State-Owned Enterprises (AgriQuality Limited andAsure New Zealand Limited) Bill — In Committee 
State-Owned Enterprises (AgriQuality Limited andAsure New Zealand Limited) Bill — In Committee 
[Volume:639;Page:9718] 
State-Owned Enterprises (AgriQuality Limited andAsure New Zealand Limited) Bill 
In Committee 
Part 1 Preliminary provisions 
Hon TREVOR MALLARD (Minister for State Owned Enterprises) 
: 
 It is important that we focus just for a short time on Part 1 because I think members will want to know that the interpretation clause is very standard around animal material and animal products as with the Animal Products Act 1999. The board is not the board of Asure but that of AgriQuality Ltd and the official assurances are again those as given in the Animal Products Act. 
The shareholding Ministers will be the shareholding Ministers of AgriQuality Ltd as opposed to those of Asure although in the current circumstances they are the same Ministers—the Minister of Finance and the Minister of the Crown who is from time to time responsible for AgriQuality Ltd. It has been the practice of previous Governments to have the Minister for State Owned Enterprises as the responsible Minister though I think it is fair to say that on occasions there have been debates around whether it is appropriate to have as with the Animal Health Board or with Learning Media different responsible Ministers and whether that Minister should be the Minister of Agriculture. The previous Government and this Government have taken decisions that having the State-owned enterprises as far as is practicable put together for these purposes is the right approach. 
Clause 4 provides that the Act will bind the Crown—it is the clause that causes the Act to bind the Crown. Clearly that is an important provision for this bill. There are important Crown powers and Crown responsibilities within this Act of Parliament and it is therefore important for the Act to bind the Crown. 
Without getting on to too much of the substance of the bill I say that the bill has been pretty fiercely contested and I am absolutely certain that the National Party will vote against even the interpretation clause—with not much point in doing so. But I think that section has gone through a thorough but intensive— 
Nathan Guy 
: Quick. 
Hon TREVOR MALLARD 
: Yes but— 
Nathan Guy 
: It was a bit quick though Trevor. 
Hon TREVOR MALLARD 
: Well I was going to say there is nothing wrong with being a bit quick. In this circumstance working pretty hard getting some work done doing a little bit of overtime getting up before half past 8 in the morning hearing some submissions balancing them out and coming out with an opinion on Part 1 is something that does not harm select committees. For select committees to work a little bit more than maybe some National Party members are used to doing—working in the mornings as well as in the afternoons—is something that I know is foreign to Mr Guy and some of his colleagues especially some of his colleagues who have been involved in this select committee. But that is something they have to— 
Nathan Guy 
: That’s a bit unfair. 
Hon TREVOR MALLARD 
: No I think it is true. Mr Brownlee is hardly a bundle of energy in the morning is he? However I did notice—and excuse the diversion Mr Chairperson—that he seemed to be enjoying his work in the Commerce Committee a little bit more recently than he has done in the past. 
Darren Hughes 
: With the Major Events Management Bill. 
Hon TREVOR MALLARD 
: With the Major Events Management Bill. I do not think I have ever seen a photo of a chair of a select committee in the  
Dominion Post  
with his tongue hung further out than Mr Brownlee’s was— 
Hon Clayton Cosgrove 
: Except at breakfast. 
Hon TREVOR MALLARD 
: Well I think Bellamy’s and the  
Dominion Post  
are kind; they do not entertain us with photos of Mr Brownlee eating but they did entertain us with a photo of Mr Brownlee as chair of the Commerce Committee drooling. 
The CHAIRPERSON (Hon Clem Simich) 
: Come back to the bill. 
Hon TREVOR MALLARD 
: In moving back to the bill I say that I do not think anyone could possibly drool over the interpretation section of this bill. It is a relatively standard run-of-the-mill animal products - type interpretation. Again I would find it hard if the National Party chose to vote against the fact that the bill binds the Crown. 
NATHAN GUY (National) 
: 
 I wish to take a call on Part 1 “Preliminary provisions” of the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. The National Party has some concerns about the bill. It was interesting to hear the Minister try to wind into us and say it was great to work hard on select committees. He said the Opposition members are a bit of a lazy lot on the Commerce Committee. I do not think that is fair. National has a concern that there has been a bit of a mad rush with this bill and I look forward to hearing the Minister explain why the Commerce Committee had to rush it through. 
In terms of clause 3 “Interpretation” it is important to realise that New Zealand’s processing plants have very very high-quality standards particularly with regard to animal products and animal material which are defined in this clause. Mr Locke will know that from being I think a former meat inspector. 
