of which went to the top 10 percent of the people. 
Hon Clayton Cosgrove 
: And offshore. 
Hon DAVID PARKER 
: And offshore owners? Well we are told in the model that 30 percent of the shares being sold will be ending up in overseas ownership—30 percent of these New Zealand assets. According to that these shares will end up in overseas ownership and that will over time increase New Zealand’s worst problem which is our current account deficit.  
What else does this legislation do? It increases power prices.  
We have had an atrocious process around this legislation. This legislation was reported back to this House 5 weeks ahead of when it was due to be reported back. 
Paul Goldsmith 
: We’re very efficient. 
Hon DAVID PARKER 
: “Very efficient” we hear from the member who wants to be the member for Epsom—the man who supports John Banks another former National Party man and a fiscally irresponsible man who tripled council debt when he was the last mayor with the Auckland City Council. And when that man Paul Goldsmith was a councillor he had a terrible risk of local government debt increasing under his watch too.  
What happened in respect of power prices is that we heard from submitters that the average price for a domestic consumer of electricity when they are getting their power from a State-owned enterprise is $265 less per annum if they are getting it from a State-owned enterprise than if they are getting it from a private sector competitor. So we wanted to ask officials whether that information which was derived by Molly Melhuish in Grey Power and supported by Geoff Bertram an economist at Victoria University was correct because Treasury never addressed it in its departmental report because it was not suitable to their case. So the Opposition members went along to the select committee and said: “Please we want advice as to whether that calculation of the price being lower through the SOEs is accurate.” Do you know what? The National Party blocked it. The National Party blocked it. National members did not want to hear the answer to that. Look at them—all their heads are down because they know that is true.  
Hon Dr Nick Smith 
: Not true. 
Hon DAVID PARKER 
: That is absolutely true. Nick Smith came along and said: “Oh that’s about Comalco.” He does not understand that Comalco is not a residential consumer. This was residential prices and they would not let us do that.  
We had queries about whether the effect of free-trade agreements would mean—because we have not got a very competitive electricity market in New Zealand—that if a future Government regulated the price of electricity it would infringe our trade agreements and allow the overseas buyers who will have bought these shares to take the New Zealand Government to court and for international trade bodies to claim their losses. We wanted to get that advice from Treasury. Were we allowed to? We got the first superficial advice. We needed to drill down to the next layer to answer the specific question that I have put and the Government blocked us from asking the question 3 weeks ahead of when this legislation was due to be reported— 
Hon Member 
: Five. 
Hon DAVID PARKER 
: Sorry it was 5 weeks ahead of when this legislation was due to be reported back.  
This legislation will increase power prices increase asset inequality increase the government deficit increase the current account deficit and leave New Zealand worse off. This Government has no adequate plan for the economy.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on the Government’s bill the Mixed Ownership Model Bill to privatise or partially privatise some of the nation’s energy assets. Under this Government the New Zealand economy has run into some real trouble. In fact you could argue that the wheels have fallen off this Government’s management and that under this bill it proposes to sell the engine because somehow selling the engine will improve the performance of the New Zealand economy. In fact every argument put up by this Government around the privatisation programme has been a very weak argument.  
Let us talk about the first argument that the Government put up. It said that companies need to be privatised so that they can access capital. Well the problem for that argument is this: the money that is gained through the sale does not go to the companies—right? The companies do not get any of the proceeds so they do not get the capital that way. If the Government sells 49 percent of the shares in the companies the only other way that the companies can raise capital is to issue more shares. So they could issue more shares in these companies. Once they do that the Government will be required to buy 51 percent of all of the new shares issued if it is to maintain its 51 percent ownership. So the Government would be required to come up with half of all the capital that these new companies require if it is to maintain its 51 percent ownership of the companies. Of course the Government has got no intention of providing half of the new capital to the electricity companies and what is more likely to happen is that over time there will be a dilution of the Government’s ownership and it will go under 51 percent. The alternative of course is what it can do currently; it can issue bonds. These companies currently issue bonds—debt instruments not equity instruments—to raise capital and they will be able to do that under the current structure just as they will have to do it once they are partially privatised which is what the Government is going to do anyway.  
The second argument that this Government then moved to once the first argument was seen to be completely ridiculous was the argument about debt. And it keeps coming back to the debt argument. I am reminded of the quote from Roger Douglas who was the previous architect of privatisation who many years after he had conducted the privatisation wrote in a book: “I’m not sure we were right to use the argument that we should privatise to quit debt; we knew it was a poor argument but we probably felt it was the easiest to use politically.” That is what Roger Douglas said. It does not make any economic sense to sell these assets to quit debt. It is not an economically rational argument or a fiscally rational argument. It is a politically rational argument and that is why the Government has now moved to that argument. Why does this argument not make any sense? The reason is very very simple. The return on the assets is much greater than the cost of Government debt. That is a simple fact. 
 If that was not the fact then there is no way you could sell these assets because you could not take them to the market and tell people that the return on these assets is actually less than the cost of Government debt—about 3 or 4 percent. No one would buy these assets if that was the actual return. The truth is that the total shareholder return which is the key measure that Treasury uses in actually measuring the return on the assets is 18.5 percent. That is the total shareholder return according to Treasury on these assets. So it is actually much more fiscally responsible to hang on to the assets and hang on to the dividend streams and the capital accumulation than it is to privatise the assets. It is for this reason that Treasury in the Budget Policy Statement was forced to admit this exact fact. If you look at Treasury papers of 2011 and 2012 where it looks at the operating balance excluding gains and losses and at the impact of privatisation Treasury says that the Government is worse off by $100 million per year as a result of the privatisation programme. That is when you account for the lower interest costs because they have retired some debt or not accumulated more debt but then you balance that off against the loss of the dividends and the capital gains from these companies. So when you balance those two things off Treasury’s advice is that the Government is worse off by $100 million per year.  
If the key issue is Government debt the reason we have Government debt is the accumulated operating deficits. That is the reason why the Government gets debt—year after year it has run deficits and under this Government they have been very very large deficits. Those deficits have to be covered by borrowing and over time we accumulate debt. By selling the assets we make our debt position worse because we make the yearly deficit worse by $100 million per year. There is not a strong or even rational fiscal argument for privatising these assets. That is what Roger Douglas conceded after he was engaged in the privatisation programme. It is a political argument; it is not an economic or fiscal argument. The argument does not make any sense from that point of view.  
Let us look at the other argument the Government has put up which is around the efficiency of the electricity market. If you recall one of the things that this Government did was to swap assets between Meridian and Genesis a couple of years ago in order to improve the competitiveness of the market. Because they were State-owned enterprises the Government was able to force Meridian to sell some of its generating capacity to Genesis and force Genesis to buy some of that generating capacity theoretically to improve the competitiveness of the market. The problem is that it can do that when they are State-owned enterprises but once they are partially privatised it cannot require the companies to do that. If God forbid Treasury got this a little bit wrong and we find out later that the perfect electricity market has not been actually created through this transfer of generating assets and we might require in order to improve the efficiency of the market a further transfer of generating assets we will no longer have that capacity once the assets are privatised because the Government no longer owns them 100 percent. If your argument is that you want to improve the efficiency of the electricity market then you would not go down this path because it does not give you the ability to do what the Government has just done which is move generating capacity if that is what the Government thinks is the relevant way to improve the efficiency of the market. Of course we also know from the evidence presented to the Finance and Expenditure Committee and never challenged by Treasury that the private electricity companies currently charge higher rates than the State-owned enterprises. We would have liked Treasury to test that evidence but we were not given sufficient time at the select committee to enable that to happen.  
We need to I think take a step back to the bigger picture about the fiscal position of the Government as well. If you recall the Government introduced some very large tax cuts for upper-income earners. These tax cuts were very very large. At the time the Government told us that they were fiscally neutral because it intended to increase the GST on middle and lower income earners in order to pay for the tax cuts for upper-income earners. That was the central part of the so-called tax switch. The Government argued that this would be fiscally neutral by making middle and lower income earners pay more for their groceries in order to pay for a tax cut for the chief executive officers of the banks. That was the deal. Unfortunately this never happened and in fact it was never fiscally neutral and the Government’s books got thrown much deeper into deficit than they would otherwise have been. In order to cover the hole in the Government’s Budget that this Government created through its very poor fiscal management it is now saying to us “Oh we have to sell the assets because we’ve got a big hole and we can’t afford to pay for schools and hospitals because we gave the tax cuts to upper-income earners which are costing maybe $2 billion a year—it is hard to quantify but in that order.”  
When you think about it the thing is that most mums and dads do not have the money to buy these companies that they currently own. Most mum and dad New Zealanders are struggling to get the kids to school and they are struggling to pay the groceries because National increased GST to pay for the tax cuts for upper-income earners. Most mum and dad New Zealanders simply will not buy these shares. A very small minority will. Of course the people who will have the money to buy the shares in these companies are the very same people National gave very large tax cuts to. So if you earned $1 million a year National gave you a tax cut of $1000 per week; $50000 a year was your tax cut from the National Government so thank you very much to National. With that extra $50000 a person will be able to afford to buy shares in these companies but most New Zealanders got bugger all out of the tax cuts and they can barely afford to make ends meet now. They will not be able to afford to buy a single share in these companies that National is effectively handing over from all New Zealanders who currently own them to a tiny minority who got the tax cuts who have the cash in hand and who will be able to buy these companies. It is a shocking piece of public policy. It is bad for the economy it is bad for the Government books and it just bad government.  
PAUL GOLDSMITH (National) 
: 
 I was half expecting the Opposition parties to be talking about the Mixed Ownership Model Bill but Dr Russel Norman devoted half his speech to tax policy which seems to suggest that maybe they have moved on to the next thing. I can understand that this bill has generated a lot of passion and I accept that there are many people who would prefer that the Government retained full ownership of all our assets. It is a natural urge to want to hold on to things and to resist change. My sense however is that most people realise that the proposal here is a modest one—that of selling only minority stakes in these companies. They know that this Government is retaining majority control and that mixed ownership will free up billions of dollars for investment elsewhere. They understand that Governments cannot keep piling on debt forever. They see the pickle that many European Governments have got themselves into and support the Government’s determination to avoid that problem here in New Zealand.  
