Cosgrove Clayton: Standing Orders — SessionalText is incorporated into the Bound VolumeCosgrove Clayton: Standing Orders — Sessional[Sitting date: 06 March 2014. Volume:696;Page:16423. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): Adhering to your ruling Mr Assistant Speaker I am going to confine my comments in the same way the Minister of Finance did. Labour will support this motion—Hon Bill English: Support the Government. Good on you.Hon CLAYTON COSGROVE: No no. Labour will support this motion not because we support in any way shape or form the asset sales but because we actually support this Parliament having a level of scrutiny over this entity. If this motion was not passed—and by the way this is another example of a stuff-up by that Minister and his Government because the Clerk advised me that it would have been possible to bundle all of these motions and it could have been done after the original legislation was passed. They could have been bundled up so that we would not be sitting here doing this in an incremental amateur-hour fashion. We want to examine Meridian Energy in a financial review. If this Minister had had his way and if there had not been so much public outrage he probably would not have put this motion up because we cannot now access the Official Information Act in respect of this organisation. Our powers are rather limited but at least we have the opportunity by passing this motion to examine this State-owned enterprise in respect of the financial reviews.I said in part of my speech that this is another example of a Government stuff-up because if you look at Meridian Energy it is a complete mess. In fact if we look at the whole mixed-ownership model how it was kicked off and how it was dealt with we find that it was indeed a complete mess. The Minister talked about high-level Government intervention. Well if ever there was an example of almost micro-management it is from the Minister for State Owned Enterprises who complicit with the Minister of Finance walked over in the dead of night without telling the board—and it confirmed that when it came and had a chat with us a couple of weeks ago—to do a nice little cosy deal with a company called RioTinto which made $US3.7 billion in profits last year I think. It was that Minister.Meridian Energy which is supposed to be independent had advised the Government that it had reached the bottom line. It could not negotiate a deal. The Government swept in threw in a $30 million sweetener halved the notice period for RioTinto to pull the pin and threw in a cheaper electricity price all of which was paraded and wrapped up by the Minister of Finance as some sort of job guarantee protection scheme for the people of Southland. If that were true it would be helpful to the people of Southland. Then we found out on Kathryn Ryan’s show—where we were both interviewed—when he was asked a really simple question about whether he asked for a jobs guarantee in return for all the little bits of—Hon David Parker: Corporate welfare.Hon CLAYTON COSGROVE: —corporate welfare that he gave to RioTinto that the answer was no. He did not even have the brains or the gumption this Minister toask RioTinto for a jobs guarantee. I accept that it may have said no. I accept that. But there is an old adage around here that if you do not ask you do not get. So because this Government had nailed itself to a must-sell time frame RioTinto sat back turned the screw and when it reached the threshold of pain on this Government and this Minister was bent over a barrel it just sprang the trap.The problem is that next time—because of course Meridian Energy post-2017 can pull the pin—Meridian Energy will just rerun the scenario except that the board will be in an even weaker situation because this Minister came over the top and put in the sweetener of corporate welfare. So the board will go in with very little moral authority and very little leverage and RioTinto—as we know it will do—will spring the trap and say: “Well we might have to pull the pin and get out of here.” because of Bill English’s ineptitude and stupidity.I have got to say that it was reported in theSouthland Times that the week before the ink was dry on the cheque for 30 million bucks RioTinto was already making machinists I think they were redundant. It was already into restructuring mode the week that Bill English signed the cheque before the ink was dry. He had the audacity to come into the House and in his answers to every question for oral answer portray this deal as protecting Southland jobs. Well we know that was totally untrue because that Minister did not even have the brains or the gumption to ask for a jobs guarantee.This is also the Minister who along with his outgoing retiring colleague Tony Ryall—you know how there is a tradition around here that when you leave they give you a silver tray; I think in his case