Goldsmith Paul: State-Owned Enterprises Amendment Bill Public Finance (Mixed Ownership Model) Amendment Bill — Third Readings 
Text is incorporated into the Bound Volume 
Goldsmith Paul: State-Owned Enterprises Amendment Bill Public Finance (Mixed Ownership Model) Amendment Bill — Third Readings 
[Sitting date: 26 June 2012. Volume:681;Page:3297. Text is incorporated into the Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 It is my pleasure to speak on the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill. Given the heat from the other side it is hard to think that this is the Labour Party that was quite happy to have the mixed-ownership model for Air New Zealand for all that time. It is hard to think this is the same Labour Party that Mr Cunliffe was a member of when he said only in 2010 to the Institute of Policy Studies: “in a capital constrained environment [Labour] will better leverage the Crown’s balance sheet in new and innovative ways.” He also said that we need to unleash State-owned enterprises to create and grow them with private partners and private shareholders. 
That was Mr Cunliffe only 2 years ago. But now Labour members are manufacturing a great deal of heat over their opposition and it makes me wonder why they are doing it. Maybe they feel that the Greens are breathing down their necks and they are panicking and now they are trying to get very excited about this. I suppose the question is whether they will buy it back when they get the opportunity. I am not sure that they will. 
So why are we doing this? We are doing this to reduce our need for borrowing in a dangerous global financial environment. We need to build a more competitive and productive economy based on savings and investment and away from debt borrowed from foreign lenders. It is about controlling our destiny by keeping the total amount of Government debt under control. We watch the travails in some European countries and too often we assume it could never happen to us. Well why not? New Zealand is heavily exposed in private debt and that is why it is critical that our Government debt remains as low as possible. So our mixed-ownership model policy is part of a wider economic programme to reduce debt increase savings and get our country through one of the worst economic crises in 100 years. 
There is so much that we want to invest in in this country and this ownership structure will free up $5 billion to $7 billion to invest in the Future Investment Fund in new high-priority infrastructure projects. That is why it makes good sense. Another benefit from this legislation as we have heard is that it will help deepen New Zealand’s capital market extending ours into an ownership society. It is a policy that will boost the New Zealand stock market and broaden the pool of investment for New Zealanders. That is important because that is how our companies will get the opportunity for more capital to grow further and to add more jobs if we have a more effective capital market. 
Thirdly the most important aspect of this legislation for me is that by introducing a share of private sector investment this legislation will strengthen the companies involved by bringing to those companies private sector scrutiny and governance. The tenor of the debate from members on the other side of the House has been anti-business and anti - private enterprise. Profit is a dirty word and private enterprise is all about putting prices up and ripping people off they say. “They do not care about customers.” they say. It just goes to show that the Labour and the Green members on the other side have no idea about the reality of businesses. 
If a company is always more expensive than the opposition when providing the same thing it will go out of business. That is how market capitalism works. And a company will be successful for its shareholders—half the Crown and half the private sector—only if it services its customers well and to do that it needs to be as efficient as possible and to look after its own staff. The only time that that basic law of capitalism does not apply is when the State controls the provision of the goods and services and when there is no healthy competition. 
I commented in the Committee stage by quoting David Lange when he referred to State trading enterprises that his Government had inherited in the 1980s. He said that they were “ludicrously overstaffed horribly overcapitalised just embarrassments”. So the State-owned enterprises that we have today are infinitely— 
Hon Trevor Mallard 
: And people lost their jobs. 
PAUL GOLDSMITH 
: And they went on to do more effective things; they actually spent their lives doing something productive. That is what it was about. So we have a situation where we have an electricity market today that is working very effectively. In 14 out of the 21 regions in New Zealand the Powerswitch website indicates that it is the privately owned company that is the cheapest. In the past year 422256 customers have changed retailer. So that indicates to me that we have a very effective market working and that is the key to it. 
Finally I wanted to say that if ever there was a policy that was clearly spelt out by a party coming into an election with a clear mandate this is such a policy. We did not hide our light under a bushel. We came out in January 2011 and said: “This is our policy.” Labour’s entire campaign was focused on saying that this was going to happen. The Greens were opposed to it vigorously and what happened? We had a very strong clear mandate the strongest polling result for any party in MMP’s history. I am not surprised that most people are now turning their attention to buying it. 
What do they expect us to do—to go back on our word? We made a clear indication prior to the election. We are going to stick with what we promised we would do which is go through with this mixed-ownership model. We have also heard a lot of nonsense about the process. I was involved with the select committee process and I heard every single one of the submissions. It was a fair and detailed and extensive process. 
Finally we are looking forward to hearing Winston Peters speaking next. I will be very interested to hear him tell the House about back in 1988—he has Shane Jones his next deputy behind him—and the 1988 prospectus for Auckland International Airport. It was signed off by the then Deputy Prime Minister and Treasurer Mr Peters when he said: “We are very pleased with the most successful public sale. It’s popular capitalism in action.” So I will be very interested to hear from him as to what has changed in the last 12 years when he was quite happy to sell that. Now he is so strongly opposed to any of these things. 
So we are looking forward to this. I believe that this is excellent policy. I am very glad that we finally made the third reading of these bills and I commend them to the House. Thank you.