Britain right now is adopting drastic measures reducing the Public Service by 700000 workers. Is that what we want to be doing? Certainly not. People probably would not know but Treasury’s forecast in 2008 when National came into Government predicted Government debt rising to 60 percent of GDP by 2026.  
Dr David Clark 
: Because there was a National Government coming.  
PAUL GOLDSMITH 
: This was before National came into Government. We heard Mr Parker saying that the Labour Government reduced debt. Well yes it did but it left this country pregnant with Government spending promises and plans over the next couple of decades that would have taken us up to a debt of 60 percent of GDP by 2026. People did know that that Government spending was unsustainable and they support this Government’s determination to bring our books back to surplus. Today Treasury’s forecast for Government debt in 2026 is zero. People know that this Prime Minister flagged the policy that we are talking about in this bill loudly and clearly before the election and since and they trust this Government’s economic competence.  
 In the meantime there is a group that has been implacably opposed to this bill. We have heard plenty from them over the past few months and it is true— 
Hon Maurice Williamson 
: Luminaries like Sue Bradford. 
PAUL GOLDSMITH 
: Yes. At the extensive select committee process the Finance and Expenditure Committee heard primarily from the opponents. Fortunately we do not weigh submissions by the kilo. But how do you balance a hundred submissions basically saying the same thing with one submission from the New Zealand Chambers of Commerce and Industry Inc. for example which represents 24000 businesses around the country? 
Hon Member 
: How many? 
PAUL GOLDSMITH 
: It is 24000 and you listen to all of them. Just dealing with some of the recurring themes that we have heard from some of the critics such as why you would sell something that is— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! The member has referred to “you” twice now. 
PAUL GOLDSMITH 
: Quite right. My apologies Mr Speaker. We have heard a number of times the question of why one would sell something that is returning 10 percent or 18 percent to reduce borrowing of 4 percent—or some variation of the same theme. The Greens have been pushing this line the hardest. The Business and Economic Research Ltd report they refer to talks about a dividend yield on mixed-ownership companies of 8 percent and a cost of Government debt of 4 percent. Well that is quite wrong. Actually if you look at the historic facts the dividend yield has been about 4 percent not 8 percent and the interest rate the Government has borrowed on has been 5.4 percent. So that does put a very different light on things.  
Russel Norman and Mr Parker miss the point entirely. You would not hear Mr Parker encouraging people to go out and borrow $100000 from the bank in order to invest in shares even though they hope that the shares might return higher than they are paying in interest. Nobody would do that because they correctly factor in risk. A company that an individual might invest in might send a better return but it might not. It might actually lose money. The one thing they know about bank borrowing is that you have to pay it regardless of the return you have got on the investment and that is what interest and investment are all about.  
The other thing that has been striking through this process has been the element of well frankly xenophobia in the Opposition particularly focusing on not wanting to be selling things to foreigners not wanting the Chinese involved—we have heard that—and wanting to turn ourselves inward as a country. I stand for an open economy. This country has been built on foreign investment. We do not have to be afraid of it. This Government has made it very clear that there are very strict limits about who can buy numbers of shares and they will be majority New Zealand - owned. I do not think we need to be anti-foreigner in our attitude. Of course the Opposition has to accept that if it wants to maintain capital investment in the economy without passing this bill it will have to borrow more from overseas. It always strikes me as odd that it does not regard that as a problem but having investment from overseas is an issue.  
The alternative would be to borrow a lot more debt on fragile and volatile foreign markets at a time when other countries are struggling under too much debt. We have just seen in the Monetary Policy Statement today that there is a risk of a severe deterioration in the European area. This could cause bank failures across Europe and in the worst case scenario international funding markets could become prohibitively expensive. So there is no guarantee that the cheap money that we can have access to today will be available tomorrow and that reinforces I think the logic of reducing our borrowing requirements. That is why this Government is being prudent in the way it is going about these activities.  
There has also been some concern raised about removing this bill from the jurisdiction of the Official Information Act and the Ombudsmen Act. Doing so is entirely consistent with the way that Air New Zealand was arranged by the Labour Government not so long ago. We must remember that these will be listed companies with substantial private ownership. They will be operating in a fully competitive market. They will have electricity and gas complaints commissioners providing an independent outlook for complaints and all of these companies will be subject to the New Zealand stock market’s continuous disclosure regime.  
Finally another thing one minority report we have had from the select committee process states that on average privately owned electricity companies charge 12 percent more for electricity than publicly owned ones. Well when we drill down to the figures what do we find? We find that that may have been the case in February 2012 but if we look at August 2010—it depends when you take your little snapshot—Contact Energy was actually the lowest-priced retailer. That is the funny thing about markets. Things bob up and down—sometimes one has got a special on; sometimes somebody else has got a special on. You cannot take a little snapshot at one moment and claim great things from it. That is not a robust way of working out how prices are generated.  
In response to some criticism of the processes it is worth reminding us that we went through a thorough select committee process through the past weeks. The bill’s first reading was on 8 March and off it went to the Finance and Expenditure Committee. There were 1490 submissions 124 of which we heard in Wellington Auckland and Christchurch. I listened to all of them. They were listened to with respect. There were lots of questions asked and Treasury provided plenty of information on all the requests that we heard. So where did we get to? This is a very significant piece of legislation and part of the National Government’s plan to deliver strong and enduring economic growth. It will reduce our requirement for international debt.  
In the meantime one of the primary benefits of this bill is that it will deepen New Zealand’s capital markets strengthening our ownership culture. It is a policy that will boost New Zealand’s stock market. It is a policy that will broaden the pool of investments for New Zealanders. A primary benefit as far as I can see in the mixed-ownership model is that it will bring disciplines of private sector ownership to these companies. The market test generated by the stock market and the signal provided by the share price as to what is happening to the value of the company or its return on capital is likely to be more transparent and more accurate than any system in place to monitor a purely State-owned enterprise.  
I have every expectation that these companies will thrive on the basis of this bill. They will generate wealth for all New Zealanders and produce electricity—and all the other things that these companies are producing—in a more efficient manner. As a result we will have less debt and we will have a stronger economy overall. This is one piece of a very effective National Government policy to bring this country through to a brighter future. I recommend this bill to the House. Thank you very much. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I would never have thought that anyone on this side would be thinking now “Bring back Rodney Hide.” He was an economic lunatic but he made more sense than the last member Paul Goldsmith. After all the sales of State assets how thin is the sharemarket now? It was always so but there is the mantra repeated over and over again by people like the last speaker. At 7.30 p.m. next election night the bewildered members of the Government over there will remember this debate. Our simple message to the National MPs is “Don’t trash the ministerial homes and don’t dent the LTDs.” because soon they will be out of them out of a job and John Key will be sunning himself in Hawaii. This bill the Mixed Ownership Model Bill makes that an absolute certainty.  
You know here they sit like at a former time in history—fiscal soundness to the left of them economic sanity to the right of them and national sovereignty in front of them. Theirs not to reason why theirs but to do politically and die and into the valley of political death rode the bewildered. Mr Joyce got up the “Minister for Everything” and he said that this bill is about three things and he is right. It is about treason it is about treachery and it is about betrayal. This is the “Benedict Arnold Bill”. This bill was rammed through the Finance and Expenditure Committee and is here over a month before the 16 July reporting time which this House asked for. Do you know what they thought? They thought: “Well if the van’s got a full load we may as well load up a bit more. We have had such a tragic time of it—week after week disaster after disaster.” So they thought: “We can disguise this we’ll get it out of the select committee take it to Parliament and hope that by the next election people have forgotten it.” Remember this at 7.30 next election night. Those members will remember this debate because they will be gone. Mr Key—“Mr Spray and Walk Away”—will be in Hawaii because all he was ever interested in with his ever-mighty ego was some addition to his CV. Does the Prime Minister really want his legacy to be that he led a Government determined to impoverish New Zealanders? Is that what he wants? Because the Government’s intention to drive this bill through in the face of overwhelming public opposition and overwhelming economic analysis that shows that it is damaging to New Zealand’s economic interest is incompetence on a grand scale.  
Hon Dr Nick Smith 
: Treasury support it.  
Rt Hon WINSTON PETERS 
: Oh no. Treasury said that this pathway leads within 10 years to overseas ownership. Treasury said that this does not make fiscal or financial sense. It costs. That is what Treasury said—hardly the epitome of left-wing thinking or socialism. Even Treasury has warned them but no the bewildered decided they would go for broke regardless.  
On one level it is truly incredible that this bill is before Parliament—incredible in the sense that it makes no sense. Here we are in 2012 yet this Government is locked into an economic model that was discredited a long time ago. It is still in thrall to outdated flawed economic policy. And why? Because the bewildered over there do not realise that the National Party is run by its financial sponsors—people like Macquarie Bank—the banks and the people whom Mr Key pays far greater heed to than to all the people who have meetings in all the halls trying to sustain National. But Mr Key is not interested in that. He is interested in helping out his mates. [ 
Interruption 
] I have been around long enough to know what a nervous gaggle looks like—and they are nervous. They are nervous. You take Melissa Lee over there. Melissa is a one-way visa to political oblivion. I am very helpful to Asian people. I want the Korean people to be successful. I want the Korean people to be successful but here comes the one person the Korean people put up in Parliament and she will be gone like lightning. This is not good for our international relations for goodness’ sake. They have learnt nothing from past experience in the sale of New Zealand State assets. They are about to repeat all the mistakes of the past. It is this and future generations of New Zealanders who will pay a massive price.  
Now let us have a moment’s silence for Telecom. That was sold for $4.25 billion and it has seen $9 billion going offshore to other markets in dividends and capital repayments. That represents a disastrous transfer of wealth and it is about to be repeated again. The Government has tried to sugar the bill with its euphemistic wording of the bill: “Mixed Ownership”. It sounds nice and innocuous. It has so-called safeguards that other members have referred to and they are bogus. Make no mistake: if this bill is passed it will be only a matter of time before the assets will be totally owned overseas. That is of course their purpose. They all know that.  
Hon Amy Adams 
: You know that’s not true.  
