Norman Russel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 01 March 2012. Volume:677;Page:744. Text is incorporated into the Bound Volume.] 
1. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Does he stand by his statement that “the mixed ownership programme will be good for … the economy as a whole”; if so will it be good for the economy as a whole if these mixed ownership companies then sell New Zealand electricity generating assets into foreign ownership? 
Hon TONY RYALL (Minister of Health) 
 on behalf of the Minister of Finance: Yes he does stand by that statement that the mixed-ownership programme will be good for the economy. That is because the alternative is to borrow billions and billions of dollars on volatile financial markets. You have only to look at what is happening in Europe where countries are being forced to slash spending and public services to see the problems that too much debt creates. In terms of the second part of the question the member’s theory is misplaced as none of the shareholding and directors rules will change in that regard. 
Dr Russel Norman 
: Will the legislation to establish these partially privatised energy companies include explicit provisions that prevent these companies from selling major New Zealand electricity-generating assets? 
Hon TONY RYALL 
: The legislation will pretty much reflect the existing situation where directors of State-owned enterprises not only operate under the requirements of the Companies Act but also are expected to act within the confines and requirements of listing requirements on the New Zealand stock exchange. 
Dr Russel Norman 
: Will the legislation to establish these companies include explicit provisions that prevent those companies from selling major New Zealand electricity-generating assets? 
Hon TONY RYALL 
: The proposed legislation does not need to include any additional features to address the concern that the member has because the Companies Act already requires that any significant transactions would involve consultation with the shareholders. The Government is retaining 51 percent majority ownership. 
Dr Russel Norman 
: Is he saying that his Government will provide no legislative guarantee that major New Zealand electricity-generating assets will not fall into foreign ownership after partial privatisation? 
Hon TONY RYALL 
: There are requirements in the Companies Act that significant transactions require the support of the majority shareholder and there are similar requirements in respect of the listing requirements of companies. So the Government is retaining 51 percent majority control. 
Dr Russel Norman 
: Does the Minister agree with the reported comments of the revenue Minister Peter Dunne who said the law must be very clear that the partial privatisation programme will not lead to the sell-off of dams and other important New Zealand generating assets? 
Hon TONY RYALL 
: I have not seen the exact details of what Mr Dunne has said in respect of that matter. I do know what is in the coalition agreement and I also know that there are requirements in the Companies Act in terms of the powers that majority shareholders have in respect of significant transactions and now similarly listing conditions also give majority shareholders those sorts of controls. 
Hon David Parker 
: Does the Government’s expectation that 10 to 15 percent of the State-owned enterprises will be in foreign ownership after the Government’s sales programme mean in effect that up to 30 percent of the shares being sold are expected to end up in foreign ownership? 
Hon TONY RYALL 
: The Government has always been very clear that at the end of this programme we expect when those companies float that there will be 10 to 15 percent of the overall shareholding potentially in foreign ownership. The member notes as he has done the maths in respect of other relativities.  
Hon David Parker 
: I raise a point of order Mr Speaker. My question asked whether the effect of that is that up to 30 percent of the shares being sold are expected to end up— 
Mr SPEAKER 
: The Minister did not question the member’s mathematics. I think he agreed with the member. 
Dr Russel Norman 
: Does he accept that there is now a conflict between the Minister of Revenue and the rest of the Government over this issue as to whether there will be legislative protection for the sale of New Zealand assets and that if he cannot solve this problem he no longer has a majority in this House to progress the asset sale programme? 
Hon TONY RYALL 
: No there is no conflict. What there is total agreement on between United Future and the Government is that we need to make sure that our country controls its level of debt. What is being proposed is an important part of making sure that our country does not face the challenges that so much of Europe happens to face when Governments let debt get out of control. 
Dr Russel Norman 
: Can his plans for partial privatisation proceed without the support of the Hon Peter Dunne? 
Hon TONY RYALL 
: I think the Government has made it absolutely clear that it is obvious what the numbers are expected to be in this legislation. We have a coalition agreement with the United Future party which quite clearly sets out the terms of that agreement. It is quite clear also that the Companies Act already has provisions that involve shareholder engagement on significant investments. I think the member is creating a Green fantasy in respect of this issue. 
Te Ururoa Flavell 
: Tena koe Mr Speaker. Kia ora tatou. What impact has the consultation with Maori regarding section 9 had on the Government’s position regarding its mixed-ownership programme? 
Hon TONY RYALL 
: I think it is already clear. It has been indicated that the Government is looking in respect of section 9 at the transmission of it into the new legislation and at clarification that it does not apply to private shareholders. 
Dr Russel Norman 
: Is it his understanding that section 131 of the Companies Act requires directors to act in the best interests of the company whereas if it is determined that it is not in the best interests of New Zealand to sell those assets those directors will be required to act in the best interests of the company not in the best interests of New Zealand? 
Hon TONY RYALL 
: The directors’ acting within the best interests of the company also requires them to act within the other provisions of the Companies Act. The Companies Act in respect of the question that the member asked in the first part of this exchange does provide express provisions for majority shareholders to have a say in significant transactions and the directors will be aware of that. 
Hon David Parker 
: What percentage of the company’s assets have to be sold before it is a major transaction that requires shareholder approval? 
Hon TONY RYALL 
: The Companies Act sets that out to be around 50 percent.