Norman Russel: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Norman Russel: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3198. Text is incorporated into the Bound Volume.] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak in the title and commencement clauses debate on this bill the Mixed Ownership Model Bill. I think the title of this bill the Mixed Ownership Model Bill is actually an interesting concept that is worth discussing. For that reason in the election campaign where this was being discussed we took the view that we were not at all opposed to the State-owned enterprises forming partnerships with private sector partners. I think the previous Government took the same view. There is not a problem with the State-owned enterprises partnering with private sector corporations in order to make progress for whatever the particular field is that they are involved in in the energy sector. 
So we particularly looking at the electricity companies saw the electricity companies as part of New Zealand’s economic future. These companies have the ability to use the expertise that they have in renewable energy generation in order to export that technology and that expertise around the world. By partnering with private sector companies they could actually facilitate that process. We were not at all opposed to maintaining the State-owned enterprises as State-owned enterprises in full public ownership but getting them to partner with some other entrepreneurs who may have some great ideas in the renewable energy sector and energy efficiency sector which then could be exported to the rest of the world so New Zealand could get its part of the dramatic growth in the renewable energy sector internationally. 
Those of you who read  
The Economist 
—and I am sure there are none in the Government benches—will see that the front cover of  
The Economist 
 this week is all about what is going on in the Arctic. Of course linked to that is the rise of the renewable energy sector. This is New Zealand’s great economic opportunity. These companies—these State-owned enterprises—provide an opportunity for us to actually get an in to that market as has been referred to elsewhere in this debate. 
The problem is that the path that the Government is going down which is to privatise these companies means that instead of maintaining the headquarters the research and development and the core of the companies in New Zealand we will see a slow drift of these companies as more and more control falls into overseas ownership and the companies lose a strategy that is attached to advancing the best interests of New Zealand. That is the danger with the strategy that this Government is pursuing. If we see these companies simply as “another company” that the Government can partially privatise or privatise in order to fill a hole in their Budget this year or next year as a result of their tax cuts for upper-income earners—if we take that view we misunderstand the significance of the renewable energy sector to New Zealand. 
New Zealand is a world leader in renewable energy technology particularly in geothermal and hopefully in the future in tidal technology. That gives us a strategic opportunity to place ourselves in the global energy market. What we need in energy is what Fonterra has done in the dairy sector. We need a global-scale New Zealand company or set of companies that are working together that can actually become major global leaders in the renewable energy sector. That is why rather than partial privatisation through this Mixed Ownership Model Bill we saw the advantage in a partnership with these companies with private sector entrepreneurs. They could get the best the private sector has to offer New Zealand in terms of its ideas and in terms of its capital but without losing control of the companies and without the companies falling under overseas control as the headquarters moves overseas the research and development moves overseas and so forth. 
We have seen what happens in other sectors of our economy when they fall under foreign ownership. You have to look only at Contact Energy—another energy company that has now fallen under Australian ownership. It does not see New Zealand as a major platform. It is not an export base to the rest of the world. The banking sector has exactly the same approach and telecommunications is the same. When we lose control of major parts of our economy into overseas ownership they no longer become platforms for advancing New Zealand interests to the world; they simply become profit centres for a multinational corporation. 
The danger with the Mixed Ownership Model Bill is that we will see the same thing happening to the electricity sector that has happened to the other infrastructure sectors in our country. Then the electricity sector simply becomes a drain on the New Zealand economy in the same way that the banking sector is simply a drain on the New Zealand economy. Instead of being a platform from which we export to the world—[ 
Bell rung 
] So it is for that reason that we think that this is a missed opportunity. You could call it the “Missed Opportunity Bill”. 
For New Zealand we have only so many missed opportunities that we can actually have. There is not an unlimited ability for us to make a mess of our economy and for successive Governments to make a mess of the economy. So if the Government takes us down this path we miss the opportunity to actually take advantage of the global green economic revolution which is happening right in front of us at the moment for anyone who happens to read  
The Economist 
 or any other mainstream economic paper. You will see that this is a “Missed Opportunity Bill” rather than a Mixed Ownership Model Bill because it is a missed opportunity for New Zealand to take its place in the world and develop another global-scale company like Fonterra which is what we need to do. 
The Government’s approach is: “Well we just turn them into mixed-ownership model companies regular kinds of companies and they just do whatever companies do. They just make profits or they do not and they provide us with electricity or they do not but it is none of the Government’s business.” That is the Government’s approach. It is just another market. But if you take that approach then you systematically and slowly start to lose control of your economy. 
That is the history of New Zealand. As we have headed down this privatisation path and this Mixed Ownership Model Bill takes us further down that path sector by sector we have lost control of key sectors of the New Zealand economy whether it is telecommunications whether it is banking and now it is going to be electricity and energy. As we do that we start to narrow our economic opportunities and the kinds of things we can do. 
If you think about the comparison with Fonterra Fonterra did not just come into being because someone decided we would just let the free market rip. Fonterra is the antithesis of the free market. When you think about it it is a producer cooperative. It came into being through an Act of Parliament. It essentially operates as a monopoly in New Zealand. It has used that platform to export to the rest of the world yet in every other sector including now the electricity sector as in this Mixed Ownership Model Bill we are taking an attitude that says “Oh just let the market sort it out. We will be fine.” 
Actually we will not be fine. If we keep going down these paths and losing control of key sectors of our economy we will continue to go backwards as indicated by the most recent current account deficit figures. Under this Government the current account deficit is getting worse and is projected to get worse. Each time we sell off some of our key assets that means some of those profits go overseas. We add to our current account deficit. We add to the economic impoverishment of our country if we do not take our strategic opportunities. Other small countries that operate in the global market have taken a much more strategic approach to what economic opportunities are available to them. They have taken an approach that is more like a Fonterra and less like a Mixed Ownership Model Bill. 
For that reason in order to provide some kinds of opportunities we have moved an amendment to this part of the bill which is about having a referendum before the bill is given the Royal assent. Obviously that is about the fact that we are very clearly aware that the people of New Zealand are resolutely opposed to the privatisation programme of this Government because they have a vision of their country that is much more long term they have a vision of their country that is about investing in their future and they have a very different vision about the future of New Zealand than this current Government. That is why we have moved a Supplementary Order Paper to this part in order to give people the ability to have a referendum so that they can decide whether this bill should progress—whether the privatisation programme that National is so keen on should progress. 
National has talked a lot about its mandate but of course when people go to the vote in an election they have might have voted for John Key but that does not mean that they supported privatisation. That is why we think there should be an amendment moved to this section— 
Hon Tony Ryall 
: Part 2 is finished. 
Dr RUSSEL NORMAN 
: —that would give people the ability to have a referendum before this bill receives the Royal assent. That is the amendment we are moving. We are moving an amendment to this part to the commencement and title. The Supplementary Order Paper that we have in front of us Supplementary Order Paper 70 is actually an amendment to the commencement and title clauses of this bill and that is why I am talking about the right of people to have a referendum to have a say about whether these assets are privatised.