Rt Hon WINSTON PETERS 
: No no. I know that it is true unlike that member who is so wet behind her ears that she is happy to sacrifice her whole constituency just for the chance of being promoted to Cabinet. I suppose that was a prospect that was way beyond her ambitious reach but that is why she is prepared to do it—never ask the real questions just go along with it! But at 7.30 on the next election night that member will know as will her constituents—perhaps she will survive but her friends will not; they will be all gone. You will look back in agony. You will look back in anger because frankly that is where this bill takes you.  
What possessed them to once again sell State assets? Who were they working for? Whose interests were they serving? For it was not the ordinary New Zealander about whom we speak. Those are the three questions that they will be asking themselves at 7.30 next election night. So do not dent the LTDs do not go trash the ministerial homes and do not go and spoil it for the next Government coming in. What we want you to understand is that being the masters of your own political destiny you have plainly stuffed it up. This madness may be due to a wilful ignorance and incompetence or something more sinister. How do we explain the intention to sell assets? How do we explain the intention to sell assets that delivered dividends that were almost $900 million last year to the New Zealand taxpayer? How do you explain that? 
Mike Sabin 
: Is the member in New Zealand? 
Rt Hon WINSTON PETERS 
: We are in New Zealand—that is my very point Mr Sabin. Up north is the most impoverished part of this country when it comes to Europeans and Maori—the most impoverished part of this country. Mr Sabin needs to go back and explain up there in Hokianga and Kerikeri—if he ever visits them—or in Moerewa or in Dargaville why he came down and sold his people out. That is what he will be asked. He will not be holding any public meetings. Oh no no. What is more he will not be engaged in any public debate because he will get thrashed. The fact of the matter is under this Government’s madcap thinking we will sell high-performing assets delivering excellent dividends at the same time the Government has to borrow money offshore. No sane financial manager will do that.  
I want to remind those members again that sometimes in politics a bill comes before your caucus an idea comes before the caucus and you know that when they begin by saying “This is a non-controversial innocuous bill.” on go the red lights the alarm bells start to ring. This is such a moment. This for them is a harbinger of things to come and it is all bad. I remember the National Party when it used to believe in the word “national” when it had a sense of national purpose when it was led by people like Holyoake people who would never sell the country out. “Kiwi Keith” he called himself. Of course he did not pose as being somebody elitist. But this new bunch—oh no no! This new bunch is different. It has no national purpose no sense of sovereignty happy to be on the international stage with a confetti bowl of trade agreements selling out the country’s soul at any given time. They hope that one day they can get away with it. You will remember this day. You will remember this debate at 7.30 on the next election night. I am going to phone all those who lose and say: “Remember you were warned.” 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Just before I call the next speaker—rather than having interrupted the Rt Hon Winston Peters—can I remind members on my right that they would like to have a look at Speakers’ rulings 60/5 especially Nos 3 and 4.  
Hon Dr NICK SMITH (National—Nelson) 
: 
 I have a simple question for the speaker who has just resumed his seat Winston Peters. Is the Raymond Winston Peters signature on the Government sale of Auckland International Airport in 1998 the same Winston Peters who has described this Mixed Ownership Model Bill as treacherous? I could not possibly believe it. Let me hold this up on the iPad. What did Mr Peters say in 1998? Let me tell you. He said: “We are very pleased with the most successful public sale. It is popular capitalism in action.” This is the same member who campaigned in the 2005 election on the mixed-ownership model for Kiwibank. I have to say the double standards that are exhibited by that member are pretty extraordinary. 
But it goes even further than that. I checked the records of members opposite and I was quite amazed to find that in 2007 the then Labour Government sold for tens of millions of dollars 49 percent of the shares in the Spring Creek Mine to American multinational Cargill Coal. Let us be clear: this was a State-owned company—100 percent. This was an energy company. Actually the sale specifically required Cabinet and ministerial approval. The documents have got the signature of the Minister of Finance the Minister for State Owned Enterprises the Minister of Energy and they also required the signature of the Minister in charge of the Overseas Investment Office. I also note that there are 14 members of the Labour front bench who sat in the Cabinet room and approved that sale and can now have the audacity—can now have the audacity—to somehow use extravagant phrases like “treachery” for exactly the same policy with other companies. That just shows how shallow as a birdbath members opposite are on this particular issue. 
But it gets even better than that. After Labour loses the 2008 election we have a wonderful speech in 2010 and let me quote it. It is from Labour’s finance spokesperson. It was to the Institute of Policy Studies here in Wellington. He said: “in a capital constrained fiscal environment we will better leverage the Crown’s balance sheet in new and innovative ways. … We can unleash State Owned Enterprises to create and grow new subsidiaries with private partners and shareholders”. Private partners and private shareholders— 
Hon Members 
: Who said that? 
Hon Dr NICK SMITH 
: That was David Cunliffe the spokesperson on economic development for the Labour Party. 
The policy of mixed ownership is good policy and I agree with David Cunliffe’s comments in that regard. It is good policy. It is rational. It is what we do in every one of our lives. This mantra of no asset sales is just that. It is not a policy. If the country adopted a policy of no asset sales ever there would be no property market. There would be no TradeMe. There would be no sharemarket.  
Colin King 
: Communism. 
Hon Dr NICK SMITH 
: Indeed it would be—indeed it would be. We even had the experience last night in the Parliament where one of my colleagues brought a bill to the House that would allow an area of land to be sold by a council so that it could subdivide it and sell it and could use the proceeds to reduce debt and invest in other council and community investments. Every party in this Parliament voted for that bill. I just simply say that exposes the absolute nonsense of the no asset sales mantra. 
Then let me repeat the other argument in the House today and it has been this. If the Government can get a better return on a business than what it costs to borrow money then it should own the business. That is the logic. Average returns on the sharemarket have been 7 percent. The Government pays about 4 percent for its money. What the Government should do to reduce its deficit is it should borrow heaps and have extra debt. In fact at the last election Labour went to the country and said: “We’re going to borrow $10 billion. We’re going to invest that and get a rate of return of 7 percent. We’re going to pay only 4 percent on the borrowings and on that basis we can close the deficit.” Well if you take that logic to its conclusion why do we not go and borrow $100 billion? Or $200 billion? Or why not go the whole hog and take a trillion because that way we could instantly get rid of the deficit and solve the country’s worries. I simply say it is a nonsense. 
You see Governments just like households need to be cautious of debt levels. We have set a cap on our debt not going greater than 30 percent of GDP. It is a prudent level that gives the capacity for New Zealand to absorb future economic shocks. This mixed-ownership model is crucial to keeping those limits. It enables us to use those billions of dollars to be able to invest back in the economy with things like broadband like the new research institute like water storage and like transport infrastructure without having to alternatively borrow billions overseas. 
But there is another part on which I have to say that Opposition members’ financial illiteracy really does stun me. Let us hear the line: “Why should people have to pay to buy shares in companies that they already own?”. That is what they have said. What an extraordinary comment of ignorance! So for instance if a State house tenant wants to buy their house off the Government these guys say that they should not have to pay for it because they already own it. I checked with the Government’s transactions. Each year the Government sells hundreds of buildings and hundreds of hectares of land. Are members opposite really saying: “Well if I buy some land off the Government I shouldn’t have to pay for it because I already own it.”? I have never heard of such economic lunacy and yet that is the argument that is put up by members opposite. 
I have also got to reflect on the issue of power prices. Let us just check the record. During Labour’s period in Government power prices went up by 8 percent compound—8 percent compound. The Minister of Energy and Resources under this Government Gerry Brownlee rightly recognised that there was not effective competition in the electricity market and in the years since the increases have dropped to less than half of that. But I say this to the Greens and to other parties opposite: it is time that you were honest with the public. I have heard the Labour spokesperson on finance and the Greens repeatedly say that they are going to “get rid of subsidies under the emissions trading scheme”. Do you know what that really means? That really means that if they are elected at the next election they are going to sock power consumers with very significant price increases against the policies that this Government has. 
I want to end on the last issue of mandate. Over the last 25 years there was a big batch of share sales in the 1980s including by people like Trevor Mallard Annette King Phil Goff and those members. I have checked the parliamentary record. Do you know what happened with those bills? They never went to a select committee. There was absolutely no electoral mandate and they went bad. One of them for a sale of asset went through this Parliament under urgency for its first second and third readings—absolutely no select committee stage. In the second period and during the course of the 1990s there were businesses like Auckland International Airport a shareholding in Wellington Airport businesses like Contact Energy and in that stage the process did not have a very clear electoral mandate. 
Any honest assessment of the history is that there has been a more open upfront and honest policy about the sale of these shares than in any time in more than a generation. The reality is that the policy was announced in January of 2011. The public had a very clear choice at the election. The select committee process was open and thorough; in fact I have to commend my colleagues for the tolerance that they showed at the Finance and Expenditure Committee. Although members opposite will say that every single little branch of the Labour Party made a submission what they do not say is that 29 chambers of commerce representing 34000 businesses came to the committee unanimously saying that they supported this bill. It makes good economic sense it keeps debt down it is about making the New Zealand economy more competitive and this House should support this bill. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Well it is interesting to rise to speak after that member Nick Smith. He expressed concerns about rationality. Let us face it: no one has ever accused him of embodying rationality. This is the member who blocked every attempt to get information from Treasury on the Finance and Expenditure Committee. He was not alone. The National members did not want to hear the facts. They did not want the facts from the officials who were there to guide them. And why was that? Why were they afraid of Treasury? Why were they afraid of the advice they would get? Because it would say that they were wrong. It would say that they were rushing the process and that they were not in possession of all of the facts to make the right decision.  
Mr Smith raised the issue of the chambers of commerce at the end of his—well how do we describe this? 
Chris Hipkins 
: Tirade. 
Dr DAVID CLARK 
: This tirade. He said that the chambers of commerce unanimously presented a view.  
Hon Dr Nick Smith 
: All 29. 
Dr DAVID CLARK 
: It is not quite like that. I asked in the select committee—Mr Smith may have been away that day if he said that that was representing all of their members because I know members who do not think this is a good idea—and the presenter conceded that he did not represent all of the members. So Mr Smith is wrong. Mr Smith is wrong.  
