Young Jonathan: Supplementary Estimates — Imprest Supply Debate 
Text is incorporated into the Bound Volume 
Young Jonathan: Supplementary Estimates — Imprest Supply Debate 
[Sitting date: 26 June 2012. Volume:681;Page:3396. Text is incorporated into the Bound Volume.] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 Better financial times—that is what the previous speaker Ruth Dyson mentioned. That is exactly what this Government is leading this nation into through its 3½ years of strong stable responsible Government and it is so essential. In the year when we took the reins of office the financial crisis had reached its peak and the New Zealand economy which had gone into recession before anyone else had shrunk 3 percent topping off 5 years of historically low growth. Exports had flattened out completely. We know that the tradable sector had been in recession since 2004. So this country was on its knees and desperately needed some wise stable strong responsible Government and this is what we are presenting. It is prudent it is moderate but it is balanced. We are presenting a Budget for the time that also has an eye for the future. We are very much part of a Government that is building a strategy for a competitive economy domestically and internationally as well. 
One of the biggest input costs to New Zealand consumers and businesses is electricity. We have worked very strongly in this particular area. The Electricity Industry Act 2010 was a redraft of the electricity landscape. It was a structural reform to electricity retailing which is bringing benefits through to industry and also to consumers. I mentioned last night and I will mention again today that an example of this is the What’s My Number campaign which creates transparency between electricity retailers regarding their pricing and the associated Powerswitch programme which means a consumer can easily switch between retailers. That is very important for this country going forward because it begins to bring some real opportunity between retailers to compete for their consumers and the benefit of that is not only efficiency which we are driving forward but also the competitiveness and the resulting price structures that New Zealand businesses and consumers are paying. That is very important in terms of this country going forward. 
Carl Hansen who is the chief executive officer of the Electricity Authority said that that campaign originally targeted 50000 unique visitors to the website it set up. That is what it targeted: 50000 in the first month. In fact it got 50000 in the first 3 days. New Zealand business and consumers are hungry for efficiency in this economy and they are looking for some price competitiveness. That is what we are doing in being a strong stable and responsible Government. We are working on efficiencies because for many many years we lived in this country as if money was no object and the spending was prolific. But the result of that was not what people were looking forward to. Productivity was low for that investment and we needed to be working on that quite strongly. So that programme happened in the What’s My Number and the Powerswitch programme. 
What that actually achieved was a reduction in the CPI for the first time in many many years. In fact back in the December quarter of 2011 that reduction happened in a quite significant way. One energy company that has been cited is Contact Energy. In fact that is a private energy company that was losing lots of customers because of that programme. Within the first month of that programme it changed its discount for online payment which had been set at 12 percent and increased that to 22 percent. So those are the sorts of structural reforms and changes that particularly this Government is looking at and we are seeing that come through— 
Hon Trevor Mallard 
: Is this the same speech as yesterday? 
JONATHAN YOUNG 
: No it is not. In fact we are seeing that come through— 
Hon Trevor Mallard 
: Who wrote this one? 
JONATHAN YOUNG 
: I wrote this one Mr Mallard. 
Hon Trevor Mallard 
: He wrote this one. He admits it. 
JONATHAN YOUNG 
: Thank you. I wrote this speech Mr Mallard. This is the programme that we are doing: structural reforms that are building this economy making it competitive and enabling businesses in this country to become stronger and more competitive internationally and that is what is going to enable them to employ more people. So it is not just a matter of the Government throwing out cash and increasing the number of people who work for the Government which is what the previous Government did increasing the core Public Service by 50 percent in its time. It is making this economy competitive. It is making it efficient. It is enabling us to compete because of efficient price structures—internationally globally—in such a way that we start to lift our tradable sector. That is what we are doing. 
I want to just touch on some of the aspects of this Budget around the area of the mixed-ownership model which is now in place. This is hugely significant for this country. We know that the Opposition members have scaremongered up and down this country but you know we know and all of us know that in January 2011 the Prime Minister started talking about this to the electorate and we went to the polls. The Opposition members went to the polls on it. That was their major platform of opposition against us yet in the poll of 2011 National won the highest vote ever in MMP’s history. 
I want you to listen to what the OECD has to say about this policy. This is in its April 2011 report on New Zealand. It says: “public ownership of commercial enterprises has increased over the last decade”. That is over the time when Labour held the Treasury benches—that is what the OECD is saying. That I guess is the nationalisation of companies and just the general thinking that the Left followed through. This is what it said: “public ownership of commercial enterprises has increased over the past decade which has likely restrained aggregate productivity by reducing competitive pressures and risk-taking while discouraging [foreign direct investment].” It said: “Compared internationally New Zealand’s SOEs seem to perform better than many others but there is room for improvement. These asset holdings are substantial and moving towards public listing of state-controlled commercial assets and full or even partial privatisation would strengthen market discipline and transparency through securities listing requirements and legislation protecting minority shareholders.” 
You know the question came up when Mighty River Power which is the first State-owned enterprise that is going to be offered to New Zealanders came to the Commerce Committee to report on its financial year ending June 2011. The question was: “So what would the benefit be if you were partially listed?” The response from Doug Heffernan who is the chief executive of Mighty River Power was simply this: “We would have saved $100 million.” 
Dr Cam Calder 
: How much? 
JONATHAN YOUNG 
: It would have saved $100 million. That is what he said. You were there Clare Curran. You heard what he said. It was very very clear indeed. He said that although the State-owned generator had performed well “the proposed sale of shares in the business will increase scrutiny of its investments and will help improve its dynamic efficiency long term.”  
Energy News 
 which was there in that room reported that that very day. Had the company been listed it is likely there would have been pressure to quit its landfill gas interests which were non-core and non-material much earlier. He told this to the Commerce Committee that day: “The company’s investment of about $100 million in gas exploration in the middle of last decade is also likely to have been viewed negatively by the investment community forcing management to act earlier.” 
We know that the Opposition has decried that but we know that market pressures create efficiencies. We know that competitive pressures create efficiencies and the beneficiaries of that are the consumers. The beneficiaries of that are the consumers who have better price structures. And this is why we introduced the Electricity Industry Act 2010—to create competitiveness in the electricity industry. Back in 2004 2005 2006 and 2007 under the previous Government all of these companies were in silos servicing just very small groups of consumers but through this there has been competition across the country and through this mixed-ownership model we are going to see that productivity increase through those competitive pressures. Thank you.