Twyford Phil: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Twyford Phil: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3182. Text is incorporated into the Bound Volume.] 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 There are many reasons to feel angry about this Mixed Ownership Model Bill—there are many reasons. It amounts to a massive transfer of resources from ordinary New Zealanders as taxpayers to the relatively small number of people who can afford to buy shares when these companies are floated. Power prices will go up; we know that. We know that New Zealanders will suffer. People who can barely afford to pay their electricity bills now will suffer and we know that this privatisation programme makes no financial sense for New Zealand. 
I want to talk about Supplementary Order Paper 60. It basically adds new clause 16A which states: “Any proceeds generated for the Crown as a result of the sale or disposal of shares in a mixed ownership model company must be paid to the New Zealand Superannuation Fund established under the New Zealand Superannuation and Retirement Income Act 2001.” One of the most galling things about this Government’s privatisation policy is the rather pathetic attempt to dress up the whole exercise in a thing that this Government calls the Future Investment Fund. It is a transparent attempt to sugar-coat what is a very bitter pill for almost all New Zealanders. National for some reason thinks that the two-thirds or maybe it is 80 percent of New Zealanders who were opposed to this policy will somehow be mollified by the idea that it is going to put the proceeds of this privatisation into some kind of notional—some kind of fictional—Future Investment Fund.  
The only thing that is possibly more galling than this is that today we have had to sit in the Chamber through Tony Ryall the Minister for State Owned Enterprises speaking in hushed tones about the European financial crisis and suggesting to the nation that if the Government does not privatise all these assets then somehow New Zealand is going to tumble into a global financial crisis and the world will come to an end. That is totally overlooking the fact that the Government’s fiscal problems are largely a result of firstly its unaffordable tax cuts and secondly its utter failure to get growth going in the economy.  
What is it going to spend the proceeds of the sales on? This is what it says: schools—a lick of paint here and there—hospitals irrigation and according to the Budget it is going to put $250 million into KiwiRail. Well as many commentators have pointed out this is all normal Government capital expenditure and it is a nonsense to dress it up as if it is some extra Future Investment Fund. I want to quote Paul Callow from Deloitte who said that “Tagging the proceeds in this way doesn’t really fool anyone: money is money and the fact that the Government has just sold a stake in an SOE simply means it has more of it to spend or needs to borrow less.”  
It is an absolute nonsense that in an energy-constrained world we are now selling energy assets—these four precious electricity companies—to fund repairs on schools and hospitals. We are selling an income-earning asset to fund the maintenance on a non-earning asset. That I think exposes the total poverty of thinking and of economic development behind this Government’s policy.  
The Future Investment Fund is a cruel hoax. It is a notional fund. It has no existence in reality and all the items that the Government has mentioned in recent months that it is going to spend the proceeds on are standard items of capital expenditure. I urge members of this Committee to support my Supplementary Order Paper 60 which instead of putting the money into this notional fund would redirect it at least to the New Zealand Superannuation Fund—the Cullen fund—which at least would not fritter away the proceeds of these precious assets on the repair and maintenance of standard items of capital expenditure. Every New Zealander knows that that should not be what happens anyway. What should happen is that this Government should cancel this privatisation programme hold on to these assets for future generations of New Zealand and hold on to them for the financial health of our nation and so that this country has the strategic assets—the energy companies—that we need to guarantee that the nation has a secure supply of sustainable and affordable energy for future generations.  
If this Government had a clue about economic development it would not be selling these assets. If you look at the example of Norway it is the textbook study of a country that got the most out of its natural resource. Norway’s State-owned petroleum company ensured that Norway’s assets—Norway’s natural resources—were exploited for the good of the Norwegian people. New Zealand is a leader in renewable energy and what is this Government doing? What is this Government doing? We are a leader in renewable energy and it is selling off the very assets that we own that will develop sources of renewable energy. 
 Even if you consider our State energy company Solid Energy and you think about the massive reserves of coal that this country has that one day may be able to be exploited in a sustainable way—it could be a huge resource for this country in years to come for future generations—what are we doing? We are privatising the very company that would ensure that the benefits from those resources are enjoyed here and the only revenue stream for a future Government is a 1 percent royalty. I cannot believe how stupid this policy is in that respect.  
If you consider Mighty River Power it is one of the world’s 10 largest developers and operators of geothermal energy. Mighty River Power is a fantastic success story in the New Zealand energy industry. Geothermal energy is only 0.3 percent of generation internationally but it is one of the parts of the global energy industry that is growing fast. It has huge prospects. Mighty River Power is developing new plants at Ngatamariki at Puketoi wind farm and another one north-east of Rotorua. It has also got a stake in the GeoGlobal Partners Fund a US company that is developing a 50-megawatt geothermal plant in California. Mighty River Power is a treasure—it is a national treasure—that we should be proud of. We should be keeping it in New Zealand hands so that it is owned by all New Zealanders and so that the benefits of this innovative company are kept in New Zealand and are there for generations of New Zealanders to enjoy. But what is this Government doing? It is privatising those assets. It is giving away the future potential of some of our most strategic assets. This Government has no qualms about privatising them.  
What could be more strategic in the 21st century than energy companies and water companies? Instead this Government is selling them off for a short-term sugar fix to give it a little bit of debt reduction in a fiscal crisis of its own making and it is going to use the proceeds to put a lick of paint on schools and hospitals. It dresses up that phoney financial transaction with this ridiculous Future Investment Fund as if this would sugar-coat what is a very bitter pill for all New Zealanders.  
The Future Investment Fund is a sham. It is a phoney fund. I urge members of this Committee to vote for my Supplementary Order Paper 60. Instead of wasting the proceeds of this privatisation on the maintenance of standard items of capital expenditure what my Supplementary Order Paper would do is shift those funds into the Cullen fund—the New Zealand Superannuation Fund. At least then the resources instead of being wasted by this Government would be kept for the benefit of future generations.