English Bill: Standing Orders — SessionalText is incorporated into the Bound VolumeEnglish Bill: Standing Orders — Sessional[Sitting date: 06 March 2014. Volume:696;Page:16421. Text is incorporated into the Bound Volume.]Hon BILL ENGLISH (Minister of Finance): I moveThat Meridian Energy Limited be a public organisation for the purposes of the Standing Orders. As a result of Meridian Energy ceasing to be a State-owned enterprise and becoming a mixed-ownership model company it is no longer subject to ongoing financial reviews by a select committee. To make Meridian Energy continue to be the subject of financial reviews it is necessary to use this process of tabling a motion in the House to deem Meridian Energy to be a public organisation under the Standing Orders. This means that when Meridian Energy’s annual report is tabled in the House it is then referred to a select committee for financial review. Mighty River Power was deemed to be a public organisation in the same way following its initial public offering and Air New Zealand goes through a similar process. We intend to recommend that Genesis Energy is treated in the same way following its initial public offering. This process is repeated for the non - State-owned enterprise companies at the start of each parliamentary term but they can all be done together of course once Genesis Energy is floated. The reason they are being done one at a time at the moment is simply the interaction of the cycle of the select committee hearings with the State-owned enterprise floats.Of course the Meridian Energy Ltd that comes before the select committee will be a different sort of company because it will now be subject to the scrutiny of the private market—that is the sharemarket shareholders analysts overseas experts and so on. I am sure that the select committee will find that when Meridian Energy Ltd turns up it will be a higher-performing company than it ever has been through its life as a company going back to the early 2000s when it was first created. Of course it is very important that it is well monitored because Meridian Energy is facing the same challenge as the other listed energy companies are and that is an increasingly competitive electricity market. If there is one thing that Governments ought to have learnt it is that a Government is not a good 100 percent owner of companies that are working to be profitable in a competitive market.There was a time when it was relatively easy for Meridian Energy to do well particularly under the previous Labour Government when the market was not that competitive the shareholder was not that demanding and demand for electricity was growing consistently. However that has all changed. Demand for electricity is now flat to falling and that means that these companies are going to have to be considerably more competitive than they were. There is no doubt that a competitive market is a better way to get results for the consumer and to get pressure on electricity companies todeliver better results for the consumer. That is innovation in the delivery of energy of which we will see an awful lot over the next 4 or 5 years; the lowest efficient prices that can be generated; and better more sustainable returns to shareholders.I want to give just one example of how a more competitive market has delivered for New Zealand energy consumers. Security of supply has become much less of an issue than it used to be. For instance in the 8 years of the last Labour Government there were four dry year emergencies out of those 8 years—four dry year emergencies where we had high-level intervention by Ministers and we had campaigns for consumers to stop them using electricity. Under this Government and more important in a more competitive electricity market we have dealt with two extreme climate events very well. For instance 2012 saw inflows into South Island hydro lakes that were the lowest recorded in the first 6 months of any year on record. That was then followed in 2013 by the worst drought in 70 years. These were two extreme weather events and both were handled competently effectively and efficiently by a more competitive electricity market.If there is one thing that would certainly not work it would be to follow the Green Party’s NZ Power policy—the Green Party’s NZ Power policy. For instance I was today asked a question about whether falling demand should be reflected in prices not falling. Well the NZ Power policy guarantees that as demand falls prices do not. It guarantees that because it guarantees a return to the owners of the generating assets. When the Labour Party members get up they should explain that point. They should explain how the NZ Power proposal will handle falling demand. They should explain that. In the absence of a better explanation here is what will happen. As demand falls prices are guaranteed not to fall—guaranteed not to fall.That comes on top of the other aspect of the NZ Power policy which is the Greens’ emissions trading system policy which Labour in its efforts to try to distance itself from the Greens never mentions now. But actually as part of the NZ Power policy the emissions trading system policy of the Greens will add $500 a year to household electricity bills. It is designed to drive down demand. It will add $500 a year to power prices but as demand falls prices will not be able to fall. So that will be the worst of all possible worlds.Meridian Energy will front up to a select committee once this motion is passed and it is deemed to be a public organisation. It will be a sharper more commercial company and better at delivering lower prices to consumers. I invite members to consider what the future of Air New Zealand would have been had the previous Labour Government not floated some of it on the stock market.The ASSISTANT SPEAKER (Lindsay Tisch): Order! This debate is about the status of Meridian Energy and whether or not it should be declared a public organisation for the purposes of the Standing Orders. It is not a general debate. Members must confine their comments to Meridian Energy and whether it should be declared a public organisation under the Standing Orders.Grant Robertson: I raise a point of order Mr Speaker. I obviously understand that ruling but I am also clear that in the earlier part of the finance Minister’s speech he spoke about the electricity market more broadly. I expect that members on this side of the House will be able to do that as well.The ASSISTANT SPEAKER (Lindsay Tisch): Order! Sure sure. I am just making that clear now. The Minister has 2 minutes remaining to focus the last part of his speech specifically on what the Business Committee has allowed to happen. I am asking the Minister to continue.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. It is just a simple question. Given that you have ruled in the twilight period of the Minister’s speech areother members going to be given the same level of scope as the Minister had in his first 8 minutes?The ASSISTANT SPEAKER (Lindsay Tisch): I am just making it very clear that although the Minister has said things that probably are outside the scope of the motion by mentioning other things I will allow a little bit of latitude but I will not allow a 10-minute speech as a general debate on these matters. [Interruption] Order! The Business Committee has given permission for this debate to happen and we will confine our comments specifically to the motion at hand.Hon BILL ENGLISH: I accept your ruling. The Government of course is proposing that Meridian Energy be deemed a public organisation because it still remains 51 percent owned by the Crown with 85 percent owned by New Zealanders and 49 percent publicly floated. I support the motion.