Cosgrove Clayton: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
Cosgrove Clayton: State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
[Volume:640;Page:10129] 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 I move  
That the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill be now read a third time 
. The purpose of this bill is twofold: firstly to permit a merger of AgriQuality and Asure provided that shareholding Ministers are satisfied that it makes commercial and strategic sense for New Zealand; and secondly to allow shareholding Ministers to direct the board of AgriQuality not to provide examination services as defined in the bill. 
First I would like to get a few facts straight following some interesting and slightly misguided comments made in the Committee last night. They related to when the bill was before the Commerce Committee and the undertaking by Trevor Mallard the Minister for State Owned Enterprises to provide Gordon Copeland with a draft Supplementary Order Paper for his consideration. After the necessary advice was received from officials on Mr Copeland’s suggested wording the draft Supplementary Order Paper was provided to him for consideration. Mr Copeland was promised a copy of the draft Supplementary Order Paper for his consideration and this was indeed done. It is unfortunate that Mr Copeland considered that the provisions in the Supplementary Order Paper did not meet his expectations. However the provisions clearly met the expectations of Mr Copeland’s former party United Future which voted for the bill last night. 
I am pleased to report that good progress has been made in developing the business case for the merger. A working-group established to assess the potential merger of AgriQuality and Asure recently concluded that there is a robust strategic rationale for the merger. Significant quantifiable gains are expected from a merger derived mainly from scale and scope economies and enhanced biosecurity capability. Although the merger is still subject to Cabinet approval and the passage of the bill into law a strong prima facie case has been established for the merger to proceed. 
The second objective permits shareholding Ministers to direct AgriQuality not to provide examination services and a number of concerns were raised in the select committee. The most significant concern raised in submissions was that by reducing the prospect of competition in the provision of export red meat inspection services the bill could result in higher prices and lower service levels than would otherwise be the case. 
The Supplementary Order Paper adopted last night addresses these concerns. The first addition to the bill Subpart 3 of Part 2 requires the Commerce Commission to investigate and report on the prices charged for examination services within 3 years of the commencement of the Act. The second addition Subpart 4 of Part 2 provides for the Crown to continue its negotiation with international trading partners to permit examination services to be undertaken by agencies other than the Crown. Further in future if more than two-thirds by value of New Zealand’s red meat exports are made to international trading partners that accept international guidelines on meat hygiene as set out in the Codex code of hygienic practice for meat then the Government will permit private provision of examination services. 
In conclusion I am confident that these common-sense amendments have gone a long way to addressing any concerns raised about the bill. This bill is critical for maintaining and enhancing shareholder value in AgriQuality and Asure companies owned by the Crown on behalf of all New Zealanders. It has the added benefit of improving New Zealand’s biosecurity response capability at a time when New Zealand is becoming increasingly at risk from incursions. I commend the bill to the House.