Parker DavidKEEP KIWIBANK BILLSecond ReadingHon DAVID PARKER (Labour): I move That the Keep Kiwibank Bill be now read a second time. I want to recount the history of this bill which was introduced by my colleague the Hon Clayton Cosgrove.The background to the bill is that the Government sold roughly half of the major electricity companies to private investors and it did not need to have recourse to Parliament to make that sale because there is nothing enshrined in legislation that requires parliamentary approval for the sale of shares in publicly owned institutions like those generators. So Clayton Cosgrove brought a bill to this House that said well parliamentary approval ought to be required if a future Government wants to sell Kiwibank. It is our only significant bank competing against foreign banks in the New Zealand market. There are some others but they are not very big when it comes to taking on the dominant banks from Australia.There was parliamentary support for this piece of legislation to go to select committee and to select committee it went. One of the reasons why I think Opposition parties and some of the other parties supported the legislation is that the Government was saying that it had no intention of selling Kiwibank anyway so they thought: We'll keep the Government honest by putting forward a piece of legislation that says you have got to get parliamentary approval before you sell Kiwibank." When the bill got to the Finance and Expenditure Committee it became apparent that the mechanism that was proposed in the bill which was to require a supermajority which is more than just a bare 50 percent vote plus one in the Parliament in support—the bill wanted a supermajority and that was perhaps a step too far with the committee requiring instead that a supermajority be in reserve for important things like reforms to electoral law. Clayton Cosgrove and the other members on behalf of the Labour Party agreed with those propositions and said: "Well we should change the bill so that it requires a bare majority of Parliament before Kiwibank can be sold but none the less it requires parliamentary approval." National used its numbers on the select committee to block those amendments being made and it has referred the bill back to Parliament without those amendments being incorporated.At about that time Kiwibank decided that it wanted to raise more capital. Kiwibank was created at a time when New Zealand Post was a much larger organisation when there was a lot more mail and it could be supported in part by New Zealand Post for its expansion plans. Because postal volumes have dropped by 80 percent New Zealand Post is no longer in a position to provide additional capital to Kiwibank to expand. The Government has refused to give Kiwibank additional capital so the board of Kiwibank has found an alternative mechanism to raise more capital which is to sell some shares to some Government-owned entities those being the ACC and the New Zealand Superannuation Fund. A good idea—we support that in the circumstances that New Zealand Post faced—but of course the effect of that is that unless there is some protection around that share sale those organisations can onsell those shares without recourse to Parliament and through that sale in the future those shares could effectively be privatised.We have Supplementary Order Paper 185—which has already been tabled in this House—which changes this bill so that parliamentary authority is required for any future sale of Kiwibank shares; sales to Crown-owned entities are allowed but only if there is a first right of refusal to the Crown to purchase those shares back from the entities which it owns anyway if those entities are to sell; and there is a requirement that the Crown exercise that first right of refusal because otherwise you cannot effectively stop these shares being privatised in the future without further recourse to Parliament. That is the effect of this bill and we hope that we will gain support for this bill from other members of Parliament so that democracy has a say in respect of whether the only significant banking institution in Government ownership cannot be sold at the whim of a Government but rather requires a parliamentary majority to authorise that sale. That is in a nutshell what this bill does.The Supplementary Order Paper has been available for a long time for people to consider and I know that other political parties have given it due consideration. We will know in an hour or two whether we have the votes for this piece of legislation to pass its second reading so that the Supplementary Order Paper can then be considered at the Committee stage of the whole House.I would make another point in respect of the unwillingness of the Government to try to improve this bill at the select committee. Michael Woodhouse in a contribution last Thursday criticised Opposition members in the Commerce Committee for not having made changes to the Easter trading legislation that he thought were necessary. This legislation is another instance of where a select committee could have improved a bill but because of this politicisation of it—on this occasion by the National Party members—it refused to do so. It can still of course be done by this House because it is in the end Parliament that decides whether legislation should proceed or not not select committees. On that basis I am urging other political parties in this House to consider the Supplementary Order Paper that I have already tabled which has been considered by members and to pass this legislation so that if in the future someone wants to privatise Kiwibank they have got to get parliamentary authority.The legislation does not block the sale of the shares and the capital raising presently under way in respect of ACC and the New Zealand Superannuation Fund. I know that to be the case. I have checked that and on that basis I think that the House should support it. I do think that given that the National Government has said that it is not going to sell Kiwibank—that is the promise that it has made the New Zealand electorate—it should have no objection to passing this piece of legislation which ensures that that principle is in place and that any future Government that wants to change that status quo just has to come to this House get a bare parliamentary majority to change this legislation or to authorise the sale and it will be right. If a Government cannot get that parliamentary majority then it ought not to sell Kiwibank. It is one of those important New Zealand institutions that ought not to be able to be done away with at the whim of a Government that perhaps is trying to achieve other purposes and does not want to come to Parliament for the tick-off of Parliament before that happens.So the earlier impediment in this legislation to support from some parties which was that the supermajority was inappropriate for this sort of legislation is dealt with by the Supplementary Order Paper that I have tabled. Clayton Cosgrove and the other members of the parliamentary team on the select committee agreed that it was appropriate that we should have just a bare majority needed for this sort of authorisation. That is the effect of the Supplementary Order Paper that lies on the Table. The underlying effect then is that the Keep Kiwibank Bill places a restriction on the sale of Kiwibank to private interests and effectively says that for the Crown to sell its shares other than to a Crown-owned organisation it needs parliamentary approval. If it is to sell it to a Crown-owned organisation the sale has to be subject to a first right of refusal in favour of the Crown which the Crown must exercise if it is triggered by the offer under that first right of refusal.The final thing I will say is that first right of refusal has to cover not just the shares that are required by a Crown-owned entity like the ACC or the Superannuation Fund at the time of the original transaction but also if there are additional shares issued to that organisation—for example by further raising of capital—then the first right of refusal applies to those additional share allocations as well so that at all times the Crown has the ability to reacquire those shares if they were otherwise to be sold to private interests."