He has been amusing himself throughout this speech about the legislation. This is not an amusing matter. This is terrible legislation. This takes New Zealand backwards Treasury has said by $94 million a year and rising. An earlier speaker Mr Goldsmith talked about the chambers of commerce too. He clearly was not listening. I wonder whether any of the National members were listening or whether the cotton wool in their ears during those select committee hearings was simply too thick.  
It was a rushed process. There were no hearings in my home town of Dunedin despite requests. There was short notice for the teleconferences. The presenters did not have the time often or the ability to get there to make their submissions that they had wanted to make. It is unpopular legislation. National took every chance it could to limit the opportunities for those to present who wanted to present against it. Just 0.6 percent of the submitters wanted to speak in favour of this legislation in their written submissions. In a recent poll 80 percent objected to this legislation—80 percent of New Zealanders. These are our assets and we do not think they should be sold.  
It is economically foolish to sell our best revenue-generating assets. These have historically delivered dividends we are told of 18 percent and that compares with borrowing costs of 4 percent. It makes no sense to sell these assets. What will it mean if we sell them? Further down the track it will surely mean cuts to public services and that is what this Government wants. That is the real agenda. It wants to leave future Governments with no choices. It wants to leave future Governments with no choice to put money into the education and health sectors because it believes in supporting those who are already wealthy and who can already afford to buy those services.  
The people who will be able to afford these shares that are going to be put on the market are the mums and dads who benefited most from those tax cuts; 44 percent of the value of those tax cuts went to the top 10 percent of earners and the bottom 20 percent of earners got just 2 percent of the value of those cuts. We know who will be the first in the queue to buy those shares and it will not be the majority of New Zealanders. Treasury tells us this legislation will take us backwards as a country by $94 million per annum.  
So what is the Government’s argument? Why does it want to do this? Nobody can understand. Firstly it said it wants to pay debt. Well frankly Government debt is an issue we need to keep an eye on but it is not the real issue in New Zealand. Private debt is the big issue here. We need pro-growth policies that support our exporters and not to be focused on the limited concerns of Government debt. “We need to pay for social infrastructure.” is what National said next. That is what it said in the Budget last year. Well in this Budget it has come up with a different story again—a third story—and now it is about other infrastructure. Government members do not know what this money is for. They do not have a plan for it. All they know is that they want to sell these assets off.  
They do not like the facts. The Budget Policy Statement tells us that $266 million a year will be saved in borrowing costs if these assets are sold off. But it also tells us that we lose $360 million in forgone dividends. That takes us backwards by about $100 million a year. It ties future Governments into borrowing when we go down the path of a partial privatisation model. Future Governments wanting to expand these enterprises will be tied into capital expansions driven by the other shareholders. Governments will have to stump up more funding and that could mean more borrowing further down the track. It is short-sighted legislation. That is what we get with a rushed process.  
We know too that the dividends will flow offshore. We have got an example of that a historic example. We know about Contact Energy. 
Hon Clayton Cosgrove 
: Who sold that? 
Dr DAVID CLARK 
: “Who sold Contact Energy?” my colleague asks. Well well well. Mr Smith referred to it earlier but he was not sure he was a bit vague on it. It was the National Government that sold Contact Energy. We know that since it was sold $1.5 billion has gone to private shareholders and we also know that the majority of those shareholders are overseas. The first thing that happened was that those shares got onsold. This Government says that—magically—that is not going to happen this time that the energy sector has changed and that the shares will go on the market and mum and dad will buy them—mum and dad mum and dad mum and dad. Well where is the guarantee? There is nothing in the legislation that will stop these shares being onsold. We know that what will happen is exactly what happened with Contact Energy; the profits will flow offshore. They will flow offshore.  
They have gone quiet on the other side. Their heads are down. It is not surprising. They know that this will affect them. They know that the New Zealand public does not like this legislation. They know it is a bad move. They have put in a little clause which they slipped in at the last minute so they can wind the legislation back if they have to. That was an interesting move. That was an interesting move right at the end. We see a back-down clause. They have put a back-down clause in. We have called it the “Hekia Parata clause”. They sneaked that into the legislation at the last minute to give them an out because they know that the public of New Zealand do not like this.  
What about the $120 million that is going to merchant bankers for this sale? What of that $120 million? Well it is about priorities. Imagine what you could do with $120 million. It is probably another teacher in every school. Rather than taking one away you could put an extra one in every school if you were not paying that money to merchant bankers. This is short-sighted legislation and we are only happy to see that back-down clause because we know what it means. We know that Mr Key is giving himself a way out for another flip-flop.  
We heard from one submitter at the Finance and Expenditure Committee about the slippery slope and the partial privatisation model as it has worked overseas. What can happen is that when you get close to that 49 percent mark private investors who are shareholders in that company say: “We won’t put anything else in unless you privatise the whole lot.” They hold the company to ransom. It has happened overseas and we know how easily it could happen here. This is a slippery slope. But no on they go. What they say is “sell sell sell”.  
What happens when they are sold? Well the other thing we know is that power prices are going to go up. We have seen it happen historically; the Government has not stopped it happening. Between 2000 and 2007 we know from historic modelling $4.2 billion worth of overcharging happened in the power sector in New Zealand. We got a report back. Unfortunately Labour was just going out of office the National Government had the opportunity to act on those findings and to rein the electricity market in. It did not do it. It did not do it and what we see is Grey Power which came to the select committee and told us old people will freeze to death in their homes because of this legislation. That is what Grey Power told the select committee. It said old people will freeze to death in their homes because of this legislation.  
We also know that businesses will suffer because of this legislation. When the only thing that matters to a company is its bottom line when its social responsibility clause comes out—National is taking it out of the legislation; there is no social responsibility clause—we know that those businesses will look to their bottom line. That is what they are incentivised to do. They will not be concerned if there is a brownout and they will not be concerned if there is a blackout as long as they are making profits.  
But “New Zealand Inc.” will care. We all as a country will see our GDP dip. We will see confidence in our economy go down. These are some of the fish-hooks in this legislation which has not properly been examined in select committee because the process was rushed—rushed by a Government scared that it will get opposed and that its own support parties will walk away because of the unpopularity attached to this legislation.  
So how do we grow exports? Well it is not this way. It is not through switching who owns these power companies. That does not change productivity. If anything it holds it back. What we do know is that the way to grow exports is through having pro-growth policies through having more research and development through having good tax policies and not through flogging off our best revenue-generating assets. We are shedding our strategic advantage. We know that Google Apple and other companies in China and around the world are investing in renewable energy because they know that in the future that will be a strategic advantage. We are flogging off our best assets as fast as we can.  
Well there is still something that we can do and that is to get out in the streets and march and it is to sign the citizens initiated referendum that Grey Power is leading. I will be out on this Saturday in Dunedin looking for an opportunity to march down the street from the dental school to the Octagon to make my voice heard and I hope others will be around the country signing that petition. This is terrible legislation— 
Mr DEPUTY SPEAKER 
: Order! The member’s time has expired. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I seek leave to table a document. It is the minutes—all the minutes—of the proceedings of the Finance and Expenditure Committee surrounding the Mixed Ownership Model Bill which will give a historical record showing all the blockages the National members put in place including blocking advice from Treasury— 
Mr DEPUTY SPEAKER 
: Order! They are on the parliamentary website are they not? They are public documents so we are not going to put that leave. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. Without wishing to waste the time of the House I am advised that there is a problem with the parliamentary website. They have not been available—I am advised but I could be wrong—thus far. Therefore I seek leave to table them. I could be wrong— 
Mr DEPUTY SPEAKER 
: No I have ruled that they are in the public arena and I have not had any advice other than that. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. Could I—[ 
Interruption 
]  
Mr DEPUTY SPEAKER 
: Order! 
Hon CLAYTON COSGROVE 
: Take a pill. 
Mr DEPUTY SPEAKER 
: Proceed. 
Hon CLAYTON COSGROVE 
: Could I ask you—I am not challenging your ruling—whether you have received advice that they are on the parliamentary website? I am not questioning the Clerk but if there is a technical problem with the website they are not in the public arena; therefore there is justification for tabling them. Unless we are clairvoyant and we have not received formal advice I would take it that that may well be the case. 
Mr DEPUTY SPEAKER 
: I have received no advice either way. I am presuming that they are public and if they are not now they will presently be so. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. Again I do not want to trifle with your patience but there is a clear ruling from Mr Speaker Smith and it is appropriate that where documents are not in the public arena they can be tabled. These may well become public at some point but if the advice is correct and they not on the parliamentary website they are not in the public arena. I have checked with the Clerk and they are allowed to be tabled. I would invite you if they are not in the public arena to adhere to the Speaker’s ruling 148/4. 
Mr DEPUTY SPEAKER 
: The issue is not whether the website is up or whatever; the issue is whether they are public documents. They are public documents and for that reason we will not be putting leave. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. 
Mr DEPUTY SPEAKER 
: I have ruled on this. The member is now trifling with me. I have ruled on it and unless this is a separate point of order the member is at grave risk of being required to leave the Chamber. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I have a request. My request is simply this: that if you can you would give consideration to that ruling based on the submissions I have made to you. 
Mr DEPUTY SPEAKER 
: I will give that some thought. 
DAVID BENNETT (National—Hamilton East) 
: 
 When we talk about the Mixed Ownership Model Bill it is legislation that—as the Labour members have said—is about choice. But this is about a choice for New Zealand going forward. We have a choice of whether we take the approach where we just borrow and hope and put our country at great risk or we make some choices now that will put our country in greater security going forward. We have the choice in this House of working out a future for our country or we can just borrow and hope and let somebody else work out that future for our country as you are seeing in Europe. That is the choice for New Zealanders out there. That is the choice that they took at the last election. They knew the economic plan and they agreed with it.  
The Labour members and the other Opposition members come into this House today to try to make the vulnerable feel that this bill will be against them. They talk about power prices and they talk about the elderly and that but they do not look at the economic reality of the situation. I thought it was an extremely good speech we had from the Hon Dr Nick Smith. That was a great speech and in that speech I think he brought some economic reality to this debate. The Hon Nick Smith talked about a lot of things there that actually showed a true understanding of economics rather than the Opposition propaganda about economics.  
