Goldsmith Paul: Mixed Ownership Model Bill — First Reading 
Goldsmith Paul: Mixed Ownership Model Bill — First Reading 
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PAUL GOLDSMITH (National) 
: 
 I rise to support the Mixed Ownership Model Bill. Ownership matters and if any members need convincing they should look at TV3’s report on the Port of Tauranga last evening where the company’s productivity and progress was noted. The comments of David Hone an employee of 18 years were powerful. He said that he like 90 percent of the workers at the Port of Tauranga had shares in the company. He said: “Working in the place that you’re a part-owner of just makes you want to make sure that it works both for you and for everyone else around.”  
Ownership matters and people’s behaviour changes when they have a stake in their company. One of the many good results of this bill it seems to me is that the employees of Mighty River Power and the other energy companies will at last have the opportunity to buy shares directly in the company that they work for and I am sure that will go a long way to improving the productivity of this country.  
This is a very significant piece of legislation and part of National’s plan to deliver stronger enduring economic growth. The issue was front and centre at all the debates during the campaign last year. It was signalled and it was well explained that it was primarily a key part of the Government’s plan to carry on investing in this country—investing in modern schools hospitals priority public infrastructure—without exposing the economy to so much international debt. What happened? The people of New Zealand turned out and returned this National Government with the highest popular vote in many decades. Most people saw through the overblown rhetoric of “selling off our assets; flogging off our assets” and understood that the Government will continue to own 51 percent of these assets and it will prevent any other shareholder having more than 10 percent. So no amount of fear-mongering can overwhelm that reality.  
Other speakers have touched on many of the good arguments in support of this legislation. I want to touch on three. The first is that this bill will reduce our requirements for extra international debt. There is so much that we want to invest in in this country and indeed this Government expects to spend more than $20 billion buying new assets over the next 4 years but there is a limit to our resources. Mixed ownership will free up $5 billion to $7 billion to invest in the Future Investment Fund in priority areas such as schools and hospitals.  
Meantime each of these four companies that we are talking about will need substantial capital investments over the next few years and in basic terms the Crown now will need to invest only 51 percent of that new capital rather than the 100 percent that it does at the moment. Again the private sector can now carry some of that burden and reduce the need for the State to be borrowing as much. The alternative is a lot more debt which we would have to borrow on fragile and volatile international markets and anybody who has been watching the news recently will see the dangers of borrowing more money at a time like this. We may be able to raise that money today but who knows what it is going to be like in the future?  
The Government’s approach is the most prudent in these dangerous times. We have heard again— 
Chris Hipkins 
: Who wrote this?  
PAUL GOLDSMITH 
: I wrote it thank you. We have heard again— 
Chris Hipkins 
: Stop reading it then. 
PAUL GOLDSMITH 
: I am not reading it. I am just referring to it.  
Hon Tony Ryall 
: It’s very well written.  
PAUL GOLDSMITH 
: Thank you very much. We have heard again other misplaced arguments about the dividend stream being higher than the borrowed costs. This line of reasoning misses the point entirely. It ignores the all-important element of risk. Most people do not follow that logic in their own lives. Most people do not borrow $100000 on their mortgage in order to buy shares because they know that there are more risks in shares. They do not do that because they correctly factor in the amount of risk.  
Another benefit from this bill is that it will deepen New Zealand’s capital markets and broaden the pool of investment for New Zealand investors and New Zealand savers. This is not just the 1 percent. It is the hundreds of thousands of New Zealanders who invest in KiwiSaver and many other investments who have the opportunity now to have a stake in these companies and that is a good thing.  
Finally the primary benefit it seems to me out of this mixed-ownership model is that it will bring the disciplines of the private sector into ownership of these companies. The market test generated by the stock market and the signal provided by the share price as to what is happening to the value of the company and its return on capital are likely to be more transparent and accurate than any system in place to monitor an entirely State-owned enterprise. I have no doubt that the disciplines imposed by the public trading floor will benefit these companies. In conclusion mixed ownership is a smart and sensible policy that will strengthen the New Zealand economy and I commend this bill to the House. Thank you.