Chauvel Charles: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Chauvel Charles: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3116. Text is incorporated into the Bound Volume.] 
CHARLES CHAUVEL (Labour) 
: 
 I want to ask Todd McClay the member who has resumed his seat to reflect on the speech he has just given. The Finance and Expenditure Committee which I had the privilege to chair for a year in the final year of the fifth Labour Government is an important committee just like the other committees of this Parliament. It is a servant of the Parliament. I have to say when I heard the stories that our members reported back as a result of their experience on that committee on this bill the Mixed Ownership Model Bill I was shocked and I think the public will be shocked as well. 
Select committees in our unicameral Parliament are designed for one thing and one thing only: to make sure that some scrutiny occurs in respect of important bills. If select committees do not provide that scrutiny the bills are not going to get it anywhere else. The quality of this debate so far indicates that—if anybody needed any proof of this proposition. 
So when a chair of a select committee as important as the Finance and Expenditure Committee simply waves Government legislation through for whatever reason—be it his own personal ambition or be it because he has been nobbled by the Minister or what have you—when he circumscribes the process by 5 weeks and when he allows Treasury to have written the report from the department before submissions have closed what he does is he contributes to that general contempt that many people start to feel about this Parliament and the way we operate. I hope he is proud of himself because I certainly am not proud of him having heard that contribution. 
There are some excellent Supplementary Order Papers on the Table in respect of this part of the legislation and I think we ought to do our jobs and give them detailed consideration. We are on TV we are on the radio and people are watching and rather than trade rhetoric across the Chamber or hear the sort of vainglorious claims that come from the other side it might actually be useful for the Committee to use its time to look at those Supplementary Order Papers and consider their merits. There is an excellent one from Clayton Cosgrove Supplementary Order Paper 49. 
Hon Judith Collins 
: Ha ha! 
CHARLES CHAUVEL 
: The Minister of Justice thinks that is amusing. Her sense of humour clearly leaves something to be desired. Supplementary Order Paper 49 and Supplementary Order Paper 50 are well worth a careful look. I hope that the Minister in the chair who is the Minister of Police and the Minister of Corrections will look at the Supplementary Order Papers with care take the advice of officials who are here at 9.40 p.m. on a Tuesday night and consider whether or not to recommend to her colleagues that these provisions be adopted because as has been said there are precious few safeguards in this legislation. 
We heard the Prime Minister stump during the election campaign about the importance of this asset sales policy. The National Government claims a mandate for ramming this through despite the fact it is doing it on a 60 to 61 vote tonight and otherwise in the House and in the Committee. But what that claim neglects is that the Prime Minister was very careful to talk about mum and dad investors majority ownership for New Zealanders and ensuring limits on foreign ownership of those precious assets—all those words that resonated so well during the election campaign. Well what do we see in the bill? Precious few safeguards to fulfil those promises made to the country. That makes a mockery of the claim that there is a mandate for anyone to do what has been done tonight in the Committee. 
Supplementary Order Paper 49 would lower the percentage of any mixed-ownership model company permitted to be held in the hands of any one owner. It would lower the threshold from 10 percent to 1 percent so as to avoid the concentration of ownership in too few hands. We heard from my colleague Phil Goff earlier and from other speakers that it would not take much—it would not take much given the current 10 percent limit for entities that are foreign controlled to acquire a controlling stake in one of these companies. You need only 23 24 or 25 percent effectively of the voting rights to acquire such a stake. That would be very easy to do under a 10 percent limit. It is much harder to do with a 1 percent limit which is why Supplementary Order Paper 49 is so important. 
 Supplementary Order Paper 50 complements the provisions of Supplementary Order Paper 49. It would do something that the bill completely fails to do at the moment—provide some teeth for breach of the ownership ceiling provisions. That is why Supplementary Order Paper 50 is well worth consideration. It is why it would be great to hear the Minister in the chair Anne Tolley get to her feet and tell us what the Government’s attitude is on this legislation. 
Clare Curran has put together a very very carefully calibrated Supplementary Order Paper and it would actually institute a financial penalty for breaching the ownership limit applied to the mixed-ownership model companies. Notwithstanding the 1 percent limit that is being proposed on this side there is nothing to actually require the enforcement of the 10 percent limit except general application of securities law. And I am afraid that many members of the public having experienced the blunt end of finance company failures will not have a lot of confidence in that whereas what Clare Curran’s Supplementary Order Paper would do is actually give some teeth to the law and it is badly required if we want people to have confidence in the processes that we adopt in this House. 
There is another excellent Supplementary Order Paper in the name of Megan Woods—Supplementary Order Paper 61. It would deal with the situation once a mixed-ownership model company has had shares sold to private investors and where there is a risk that they will put pressure on the company to asset-strip in order to make a return on their investment—and that is clearly a commercial temptation that will lie on investors of any sort of scale in these businesses. The organisations will have been removed from the ambit of many of the Acts ensuring the responsible behaviour of State-owned enterprises so it is even more important to give the public warning of what these companies are actually doing. 
So Megan Woods’ amendment would provide that the companies cannot sell off individual assets like dams and wind farms to private companies in order to accomplish that sort of asset-stripping exercise which would defeat the purpose of the 51 percent ownership limit clause. Instead under Megan Woods’ amendment a mixed-ownership model company would be required to publicly notify that it intended to sell an asset and then seek the approval of the Governor-General by Order in Council in order to accomplish such a sale. 
Related Supplementary Order Papers are Supplementary Order Paper 52 in the name of the Hon Phil Goff and Supplementary Order Paper 51 in the name of Kris Faafoi. These attempt to give some teeth to what the Prime Minister promised—but has done nothing to accomplish in the legislation—which is that there would be majority Kiwi ownership in the 49 percent of the assets that were sold. So the provisions of Phil Goff’s Supplementary Order Paper would seek to correct the omission of requiring Kiwi mums and dads to be at the front of the queue. Kris Faafoi’s Supplementary Order Paper would do a similar thing. Phil Goff’s would do it by making sure that the bidders were Kiwi taxpayers; Kris Faafoi’s would do it by ensuring that the bidders were Kiwi passport holders. 
These sorts of safeguards are necessary if the National Government wants to claim any sort of mandate for doing what it is doing now—privatising these assets—because there is no way to guarantee that they will be sold to Kiwi investors unless there is some sort of enforcement mechanism such as those that are set out in the Supplementary Order Papers. 
There are some other important Supplementary Order Papers on the Table. Clayton Cosgrove has one Supplementary Order Paper 48 which would apply the principles of the State-owned enterprises to the mixed-ownership model companies. We have seen that the requirement to be a good employer is omitted the requirement to act socially responsibly is omitted and the requirement to deal in an appropriate way with the assets of iwi vanishes. Well Clayton Cosgrove’s Supplementary Order Paper would remedy those omissions just as Supplementary Order Papers 57 55 59 and 60 would deal with further serious omissions in the scheme of the legislation. 
Supplementary Order Paper 57 in the name of David Parker would apply Treaty principles to the directors and management of the mixed-ownership model companies. Supplementary Order Paper 55 would ensure that the entire mixed-ownership model structure is subject to Treaty principles—that is in the name of Trevor Mallard. Supplementary Order Paper 59 would ensure that State-owned enterprises with water resources are not eligible to be sold. These are all important provisions.