When you look at economics you have a choice but you also have assets. As people—individuals—and as a country we use our assets in different ways. We buy and sell assets we make the most out of them we capitalise them and we borrow off them if we need to. We have all those options available and this is a sensible approach going forward. Nick Smith used the issue of a State house. Can you say that just because— 
Hon Clayton Cosgrove 
: What would that member know about a State house? 
DAVID BENNETT 
: That is what he said. When you use a State house as an example he said that if you had to buy that back from the State can you go to the State and say that you already owned it in the first place? You cannot. It is a natural part of economics that you cannot do that yet that is what the Opposition is saying should happen here.  
If you look at the example of someone buying or selling a house as one of my other colleagues said we do that in our lives. People buy and sell houses and they build their equity through that. This bill is about this Government building the equity of New Zealand through using our assets most appropriately. We have a choice in how we use those assets and if we do not use those assets properly and we do not build for the future of this country going forward we will pay a big price in a few years’ time.  
When you go overseas you can see what that big price is looking like in Europe. If you put your head in the sand and think you are just going to borrow and you do not have to build your economy— 
Sue Moroney 
: I raise a point of order Mr Speaker. The member has been here for some time now and he is accusing you of borrowing and selling. I think the member has been here for long enough to know not to bring you into the debate. 
Michael Woodhouse 
: I wonder if you might refer the member to new Speaker’s ruling 27/5(2). 
Mr DEPUTY SPEAKER 
: Members are required to be a bit careful about which pronouns they use to avoid bringing the Speaker into the debate. I ask David Bennett to consider that as he continues. 
DAVID BENNETT 
: Let us look at what has happened overseas. If people look at what is happening in Europe at the moment—look at places like Italy and Spain—what kinds of interest rates are they paying? We had the Monetary Policy Statement come out this morning and the Labour Party’s David Parker talked a lot about economics in his speech on this bill earlier. We should have a look at that and see the interest rates in Italy and Spain getting up to that 7 percent interest rate. New Zealanders do not want to be in that situation. The biggest thing we can do for New Zealanders is provide that stable economic environment and not give them those high interest rates.  
If we look at what the Labour Government delivered for New Zealand in October 2005 the official cash rate was 7 percent and then it got up to 8.25 percent by July 2007. The economic management of the Opposition will put interest rates up as you are seeing in those countries in Europe. They have borrowed they have put their head in the sand they have not looked at what their economic options are and they are paying the price with high interest rates.  
New Zealanders out there need to look at that as well. They looked at that in the last election because they realised that that was the implication for them. If they did not have good economic management if they did not make choices like this they would get to a situation where you would have those high interest rates and their personal situations would be put in jeopardy. That is the choice that is out there. That is the choice that New Zealanders understand. The Opposition does not understand that choice.  
When we talk about the mixed-ownership model we get a lot of rhetoric from the Opposition. They talk about dividends at certain percentages and comparing that with interest rates and saying: “Well hey the Government could actually earn more if it held those assets.” That is simply not true—simply not true. New Zealanders understand— 
Sue Moroney 
: I understand all right. They understand all right. That’s why they’re voting with their feet on this one. 
DAVID BENNETT 
: —and the figures are here for Miss Sue Moroney. If Sue Moroney wants to have a look at the figures she will see that we get about a 4 percent dividend and we have about a 5 percent interest rate. That is a 1 percent loss Miss Sue Moroney if you want to look at the economics of it.  
New Zealanders understand what a loss means in economic value; unfortunately the Opposition does not. When we look at that we see that New Zealanders know that that dividend rate should not take into account capital taken out of those companies. The Opposition uses figures that take into account the capital taken out of those companies not just the real dividend on the income that those companies generate. I think that is very important. When we look at that we also need to look at what they are. They are State-owned enterprises. And what are State-owned enterprises? They are expected to operate in the commercial market just like any other companies would. If you look at the principles of the State-Owned Enterprises Act they say: “as profitable and efficient as comparable businesses that are not owned by the Crown …”. So they are not expected to be loss-making ventures which the Labour Party or the Green Party or New Zealand First talks about. They are expected to be profit-generating just like a private company. That is why under the Labour Government you saw a large increase in costs on consumers. That is part of the nature of the demand and supply of energy and New Zealand has a very high sense of renewable energy. The last speaker from the Labour Party talked about the need to make a cleaner greener economy. Well we do that through our energy sector. It has a very high aspect of renewable energy. That is something that we are very proud of and we invest in and we look forward to these companies being a part of that in the future.  
When we look at the State-owned enterprises we need to take into account what their role is. They are Government-generated and Government-owned to a large extent but they also have aspects of private ownership in them in some cases. There is nothing wrong with a balance between private and public. We do that in a lot of things to deliver services throughout our communities whether in education or in health. Why can we not embrace a public-private use of capital resources and skills? The private sector does bring some skills to the table that the Opposition will not acknowledge. The private sector tends to bring good management skills an understanding of consumers and customers and the ability then to deliver to consumers. The public is not so good at doing that necessarily in a commercial environment such as a State-owned enterprise. A good mix of public and private will be in the best interests of New Zealand consumers it will be in the best interests of the New Zealand Government and it will be in the best interests of our economy going forward.  
This bill is about choice but it is about the choice of the economic management of our country going forward. We can choose either to put our head in the sand borrow and pay the consequences when someone else will be in charge of this process in 10 years’ time or to make that investment in the right things that build a stronger country going forward which we can have a say in and that will deliver the best results for New Zealand. Thank you. 
Hon Clayton Cosgrove 
: Point of order. 
Mr DEPUTY SPEAKER 
: I was going to respond with the consideration I have given to the member’s earlier point and the member might want to listen to what I am going to say and then reflect on that. I did take some time to discern the situation as it pertains to the minutes of a select committee. Let me firstly say that with regard to the parliamentary website I have checked the availability of these records on the website and the select committee documents have been available since Monday and there have been no complaints either internally or externally about that. With regard to the matter of the minutes the minutes will become a public document when the Mixed Ownership Model Bill has completed its passage through the House. So in that regard they will become a public document and it was on that basis that I ruled. What the member is actually seeking to do is to release minutes before the appropriate time at which there may be an issue of contempt and the member needs to actually reflect on that. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. I have inquired of the Finance and Expenditure Committee clerk also. There two things I would say to you. You are right: the minutes are not on the website. The advice that I have been given a few moments ago is that it is not protocol that the select committee minutes are placed on the website.  
Mr DEPUTY SPEAKER 
: That is just what I have said. 
Hon CLAYTON COSGROVE 
: That is correct. However I asked the Clerk—not the colleague currently here but the previous Clerk who was here—whether those minutes are available publicly whether they are available to be accessed. I also checked with the Finance and Expenditure Committee clerk who tells me that although it is not protocol to put them on a website if members of the public were to ring or approach the minutes would be able to be released. That is the advice I have got and I have got it from one of your senior people and also the clerk of the Finance and Expenditure Committee. My point is simply this. I in no way wish to breach the rules of the House or bring the House and myself in contempt of them. However that is the advice I have received from two officials. That being the case they are not publicly available documents in respect of access and I seek on that basis on the basis of advice I have received from your people to have them tabled. If I am incorrect that is a matter for your staff not me. 
Mr DEPUTY SPEAKER 
: And I have given that ruling. The minutes will become public after the passage of the bill and there can be a breach or a contempt if they are released before that point. That is why I have ruled essentially that they will be a public document and I am advised that they are not available to the public until that point until the point that the bill has completed its passage through the House—I am advised. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. Then we have a difficulty. I suspect we both have a difficulty actually—not Nick Smith but we have a difficulty—and that is that you have received some advice and I have also received advice not just from shall we say a non-senior official but from a senior official in this Chamber and we now have a situation of contrary advice to you and to me. I do not challenge— 
Mr DEPUTY SPEAKER 
: There is no conflict. Well there is no problem because I have given a ruling and said that I will uphold the rules of the House that minutes do not become available before a bill’s passage 
because of contempt. I have also ruled that they will be a public document and this House does not seek leave to release public documents. I realise there is an issue of timing but the issue of contempt is the one upon which I have ruled. 
The next member to seek a call is seeking a split call. The first to take a 5-minute call is Hone Harawira.  
HONE HARAWIRA (Leader—Mana) 
: 
 Kia ora Mr Speaker. Kia ora tatou katoa. The agenda of this Government as evidenced through this bill the Mixed Ownership Model Bill is now clear for all to see. Assets services and resources currently being managed by the Government for the benefit of the citizens of this country will be sold to the highest bidder many of whom will be overseas companies that have no interest in the Treaty of Waitangi or the people of this country be they Maori or Pakeha.  
Twenty years ago when National decided that electricity was no longer an essential service the industry was deregulated and households started paying more for their power than big business. Today welfare services are being privatised and the Government is wiping its hands of its responsibilities to provide for its most vulnerable citizens. Education continues to be privatised through the introduction of charter schools and the continued funding of private schools at the expense of public education for the children of ordinary New Zealanders. Access to health is being denied to the poor by ever-increasing costs while the country leads the developed world in Third World diseases. Accident compensation is being denied to victims through complex and costly processes and bad management as the Government prepares to privatise ACC. The Department Corrections is getting a brand new billion-dollar jail but the rights to run it have already been sold off to an overseas company. State housing is being sold off to the private sector while homelessness reaches record levels. And water management and water rights have already been privatised by the Government in different parts of the country.  
But the really surprising thing to me is how long it has taken us to wake up to the fact that selling off resources assets and services built up by generations of New Zealanders will leave our children and our mokopuna with a future almost too bleak to contemplate. Yet such is the future that this bill and this Government offer us all. Mana opposes this bill to sell off 49 percent of the shares in Mighty River Power Meridian Energy Genesis and Solid Energy because there are no provisions to guarantee that New Zealanders will get preferential treatment or even a dedicated percentage of the shares. There are no provisions stopping overseas companies from bidding for a majority of the shares in the new companies. There are no provisions requiring the Government to protect the interests of New Zealand citizens to regulate the price to New Zealand customers or to guarantee supply to New Zealand citizens over business interests. There are no provisions to require the new companies to honour Treaty obligations even though the Government is still the majority shareholder. And there are no provisions to ensure that Maori interests in water will be protected. In fact the Government’s opposition to the New Zealand Maori Council’s application to have those interests considered by the Waitangi Tribunal shows how much contempt this Government has for Maori opinion and how much disregard it has for its coalition partner the Maori Party.  
