English Bill: Standing Orders — SessionalText is incorporated into the Bound VolumeEnglish Bill: Standing Orders — Sessional[Sitting date: 22 July 2014. Volume:700;Page:19271. Text is incorporated into the Bound Volume.]Hon BILL ENGLISH (Minister of Finance):I move That Genesis Energy Ltd be a public organisation for the purpose of Standing Orders. This is a process we have been going through with each of the mixed-ownership model companies. As a result of Genesis Energy ceasing to be a State-owned enterprise and becoming a mixed-ownership company it ceases to be subject to ongoing financial reviews by a select committee. To ensure that Genesis Energy continues to be subject to financial reviews we need to put this motion through the House which deems Genesis Energy to be a public organisation under the Standing Orders. That will mean that when Genesis Energy’s annual report is tabled in the House it is then referred to a select committee for financial review. Following completion of their public offerings Mighty River Power and Meridian Energy were deemed to be public organisations in the same way. Air New Zealand was also deemed to be a public organisation and has been for some time.This is just part of the procedural tidy-up after the successful floats of 49 percent of these Government companies. The merits of the policy have been debated probably more extensively than any other single issue over the last 3 years and the Government is pleased to note that after that debate and the sale of the assets there is around $4.7 billion that has been put into the Future Investment Fund and that is now available to be recycled into other public assets—a process that is well under way and from which thousands of New Zealanders will benefit. Particularly I am pleased to see that some of this money is going into the rebuild of Christchurch schools where we have a generational opportunity to spend $1 billion on new schools and upgrades and to change the way that the schooling system operates in our second-largest city. It is pleasing to see that so many of the members of the Christchurch educational community are involved in taking that project forward.Dr Megan Woods: Give us all the facts.Hon BILL ENGLISH: If the member is looking for some facts I will just give her some facts. The share offer programme has increased the incentive for these companies to improve their performance and this is now flowing into higher dividends for the Crown. It is particularly noticeable in the case of Genesis Energy the company about which we are debating today. Despite selling just under half of the shares in the company the Crown expects to receive nearly twice as much in dividends from Genesis Energy this year than it did in the best year in the decade up to 2012. So in those 10 years when the company was fully owned by the Crown—100 percent—in its best year we received half the dividends that we will receive from Genesis Energy this year. So the taxpayer sold half the company and it is getting more than twice the return. That makes a lot of sense.The Opposition members are going to get up and say that is because power prices went up. Well they should look at the last CPI index which shows that the increase in power prices was all due to increases in line charges from the monopoly community-owned companies. In fact the variable power price the energy price dropped very slightly. So the increased dividend which is twice as big a dividend as the best of the last 10 years under Crown ownership is not due to higher power prices. It is due to a better-run company that no longer wastes taxpayers’ money or tries to exploit what was a less than competitive position up until 3 years ago at the expense of the consumers of power. There are many other benefits from the floats—that is just one of them.As a result of Parliament passing this motion select committees will have the opportunity to question Genesis Energy closely about why it is now paying the Crown twice the dividend when the Crown is a 50 percent shareholder—twice the dividend it paid when the Government was a 100 percent shareholder. Actually a similar but not quite the same pattern applies for Mighty River Power which is also paying somewhere between 50 percent and 100 percent more dividend to the Government when it owns half the shares as when it was 100 percent owned. In the case of Meridian Energy it does not work out that way because Meridian Energy had a number of special dividends and the special dividend that it paid—the very large special dividend that it paid—was because it sold assets actually.Hon Craig Foss: Who to?Hon BILL ENGLISH: Well it sold assets in Australia. It set up some energy generation in Australia and sold it very successfully. I have not actually done the calculations if you take that special dividend out but I am sure that once you remove that special dividend we will see that there is also a better performance by Meridian Energy and taxpayers getting a better deal.The final point I would make is this. The only reason the Government has billions of dollars investment is because ordinary Kiwis pay their power bills and at the end of a week of working in the cold wet July weather they hand over $300 of PAYE. That is how we get billions. But just because they come in small amounts is exactly the reason we should respect them. We should pay attention to every $300 because if Kiwis kept it they would be able to do a lot with it. They would be able to upgrade their car pay for the school trip buy a new washing machine and that is why I am so deeply opposed to the wasteful arrogant attitudes of the Opposition members who think that the billions somehow belong to the Government. They do not. They belong to people working in the rain and cold today and this motion is part of a process that reassures ordinary New Zealanders—everyday New Zealanders paying their tax and their power bills—that the National-led Government respects their contribution to New Zealand’s common good. We will make sure that people on good pay with good jobs who run these companies are thoroughly scrutinised and most particularly scrutinised by a market that can signal very clearly by reducing the share price when that company is not performing.