Stewart Barbara: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Stewart Barbara: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 24 July 2012. Volume:682;Page:3803. Text is incorporated into the Bound Volume.] 
3. 
BARBARA STEWART (NZ First) 
 to the  
Minister for State Owned Enterprises 
: How many “mum and dad investors” does he believe will benefit from the loyalty bonus shares under the Mixed Ownership Model? 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 Securities legislation prevents me from commenting directly on the expected level of demand for shares. However in answer to the member all everyday New Zealand investors who meet the conditions of the loyalty scheme will get the appropriate loyalty shares. The Government is very confident that all 4.5 million New Zealanders will benefit from a successful float because this will help control New Zealand’s debt as the world debt crisis deepens and allow us to invest in building schools roads and hospitals without having to borrow from foreign banks. 
Barbara Stewart 
: Is he aware that the result of the Queensland Rail share float meant that of the 80000 local mum and dad investors 50000 sold their shares in the company before the loyalty share bonus eventuated; if so why does he believe that the proposed share floats in New Zealand will be any different? 
Hon TONY RYALL 
: I would have to check those figures before I am able to confirm them. What I can tell you is that the share floats in New Zealand—the share floats that the Government is planning—are different in the sense that this Government is maintaining 51 percent New Zealand control of those companies as a minimum with a cap of 10 percent on any other shareholder. That is legislated in the law. 
Hon Clayton Cosgrove 
: Given that the Prime Minister has said and this is a direct quote: “We could say one hundred percent of shares to New Zealanders obviously we could say less but we are targeting that eighty five to ninety percent and I’m confident we’ll reach it.” is the announcement of a loyalty bonus share scheme not an admission of defeat that these shares will not be held by Kiwis in the long term and that they will eventually be sold predominantly to foreign interests in the same way that Contact Energy shares were predominantly sold to foreign interests? 
Hon TONY RYALL 
: No because the Government is determined that there will be a successful float because that is in the interests of all New Zealanders. I have to tell the member that the use of loyalty shares is not unusual. When a Government across the Tasman sold Qantas shares it had bonus shares of one for every 25 held to a cap of 800 bonus shares. Telstra 3 saw a bonus share of one for every 25 held to a cap of 8000 shares for the general public. And for Queensland Rail it was one bonus share for every 20 shares for Australians and one for every 15 shares for Queenslanders. I think this is quite a mainstream approach part of keeping everyday New Zealanders at the front of the queue and I would like to thank the Opposition for the great publicity it is giving the Government’s loyalty share proposition. 
Barbara Stewart 
: Has he received any advice or reports indicating that mums and dads account for more than 7 percent of the population; if so how does he reconcile this with the fact that based on Treasury forecasts only 7 percent of New Zealanders will purchase shares in mixed-ownership model programmes? 
Hon TONY RYALL 
: The Government has made it clear that this is a programme that seeks to engage support from everyday New Zealanders and of course those who are able to participate will. That is why we have got the low entry-level minimum figure of $1000. Many everyday New Zealanders are saving in KiwiSaver and certainly in the Superannuation Fund and they will get the opportunity to participate in these floats. And of course other everyday New Zealanders will benefit from the proceeds which will be reinvested into schools roads and hospitals without increasing our foreign debt. As the member will know debt markets have become more uncertain with the announcement this morning that Moody’s has put the German economy on negative watch and that is part of why we need to control our debt here in New Zealand.