Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 28 June 2012. Volume:681;Page:3491. Text is incorporated into the Bound Volume.] 
1. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister of Finance 
: When did he become aware of the decision to write down the value of KiwiRail by $6.7 billion? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the Minister of Finance: KiwiRail’s chair first expressed a desire to the Government that it revalue KiwiRail’s balance sheet to reflect a more commercial value in late 2010. KiwiRail then spent several months working through the various legal accounting and tax implications of such a step. In October last year KiwiRail announced its intention to proceed with—at that stage—an estimated $6 billion write-down and announced that at its annual public meeting. Cabinet took the decision to approve the final write-down this month on the basis it would put the company on a more commercial footing under its long-term $4.5 billion turn-round plan. Under the plan the Government is committed to ensuring that KiwiRail can fund its business on a commercial basis. 
Hon Clayton Cosgrove 
: Given that time frame of pre-warning why did he not include any quantification on the write-down in the value of KiwiRail assets in Budget 2012? 
Hon STEVEN JOYCE 
: The proposed KiwiRail write-down was included as a specific risk in Budget 2012 but it was unquantified. The reason it was not included in the actual Budget numbers at that time is that it had yet to be considered by Cabinet. So there was uncertainty as to whether it would proceed in the current financial year or whether there was too much uncertainty around the amount. There is still some uncertainty around the final amount but the numbers quoted in yesterday’s press releases are the best estimates at this time. 
Hon Clayton Cosgrove 
: Why did he announce the decision in Budget 2012 with such specificity to allocate $250 million from the sale of Mighty River Power towards KiwiRail without the same form of transparency and specificity when quantifying the amount of the planned write-down? 
Hon STEVEN JOYCE 
: Well it is because the $250 million capital expenditure has been planned and budgeted for KiwiRail for some time. The actual amount of the valuation and when it could occur were actually not decided until the opportunity was there for Cabinet to consider it. 
Hon Clayton Cosgrove 
: Can he confirm that in the 2011 financial year Treasury contracted NG Consulting Ltd a company that specialises in initial public offerings and valuations to provide advice relating to the Government’s ownership interest in the KiwiRail group? 
Hon STEVEN JOYCE 
: No I cannot confirm that for him today but I can confirm for him that the Government has no intention nor does it believe it would be possible to sell KiwiRail. It was picked up by the previous Government at a rather large price. It was revalued upwards—the different components—by the previous Government. This Government is focused very much on a difficult turn-round plan which is very challenging for the company and would be very surprised if somebody wanted to buy it currently. 
Andrew Williams 
: Will he confirm that no financial consultants have been engaged to advise the Government on the sale of KiwiRail or the land in the ownership of the New Zealand Railways Corporation to foreign interests? 
Hon STEVEN JOYCE 
: I obviously cannot confirm everything the Minister may have received but I can confirm to the member there are absolutely no plans to sell KiwiRail. There are absolutely no plans to sell what was being described as the longest and skinniest farm which is KiwiRail’s land under its tracks. I think members opposite would do well to consider that the Government on behalf of taxpayers is doing a very very challenging job to rescue what was an appalling situation inherited in regard to the rail company. 
Hon Clayton Cosgrove 
: Given that answer will he give the House a guarantee today that KiwiRail or part thereof will not be at any time sold by his Government? 
Hon STEVEN JOYCE 
: The member is posing something that is eminently not possible. The reality is—I tell you what we would not be able to sell it at the price that Labour bought it. Labour spent over $1 billion— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. 
Hon STEVEN JOYCE 
: —in 2008. If somebody— 
Mr SPEAKER 
: Order! Order! A point of order has been called. 
Hon Clayton Cosgrove 
: With respect there was no political loading. It was a simple question. [ 
Interruption 
] 
Mr SPEAKER 
: Order! A point of order is being heard. 
Hon Clayton Cosgrove 
: It was a simple question that built on the Minister’s previous two answers. It simply asked him whether he would guarantee to the House that KiwiRail or part thereof would not be sold off at any time. It is a simple question whatever else— 
Mr SPEAKER 
: Order! The member is absolutely right. His question was quite a simple question like that. I thought the Minister had answered it at the start and that he said it would be impossible to sell it. But since he then went on to add unnecessary criticism of the questioner’s party maybe the Minister now should answer the question rather than just leave it to assumptions. 
Hon STEVEN JOYCE 
: I will try to answer the question for the member as follows. The Government is focused on very much trying to recover some of the sunk cost in KiwiRail and— 
Mr SPEAKER 
: Order! Order! The question was a very simple question. It just asked whether the Minister is prepared to guarantee that the Government would not sell any shares or part—I cannot remember the exact wording now—of that asset. I can understand the Minister’s desire to say why it might be impossible but the answer is dead simple. The answer is either the Government is prepared to or it is not prepared to. The question did not ask whether it was possible. It asked whether the Government would sell or whether the Minister would give a guarantee that the Government would not try to sell any of it. 
Hon STEVEN JOYCE 
: I raise a point of order Mr Speaker. I was trying to provide some context as to why it would not be possible to do so but if the Speaker would prefer I will not provide that context. It is just that normally Ministers do get the opportunity to provide context to the answers to their question. 
Mr SPEAKER 
: Order! Normally the Speaker is perfectly happy to see Ministers do the context after they have answered the question. 
Hon STEVEN JOYCE 
: After the questioner’s statement— 
Mr SPEAKER 
: Order! The issue is simple. The answer does not actually need a lot of context. The Government is either prepared to sell or not. I am always happy to allow context after the question has been answered. 
Hon STEVEN JOYCE 
: My point is that it would not be possible to recover anything like the sunk cost of KiwiRail so the Government is very much focused on trying to turn the business around to recover some value for stakeholders. The matter just simply does not come up. I would not guarantee it because the reality is—[ 
Interruption 
] No the reality is that you cannot guarantee anything in this world. I can tell the member that it is a long long time before we will get back under any circumstances the money that Labour wasted in KiwiRail.