Cunliffe David: Questions for Oral Answer — Questions to Ministers Questions to Members 
Cunliffe David: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:675;Page:20976] 
9. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: If he expects at least 85 to 90 percent of the State-owned assets he intends to privatise would remain in New Zealand’s ownership including the Crown’s holding what percent of the shares he plans to sell would be bought by foreign buyers? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 It is hard to say because the percentage acquired by overseas buyers will depend on demand from local investors. We expect that demand from local investors will be strong. Between households KiwiSaver funds Crown financial institutions and other funds they have the capacity to buy and hold most or all of the stock offered if they choose to do so. Moreover many local investors are likely to take a buy-and-hold approach. For this reason we expect that the portion eventually bought by overseas bidders is likely to be small but as I said we cannot say for sure what it would be. 
Hon David Cunliffe 
: If by his own admission it is 10 to 15 percent of the total and he is selling only half is that not 20 to 30 percent of what is actually sold? 
Hon BILL ENGLISH 
: Well it is a bit like the member counting the number of people who are not voting for David Cunliffe in the Labour caucus is it not? Of course mathematically that is possible but when the member puts it that way it makes me realise that the 85 to 90 percent may be too conservative. 
Hon David Cunliffe 
: Has Minister “2 Percent” reassessed the business case for asset sales in light of the increased $900 million in dividends excluding Genesis which is yet to report; and can he confirm that this recent increase in the dividend stream would be lost to the New Zealand taxpayer if his sale programme goes ahead? 
Hon BILL ENGLISH 
: No I cannot. The Government would be the 51 percent owner so the Government would receive 51 percent of the dividends. The $900 million figure that the member quotes includes a one-off payment associated with the asset swap in the South Island as do a lot of the previous dividend figures that he quotes. In fact the underlying dividend is only about $380 million. 
David Bennett 
: What successful examples of firms operating mixed-ownership models has he seen? 
Hon BILL ENGLISH 
: I have already mentioned Air New Zealand which has operated as a mixed-ownership company for some years because it was set up that way by the previous Labour Government. Another similar case is the Port of Tauranga which is 55 percent owned by the Bay of Plenty Regional Council and which has experienced in recent years a growing proportion of New Zealand ownership because it is a well-run and profitable company. Its share price has almost doubled in value over the past 3 years making it close to the best-performing stock on the New Zealand Exchange. The Government would expect that if these companies are floated they will also be high-performing stocks on the New Zealand Exchange. 
Hon David Cunliffe 
: Given that the carnage on international sharemarkets has seen New Zealand’s listed energy stocks fall by 20 percent already this year and given that that is a number the Minister is well acquainted with has he revised downwards the expected proceeds of selling Genesis Meridian Energy and Mighty River Power; if so by how much? 
Hon BILL ENGLISH 
: I think the volatility in those sharemarkets underlines the wisdom of the Government’s decision which that member has opposed to borrow billions of dollars and invest New Zealanders’ money on those foreign sharemarkets through the Superannuation Fund. With regard to guesses about the funds that might flow from a float Treasury made a best estimate some time ago and the Government would want to make the best of conditions at the time. But no we have not revised that estimate. 
Hon David Cunliffe 
: How much lower would equity markets have to plummet before the Government suspended its asset sales programme or would it sell at any price because it is driven by ideology not value for taxpayers? 
Hon BILL ENGLISH 
: The Government is not driven by ideology in this case. In this case it wants to provide opportunities for New Zealand savers to invest and to source capital to invest in hospitals schools and broadband so we do not have to borrow it from foreign lenders and pay them interest. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. The Minister has not addressed the question which asked by how much lower would equity markets have to fall before— 
Mr SPEAKER 
: Yes if the member had stopped his question at that point it would have been fine but he went on to talk about whether it was driven by something or ideology and the Minister quite appropriately answered that part of the question at least in his judgment.