Goff Phil: Questions for Oral Answer — Questions to Ministers 
Goff Phil: Questions for Oral Answer — Questions to Ministers 
[Volume:674;Page:20025] 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all of his statements on the privatisation of New Zealand State-owned power companies? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the Prime Minister: In respect of the Government’s plans to sell a minority stake in four State-controlled energy companies yes. 
Hon Phil Goff 
: Is Contact Energy privatised by National in 1999 an example of a company in which control has now been lost to foreigners; if not why did he say in answer to that question yesterday that “nothing could be further from the truth” when the majority of shares are foreign-owned and the majority of directors are foreigners? 
Hon BILL ENGLISH 
: Contact Energy is not the model the Government is following. That model was wholly privatised and a big chunk of it was sold initially I think to Edison Mission Energy which was onsold to Origin Energy which has ended up now owning 50 percent. The Government is pursuing a different model: 51 percent Crown ownership and Kiwi mums and dads at the front of the queue. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. You will recall that I asked the Prime Minister why he said yesterday that “nothing could be further from the truth” in answer to the question of whether control of Contact had passed to foreigners. I received no answer to that; I had a very interesting history but no answer to the question. 
Mr SPEAKER 
: Well— 
Hon Members 
: It was on notice. 
Mr SPEAKER 
: Well actually that was a supplementary question. With respect to the members I say that the question on notice was not that question. The member asked why and the Minister gave in his opinion the answer why. It may not have been a very satisfactory answer but that is why there are further supplementary questions—to test that “why” answer out because it clearly was not satisfactory to the member. 
Hon Phil Goff 
: Why did the Prime Minister say yesterday that “nothing could be further from the truth” when asked whether the control of Contact Energy had passed to foreign owners when the majority of shareholders are foreigners and the majority of directors are also foreigners? 
Hon BILL ENGLISH 
: Again the member is describing a sale quite different from what the Government is proposing. In that case the reason that the majority of shareholders are foreigners is that the Government sold about 50 percent of it ultimately to a foreign owner a cornerstone shareholder. This time no sale of a cornerstone shareholding is being proposed. The Government is putting forward a model much more like Air New Zealand’s—51 percent Government ownership. 
Mr SPEAKER 
: What I will do if it will assist the member is invite him to repeat his question exactly as he put it. It would appear that the Minister may not have heard it. 
Hon Phil Goff 
: It appears so Mr Speaker. From memory: why did he say yesterday that “nothing was further from the truth” when Contact Energy when privatised was passed over into foreign control when in fact the majority of shares are foreign-owned and the overwhelming majority of directors are foreigners? 
Hon BILL ENGLISH 
: Because the Prime Minister was talking about the question the member actually asked yesterday which related to all those shares—50 percent of Contact Energy—that were floated in the retail market to mums and dads. As it happens the biggest single owner of those shares is the New Zealand Government. 
Hon Phil Goff 
: Why does the Prime Minister keep on saying that it is about mums and dads when the fact is that 80 percent of the shares in Contact Energy are owned by fewer than 1 percent of shareholders who are certainly not average mums and dads but wealthy investors and foreign companies? 
Hon BILL ENGLISH 
: Because as the Prime Minister pointed out—and I think the Minister of Finance might have pointed it out—in Contact Energy’s case the Government set out to sell the whole of the company including a cornerstone shareholding. That is not the model the Government is now proposing. The reason as I said that a majority of shares in Contact Energy may be owned by foreigners—and they probably are—is that half of it was sold to foreigners in the first place. That is precisely the difference. The model the Government is now proposing is 51 percent Government ownership with Kiwi mums and dads at the front of the queue to buy the rest of it. 
Hon Phil Goff 
: Does the Prime Minister understand that at the time of privatisation there were 225000 shareholders which has now dropped to 80000 shareholders as of August and what does that represent if not the sale of shares from the mums and dads to the wealthy investors and the big corporates? 
Hon BILL ENGLISH 
: In the first place the member does not know who those shares might have been sold to. Secondly this does come down to a matter of trusting New Zealanders. We believe that New Zealanders want to invest in New Zealand. Labour members believe that New Zealanders want to sell out at the first chance they get. We are with the New Zealanders. 
Hon Phil Goff 
: I seek leave of the House to table a number of documents. The first one is from the Contact Energy Ltd annual report 2010 which shows that nearly 80 percent of its shares are owned by fewer than 1 percent of shareholders. 
Mr SPEAKER 
: Leave is sought to table that document from the annual report. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: I seek leave of the House to table a document that is a company extract from Contact Energy Ltd which shows that at least five out of seven directors are not New Zealanders. 
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. 
Hon Phil Goff 
: I seek leave of the House to table a document from the Parliamentary Library that shows that the original number of shareholders—225000—has now dropped to 80911 which is presumably mum and dad investors selling out— 
Mr SPEAKER 
: The last bit the member knows is totally out of order—totally out of order—because that was not a necessary description of the document. Leave is sought to table that document. Is there any objection? There is objection to the tabling of that last document. 
Hon Phil Goff 
: Does the Prime Minister agree with Pattrick Smellie who says—in the same article that he has quoted Pattrick Smellie from time and again—that partial privatisation will lead to “higher power prices sooner than might otherwise be the case” or does he still contend that privatisation will not lead to faster rises in power prices? 
Hon BILL ENGLISH 
: No I do not agree with Pattrick Smellie. In fact Labour should be apologising for what happened while all these companies were in 100 percent State ownership. Power prices went up 70 percent in 8 years. The future of power prices will be determined by the competitiveness of the market and this Government has moved to improve the competitiveness of the market and protect consumers from rapacious State-owned companies. 
Hon Phil Goff 
: Does the Prime Minister accept the figures set out in the business section of the  
Dominion Post  
this morning that show that the privatised company Contact Energy is charging a typical four-person household in Wellington $500 a year more in power prices than any of the State-owned enterprise power company alternatives? 
Hon BILL ENGLISH 
: I have not seen those figures so I cannot comment on them. It would be a bit bizarre if Labour believes that one power company can consistently charge a lot more than the rest of them and retain all its customers. In the long run that simply cannot be the case and in fact my understanding is that Contact Energy is losing customers probably because its prices are too high.