Dalziel Lianne: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Dalziel Lianne: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 29 June 2010. Volume:664;Page:12247. Text is incorporated into the Bound Volume.] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 It is a pleasure to contribute to this debate with particular focus in this aspect on Solid Energy. It was quite interesting because in preparing for this debate this afternoon I decided to google three words: solid energy and sale. A report popped up as the No. 1 item. I will quote from it because it is really relevant to the debate that we are about to have on this State-owned enterprise: “There would be few Ministers in the John Key Cabinet more enthusiastic about the prospects for state-owned coal miner Solid Energy and its partial sale than Resources Minister Gerry Brownlee. So the height from which he jumped on [Solid Energy’s] chairman John Palmer for suggesting such a thing shows just how nervous the Govt has become about discussing the ‘P’ word at all. With the furore created by Finance Minister Bill English’s thinking aloud about part-sale of KiwiBank only just put to bed Palmer’s decision to air his personal views about the politics of asset sales was ‘unhelpful’ as they put it in the Beehive.” Well it may have been unhelpful but it was pretty accurate and it was fairly truthful I would say as a rough assessment of the situation. The truth has been very unhelpful to Government members on this issue. 
The article goes on to state that Solid Energy despite all of the furore will be the first cab off the rank should the Government get a second term. I think that it is important to reflect on that because we have been told time and time again that the Government has a commitment in place but that the commitment is for this term only. It is a one-term commitment—that is the exact phrase used by the Prime Minister just recently. Members on this side of the Chamber are perfectly well aware that John Key is regretting that one-term commitment because it has tied his hands in terms of what Government members would really like to do at this stage in the cycle. He is certainly absolutely determined to go to the polls next election without that particular constraint and we all know what that means. The Government of the day if it was not constrained by the commitment that had been made in the lead-up to the last election would be selling assets. 
I also have a theory as to why National made that commitment when it probably did not need to in order to be elected. I think that it had suffered from the campaign that it had run in 2005. It realised that under MMP there was no guarantee that it would win an election when it was caught out in such an obvious set of conduct that when brought to the public eye actually led to a change in the result of the election. 
In respect of Solid Energy I think that the Minister of Energy and Resources should reply now to the point that we have the very clear impression from the report we received from that State-owned enterprise that the Government is doing all the preparatory work for its sale anyway. Government members are working extremely hard to make sure that this company is readying itself for at least a partial sale but I suspect that that will be for a complete privatisation. This agenda has been part of National’s less-than-public face and it definitely wants to go to the next election without having that constraint on it. 
If we look at what John Palmer said when he gave his speech—and I will come back later to whom he checked that speech with before he gave it—we see that Solid Energy is a classic case. The fact is that Solid Energy was described by John Palmer as being a lower political risk than other State-owned businesses like Kiwibank. His expression was that that debate was vastly different to the emotional discussion surrounding State-owned Kiwibank. Well we have just heard from the previous speaker Stuart Nash who spoke on Kiwibank all the reasons that the New Zealand taxpayer the New Zealand people does not want to see that bank sold. It has taken on an important role in our economy in light of the strategic positions of the other four banks which repatriate significant profits from this country on an ongoing basis. I think that the Government is relying on the fact that people do not feel so connected to their mining company. Solid Energy does not quite engender that same sense of warm fuzzies that Kiwibank certainly does—the passionate loyalty as my colleague said. 
But when we think of the Government’s reaction to John Palmer’s speech we know that it has been quite extraordinary. Gerry Brownlee said that he had overstepped the mark but I think that the only reason he overstepped the mark is that he said it in public. That was the only thing that overstepped the mark. He told Bill English that he would give that speech before he gave it to the NZX AGM. So to get slapped down by the Minister of Energy and Resources is somewhat ironic. I am not allowed to use a certain other word that begins with “h” but irony I can certainly use. There is an irony in the fact that the Minister of Finance knew about the speech before John Palmer gave it. Mr Palmer delivered that speech knowing full well its repercussions. I believe that the Government wanted him to float the privatisation of Solid Energy as an idea and that Gerry Brownlee has been shedding crocodile tears in order to cover up for the fact that he is absolutely onside with what the chairman of Solid Energy said. 
It seems that the reason Bill English floated the Government’s real position on asset sales the day after the Budget was also to get feedback. When there was a huge public backlash National members all suddenly ducked for cover. But sale is not off the agenda; talking about sales is off the agenda. Fortunately in this Parliament we get to expose the Government’s somewhat ironic position on that matter. 
I will also comment briefly on the example of Air New Zealand used by John Palmer as the best way to structure ownership so that we get the best of both worlds. But he failed to comment on how Air New Zealand got to the position that it is in today. There was a State sale Air New Zealand was asset stripped and there was a Government bail-out. That is how Air New Zealand got to the point it is in. So it seems to me to be somewhat ironic that the Government is using Air New Zealand as a classic example of how to privatise although obviously not to New Zealand’s benefit. 
Don Brash was very open about the desire to privatise Solid Energy back in 2005. It was absolutely on the table then and my contention is that it is still on the table; it has just been covered up by a bit of cloth which the Government intends to pull away straight after the next general election. Solid Energy provides an enormous return on investment to the Crown as the select committee report makes clear. That is why it is crazy to think about selling it. But more important it owns very important strategic assets that we do not want in foreign hands. It is absolutely vital that we hold on to Crown ownership. We have seen from the strategy supported by the Government that it is using a soft sell approach which states that mum and dad investors need something rock solid to invest in because they do not trust the share market and they do not trust finance companies any more. But I ask how long it will remain in mum and dad’s hands when offers come flooding in from overseas because that has not been a way of protecting ownership within New Zealand at all. I think that the Government has to think of a different way especially in regard to these core assets. 
The Prime Minister has started using an expression to float ideas that might be unpopular with the public. He says: “We will kick the tyres.” Well I see that as a warning sign. Every time he uses that expression I draw breath. He says: “We will kick the tyres on MMP. We will kick the tyres on the policy of State asset sales.” As he said on 24 May of this year the Government’s State asset sales policy was a one-term commitment. I think that is the real issue. “Kicking the tyres” is an expression that the Prime Minister has come up with in order to enable the Government to float ideas that it knows the public will not like. 
Report noted.