Bridges Simon: Questions for Oral Answer — Questions to Ministers 
Bridges Simon: Questions for Oral Answer — Questions to Ministers 
[Volume:678;Page:1369] 
1. 
SIMON BRIDGES (National—Tauranga) 
 to the  
Minister of Finance 
: What measures is the Government taking to responsibly manage its finances and reduce the build-up in debt? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the Minister of Finance: I am pleased to report that responsibly managing public finances is one of the Government’s four priorities in this term of Government. We have taken a number of steps. We have committed to a fast return to surplus in 2014-15 so we can stop the increase in public debt. We have reprioritised about $9 billion of lower priority spending in the last three Budgets. We have told public sector chief executives to take a careful look at their own operations and tell us how they could be improved to deliver better services without extra money and we have committed to selling minority shareholdings in five State-owned enterprises to New Zealanders which we expect to raise between $5 billion and $7 billion over the next 3 to 5 years—money we therefore will not have to borrow in volatile overseas markets.  
Simon Bridges 
: What are some of the reasons Government debt has increased in recent years? 
Hon STEVEN JOYCE 
: The pre-election update showed that net Crown debt increased from $10 billion in 2008 to $40 billion last year. It was caused by a number of factors including the Government’s supporting the economy through the recession and the global financial crisis rebuilding Canterbury through the $5.5 billion Canterbury Earthquake Recovery Fund and about $7 billion in Earthquake Commission expectations and paying out on earthquake claims and—the biggest factor—an unsustainable 85 percent increase in Government spending from $35 billion a year in 2000 to $64 billion a year in 2009. That massive ramp-up in spending left us facing projections of never-ending deficits and ever-rising debt and that is why the Government is working hard to turn that round. 
Simon Bridges 
: How will the Government’s partial sale of shares in four energy companies and Air New Zealand help to reduce debt? 
Hon STEVEN JOYCE 
: It will play a very important part in our overall programme. The sale to New Zealanders of minority shareholdings in Mighty River Power Meridian Energy Genesis Solid Energy and Air New Zealand will free up money to invest in priority projects like modern schools and hospitals without our having to borrow that money from uncertain world financial markets. The Government expects the programme to raise between $5 billion and $7 billion over the next 3 to 5 years. I suppose our opponents who seem very critical should explain to New Zealanders why borrowing this money and paying more interest to overseas lenders would be better than paying dividends to New Zealanders. 
Hon David Parker 
: Is he aware that at the Finance and Expenditure Committee this morning the Office of the Auditor-General when giving evidence of its audit of Treasury’s implementation of the Crown Retail Deposit Guarantee Scheme said that so far as it could ascertain at the time Treasury did not report in writing to the Minister of Finance or any other Minister that finance company liabilities were growing sharply in the 6 months after the guarantee which increased the risk by the Crown by more than $100 million in that period alone? 
Hon STEVEN JOYCE 
: The Minister of Finance obviously did not attend that committee meeting this morning. However I would point out that the Auditor-General’s report on the Crown Retail Deposit Guarantee Scheme found that the scheme worked as intended to protect the stability of the financial system overall. The report identified some issues early on in the scheme that needed to be tightened up and from about March 2009 it identified that they were. That is of course hardly surprising given that the scheme was put in place in haste by the previous Government in the middle of an election campaign. 
Hon David Parker 
: Is he concerned by the Office of the Auditor-General’s findings in its performance audit that Treasury monitoring and reporting to Ministers—or non-reporting to Ministers—of increases of more than $100 million in finance company deposits and increasingly risky lending was inadequate? 
Hon STEVEN JOYCE 
: Treasury of course only had limited powers to stop companies growing their books. That is one of the difficulties and the moral hazard of a retail deposit guarantee scheme. I think that is one of the challenges and I am sure it was one of the challenges the Minister of Finance faced at the time when the Government was trying to deal with on the one hand the risks and stability of the whole financial system and then the issue about potentially encouraging people to deposit into guaranteed finance companies. So that is one of the challenges. The report says Treasury could have monitored some things more closely and asked companies why it was occurring but that does not necessarily translate into stopping companies unless they were in breach of their deeds. 
Rt Hon Winston Peters 
: Does his first answer to Mr Bridges when he said that the Government was committed to selling these shares to New Zealanders possibly mean that no foreign interests will obtain any shares if there is full New Zealander subscription? 
Hon STEVEN JOYCE 
: We have been on record as saying about 85 percent to 90 percent of those companies would be owned by New Zealand mum and dad investors and of course the Government’s 51 percent cornerstone shareholding. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I am asking from his words whether or not he admits the possibility that what he is saying by way of assurance is true: that it is possible no foreigner will obtain any of these shares. That is the question. 
Mr SPEAKER 
: With respect I thought the Minister’s answer was no he cannot give that assurance. 
Rt Hon Winston Peters 
: Well why did he say so? 
Mr SPEAKER 
: He did not use exactly those words but it was perfectly clear what he was saying that there was a certain percentage the Government expected to remain in New Zealand hands and therefore some of the rest could end up in foreign hands.  
Simon Bridges 
: What reports has the Minister seen supporting the partial floats of these State-owned enterprises? 
Hon STEVEN JOYCE 
: I have seen a report in today’s  
New Zealand Herald  
that says there is a strong interest from the investing public in these partial floats. For example Hamilton Hindin Greene director Grant Williamson is quoted as saying: “We’ve had a rather large number of investors show interest including new investors that maybe haven’t been in the market for some time.” As Ministers have said the Government expects between 85 percent and 90 percent New Zealand ownership of these companies including the Government’s commitment to retain at least 51 percent. 
Rt Hon Winston Peters 
: Can I ask the Minister: is the answer to my question no or does he need it translated from somewhere else? 
Hon STEVEN JOYCE 
: If the member is asking whether the answer to that question that he just asked is no I suppose that the only correct answer is that I do not know because he has not actually asked me a question in the question. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. You were seeking to be helpful to me in explaining what answer he had given. I am asking now a very direct question: is the answer to my first question no? 
Mr SPEAKER 
: I think it is perfectly obvious what the Rt Hon Winston Peters means and I think the Minister could answer it. The member is simply asking whether the answer to the first question he put to the Minister today is no. I think that is capable of being answered. 
Hon STEVEN JOYCE 
: The only trouble is I cannot remember exactly what he asked in his first question today and so I do not know whether I am answering no in the affirmative or the negative. 
Mr SPEAKER 
: Order! I think I can offer a remedy for the situation. [ 
Interruption 
] Order! I am on my feet. I invite the right honourable member to repeat his first question. 
Rt Hon Winston Peters 
: Is the answer to the question that I first raised with regard to Mr— 
Hon Paula Bennett 
: He can’t remember either. 
Rt Hon Winston Peters 
: Well actually to help you I am trying to put it in a more simple way. 
Mr SPEAKER 
: Order! What I actually invited the right honourable member to do was to repeat his first question. He was complaining about the fact that he felt it was not answered adequately and that led to his second question which led to confusion because the Minister was not sure what he was asking. So I invited the member to repeat his first question. 
Rt Hon Winston Peters 
: Thank you. Does it mean given that his answer to Simon Bridges was that the Government was committed to selling these shares to New Zealanders that it is possible no foreigner will be able to buy any shares at all in these enterprises? 
Hon STEVEN JOYCE 
: It is always possible that no foreigner may end up buying shares but the Government’s stated intention is for New Zealand shareholders to be at the front of the queue. We expect around 85 to 90 percent of those companies to be held by New Zealanders including the Government’s 51 percent share once the share offer has taken place.