Norman Russel: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Norman Russel: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3178. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on this bill before the Committee the Mixed Ownership Model Bill which is the partial privatisation of the people’s assets by this National Government. I wish to speak to a few particular aspects of this bill and I want to start with the amendment that the Government is moving around protecting—or apparently protecting—the 51 percent ownership limits. That is it is moving an amendment so that the Government needs to maintain 51 percent not only of the voting shares but of all categories of shares. 
On the one hand this is a bit of a victory in the sense that it is forcing the Government on to the back foot on this issue. Originally what the Government wanted to do was maintain 51 percent of the voting shares only but then allow more of the non-voting shares to be sold off. It will not be able to do that any more so that is progress. However what it points to is one of the fundamental problems with this bill which is about access to capital. Because these mixed-ownership model companies which are established by Part 2 could originally as the bill was have accessed more capital by issuing non-voting shares and the Crown would not necessarily have bought those non-voting shares— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr RUSSEL NORMAN 
: As I was saying before the break I was discussing the Government’s amendment that would prevent the Government from selling more than 49 percent of all the share types not just the voting shares and the significance of that for the companies. What this means is that there is now fundamentally no difference in terms of access to capital between the mixed-ownership model companies and the State-owned enterprises. Previously before this amendment came in the mixed-ownership model companies had the ability to issue non-voting shares in order to raise capital even if the proportion of non-voting shares in private owners went above 49 percent. That gave them a mechanism to raise capital via that method. Once this amendment goes through assuming that it will the mixed-ownership model companies will no longer have that access to that capital. In fact they will totally require the Crown to buy 51 percent of all the shares that they issue whether those shares are voting shares or non-voting shares in order for the Crown to maintain its 51 percent ownership of all the shares—voting and non-voting. 
There is no way that the Government is going to provide these electricity companies with half of all their new capital needs—it is just not going to do it. The Government has repeatedly said that it has no capital to spare it does not want to provide capital to these companies and it does not want to provide capital to any companies. So from the point of view of the companies their only option to raise capital will be through debt instruments—that is they will issue bonds. They will not be able to issue new shares because the Government will basically block it from happening. So their only way to get more capital is to issue bonds or debt instruments. That is exactly what they can do now. They do not need to be converted into mixed-ownership model companies in order to raise capital through issuing debt instruments. The only new opportunity that they are provided in order to raise capital in becoming mixed-ownership model companies is that they could issue new equity instruments. But because the Government will not be willing to fork over new capital to buy the necessary 51 percent of all the shares that these companies may issue there is no way the Government will allow them to do that. It fundamentally undermines the basic rationale of the entire reason that the Government started down this path.  
The next issue I want to talk about is the issue of appropriations. The Government has been floating in this House and elsewhere the idea that it will be issuing bonus shares if you like. It is a loyalty programme. What this means is that if you purchase 15 shares and you keep them for a certain amount of time then you will be given a bonus share a 16th share for free. The bonus share does not come for free from the point of view of the seller of the asset. From the point of view of the seller of the asset they are basically giving away money. The Crown does not have the legal ability to give away money without getting an appropriation from this Parliament. Under the Constitution Act— 
Gareth Hughes 
: I raise a point of order Mr Chairperson. I wish to apologise to the member for interrupting but the Standing Orders very clearly say that interjections must be related to the debate. I find it highly disrespectful what is happening between the Minister and Clayton Cosgrove. 
The CHAIRPERSON (Eric Roy) 
: I do not think the member is a Minister; I think he is a member. But the point is well made that there should not be interjections going backwards and forwards. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. I apologise to my Green colleague and I apologise to you. I was assisting Mr Heatley with his addition. 
The CHAIRPERSON (Eric Roy) 
: That is not a point of order and let me just say there will be no tolerance for that. If members are going to use points of order to make points that are not related to the debate or in regard to the order of the House they may not be in the Chamber. Let us have some decorum. 
Dr RUSSEL NORMAN 
: The important point here is that the free shares that the Government will be issuing are essentially an expense on the Government account. They do not come for free. Someone has to pay for them and the people who pay for them will be the Government itself. Under the Constitution Act you simply cannot make expenses on the Crown account without parliamentary authority.