Copeland Gordon: Debate on Crown Entities Public Organisations  and State Enterprises — In Committee 
Copeland Gordon: Debate on Crown Entities Public Organisations  and State Enterprises — In Committee 
[Volume:631;Page:3072] 
GORDON COPELAND (United Future) 
: 
 It is very appropriate that I follow on from the remarks just made to us by the Minister in the chair the Hon Clayton Cosgrove because at this point in the debate on the State-owned enterprises I want to talk about the ownership of Genesis Energy Meridian Energy and Mighty River Power. United Future believes that the current view of never selling any of the State-owned enterprises and retaining 100 percent State ownership is a very very deeply flawed policy when looked at from the point of view of determining what will maximise New Zealand’s economic growth and how to take steps to ensure that happens. If the 20th century taught the world one thing very very eloquently it was that Governments are not good at running businesses. Having sat through the committee of inquiry into Television New Zealand (TVNZ) I can tell members New Zealand is no exception to that and we should not think we can do something here that has failed in every other country. 
We have Labour’s view of never selling anything. National has changed its position on the State-owned enterprises because at the last election we were told by Dr Don Brash that it would not sell anything either except for a few small farms and a wee bit of Solid Energy. The ACT party’s view is to sell them all and just go in for straight market economics and so on. United Future has a different position and it is one that I believe is fundamentally sound and the House should look at. United Future’s view is that the partial sale of the State-owned enterprises to mum and dad investors could completely revitalise those businesses lift local savings and investment increase the returns to the Government and relieve the Government of ongoing capital demands. It could also build wealth for many thousands of mum and dad investors and ownership societies. United Future therefore proposes that about 40 percent of the State-owned enterprises should be sold. 
However I say immediately that we propose that that 40 percent be sold to New Zealand mum and dad investors in the various ways in which they invest in shares—through managed funds and superannuation schemes etc. We would put safeguards in place to ensure that no more than say 20 percent—and certainly less than that in the case of TVNZ—of those shares could ever migrate overseas into the hands of non-residents. That would give New Zealand continued majority ownership and control of the State-owned enterprises going forward. That policy is unique to our party and I believe the House should look at it very seriously. 
I can understand that New Zealanders are nervous about selling even 40 percent of the shares in State-owned enterprises. I completely understand that and sympathise with them following the debacle of the 100 percent sales of Air New Zealand and New Zealand Rail which have rightly made Kiwis very nervous about asset sales. But I stress that in both cases those enterprises were sold 100 percent and certainly in the case of New Zealand Rail were sold to asset strippers. We certainly do not suggest we go down that street. Australia for example has its four pillars policy in place which ensures that banks financial institutions and the media remain under Aussie control. The United Future policy represents a Kiwi equivalent of that very wise Australian position. 
We estimate that such a partial sale would release somewhere between $5 billion and $7 billion for reinvestment by the Government in other areas. The reinvestment of those funds would provide a new and an exciting range of opportunities for New Zealand. For example some hundreds of millions of dollars could be invested long term to produce income for universities that would enable them to award scholarships for postgraduate work across a range of high-level scientific and engineering skills. That skill set in and of itself has the potential to significantly lift New Zealand’s economic growth by creating a knowledge-led economy. We cannot have a knowledge-led economy without that really top-end PhD level of scientific input and engineering skill. A similar investment could be made in the top end of medical technology by our major hospitals so that New Zealand could establish and maintain First World status in all major surgical and diagnostic areas. 
The land transport funding problems in Auckland Tauranga Wellington and elsewhere could be overcome by utilising the money realised from the 40 percent sale of the State-owned enterprises thus eliminating congestion and providing the New Zealand economy with a major productivity boost. The drag on our economy at the moment of that congestion is very very material indeed. If any money is left over after that we could use it to repay Government debt although I point out that the Government is now in a net credit rather than a debit situation. In other words our net financial assets now comfortably exceed our net financial liabilities. 
Reports noted..