Cosgrove Clayton: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 29 June 2010. Volume:664;Page:12231. Text is incorporated into the Bound Volume.] 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 At the  
Press 
 South Island forum last month the Prime Minister made a very interesting comment that if National were to go down the privatisation path the most likely candidates for part sale would be State-owned energy companies. It is very interesting. The alibi that the National Government has used when raising this issue—firstly when Bill English spilt his guts and let the cat out of the bag over State-owned enterprises in respect of Kiwibank the day after the Budget—is that for a number of assets there will need to be further capitalisation. National says in respect of further capitalisations that there is not enough money or enough cookies in the jar and it is reluctant to use taxpayers’ money so these assets should go on the block. 
It is interesting to look at Genesis Power. In February 2010 Genesis Power announced a $64.6 million half-year profit. Given that demand for electricity is already on the rise and is expected to continue to be even as we move out of the recession it is likely on projections that Genesis Power will continue to expect large profits in the coming year and in the future. It dampens down if not negates the National Government’s alibi that it wants to get rid of either in part or in whole those particular assets especially as the Prime Minister said it would be energy assets because they will require further capital. In the case of this particular asset and others that I am sure my colleagues will deal with later it does not require—certainly not at the mid-point—further capitalisation. 
It is very very telling that in the  
Press 
 forum the Prime Minister made specific reference to the partial privatisation of energy companies. He essentially said that they will be the ones on the block the first cabs off the rank if National was to win next year’s election. 
Let us look at all the State-owned enterprises and at the ethos and ideas around selling energy companies and entities like Genesis Power. The Minister of Finance has said that mum and dad Kiwis will be able to buy a slice of assets like Genesis Power and that this will be great as it will put a great injection into our capital markets. The only problem with that argument—and mum and dad Kiwis all around are not silly—is that they already own Genesis Power Meridian Energy and others such as Kiwibank Solid Energy and the like. Kiwis already own those and they have already paid for them. In some cases Kiwis have paid for them twice as the previous Government had to buy back assets that were on their knees thanks to the National Government of the 1990s selling them. Mum and dad Kiwis already own those assets. Mr English Mr Power and Mr Brownlee are challenging mum and dad New Zealanders to put up for a second time or shut up—put up money they have already spent in purchasing these assets through their taxes and somehow feel good that they can buy them back again. 
Then there is the issue of who would purchase a percentage of a State-owned asset like Genesis Power. In a recession where 70-odd percent—through the electorates it ranges from about 67 percent to 76 percent—of New Zealanders earn $40000 or less per year. Once they get their little measly tax cut and they take into account that it is negated by a 2.5 percent rise in GST and 5.9 percent inflation they are $30 to $50 a week worse off. Somebody who earns $1 million a year—like some of the mates of members on the other side of the Chamber—will receive $1000 a week as a result of the tax cuts. I think we can work out that Kiwi mums and dads in most of the communities will not be able to afford to buy a slice of an energy asset like Genesis Power. 
It will not be the 70-odd percent of New Zealanders who earn $40000 or less per year who are $30 to $50 a week worse off. They will not have the discretionary spending power to amble down to the stock exchange have a chat to their broker and spend $1000 to grab a slice of Genesis Power as Mr English—generous fellow that he is—said to. It will not be those people because they will not have the discretionary spending power thanks to that crew over there; it will be many of Mr Brownlee’s mates including one of his best ones Mr Henderson of Christchurch although he is in a bit of shtook at the moment. It will be Mr Brownlee’s mates who are earning $1000000 a year and who thanks to Mr Brownlee will get $1000 a week back in tax cuts. That sort of person will be able to mosey on down in the Daimler to the stockbroker and say that they will have a chunk of that asset thank you very much. I suspect it will more likely be some of the people that Mr Brownlee and others deal with on a daily basis. Those large financial overseas institutions will be as they were in the 1990s licking their lips to see whether they can grab hold of a slice of a Crown entity or a State-owned enterprise like Genesis Power Kiwibank or Solid Energy. 
Hon Steve Chadwick 
: Like a fire sale. 
Hon CLAYTON COSGROVE 
: As my colleague says it will be like a fire sale. I think Mr Brownlee served for a time in the Bolger Government and we remember what Mr Bolger did in respect of KiwiRail. Mr Brownlee was part of a fire-sale Government in the 1990s— 
Hon Trevor Mallard 
: I don’t think he was in that Government. 
Hon CLAYTON COSGROVE 
: Oh he was not there; he was a latecomer. He is a member of a party that has a legacy of fire sales in respect of the 9 years it was in Government. Those large foreign financial institutions will be involved. 
Then we have the point that National is extremely fond of saying that it listens to the people is engaged with the people and is connected with the people. Mr Brownlee does not like it and all his fingers and toes are used to recalculate it when he sees it on TV at night but we have had an opinion poll in which 80 percent of New Zealanders said they did not want their remaining assets such as Crown entities like Genesis Power sold—full stop end of story game over. 
I make a prediction that two things will happen. The Government will quieten down about this policy. Mr English will have been gaffer-taped at this point and told to not talk about sales. It was interesting to note what happened in a select committee hearing with Mr Power the Minister for State Owned Enterprises. I asked him whether he had ever talked to his Cabinet colleagues such as Mr Brownlee or Mr English about Mr English’s articulation of his position on sales of various State-owned enterprises. He said no. I asked him whether he had ever dreamt about it passed Mr English a note about it at Cabinet over a cup of tea done semaphore between the offices made a phone call written a letter or ever discussed it in Cabinet. He said no. He had never even dreamt about it never even seen a psychic to predict what Mr English might want to do after an election. That lacks credibility to a high degree; there is no credibility in the assertion that the Minister for State Owned Enterprises has not had a wee chat with the Minister of Finance after Mr English spilt his guts the day after the Budget talking about a policy that the Government did not really want to talk about. 
Assets like Genesis Power are being readied for sale now under the guise of economic efficiency. If the Government wants to sell them the day after the next election which it will if it wins it cannot flick a switch and in 24 hours prepare a State-owned asset for sale. It will be very interesting to watch over the coming months whether the Government goes silent on that issue. The undeniable truth is that 80 percent of New Zealanders have wised up. They know that they already own Genesis Power. They know that it was a con when Mr English said they could have a wee slice of it back. They know who will buy it if it is put on the block: not the Kiwi mums and dads but the big end of town the foreign end of town—those foreign institutions. Eighty percent of New Zealanders have when asked by scientific pollsters turned round and rejected the policy. The Government would be very very wise to listen to the 80 percent of New Zealanders who have said “no way”. The public have learnt; they have seen it time and again. They have seen what happens when State-owned assets are put on the block and they say no. 
It will be very interesting if Mr Brownlee in this debate or in the debates on the other Crown entities responsible for energy that follow gets on his feet and tells us after all the bluff and bluster what he will do to help New Zealanders this winter in respect of their power prices and in respect of their ability to heat their homes in a basic way. We know that Mr Brownlee the great believer in insulation—anatomical and otherwise—has gone to great lengths to stomp around the country and say that he will sort it out. He says that he will ensure that Kiwis are looked after and that he will demand that power prices are not elevated to a point where they become unaffordable.