it will be a silver candelabra. He will go down in history as the worst most negligent Minister for State Owned Enterprises. He is the man who in the Solid Energy deal stood by and just let it all happen.Hon David Parker: Told them to borrow more.Hon CLAYTON COSGROVE: He told it to borrow more. He told it he wanted more dividends. He ramped up its gearing to around 42 percent when mineral companies have about 0 to 10 percent gearing. Ms PipDunphy the acting chair of Solid Energy was asked by the Commerce Committee today whether had Solid Energy had a gearing ratio that was similar to other international minerals companies—that is 0 to 10 percent—that company would be in the dire straits that it is in today. The answer was no we would not be. We would not be.Hon David Parker: What did Mr Palmer say the previous chair?Hon CLAYTON COSGROVE: Oh well of course Mr John Palmer was waxing eloquently and orbiting a stratosphere that a number of us have not been to because he could not agree. They kept arguing about the price of coal not arguing about how you manage the path of the price of coal. He also of course—The ASSISTANT SPEAKER (Lindsay Tisch): Meridian. It’s on Meridian.Hon CLAYTON COSGROVE: Indeed yes I am getting to that. We are not up to 8 minutes yet but I take your point. Mr Palmer of course confirmed that the Government had put pressure on Solid Energy to increase its borrowing ratios.In respect of Meridian Energy the two shareholding Ministers Mr Ryall and Mr English have presided over a complete debacle. These are the Ministers who said originally—in fact it was the Prime Minister who said that the original figure for the mixed-ownership model sales would be around $10 billion. Then it went down to—Hon David Parker: And sold to mums and dads.Hon CLAYTON COSGROVE: —and sold to mums and dads—about $8 billion then it was $7 billion then it was $5 billion to $7 billion. Now we know that the total amount not including Genesis which is the smallest of the lot is around $3.93 billion. That is a great success according to Bill English and Tony Ryall.Hon David Parker: And how many New Zealanders?Hon CLAYTON COSGROVE: How many New Zealanders? Very very few. Look at Mighty River Power—Hon David Parker: Less than 2 percent.Hon CLAYTON COSGROVE: —less than 2 percent. Look at Mighty River Power which gained just 113000 so-called mums and dads. Then we find out that that of course includes companies and trusts. Then you had Meridian Energy the one we are debating at the moment where 63000 mum and dad shareholders signed up—half as many as Mighty River Power—a short time later. Then of course less than 0.1 percent of the population signed up for Air New Zealand. This is widespread mum and dad - like public ownership! Of course those people who did sign up for Mighty River Power have taken a bath. Meridian Energy has basicallyflatlined. Air New Zealand—who knows where it will go? So I say to Mr English what gall the man has to stand up and somehow take credit somehow say that this mixed-ownership model has worked.Hon Bill English: Very successful. Very successful.Hon CLAYTON COSGROVE: He says it is very successful. I say this to Mr English: if his Prime Minister were still working for Merrill Lynch—Hon Bill English: Good value for taxpayers.Hon CLAYTON COSGROVE: Oh a good deal for taxpayers! Well I say this: what planet is that member on? Normally when you sell something you try to maximise the return for the owner. If John Key were still at Merrill Lynch he would say to the owner—that is the taxpayer—“You’re not going to maximise a return on these assets if you sell them now or probably in the future. Pull the pin.” The taxpayer could have got between $7 billion and $10 billion and then it was between $5 billion and $7 billion. The poor old taxpayers were washed up in a fire sale with $3.93 billion plus a few dollars thrown in and with Genesis Energy over the top. That is a disgrace that is a fire sale and that is selling most of it to your mates.We know what happened under “Mad Max” Bradford. Contact Energy was predominantly Kiwi-owned. Then of course the share register changed and now it is overwhelmingly foreign-owned. And we know what will happen to the dividends of Meridian Energy. Half of them will end up of course not in the public purse. One or two shekels might go to the odd mum and dad shareholder and the rest will head overseas. That is really smart economics—really smart. It is ridiculous. It is a fire sale. And the reason—Hon Bill English: Very successful.Hon CLAYTON COSGROVE: He says: “Very successful.” Well he will take that to the grave. He will take that to his political grave all right. That will be on his headstone. That will be on his headstone. And mums and dads who used to own 100 percent of these shares and get the benefit of 100 percent of those dividends know he sold the family silver in a fire sale.