Hipkins Chris: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Hipkins Chris: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3175. Text is incorporated into the Bound Volume.] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Well there you have it. National members do not like it. They do not like it and they want to shut it down. They want to end the debate because it is not going well for them. It is not going well for them because they know that New Zealanders do not support this piece of legislation the Mixed Ownership Model Bill. New Zealanders know that we inherited these assets from those who came before us and this Government has no respect for that whatsoever. It is ready to hock them off. Forget about future generations. Forget about leaving anything for them. Just sell it—just sell it. If it cannot cut it it wants to sell it. That is what this Government is all about. Those members do not want to talk about it any more so now they are trying to shut the debate down. It is no wonder they do not want to talk about it because the Mixed Ownership Model Bill is riddled with holes. 
I want to talk in particular about new section 3C inserted by clause 15. This is an incredibly important section because it is a provision that under normal circumstances would never get through this House. It would never get through this House because this is what is known as a “Henry VIII” clause. It is a “Henry VIII” clause in the sense that it gives the Government without reference to Parliament the ability to change the law. It gives the Government by Order in Council the ability to change the law without reference to Parliament. We call it a “Henry VIII” clause because in the Proclamation by the Crown Act of 1539 Henry VIII effectively gave himself the power to do just that—to basically make laws by a proclamation and without any reference to Parliament. These days that is frowned upon. These days we think it is a good idea that where the law is going to be changed the Parliament should debate and vote on that. This provision here gives the Government the ability to change this legislation once it is passed without coming back to the Parliament to have that approved. It is a constitutional outrage. It is wrong. It is absolutely wrong.  
In fact this Parliament has recommended against such clauses. The Regulations Review Committee in this Parliament was set up at least in part to prevent those types of mechanisms being put in place. Normally the Regulations Review Committee would produce a recommendation against this. Of course that may well have happened had this bill not had a truncated select committee process. Had the Government not used its majority on the Finance and Expenditure Committee to report it back 5 weeks early perhaps the Regulations Review Committee would have had a chance to do its job. It could have highlighted to the Government the fact that this provision is a “Henry VIII” provision and it is not something that the Parliament should be passing.  
This section new section 3C particularly subsection (2)(a) and (b) allows the Government by Order in Council to amend the Ombudsmen Act and the Income Tax Act without those amendments going to Parliament. That is absolutely outrageous. The Ombudsmen Act is actually quite an important part of our constitutional framework. It is not just a regular law; it is actually part of our constitutional framework the Ombudsmen Act. It is a constitutional outrage. I have already said that. Listen up listen up. This provision gives the Government by Order in Council the ability to amend the Ombudsmen Act 1975. Orders in Council without reference to Parliament are not designed to amend primary legislation. They are not designed to amend primary legislation.  
Gerry Brownlee needs a lesson in how the New Zealand constitution works. It is very concerning to learn that the Leader of the House the guy responsible for overseeing how Parliament works does not understand that the Government should not change legislation without bringing those amendments to Parliament debating them and having them voted upon. Gerry Brownlee seems to think it is OK. Well it is probably not surprising because this is the guy who brought a bill to Parliament that basically made him the tsar of Christchurch with the ability to change just about every law in the land without it having to come back to this Parliament. This provision is wrong and it should not be allowed to stand. In fact I have a few amendments that I intend to table on this particular provision to allow us to examine that more fully.  
I want to turn now to Supplementary Order Paper 64 in my name. It has been on the Table for some time so members should have made themselves familiar with it. It is a very good Supplementary Order Paper. By way of background first of all under the recommendation of the select committee if a vote has been passed by one of these new mixed-ownership model companies whilst somebody holds more than 10 percent of the shares under this legislation being proposed by the Government if the company could mount a case that it was unaware that someone held more than 10 percent of the shares then that resolution would continue to take effect. What my amendment does is that it does still allow that to happen but for situations where a person breaches the 10 percent cap and where the vote was close and it would have made a material difference to the outcome if that person had not held the 10 percent this amendment basically says that the resolution passed by the company should not stand. So it is a very important safeguard. I hope the Government will vote in favour of it.  
It is in no way a frivolous amendment. In fact it is quite an important amendment because it basically says that if someone knowingly goes out and buys more than 10 percent of the company to exercise more than 10 percent of the voting rights and then uses those voting rights so that some resolution is passed that would not have been passed had they not breached the 10 percent cap that should not be allowed to stand and this amendment guarantees that it would not be allowed to stand. So I hope the Government will vote in favour of this amendment because it is a very sensible and practical amendment.  
The two major issues that I have talked about are the “Henry VIII” provision under section 3C in clause 15—I hope the Government will take that on board and support some of the amendments that I intend to put forward to that—and I hope it will support my Supplementary Order Paper 64 which will amend clause 16 with regard to the 10 percent voting rule because I think those are very very important.  
Just one final thing. To talk a little bit more about section 3C there is debate around whether or not the Government should able to declare these companies to be State-owned enterprises again if it decides not to sell them. In doing so in saying that it is not going to sell them and is going to make them State-owned enterprises again— 
Hon Member 
: The flip-flop clause! 
CHRIS HIPKINS 
: —the flip-flop clause; it is the back-out clause because it knows it is on a hiding to nothing with this because the public just does not like it—this is the back-down clause— 
Hon Member 
: Hekia Parata clause. 
CHRIS HIPKINS 
: —otherwise known as the Hekia Parata clause; that is right—it is designed to allow it to do that. If it decides to keep 100 percent of those companies it can make them State-owned enterprises again and make them subject without reference to Parliament to the Ombudsmen Act the Official Information Act and so on. So the question is that if by keeping 100 percent of them the Government thinks it is acceptable to make them subject to the Ombudsmen Act the Official Information Act and so on why would it not do that if it is going to retain 51 percent of them? What is different between owning 51 percent of the company and owning 100 percent of the company? Why would it be that with 100 percent ownership it should be under the Official Information Act and the Ombudsmen Act but under 51 percent ownership it should not be subject to those mechanisms? There is actually no justification for that. In fact if the Crown is going to own a 51 percent stake in these companies they should be subject to the Official Information Act and the Ombudsmen Act. They should be subject to Parliamentary scrutiny as fully owned Crown companies are and State-owned enterprises are because it is ultimately the taxpayer’s money that is involved in the shareholding here. It is taxpayers’ money so they should be subject to that. Unfortunately under this section 3C that the Government has put forward the Government could make these companies that are becoming mixed-ownership model companies subject to those pieces of legislation only if it retained a 100 percent shareholding in them. If we take for example Air New Zealand the Government does not own a 100 percent shareholding but it owns the vast majority of shares because it was sold off and it collapsed and the Government had to buy it back. 
Hon Clayton Cosgrove 
: What Government did that? 
CHRIS HIPKINS 
: It was the Labour Government that did that Mr Cosgrove and it was a very sensible decision by the Labour Government. Because of the failed privatisation of Air New Zealand we were faced with a choice between having no national airline at all and the Government buying it back. So the then Labour Government decided that it should be purchased back because it was important that New Zealand had a national airline. The difference between that and this bill of course is that these things are bolted down. The hydro dams and the gas plants are bolted down. It would be a very very difficult situation if these companies collapsed that the Government would find itself in. I strongly oppose this legislation.