Cosgrove Clayton: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3103. Text is incorporated into the Bound Volume.] 
Hon CLAYTON COSGROVE (Labour) 
: 
 Given the speed with which we enter the debate on Part 2—I hope the precedent set in Part 1 is not going to be followed—I want to come directly to new section 45S “10% limit on holdings by persons other than the Crown” in clause 16. 
It was interesting during the Finance and Expenditure Committee hearings because we heard from a number of professional technical submitters who have knowledge in this area. To quote one of them you could drive a bus through the 10 percent ownership cap. The thing I find interesting—and the grinning Minister in the chair the Minister for State Owned Enterprises might be able to shed some light on this—is that nowhere in this piece of legislation is there a penalty for exceeding the 10 percent cap. It does talk about a remedy in new section 45T(1)(b) in that the contravention essentially has to be remedied within 60 days but there is no penalty monetary or otherwise for exceeding that. 
One of the submitters—and I am trying to recall her name—from a thinktank in New Zealand said that in order to police this 10 percent cap you would have to have some sort of securities police force I think was the term that was used actively policing and scrutinising every transaction. In fact the committee put to the officials an interesting scenario of say overseas owners who were mum dad and a son and asked whether there would be some related-party transaction if the son were to buy 10 percent and mum and dad were to buy 10 percent as well. The answer was essentially if the son was under the legal age of an adult then he was under the influence of his parents and there would be. Once he hit the legal age of an adult he could buy 10 percent and there would not be a problem. So there are a number of difficulties and problems with the 10 percent cap such that it is. 
 The question is in respect of nominee trusts also. Well the trustees corporations and others that can exceed the 10 percent cap have an exemption but there were a number of commercial vehicles and scenarios that were put to us by the submitters whereby especially if they were foreign-owned and outside the New Zealand jurisdiction you could get round this. So I would like the Minister to give us some sort of assurance. He has not in the past. He has not addressed the issue. Maybe like other issues in respect of power prices he has not bothered to ask the question because he does not want the answer but I would like some assurances around those. We have an amendment in my name Supplementary Order Paper 49 to limit that cap to 1 percent and we do that deliberately. We do that deliberately because this so-called cap has actually got to work. 
I also want to turn to the provision that relates to the Treaty of Waitangi new section 45Q. Members will recall of course that much was trumpeted by the Maori Party members and others— 
Hon Parekura Horomia 
: That’s right. They’re a disgrace. 
Hon CLAYTON COSGROVE 
: They are a disgrace my colleague says. They are because they are voting for this Mixed Ownership Model Bill. The Maori Party went around the marae saying that “We will ensure that Maori interests are secured in this bill.” OK fair go that is all right. We thought those members were acting in some sort of responsible way until Tuwharetoa in the form of the Hon Georgina te Heuheu a former National Party Cabinet Minister and a respected lawyer turned up to the committee. Tuwharetoa were armed to the teeth with legal advice and essentially upon questioning told the committee that the so-called replication clause in this bill which has been taken from the State-Owned Enterprises Act with a tweak of course—new section 45Q—did not preserve their Treaty customary legal or property rights. They also told us that very little consultation at that time had occurred with them. So I say to the Maori Party members who went around the marae and trumpeted that they were the saviour of Maori interests that they had forced the Government put its feet to the fire to put in a replication clause to look after those interests well Georgina te Heuheu and Tuwharetoa do not agree with that. They do not agree with that. I argue that it is smoke and mirrors. 
It was interesting because Tuwharetoa made it very very clear to the committee that they would seek legal remedies in any form—primarily I believe through the courts—to ensure that their rights were preserved. It is interesting in respect of the Minister’s officials because we asked for advice on this and like many times in that select committee process we had an absurd situation. We posed questions to the officials. And I do not blame the officials; they were under instruction both from the Minister and we know from the chair who instructed them in the select committee to bring their report on the submissions on a particular date ahead of when those submissions had been made. At the direction of the chair on his own admission—presumably under instruction from the grinning Minister in the chair—a report was prepared by Treasury on the submissions prior to those submissions being concluded. 
One of the issues that we pursued with the officials was whether they were confident that Tuwharetoa’s concerns had been addressed. We found out that yes there was consultation with Maoridom. Yes there was. But when we asked these questions the answers we got back were based on a Cabinet paper that postdated those consultations on the marae but pre-dated Tuwharetoa’s submission to the committee. I assume that the officials being the diligent and professional souls they are would have put the factual situation to the Minister and the Minister would have said scrub that. At that point we wanted to pursue these issues directly with the officials. At that point of course we now know and the record shows it and the minutes of the select committee which the Government members tried to block up until last week show it—but we got them out anyway and legally and appropriately; they did not want the public to know that at every step they had blocked questioning—the chairman of the committee moved that the Opposition parties should prepare minority reports. So on the same day that the Government asked the officials about these substantive issues like Tuwharetoa’s concerns we were to prepare minority reports and have them submitted to the committee—prior to the officials coming back with those answers. 
Hon Lianne Dalziel 
: That’s outrageous. 
Hon CLAYTON COSGROVE 
: That is outrageous. It is outrageous not because it is about politicians but because the public actually expects us to do a job. That member over there Mr McClay I am told—I was not in the Chamber—said that the Opposition members did not ask questions. Well I tell you we asked questions all right. All of the political parties asked questions. We were permitted to ask only one committee question of most of the submitters and regardless of the fact this bill was reported back to the House 6 weeks in advance. There was no need to rush it. There was no need to write a report before Tuwharetoa’s concerns had been addressed. We raised these issues about the 10 percent cap and Tuwharetoa and these substantial questions and the committee presumably under the stewardship and instruction of the grinning Minister in the chair just said: “We don’t want to know. We’ve already written the report. We don’t want to listen to the submitters. Our way or the highway.” 
As a result of this we have vulnerabilities in this bill and Labour members have put up very serious amendments in respect of the 10 percent cap. I do not believe that Tuwharetoa’s concerns have been even addressed by this Government. We do not know what has been said behind the scenes and of course because we have had no report back from Tuwharetoa and we have not had the officials under instruction seriously consider these issues we do not whether those rights are going to be preserved or not. We do not know. I say this to the Minister: it will be very interesting after he has sort of slipped this one through as fast as he possibly can to see whether it comes a gutser or is stalled because of court action by Tuwharetoa or others. If I were an investor about to participate in a float I would be putting up a big sort of caution sign if I knew that that float could be confronted by court action by the tribe or anybody else. Why would you invest? Then of course that affects the market price and of course the taxpayer gets hit both ways. 
But oh no bloody-minded as it is National will push it through with a lack of scrutiny. In fact you know even the most cynical politician from time to time like this crowd might put on an act and go through the motions. Those members were not even sophisticated enough to do that. It was blatant. It was in your face. It was: “We don’t care. We’ve written it. We’ve done the report. We don’t even take seriously the issues put forward.”—and they were put forward by one of their own former Cabinet Ministers and an eminent lawyer the Hon Georgina te Heuheu. That tribe came to our committee armed to the teeth with professional legal advice. So the Minister should place on record as he—