Bennett David: Mixed Ownership Model Bill — Second Reading 
Text is incorporated into the Bound Volume 
Bennett David: Mixed Ownership Model Bill — Second Reading 
[Sitting date: 14 June 2012. Volume:680;Page:3019. Text is incorporated into the Bound Volume.] 
DAVID BENNETT (National—Hamilton East) 
: 
 When we talk about the Mixed Ownership Model Bill it is legislation that—as the Labour members have said—is about choice. But this is about a choice for New Zealand going forward. We have a choice of whether we take the approach where we just borrow and hope and put our country at great risk or we make some choices now that will put our country in greater security going forward. We have the choice in this House of working out a future for our country or we can just borrow and hope and let somebody else work out that future for our country as you are seeing in Europe. That is the choice for New Zealanders out there. That is the choice that they took at the last election. They knew the economic plan and they agreed with it.  
The Labour members and the other Opposition members come into this House today to try to make the vulnerable feel that this bill will be against them. They talk about power prices and they talk about the elderly and that but they do not look at the economic reality of the situation. I thought it was an extremely good speech we had from the Hon Dr Nick Smith. That was a great speech and in that speech I think he brought some economic reality to this debate. The Hon Nick Smith talked about a lot of things there that actually showed a true understanding of economics rather than the Opposition propaganda about economics.  
When you look at economics you have a choice but you also have assets. As people—individuals—and as a country we use our assets in different ways. We buy and sell assets we make the most out of them we capitalise them and we borrow off them if we need to. We have all those options available and this is a sensible approach going forward. Nick Smith used the issue of a State house. Can you say that just because— 
Hon Clayton Cosgrove 
: What would that member know about a State house? 
DAVID BENNETT 
: That is what he said. When you use a State house as an example he said that if you had to buy that back from the State can you go to the State and say that you already owned it in the first place? You cannot. It is a natural part of economics that you cannot do that yet that is what the Opposition is saying should happen here.  
If you look at the example of someone buying or selling a house as one of my other colleagues said we do that in our lives. People buy and sell houses and they build their equity through that. This bill is about this Government building the equity of New Zealand through using our assets most appropriately. We have a choice in how we use those assets and if we do not use those assets properly and we do not build for the future of this country going forward we will pay a big price in a few years’ time.  
When you go overseas you can see what that big price is looking like in Europe. If you put your head in the sand and think you are just going to borrow and you do not have to build your economy— 
Sue Moroney 
: I raise a point of order Mr Speaker. The member has been here for some time now and he is accusing you of borrowing and selling. I think the member has been here for long enough to know not to bring you into the debate. 
Michael Woodhouse 
: I wonder if you might refer the member to new Speaker’s ruling 27/5(2). 
Mr DEPUTY SPEAKER 
: Members are required to be a bit careful about which pronouns they use to avoid bringing the Speaker into the debate. I ask David Bennett to consider that as he continues. 
DAVID BENNETT 
: Let us look at what has happened overseas. If people look at what is happening in Europe at the moment—look at places like Italy and Spain—what kinds of interest rates are they paying? We had the Monetary Policy Statement come out this morning and the Labour Party’s David Parker talked a lot about economics in his speech on this bill earlier. We should have a look at that and see the interest rates in Italy and Spain getting up to that 7 percent interest rate. New Zealanders do not want to be in that situation. The biggest thing we can do for New Zealanders is provide that stable economic environment and not give them those high interest rates.  
If we look at what the Labour Government delivered for New Zealand in October 2005 the official cash rate was 7 percent and then it got up to 8.25 percent by July 2007. The economic management of the Opposition will put interest rates up as you are seeing in those countries in Europe. They have borrowed they have put their head in the sand they have not looked at what their economic options are and they are paying the price with high interest rates.  
New Zealanders out there need to look at that as well. They looked at that in the last election because they realised that that was the implication for them. If they did not have good economic management if they did not make choices like this they would get to a situation where you would have those high interest rates and their personal situations would be put in jeopardy. That is the choice that is out there. That is the choice that New Zealanders understand. The Opposition does not understand that choice.  
When we talk about the mixed-ownership model we get a lot of rhetoric from the Opposition. They talk about dividends at certain percentages and comparing that with interest rates and saying: “Well hey the Government could actually earn more if it held those assets.” That is simply not true—simply not true. New Zealanders understand— 
Sue Moroney 
: I understand all right. They understand all right. That’s why they’re voting with their feet on this one. 
DAVID BENNETT 
: —and the figures are here for Miss Sue Moroney. If Sue Moroney wants to have a look at the figures she will see that we get about a 4 percent dividend and we have about a 5 percent interest rate. That is a 1 percent loss Miss Sue Moroney if you want to look at the economics of it.  
New Zealanders understand what a loss means in economic value; unfortunately the Opposition does not. When we look at that we see that New Zealanders know that that dividend rate should not take into account capital taken out of those companies. The Opposition uses figures that take into account the capital taken out of those companies not just the real dividend on the income that those companies generate. I think that is very important. When we look at that we also need to look at what they are. They are State-owned enterprises. And what are State-owned enterprises? They are expected to operate in the commercial market just like any other companies would. If you look at the principles of the State-Owned Enterprises Act they say: “as profitable and efficient as comparable businesses that are not owned by the Crown …”. So they are not expected to be loss-making ventures which the Labour Party or the Green Party or New Zealand First talks about. They are expected to be profit-generating just like a private company. That is why under the Labour Government you saw a large increase in costs on consumers. That is part of the nature of the demand and supply of energy and New Zealand has a very high sense of renewable energy. The last speaker from the Labour Party talked about the need to make a cleaner greener economy. Well we do that through our energy sector. It has a very high aspect of renewable energy. That is something that we are very proud of and we invest in and we look forward to these companies being a part of that in the future.  
When we look at the State-owned enterprises we need to take into account what their role is. They are Government-generated and Government-owned to a large extent but they also have aspects of private ownership in them in some cases. There is nothing wrong with a balance between private and public. We do that in a lot of things to deliver services throughout our communities whether in education or in health. Why can we not embrace a public-private use of capital resources and skills? The private sector does bring some skills to the table that the Opposition will not acknowledge. The private sector tends to bring good management skills an understanding of consumers and customers and the ability then to deliver to consumers. The public is not so good at doing that necessarily in a commercial environment such as a State-owned enterprise. A good mix of public and private will be in the best interests of New Zealand consumers it will be in the best interests of the New Zealand Government and it will be in the best interests of our economy going forward.  
This bill is about choice but it is about the choice of the economic management of our country going forward. We can choose either to put our head in the sand borrow and pay the consequences when someone else will be in charge of this process in 10 years’ time or to make that investment in the right things that build a stronger country going forward which we can have a say in and that will deliver the best results for New Zealand. Thank you. 
Hon Clayton Cosgrove 
: Point of order.