The Government is clearly committed to its plan to push ahead with the sale of State assets but I want to take this opportunity to thank all those who have taken a stand already against this bill. There have been many including the 1500 who made submissions to the Finance and Expenditure Committee the overwhelming majority of which were opposed to the bill; the tens of thousands who joined the “Aotearoa is Not for Sale” march from Te Rerenga Wairua to Parliament last month; Grey Power and the students associations which were an unlikely mix brought together by a hugely unpopular bill; the New Zealand Maori Council and those iwi doing their best to stop the Government selling the assets and the “to hell with the people” agenda; and the unions the Labour Party the Greens New Zealand First and Mana who attended the launch and have all committed people to gathering the 300000 signatures required for a referendum on stopping asset sales. 
Let me take this opportunity to urge those same groups to redouble our efforts because once those shares have been sold and those companies have been privatised investor demands for an ever-increasing return courtesy of higher power prices will force more of our old people to switch off their hot water to save power; lead to even greater sickness in cold and damp homes as poor families are forced to cut back on heating light and refrigeration; and reduce this nation to a level of servitude that our children simply do not deserve. Kia ora ra. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. I want to refer you to Standing Order 236(3) which reads: “The follow proceedings may be disclosed: (a) those proceedings that do not relate to any business or decision still before the committee:”. I put it to you Mr Deputy Speaker and I have taken advice on it—you may or may not be aware of it—that it is not a contempt of Parliament to release the minutes. Just for the record—I am sure you will indulge me—I hope I have not brought a Finance and Expenditure Committee clerk into career danger because I may have misinterpreted the advice he gave me. He is very solid citizen. My advice is that indeed it would be a contempt to release minutes that pertain to live decisions before a committee. However it would not be a contempt to seek leave to table all aspects of the minutes—somebody would have to get the scissors out I suspect—that pertain to the bill before the House. If I am correct given that that is the case and given also that those minutes we have now had confirmed—and I am very happy to take you at your word because it is consistent with my advice—are not publicly available or parts of the minutes on the parliamentary website then there is an issue as to public availability. I do note that the scissors would have to come out and there might have to be some work on this but I would just put it to you that we can refer to these minutes in the Chamber but there is a large number of people on all sides of this debate external to this Chamber who are wanting to access those documents. They are not available to them and they should be. So on that basis unless you advise me I am still in contempt— 
Mr DEPUTY SPEAKER 
: I will respond to that. I think the member now has grasped the nettle of it—that to release the minutes of the Finance and Expenditure Committee where there are other bills and other bits and pieces would be in contempt. But I think the member is now suggesting that he table only the minutes that pertain to this piece of legislation and I would accept that it is in order for that leave to be sought. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I seek leave for all Finance and Expenditure Committee minutes that pertain to the Mixed Ownership Model Bill that are before the House be tabled in order to show— 
Mr DEPUTY SPEAKER 
: You do not have to give the reasons why. 
Hon CLAYTON COSGROVE 
: Well I am allowed to give a description— 
Mr DEPUTY SPEAKER 
: No. Order! The member does not have to give it. He has sought leave for what he is seeking to do. I will now put the question. Leave is sought for that purpose. Is there anyone opposed to that course of action? There is. Right. Now there is a 5-minute call from Gareth Hughes. 
GARETH HUGHES (Green) 
: 
 Kia ora. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the Mixed Ownership Model Bill which must be one of the most unpopular damaging pieces of legislation introduced by this Government in this term. What this bill is is intergenerational theft. This bill is simply failed ideology back in action. This bill is going to see our electricity prices increase. But the madness is that this bill just does not even make economic sense. It is this Government that got us into the fiscal hole we are in right now and it is this Government that wants to flog off the people’s assets to pay for its poor fiscal decisions. Of course if you give $2 billion worth of tax cuts to those who need it the least if you are throwing $1.5 billion at greenhouse gas polluters and if you have $14 billion to throw at uneconomic roads of course you are going to find yourself in a fiscal hole. The best advice this Government can take is to stop digging but instead it wants to sell the spade as well. It is the Government that got us into this mess and now it wants to sell up our assets to get us out of it.  
The Government is rushing this ideological legislation through under urgency because it knows how unpopular this is. 
Hon Dr Nick Smith 
: It’s not under urgency. That is rubbish.  
GARETH HUGHES 
: Oh if this legislation is not under urgency the process around it has been an urgent process where the Government has not listened to people. It has rushed it through because it knows how unpopular this is. Kiwis remember what happened the last time Labour and National Governments sold off our assets. I urge the National Government if it wants to listen to the people to put it to the people and put it to a referendum.  
Hon Chris Tremain 
: So the election doesn’t count! 
GARETH HUGHES 
: There is no mandate from the election. We saw a half-arsed campaign from the Labour Party and it is good to say in this House that the election was not a mandate on asset sales. You want a mandate? Put it to a referendum. Listen to the people. It does not make sense. It is economically stupid. These assets are returning healthy dividends to pay off debt that costs less than the cost of borrowing for that debt. We look back to when the last Government sold Contact Energy BNZ and Telecom for $7 billion and subsequently there has been $21 billion worth of dividends that Kiwis have missed out on. Business and Economic Research Ltd did an analysis of the legislation and the Government’s mixed-ownership plan and what we know is that the Crown accounts are going to be permanently worse off as a result. What we know is that electricity prices are going to increase. Analysis of the Ministry of Economic Development’s own data shows that private electricity generation is 3.3c per kilowatt more expensive than that of the State-owned enterprises. 
Let us look at one member in particular the Hon Peter Dunne who is making this bill possible. He will go down in history as the only member of this House to be part of two Governments that have sold off State assets in such a manner. Peter Dunne is going to live in infamy. I hope he is sending out his CV because I do not think he will be returned.  
But it does not have to be this way. We can actually keep these assets and use them. They can be at the forefront of selling our expertise in renewable electricity generation—things like geothermal which we are doing a job of exporting around the world. We could be using this to transform to a clean green economy. We could be building jobs but instead this Government wants to flog them off to make up for its own failed fiscal policies. It wants to keep that hole from its own mistakes.  
We would like to thank the submitters. We heard an overwhelming message from all those submitters not to do it. It is a bad decision. We will see you in 2014. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Speaker. I am sorry to return to the issue before— 
Maggie Barry 
: So are we. 
Hon CLAYTON COSGROVE 
: I know they are because they do not want to have the documents released. 
Mr DEPUTY SPEAKER 
: Order! 
Hon CLAYTON COSGROVE 
: I am responding to an interjection. 
Mr DEPUTY SPEAKER 
: No do not respond to them. Give your point of order. 
Hon CLAYTON COSGROVE 
: The last time I checked you could not interject on points of order. I refer you again to Standing Order 236(1): “The proceedings of a select committee or a subcommittee other than during the hearing of evidence are not open to the public and remain strictly confidential to the committee until it reports to the House.”  
I have taken further advice and I need reassurance from you in respect of a request from the public. If a member of the public requested the sections of minutes that pertain to the bill before the House the Mixed Ownership Model Bill which we are debating because it has been reported to the House—if a request was made by any person to the Clerk’s Office to have those documents released—then I am advised that they would have to get the scissors out and cut it up and release all those minutes and leave given that it has been blocked by the Government would not be required. That could be done simply through a request by a member of the public. I would be grateful if you could confirm or not please. 
Michael Woodhouse 
: Speaking to that— 
Mr DEPUTY SPEAKER 
: I do not need any assistance. Firstly that is not a matter of order of the House. That is something that would occur outside of the House and the member is correct in his assumption. So it not a matter of the order of the House—I will just say that. We have one speaker to go. 
MAGGIE BARRY (National—North Shore) 
: 
 I rise to support the Mixed Ownership Model Bill which of course is sponsored by the Minister for State Owned Enterprises Tony Ryall. It is set down for its second reading and I would have to say that there has been a great deal of wilful misinformation and alarmist rhetoric that we have heard this afternoon from across the other side of the House. We have also seen it in the grounds of Parliament. Earlier this afternoon I noted that there were a couple of dozen people holding out placards stating: “New Zealand is not for sale”. I agree with them—it is not for sale. That was what Labour did in the 1980s and 1990s. That is not at all what we are about.  
Earlier we heard the former member of Parliament for Waimakariri who is on the phone at the moment talk about having political regrets and how his party has learnt from its former mistakes. Well I doubt that somehow. I doubt whether he has learnt very much at all. Unlike Labour through the 1980s and 1990s— 
Hon Simon Bridges 
: He’s not listening to you.  
MAGGIE BARRY 
: He never listens. He never listens—paper ears. Unlike Labour we have looked carefully at the legislation. We did not sneak it in. On 26 January last year our Prime Minister John Key outlined the mixed-ownership model. We campaigned on it. We went into detail on it. I am going to go into a bit more detail in a few moments because I think it has been lost in a lot of the misinformation and stuff and nonsense we have heard today.  
But we have a mandate and that has been questioned by some people in this House. Our mandate is called election 2011. There were a lot of people who listened to what we were saying about the mixed-ownership model because we were up front about it and they decided that we were right and they voted for us. We got 47 percent of the party vote—the most ever. Labour on the other hand dug up a whole lot of old signs stating: “No asset sales.” It campaigned hard on that. What did it get?  
Hon Dr Nick Smith 
: Worst result ever.  
MAGGIE BARRY 
: The worst result ever. So what does that tell members opposite? Not very much actually because they are not listening to it but in fact they should have learnt from their mistakes but they absolutely have not.  
In the years when I was on  
Morning Report 
 and working for the then National Radio I saw Phil Goff and all the others come into the studio day after day. The phrase: “They’re selling off the family silver to pay for the daily groceries.” was invented for what Labour did and a lot of those members are still there. They were the architects of the old misfortune and they continue to plague the Labour Party of today which is why they lurk in such low numbers on the opposing side of the House.  
