O'Rourke Denis: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
O'Rourke Denis: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3163. Text is incorporated into the Bound Volume.] 
DENIS O’ROURKE (NZ First) 
: 
 I want to begin first of all by setting out what National’s legacy is going to be as a result of the passage of this Mixed Ownership Model Bill if indeed it does pass. In fact there will be five legacies. 
First of all the glass will be empty when it comes to water rights for power generation in this country. Secondly the cupboard will be bare when it comes to energy generation assets in this country. Thirdly we will still be as deeply in debt at the end of this process as we were at the beginning. There is no doubt at all that this Government’s objective of achieving a surplus in 2014 is totally unrealistic. We will still have the debt at the end of that and it will be just about as much as we have now. That is the result of Government mismanagement and it will not be saved by the sale of these assets. 
Fourthly we will have higher power prices for everybody in this country. Most people believe that. They believe it simply because that is what will happen when overseas purchasers get hold of the majority of the shares in these companies as they will eventually—as they will eventually. And they will do that because they know that the ownership of these companies and the control of these companies is almost a licence to print money simply because of the degree of dominance these companies have in the New Zealand energy market. 
Fifthly of course for the same reasons I have just outlined we will have compromised New Zealand’s economic sovereignty. That is what most people think is a complete disgrace and that is the main reason for most of the objections. 
I also want to reply to Bill English who made a speech earlier today. He goaded Labour about not making a commitment to buy back these shares. I would also like Labour to commit to a buy-back of these shares and I would like to hear from the Greens as well on that issue because New Zealand First has made that commitment and has made it unequivocally. But in return I also want to challenge Mr English and National to also commit to and agree to a clause in this bill empowering shareholding Ministers to buy back these shares and at no more than the price that was originally paid for them when they were sold by the Crown. I challenge Mr English and National to do that. If Mr English thinks it was smart to goad the other parties let him put his actions where his words were and commit to exactly the same thing because as I have said New Zealand First has made that commitment unequivocally and I want to hear that from all of the other parties as well. 
It makes sense. It makes sense to commit to buy back these shares simply because these shares are such a good investment. That is why they will be popular in the market place. People know that they are worth buying and New Zealand First does not deny that. New Zealand First understands that. That is why they should not be sold in the first place and that is why New Zealand First will buy them back if it ever gets the chance to do so—and I think we will. 
Another thing is this. Because of the dividend stream including both ordinary and capital dividends it makes no economic sense for these shares to be sold. In fact they are profitable shares. They are worth more for their dividend stream than the cost of servicing loans if they were sold. It will be profitable and economically responsible to buy them back because over recent years the average return from these companies has been 16 percent or more. That is the truth if you include both capital and ordinary dividends. That is the fact. That is exactly why we should be keeping them. At the same time the cost of borrowing by the Government is usually less than 4 percent so it makes absolutely no sense whatever to sell these shares. 
In addition to that of course there is capital growth in these companies as well. That should accrue to New Zealanders and not to some overseas purchaser of them. 
So New Zealand First’s proposal in the amendment in the name of Winston Peters is to make it possible at the option of the shareholding Ministers to compulsorily buy back these shares—