Shearer David: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Shearer David: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 26 June 2012. Volume:681;Page:3272. Text is incorporated into the Bound Volume.] 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all his statements? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: In light of his statements concerning litigation around the plan to sell off shares in Mighty River Power is it the Government’s intention to hold back some of the 49 percent of the Mighty River Power shares it is privatising to cover the risk to the Government of a successful challenge from Tuwharetoa; if so what is that percentage ? 
Rt Hon JOHN KEY 
: No. 
David Shearer 
: Was the risk to the taxpayer of any litigation identified by the time of the Budget; if so was it included as a specific financial risk quantified or unquantified? 
Rt Hon JOHN KEY 
: There is always litigation risk. That has always been known. The likely effect of that is not cost; the likely effect of that would be delay. 
David Shearer 
: Is it the Government’s intention that the taxpayer may need to therefore bear the risk of the Tuwharetoa or Maori Council challenge in court; if so is this a deliberate protection of companies and individuals contemplating buying shares? 
Rt Hon JOHN KEY 
: We live in a democracy where people have the right to test their legal rights in court if they choose to do so. Whether someone would be successful in getting such an application heard in the courts or successfully judged in the courts is a completely different issue. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. That was an interesting answer but not one to the question that was asked. The question that was asked went to who was bearing the risk: whether it was the taxpayer or the purchasers. That was not addressed. 
Mr SPEAKER 
: I will allow the Leader of the Opposition to repeat his question for avoidance of any doubt. 
David Shearer 
: Is it the Government’s intention that the taxpayer bear any risk of Tuwharetoa’s or the Maori Council’s challenge; if so is this a deliberate protection of companies and private individuals contemplating buying shares in Mighty River Power? 
Rt Hon JOHN KEY 
: There would not be a financial risk; there could be a time risk. 
David Shearer 
: Did his Government encourage the board of Mighty River Power to increase salaries before partial privatisation in order to avoid the embarrassment of salaries skyrocketing after the sale? 
Rt Hon JOHN KEY 
: No. I would note that in the 9 years that Labour was in office the chief executive’s salary at Mighty River Power trebled. 
David Shearer 
: In light of his answer did he think that was a good justification for the increase in salaries this time around with Mighty River Power? 
Rt Hon JOHN KEY 
: Contrary to what the member might think I have not been asked about salaries today; I was asked about directors’ fees. 
David Shearer 
: Has he seen the analysis by Ernst and Young that Mighty River Power Genesis and Meridian Energy are well run by international standards and is he therefore aware that any effort to extract further profits from these companies will be at the risk of either asset stripping or increasing power prices? 
Rt Hon JOHN KEY 
: If they want to increase power prices all they need to do is go and ask Labour because Labour got them up by 72 percent. 
Dr Russel Norman 
: In his answer to the earlier question is the Prime Minister now admitting that the legal action or potential legal action from Tuwharetoa and the Maori Council could delay the asset sale programme? 
Rt Hon JOHN KEY 
: There is always that risk from litigation; that has been known for a very long period of time. I do not think it is necessarily likely. I am just saying that that is always a possibility. 
Dr Russel Norman 
: Given his reported statement that he is unconcerned and unsurprised that directors’ fees would double if his asset sale policy goes ahead why did he not tell New Zealanders earlier that privatisation would mean that power company directors would see their pay double paid for out of power bills? 
Rt Hon JOHN KEY 
: I am not sure I have ever been asked that question either. I was asked about an increase in the fees for the directors of Mighty River Power not in the context of what percentage they were moving. It is worth remembering that Mighty River Power is a company of revenue in the order of about $1.5 billion so changes of the magnitude that has been outlined by the member are not likely to have any impact on power prices. 
Dr Russel Norman 
: Has the Prime Minister seen the document from Treasury that indicates that director fees are likely to double and where does he think these companies are going to get the money from if not from consumers? 
Rt Hon JOHN KEY 
: No I have not seen that report. Secondly I think it is very unlikely. History tells us that companies that are run privately where they are listed on the stock exchange have continuous disclosure and are open to all of the analysis by stockbrokers and by analysts in the market tend to be better run.