Lotu-Iiga Peseta Sam: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Lotu-Iiga Peseta Sam: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Volume:673;Page:19323] 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is a privilege to speak on the financial review of Mighty River Power. I start by saying what a great company—what a great company—Mighty River Power is in the types of businesses that it runs throughout this country and also around the world. Part of its headquarters is in my electorate of Maungakiekie and people of my electorate are certainly thankful for the employment opportunities it provides locally. It runs a very efficient and effective enterprise and it is certainly welcome in my electorate if not in Mr Parker’s electorate. 
Todd McClay 
: He hasn’t got an electorate. 
PESETA SAM LOTU-IIGA 
: Of course; that is right. He lost his electorate some years ago. 
This debate has turned to the mixed-ownership model of our energy companies. It must be said that this mixed-ownership model has worked in the past. The honourable Minister for State Owned Enterprises referred to the current state of Air New Zealand but also Telstra and numerous companies around the world have used the mixed-ownership model effectively. They have used it firstly to raise capital and secondly to provide investment opportunities for investors—both private and family investors and also for superannuation funds. The mixed-ownership model will provide investment opportunities for our superannuation funds our KiwiSaver investment funds and our capital markets which are in dire need of expansion. 
The Minister also referred to the fact that the partial sale of these companies would result in assets being purchased—other infrastructure assets. Currently as we all know from Budget 2011 there is a $16.7 billion deficit for this financial year. One of the ways of addressing this deficit is through our infrastructure and investment strategy which requires funding. We do not want to go to Japanese financial institutions or Chinese lenders for that capital. Capital is available in this country through the mixed-ownership model and it will provide the roads schools and broadband investment we spoke about earlier this afternoon. But also it is about providing for those high-priority infrastructure projects that this country needs in order to lift our economic growth and to lift productivity for our businesses across this country. 
Private investment will bring with it financial discipline. It brings with it the discipline of being in a financial market where analysts and equity specialists can break down a company’s assets and liabilities can break down the balance sheet and its profitability and can break down its long-term sustainability as an enterprise. That is certainly one of the advantages of this ownership model. 
Mr Parker in the previous speech referred to the fact that such companies maximise prices and minimise costs and that the two are actually interchangeable. I beg to differ because minimising costs and running corporations or businesses effectively is a far cry from maximising prices. They are two distinct things. Mr Parker also failed to mention that the other way of increasing an organisation’s capability is to increase volume. That is exactly what Mighty River Power is doing—that is exactly what it is doing. It is investing overseas. We heard from Doug Heffernan in his testimony that Mighty River Power committed US$250 million for investment in geothermal developments overseas and it is in partnership with overseas organisations such as GeoGlobal Energy. These organisations are stable they are market leaders and in collaboration with Mighty River Power they are leading the world in geothermal technology. 
Report noted.