We are committed to the mixed-ownership model because it is needed. As we heard earlier today from Ministers Joyce and Foss it is all about the debt. Our partial share float where the Government maintains a majority shareholding is essential if we want to control our out-of-control debt. We do not want debt for New Zealand. Unlike the others we do not want to borrow. We are not prepared to put future generations of New Zealanders under the yoke of debt that Labour has consigned us to. Why expose us to it?  
The mixed-ownership model has many advantages and I will recap on them because there has been a lot of misinformation so let us look at it. The mixed-ownership model does provide much-needed money to invest through the Future Investment Fund. I will go into that in a bit more detail later but we do not need to borrow more to invest in things that we need in this country and that is a very important thing to keep in mind in these difficult financial times. There will be huge benefits to New Zealand’s capital markets. We need more attractive investment opportunities for people in our capital markets because they are a bit moribund so the mixed-ownership model will provide more opportunities for investors.  
The other thing is that we are keeping control of the assets. Yes it is the “c” word: control. We are keeping 51 percent control and we are getting in the dividends. [ 
Interruption 
] No I was getting a bit close to the wind with the “c” word but it is about control. It is not a word that members opposite know a lot about when it comes to fiscal responsibility but we are well across it.  
These mixed-ownership model companies that we are proposing to partially float are companies they are businesses and they will benefit from operating under a more commercial model. What is a Government doing in the day-to-day running and the minutiae of electricity companies? If you get other people involved there will be more money that we as a Government do not need to borrow. They can invest and grow these companies. There are a lot of good things to come from the discipline and scrutiny of the model that we have proposed. They can get access to capital and grow and expand without us needing to borrow it.  
Kiwi-owned is a very important part of this. We are committed to keeping a very strong Kiwi ownership in these companies because we think it is important—so important that we have set clear targets and guidelines around it: 85 percent to 90 percent of Kiwis’ ownership will be there at the time of the offer. That is what we are looking at. We will also have very strict ownership limits and those are going to be enshrined in legislation. There will be a 10 percent share cap. No other investor apart from the Government of course which retains 51 percent will be able to own more than 10 percent of the company.  
There are a lot of New Zealand companies that would like to get involved. Iwi and superannuation funds instead of investing their money overseas in farms in Canada or Tasmania will be able to invest in strengthening the future of good New Zealand companies and I think they are clamouring to invest. Kiwis who apply for shares will be at the front of the queue. So here is a question. Would you rather that dividends were paid to New Zealanders or would you rather that we paid interest to overseas debtors? What do you think? Members opposite would go for the debt every time because that is the limited perspective they bring to this.  
The Future Investment Fund which again was very well-signalled is something that we have already earmarked. Just consider for a moment how far $33.8 million is going to go towards modernising and transforming New Zealand schools. There will be $88.1 million going into the health sector. That is going to develop hospitals and again we will not need to borrow to do that. There will be $250 million towards the KiwiRail Turnaround Plan. The Greens are always banging on about how much they hate roads; we have got New Zealand rail benefiting. These are all good things. Up to $400 million is going to be used as equity investment in irrigation projects that will help increase our productivity grow our rural economy and create jobs—measures of course that members on the other side loathe and abominate—and there is another $80 million that we have earmarked under the Future Investment Fund that will go towards transforming Industrial Research Ltd into an advanced technology institute. Again that is investing in the future of the way that we are looking at rolling out broadband—the “high-tech HQ” which is part of the vision that we have for New Zealand investing in our future.  
Members have also said in closing that we have rushed this through. I absolutely reject that notion. There were 1490 submissions. We heard 124 of them. We were here in Wellington hearing them we went to Christchurch and we went to Auckland.  
Dr David Clark 
: How many were in favour?  
MAGGIE BARRY 
: Yes there were a lot of Labour people and a lot of Green people who submitted. That is what they did. They were motivated to do it the language was pretty similar and they said their bit. Then we had the chambers of commerce. Some people have disputed that chambers of commerce actually represent people. They were absolutely in favour of the mixed-ownership model and there are a lot of them. In Auckland alone 20000 small businesses are represented. I spoke to Michael Barnett who actually came and submitted and he said that the vast majority of his members were absolutely in favour of it. So it is not rushed. We have the mandate that is known as the 2011 election this is essential for our future it makes sound economic sense and I commend it to the House. 
The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to. 
A party vote was called for on the question  
That the question be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Question agreed to. 
A party vote was called for on the question  
That the Mixed Ownership Model Bill be now read a second time. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Bill read a second time. 
Dairy Industry Restructuring Amendment Bill 
Second Reading 
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 I move  
That the Dairy Industry Restructuring Amendment Bill be now read a second time 
. The Dairy Industry Restructuring Amendment Bill was tabled in the House in March 2012. It had its first reading on 3 April after which it was referred to the Primary Production Committee for consideration. The committee received and considered 99 written submissions and 43 oral submissions on the bill.  
The bill does three key things. Firstly it will enable Fonterra to proceed with Trading Among Farmers or TAF as it has become known if its shareholders so decide. But at the same time the bill will ensure that farmers will retain their ability to freely enter and exit Fonterra in a TAF world. Secondly if TAF does not proceed or if it is wound up it requires Fonterra to value its shares at a full fair value. This is also to ensure the freedom of farmers to enter or to exit at fair value. Thirdly the bill creates greater transparency for the way that Fonterra sets its farm-gate milk price bolstering the incentives for Fonterra to set a reasonable and efficient price and providing for a contestable milk market. This is in recognition of the importance of Fonterra’s farm-gate milk price to the entire New Zealand dairy industry.  
During the consultation period submitters queried a number of aspects of the bill. In relation to TAF some submitters considered that the Government should not be introducing this legislation because they had concerns with Fonterra’s proposed capital restructure. I have always said that Trading Among Farmers is a matter for the board and the shareholders of Fonterra. Although the bill enables Fonterra to proceed with TAF it in no way requires Fonterra to implement it. Rather it sets up a regulatory framework to ensure that farmers can freely enter and exit Fonterra in the absence of the share issue and redemption obligations that Fonterra currently requires.  
Any concerns with the design of TAF itself are for the Fonterra board and management to address. I am therefore delighted that Fonterra has decided to hold a final vote on TAF later this month. I note in particular that shareholders are being asked to approve a number of constitutional changes that provide greater protection around shareholder ownership and control. I see this as a positive step because a number of submitters raised concerns that TAF would lead to the demutualisation of the cooperative—an argument that I do not accept.  
One of the main criticisms of the bill was that it was being progressed through the House even though the final decision on TAF had not been made. I do not see this as an issue because the bill does not require Fonterra to implement TAF. However if Fonterra decides to go ahead with TAF it is crucial that the legislation is finalised to provide enough certainty to investors ahead of the proposed launch in November this year.  
The TAF provisions in the bill remain largely unchanged since its first reading. The provisions of new section 109K which relates to the behavioural obligations on Fonterra have been clarified so that certain conduct is prohibited only if it is for the purpose of restricting farmers’ freedom of entry and exit. Some technical changes have also been made to the Order in Council process to reflect concerns put forward by the Regulations Review Committee.  
The fair value share provisions in the bill received criticism from a number of submitters who considered that it is not appropriate for Government to intervene in the share valuation of a private cooperative. However Fonterra is not a normal cooperative. Its dominant position in the market means that its share value has an impact on the overall efficiency of the total dairy industry. If Fonterra was to set its share price at a nominal value this would clearly discourage farmers from exiting Fonterra and encourage other farmers to enter thereby impacting on the contestability of the farm-gate milk market. That is why unlike the share price of any other cooperative Fonterra’s share price is a public policy concern.  
A number of changes have been made to new section 77A since the bill was introduced. These changes clarify the Government’s policy intent that the share price should be set at a full fair value in the absence of Trading Among Farmers. In relation to Fonterra’s farm-gate milk price some submitters suggested that the milk price monitoring regime should be designed to promote competition and that the resulting competitive market will drive efficiency. However the bill provides for a contestable milk market.  
Contestability is not about actively promoting or precluding competition. Rather a market is contestable if the threat of entry prevents an existing firm from taking advantage of its market power irrespective of whether or not there was actual competition in the market. In a contestable market both a dominant firm like Fonterra and its competitors will have the incentives to operate efficiently and to innovate. I believe that contestability remains the appropriate standard to maximise the potential of the New Zealand dairy industry and that of course was the original premise of the Dairy Industry Restructuring Act in 2001.  
This bill will ensure that regardless of whether Fonterra chooses to proceed with TAF farmers will retain the ability to freely enter and to freely exit Fonterra. This bill is crucial to ensure the continuing growth of an efficient and innovative dairy sector. I would like to take this opportunity to thank the members of the Primary Production Committee chaired by Shane Ardern for the committee’s consideration of the bill. I commend this bill to the House.  
Hon SHANE JONES (Labour) 
: 
 Tena koe Mr Speaker. Before I turn my attention to the Dairy Industry Restructuring Amendment Bill I would like to echo what the Minister for Primary Industries has said acknowledge the role played by Shane Ardern as the chair of the Primary Production Committee and say that it is one of the most interesting select committee experiences that I have had the opportunity to either endure or enjoy since 2005. More in sorrow than in anger we oppose this bill. We do so knowing that we were the architects under the leadership of Helen Clark who enabled this monopoly to come into existence. It was a monopoly that enjoyed the privilege of escaping the purview by and large of the Commerce Commission—no small gesture made by the Government at that time. Unfortunately the size of the gesture has been inversely related to the level of gratitude from those who have benefited from it in the rural community. As a rural-born Labour politician I have learnt to live with that. I look forward to the Committee stage of this bill because deep down I do not think there is a single member in the House who would not like to see a broad level of support given the centrality and the power of the dairy industry in our New Zealand economy. But at this stage I stand on behalf of my party and no doubt the sentiments I offer will be echoed by my other colleagues. 
At the pith of the debate that bedevilled us during the select committee process was whether or not “New Zealand Inc.” was going to be better served by enabling TAF to come into existence especially the unit trust which will allow for beneficial entitlements derivatives or unit instruments to be held by non-producers. That was a key debating point. I formed the view that I was not convinced by what the Fonterra advocates had to say. I want to say also that they put forward a quality level of submissions as did their opponents. But during the course of the debate I was and remain troubled that the existence of this particular unit trust does provide over time a slope that could inexorably lead to demutualisation. For those reasons we are actually looking forward to discussing with the Government and other stakeholders a set of amendments later in the process.  
