Bayly Andrew: Keep Kiwibank Bill — First ReadingText is incorporated into the Bound VolumeBayly Andrew: Keep Kiwibank Bill — First Reading[Sitting date: 14 October 2015. Volume:709;Page:7267. Text is incorporated into the Bound Volume.]ANDREW BAYLY (National—Hunua): It is a pleasure to talk on this bill tonight—rather strangely named I have to say the Keep Kiwibank Bill. To me this is one of those topics that is very appealing in a conceptual way but when you start to look inside the technicalities of it I think it starts to fall apart a little bit. For instance this whole issue about making sure you retain ownership of Kiwibank—you have to ask yourself: what does actually constitute a sale? Just to give you some examples of what I mean about that what happens when the directors of New Zealand Post legitimately want to raise cash through the form of issuing new equity to fund an expansion of for instance Kiwibank’s operations itself or maybe other operations within New Zealand Post? That is one example. Secondly does raising equity to meet increased prudential requirements that the Reserve Bank may legitimately impose on all banks including Kiwibank constitute a sale?Thirdly if the board of New Zealand Post chooses to sell part of the business maybe even part of Kiwibank operations does this constitute a sale particularly if it is a minority part of Kiwibank’s operation or if it is in fact a larger portion of the bank’s operations? When does that constitute a sale? And what about the issue of issuing quasi-equity instruments which hopefully Mr Clayton Cosgrove has a good feeling for such as—just to give him an example just to refresh his memory—convertible debt instruments which are very common instruments in capital markets. In fact I note that back in April earlier this year Kiwibank was in fact in the process of issuing another round of equity instruments to help fund-raise and meet its ongoing debt-financing requirements.What I have done is just quoted four examples of where equity may legitimately be issued or sold and do they constitute a sale? This is obviously something that this bill would need to seriously address and I do not think it does. But the next question for me is: why stop here? We own numerous State-owned enterprises and so what is so special about Kiwibank? Why not for example Landcorp? I am surprised that the member has not put that up. If we were to propose Landcorp as an example I do note that Assistant Speaker Mallard made a very important speech back in October 2007 when even he acknowledged that selling land farms that Landcorp owned was actually a legitimate part of its business. So it is again a similar example that I use with Kiwibank. It may be that Kiwibank may want to sell down part of its operations so we have got a corollary there. I just do not understand what makes Kiwibank so special for the Opposition.The third thing is: why we should be impeding New Zealand Post? I note in New Zealand Post’s recent profit announcement that it actually achieved a profit of $135 million. This was reported very recently. But of particular interest to me was that of that $143 million actually $46 million came from the sale of its Australian business. Again you know here we have got this entity New Zealand Post which includes Kiwibank and here we are: just in the last few months New Zealand Post has been selling down some of its operations. And of course everyone is very happy that New Zealand Post is making a profit.Finally I cannot understand why we are imposing this rigorous test of a 75 percent majority of this House to approve such a sale. It is an extraordinary test and my colleague Mr Chris Bishop was talking through on this before. Why should this be contemplated? Why is such a test required which is even more onerous than passing bills through this House? That is what I fail to grasp. Finally I would have to say: if we were to pass this bill what does that imply for the governance structure of New Zealand Post? I think that for anyone sitting on that board to have that inflexibility cuts across the whole role of governance in New Zealand Post and would perhaps impede the ability of directors.