Ryall Tony: Mixed Ownership Model Bill — First Reading 
Ryall Tony: Mixed Ownership Model Bill — First Reading 
[Volume:678;Page:990] 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 I move  
That the Mixed Ownership Model Bill be now read a first time. 
 I intend that the Finance and Expenditure Committee consider the bill and I intend to move that the committee report to the House by 16 July 2012.  
This legislation and debate is about debt. It is not about the Treaty of Waitangi it is not about foreign ownership and it is not about other considerations; it is about controlling our nation’s debt. This bill enables the Government to remove four energy companies from the State-owned enterprises legislation and insert them into the Public Finance Act. Let us be clear on this: the new legislation we introduce today guarantees majority Government control of these four energy companies. At least 51 percent remains in the Government’s hand. It fixes into the law of this nation that no person and no entity including foreign investors can own more than 10 percent of the voting rights in any one of these companies. These companies will remain New Zealand - controlled companies contributing to the New Zealand economy and that is what this legislation is about.  
The Mixed Ownership Model Bill is part of this Government’s wider economic programme which is about controlling debt increasing savings and getting our country through the worst financial crisis the world has seen in 100 years. No nation can afford to let its debt get out of control. But many countries are letting their debt get out of control and in the process very great chunks of their sovereignty are being taken away. These countries are losing control of their destinies. You see it every night on the 6 o’clock news; huge debt is at the core of why Britain Spain Italy and Greece are being forced to impose austerity measures and why the United States is locked in a debate about how to cut its enormous debt. 
Hon John Banks 
: I raise a point of order Mr Speaker. I sit about 9 feet to the right of the Minister. [ 
Interruption 
]  
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! Members will be seated. Can I just remind members that when there is a point of order on the floor there is absolute silence. 
Hon John Banks 
: I have sat here at question time day after day and all I hear is barracking and barking from all sides of the House. I am one member of Parliament who is very interested in hearing what is being said and transacted across the House. The Standing Orders and Speakers’ rulings have plenty to say about rare and reasonable interjections. The barking and the barracking across this Parliament from side to side and corner to corner does this House no good. People sitting at home watching on television and witnessing it in the galleries think it is a disgrace. I put it to you Mr Assistant Speaker: why do we not give the Minister an opportunity to say what he has to say and then I will listen very intently to what the members of the Opposition have got to say. We might learn something. How about that for a proposition? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. The member has made his point. Interjections are to be rare and reasonable and I would refer members to Speaker’s ruling 62/4. 
Hon TONY RYALL 
: Huge debt is at the core of so many of the problems of countries in Europe and around the rest of the world. Most of these countries have absolutely no choice—no choice whatsoever—but to put in place policies that reduce debt and that will greatly reduce important front-line services while tens of thousands of people are protesting in the streets due to these measures. Britain is looking to reduce its Public Service by over 700000 people in the next few years. Greece Italy Portugal and Spain are cutting their public health spending. Public servants from throughout Europe and other parts of the world are having their wages and salaries cut. Other countries are being forced by their foreign bankers to sell their public assets in order to get their debt under control. We do not want that for New Zealand. That party opposite might want to put this country on a road to Athens but this party in Government does not.  
New Zealand is different and we are fortunate. Thanks to 3 strong years of leadership under this Government and our financial management New Zealand is not in that position. However we have a duty to future generations to control our debt. Our debt is projected to increase to almost 30 percent of GDP or $72 billion in the next few years but we have planned and prepared for that. In a few more years we will continue to borrow as we get our deficit under control as we protect and grow our public services. But this Government has confidence that our policies will carry us through and out of the recession as we get our books back into surplus and that includes controlling our debt. That is what this bill is part of.  
The partial public share offers we are providing for in this legislation together with the sell-down of parts of Air New Zealand are expected to raise between $5 billion and $7 billion. We fully expect that 85 to 90 percent of those companies will be New Zealand - owned when they float. We can do that because the Government controls the allocation policy for each of these share offerings. We will decide what categories of shareholders get what and we will have New Zealanders at the front of the queue. Everyday people will get the opportunity to have a direct stake in these companies. Everyday people will have an opportunity to have a direct stake in these companies and that is the heart of the Opposition’s attack. It does not believe that everyday New Zealanders can be trusted to own shares.  
Under this Government the $5 million to $7 million worth of proceeds are going to be put in the Future Investment Fund which is going to be available for important public infrastructure like schools and hospitals instead of borrowing that money from overseas banks—the same banks that are putting the pressure on countries like Ireland Italy and Portugal to pay back their loans and cut their services. As the Minister of Finance has said New Zealanders would rather pay dividends to New Zealanders than interest to overseas lenders.  
The four energy companies will continue to be New Zealand - controlled and New Zealand - run just like Air New Zealand. We will offer those shares predominantly to New Zealanders as an opportunity to buy into these companies in order to raise funds to pay for much-needed assets such as schools and hospitals. 
The Government has made it clear we are not walking away from our Treaty obligations. We held 10 consultation hui throughout the country and we listened with an open mind. As a result of the consultation section 9 of the State-Owned Enterprises Act has now been transmitted into the legislation with the clarification that private shareholders are not affected. Maori and all other New Zealanders will have their interest protected through the Resource Management Act which these companies must comply with. They are still there.  
There are some who argue that the Government is better off retaining full ownership because it gets more revenue from continuing to own these State-owned enterprises outright than the benefits of the partial sale. That is not right. The four energy State-owned enterprises’ dividends have averaged about 4.1 percent over the last 5 years compared with the cost of new debt for the same period of around 5.2 percent. There are lots of other figures being thrown around. Let us be clear: the facts are that in general terms it is pretty evenly balanced but what they do not take into account is the huge social benefit of the schools and the hospitals that the proceeds will be invested in. The future profitability of these companies which private shareholders may get through their dividends is captured in the sales price. So we get the cash upfront without risk and that makes a lot of sense in these difficult times.  
There are other important benefits flowing from this legislation. We have the opportunity for New Zealanders to invest in and grow their own economy. The New Zealand Superannuation Fund is investing in energy companies throughout Australia but it is not allowed to invest in our own country. It is not allowed to invest in our own country.  
The Government thought long and hard before committing to this policy because we know that New Zealanders are not enthusiastic about partial asset sales. They remember what happened in the late 1980s under the Labour Government and that is why we have this new approach. But I say to New Zealanders that looking at those polls I bet that if we asked New Zealanders whether they want to prevent future generations from being saddled with debt they would say yes. That is what this Government is determined to do. We must control the debt and this mixed-ownership model is about providing overwhelming New Zealand control and freeing up 3 percent of the Government’s assets which can go into a Future Investment Fund to be invested in important schools and hospitals.  
This is important legislation. Our country must control its debt. This is part of a well-thought-through plan that will deliver benefits to New Zealanders for years to come. It will improve the investment opportunities for New Zealanders it will help these companies improve and most important it will provide a very clear message to future generations that this was a Parliament that recognised at a time when the rest of the world was losing control of its destiny that this country took it back.