I want to follow up on what the Minister has had to say. Not surprisingly a number of the members on this side of the House—in particular the Maori members—have been lobbied and have been cajoled in my case by a dairy company that is partly owned by Dalmatians and a dairy company that is owned by Maori. They have both had interesting things to say: that this bill may actually lessen the level of rivalry between what I might call the minnow players and the mother ship Fonterra. I think all New Zealanders have an interest in seeing a flourishing Fonterra. No New Zealander has an interest in seeing a calcified institution or an institution that unwittingly allows the cooperative legacy to slip away from it because rest assured the sophistication of the analysts the advisers and the observers once the TAF proposal gets up and running must not be underestimated—but that is for another day.  
We did have concerns and reflected them through the select committee process as to whether or not the new standards for setting the milk price were going to enable Fonterra to set itself up as a model not so much of how it performs as an institution but perhaps of how a notional efficient firm performs. At one level no one wants to see a level of subsidy being delivered through an unreasonable milk price from Fonterra to its rivals but at the same time we shared a concern that in the absence of rivalry Fonterra may not actually prove to be as strong as it should be. Also in the absence of rivalry we could not be confident that the actual milk price—which does impact on the daily lives of New Zealand families—could be managed.  
The Minister has talked about the term “contestability”. We have—I certainly have—sought advice and looked through various sources of information as to what this will likely be. In the absence of a very tight definition as to what “contestability” means I fear that we could see a reversion back to the Telecom-like litigation of the 1990s and after 2001-02. I certainly know that the Minister being a strong pro-commerce man does not want to see that. We do not want to see that. The Commerce Commission is going to enjoy a level of oversight over how the milk price is set and I think where that probably will come undone is that it will be first quite bureaucratic and second highly unlikely to enjoy the power to exert considerable levels of influence or game-changing behaviour. But that has been where the bill settled.  
I want to also talk about the importance at one level of enabling Fonterra to continue its strategy. During the submissions I amongst others said we were not particularly interested in hearing about your brand strategy the geopolitical considerations. That is a job for the shareholders their directors and their managers: to go out and do perhaps what the Catching the Knowledge Wave conference failed to do—actually go and turn from a raw commodity more wealth. I do not think there is a single member on this side of the House who does not want to see that happen. But does one need to do it in such a way where we run the risk of importing shareholders—owners of capital—into a cooperative structure and inevitably building a potentially level of tension? We were told that sounds conspiratorial. We were told that sounds quite lurid; that farmers will continue to enjoy total control as to what happens to the cooperative. As we currently understand the law that may or may not be the case. But as night follows day once these derivatives start to be traded I am absolutely certain a level of influence will emanate from this new class of shareholder—the directors or the broader stakeholders the actual producers—the guys and girls in “Strugglers’ Gully” so to speak managing debt milking cows looking for sharemilkers deciding whether a Kiwi or a Filipino should fit the bill. That is my fear. I fear that we will have investor capital and we will have producer capital and inevitably the cost of that tension will be the erosion of the underlying principles and the core meaning of what it is to have a cooperative.  
We did have concerns that the select committee process was truncated but those of us who have been Ministers in the past realised that certain imperatives are set down. Government members of the select committee I must say were—certainly to me anyhow—slightly indulgent to enable us to ask a whole bunch of questions. I do not want what I am saying to be used in any sense to deride the level of camaraderie that we as fellow parliamentarians enjoyed in trying to deal with this bill. But at the end of the day it got to very deep fundamental beliefs. Does one believe that this bill is in the best interests of New Zealand’s largest exporter which enjoys a level of commercial privilege shared by no other commercial entity in New Zealand? That is an inescapable fact. And are we doing the right thing as parliamentarians by enabling this kind of evolution? It can be said that that level of sovereignty belongs with the owners of the cooperative. We heard that argument very powerfully but I say to those stakeholders in that cooperative by dint of the Government of the time society has enabled you to enjoy what is virtually a State-trading level of privilege. So there has to be give and take.  
We are not blind to the fact that there are large capital issues at stake to drive an expansion in Fonterra etc. but without straying into the commercial mechanics as to how one does that in the absence of safeguards which may or may not come to pass in the Committee stage we at this stage as I have said will not be supporting this bill. We fear the long-term implications not only to our economic sovereignty and to the performance of this particular institution but of whether we are allowing and acquiescing in the demutualisation of a proud cooperative structure which has defined the growth of New Zealand’s most enduring industry—the dairy industry. So despite the fact—as referred to—that friends on the other side of the House were very charitable in the time made available we were unable to close the gap. I look forward to hearing what might come through the Committee stage. Thank you. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is a pleasure to rise in this debate on the Dairy Industry Restructuring Amendment Bill. Before I start my discussion I need to declare an interest as I through a family trust am a shareholder in Fonterra. I want to thank the Primary Production Committee members and the officials—the long-suffering officials—who were taken round and round the paddock many times. Mr Deputy Speaker I am sure you are pretty aware with the close eye you were keeping on proceedings there of just how much that was the case. I will not make mention of the membership of the committee entirely because I fear I might be in breach of Standing Orders but the wisdom that was brought to the job by a number of members on that committee was well appreciated.  
As the Minister for Primary Industries said we received 99 submissions and we heard 43. The importance of this decision on “New Zealand Inc.”—and the previous speaker Shane Jones touched on that a number of times—I do not think can be overstated. Fonterra is the largest company in New Zealand. It is the biggest exporter in New Zealand. The industry itself as a whole including the independents is by far the biggest part of the New Zealand export industry. So getting this right is hugely important to “New Zealand Inc.” and not putting up any barriers or other such things that might stand in the way of that type of growth is absolutely essential.  
I guess the question is why is the legislation needed and where it came from. I think it is worth reminding those who might be listening to the debate that it actually came from the industry itself. Fonterra over a number of years had a look at its capital structure identified that it potentially had a substantial redemption risk and came to the Government seeking some kind of redress through the legislation that is before us to introduce what it describes as a permanent capital model. That is where the concept of Trading Among Farmers was born. As the Minister rightly stated—and there is confusion amongst some of the shareholders of Fonterra and the farming sector at large—this legislation is enabling. It does not require TAF. If the farmers themselves decide and the board of directors itself decides on 25 June—this month—not to proceed with TAF then it will not proceed.  
In the view of the committee we worked tirelessly to achieve a structure that would allow the company to carry out that wish if that is the majority view of those who are part of that decision making. The legislation should not be a political football and I was heartened by the fact that there is still some hope of getting Labour across the line in the Committee stage. I was disappointed to hear the Hon Shane Jones say that he would not be supporting the legislation at this stage because I think it would be much more enduring if we could enjoy cross-party support for this legislation. I look forward to the amendments that may come forward from the member or from the Labour Opposition in this regard and we on this side of the House will certainly be seriously looking at those amendments and taking them into consideration.  
I am aware that all members of the select committee and many members of Parliament were lobbied very heavily by all interest groups in the industry—all the stakeholders—and there was some interesting debate around what model might or might not work and why the State may need to intervene or otherwise in this general process. The only comment that I would make there is that sometimes you need to look at the evidence of what has happened. You also need to ask I guess the basic philosophical question of where the State stops and where the State starts. Obviously in the case of Fonterra it was a construct of legislation. Those of us who have been part of the industry for our whole entire lives as in my case—and I certainly was here at the time when the first bill was passed and debated—understand absolutely that this was a construct of legislation and that because of that there are going to be some regulations placed on what was at the time of its formation about 90 percent of New Zealand’s total milk processing. Now I understand it is about 86 percent of farm-gate collection of milk. It gives the entity Fonterra known as a new co-op at the time a very substantial stake in the total industry. So from that of course there is going to be some regulation. It should be widely acknowledged that that is going to be necessary and I think by most it is. It is just a question of how much and where that stops and starts.  
So the process that the select committee went through was to try to set those parameters and I think the recommendations the committee made back to the Minister which have by and large been accepted and the officials’ support were certainly well and truly tested. I think they have ended us in a position where the compromise—which it overwhelmingly is and I think we have to accept that it is a compromise—is about right.  
We look forward with some enthusiasm to the process going through Parliament. I would certainly like those out there in dairy industry land who are considering this proposal now to seriously read all of the information that has been provided to them by Fonterra. I would like them not to make a rushed decision but to ask the questions of their industry leaders that they want answered and to satisfy themselves. I am confident that they will. Certainly the industry over the years has demonstrated that it has the ability to do that. Nothing is without risk but doing nothing also carries its own risks. So I urge you to consider all the options that are before you before you make that call. But at the end of the day make the call and move on.  
I certainly want to recognise the substantial contribution to the select committee that was made by those who submitted to it. We had a range of submitters including Fonterra of course and others who gave us specialist advice from outside. We had an independent adviser. I do not know what else could have been done to be frank that would have given this process more scrutiny. There was suggestion by some that this was a truncated process. Well the select committee met during adjournment and it met during extended hours. I thank the Opposition members who were part of the select committee for their leave for that process to take place. The members of the committee at times threw their hands up in the air and said: “We’ve had enough.” That would indicate to me that we were not denying anyone the opportunity to work through the concerns that they may have. As I said at the beginning sometimes we went round in circles a few times. That was as far as I was concerned designed to allow everyone who had questions the opportunity to ask them and to have them satisfactorily answered.  
I look forward to the passage of this bill. I am certainly curious to see what might come out of the Committee stage. I hope that members on the other side will eventually get to the point where we can get cross-party support for such an important piece of legislation for “New Zealand Inc.” and that this bill will progress. Thank you. 
CHRIS HIPKINS (Senior Whip—Labour) 
: 
 Pursuant to a discussion just held between the whips I seek leave for the House to rise a few moments early so that the next speaker can have their full 10 minutes uninterrupted. 
Mr DEPUTY SPEAKER 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not.  
Debate interrupted. 
The House adjourned at 5.58 p.m.