Ryall Tony: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Ryall Tony: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Volume:673;Page:19321] 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 On reading the financial review of Meridian Energy it is most interesting to note the focus of the report. The Commerce Committee noted Meridian Energy’s growing wind portfolio and the number of options it had in the pipeline in this area. There were a number of questions on a West Coast project and its impact on the environment—apparently Meridian Energy stood by this project—and it also talked about Meridian Energy’s offshore renewable projects being supported by the committee. 
Of course the other strong feature of any review of Meridian Energy would be the impact of the Christchurch earthquakes. I think in light of the events of yesterday we can all appreciate the sense of frustration anger disappointment or whatever we want to call it in Christchurch. So many people have lived on the edge for so long and to have yet another earthquake is obviously very destabilising and worrying for a lot of families down there but strong leadership is being provided by the authorities I am absolutely sure. An important part of Meridian Energy a company with strong links to Christchurch is the work it is doing to assist the electricity authorities in the whole of the Canterbury area in what they are doing. 
The member opposite David Parker spoke previously about some of the Government’s thinking around the mixed-ownership model. We would not think that Labour members would even acknowledge that electricity prices went up 72 percent in 9 years under the Labour Party opposite when in Government. Over those 9 long years power prices went up 72 percent. Those members can stand up now and wring their hands about the effect of electricity prices on consumers but they just ignore what happened during those Clark years when prices went up 72 percent. Ownership is not a feature of price rises and that is not an argument to be accepted. 
There are a number of reasons why the Government is looking at a mixed-ownership model much like we have with Air New Zealand—a model that was supported by the previous Government—in respect of Meridian Energy and a number of other companies. The first is recognition that the New Zealand economy and the New Zealand Government is facing huge demands on capital. Over the next 4 or 5 years we will need about $32 billion of capital to invest in vital public infrastructure like roads hospitals and schools. We can face the reality that we might have to borrow that money or we can say that some of our current capital is invested in areas that we could free up and move into higher-priority areas. I think hospitals schools and roads and building that infrastructure are vital for the future of New Zealand. 
Secondly a mixed-ownership model provides an opportunity for New Zealanders to invest directly in assets that are important to the New Zealand economy. You know I can recall going to a public meeting in Mount Maunganui in my electorate last year. It was a fascinating meeting. We talked about the fact that the Government was trying to move the incentives to encourage people to invest not in residential property but in productive investments. One of the older guys got up and said: “Well if we’re not to invest in residential property what do you want us to invest in?”. They had spent years investing in Blue Chip and years investing in risky finance companies and had not had the opportunity to invest in blue-chip companies that help build the infrastructure of New Zealand. The mixed-ownership model will give those people an opportunity to have a high-class investment in the future of New Zealand. It will allow them to have a secure investment and a better investment than other options they would have to invest in. 
It also gives our superannuation funds an opportunity to invest back into New Zealand. People’s KiwiSaver people’s savings can be invested in a good quality New Zealand company and there will be improved opportunities for that. There will also be opportunities for improved performance by the companies because we know there is much more scrutiny on the performance of the publicly listed energy companies their capital intentions and their behaviour in the market than there is on Government-owned businesses. There are real opportunities in using the mixed-ownership model to benefit Kiwi mums and dads in the next few years. 
Report noted.