The National Party has a concern that if this bill goes through it will reduce competition and that will drive up the cost at the farm gate—it will drive up the cost for the purchaser at supermarkets and butchers shops. That is why National has concerns overall. I look forward to the Minister taking a call and letting us know why the bill was rushed through in this fashion. 
Hon Trevor Mallard 
: That’s in clause 2. We will get to that. 
NATHAN GUY 
: That is right. I am just shadowing that— 
Hon Trevor Mallard 
: Foreshadowing. 
NATHAN GUY 
:—under Part 2 which is really the meat of this bill I know—[ 
Interruption 
] I hope Mr Mallard can take a call and let us know why we had to rush this bill through the select committee. 
The main thing under Part 1 is that this bill will raise some big concerns for people who are producing the animal material and the animal products. I am talking about farmers because they are up in arms about this legislation and particularly about how it will affect their costs which will go up. 
PANSY WONG (National) 
: 
 It is very strange to hear the Minister in the chair the Hon Trevor Mallard filibustering on Part 1 of the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill which is entitled “Preliminary provisions”. I was looking forward to his passionately explaining to us the significance of the definition “ ‘animal material’ has the same meaning as in section 4(1) of the Animal products Act 1999.” Was there some secret agenda to change that definition in the legislation? 
I think the definitions in the interpretation clause are very important. I particularly want to talk about the definition of “Board”. The bill states in clause 3 that “ ‘Board’ means the board of directors of AgriQuality Limited”. Speaking as one from a commercial background I know that usually when a board of directors is set up the shareholders give the board a lot of discretion to administer the affairs of the company. In an AGM situation shareholders indicate whether they are happy with the board emailing a range of strategic directions and a forecast. Usually shareholders expect a dividend rate and if they are not happy it is quite obvious and they sell their shares. 
But when the Government owns a company the authority of the board takes on a slightly different shape. Usually when a competent Government sets up a company it will give quite clear directions and expectations about what it wants the board to achieve. Then the directors will be left to chart their own course as long as they can deliver those directions and expectations which generally are set right out before the beginning of each year. 
That is what I think is really important. I am not too sure how the directors of the board of AgriQuality Ltd will feel after the passage of this legislation because Part 2 which we will be voting on shortly consists of many clauses that state what the shareholding Ministers can dictate to the directors. They can write to them and give them instructions. In effect when we get to the crux of it—and National members cannot wait to get to Part 2—it seems that the task of these directors will indeed be very difficult. The directions from the shareholding Ministers may sometimes put the directors almost in a position beyond where their standards of professional conduct might want to take them. Therefore I have a lot of sympathy for the position that existing and potential directors of AgriQuality Ltd may find themselves in. They will realise that their independence and professional expertise may be compromised by the passage of this legislation because Part 2 provides for the shareholding Ministers to have a lot of power to give directions to them. 
I was told by my caucus colleagues who are familiar with the rural sector like our very hard-working excellent junior whip Nathan Guy—the future member for Otakiand one of our very good members—that the existing directors of AgriQuality Ltd and Asure New Zealand Ltd are doing a good job. Mr Guy told me that they are doing a great job. They are competing with each other. They have broad directions given to them from the shareholding Ministers and they have the independence to do their best to serve these companies. Why are we doing this to them? 
KATE WILKINSON (National) 
: 
 I am absolutely delighted to rise to take a call on this bill— 
Jill Pettis 
: You want to get out more Kate if this delights you. 
KATE WILKINSON 
: I am actually grateful I say to Mrs Pettis that it has a long title which is the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. 
Hon Trevor Mallard 
: No no—we’re doing Part 1 not clause 1. 
KATE WILKINSON 
: Yes I appreciate that we are doing Part 1. 
In relation to Part 1 I particularly want to talk about clause 4 because I think clause 4 is quite a telling clause. I know that it is simple and that it states: “This Act binds the Crown.” but as any student of law would know one of the first sections one goes to when attempting to read legislation that has been passed by this House is the section stating whether the Crown is bound by the legislation. So that clause is very important. 
The second most important section is usually the interpretation clause because again one needs to know whether the Act is applicable. 
In relation to the Act binding the Crown we have to go back to what the purpose of this legislation is—that is to reduce competition. The explanatory note of the bill states that the Government wishes to prevent this competition from occurring. So we can understand why this particular Government wants the Crown to be bound by this legislation. 
Progress reported. 
Report adopted.