Norman Russel: Standing Orders — SessionalText is incorporated into the Bound VolumeNorman Russel: Standing Orders — Sessional[Sitting date: 22 July 2014. Volume:700;Page:19274. Text is incorporated into the Bound Volume.]Dr RUSSEL NORMAN (Co-Leader—Green):I rise on behalf of the Green Party to address this motion regarding Genesis Energy. This motion of course comes out of the Government’s failed privatisation programme. I think it is important for us to remember how the privatisation programme worked. The first step was tax cuts for the very wealthy which have cost probably in the order of $5 billion and probably more so far—just the cost of tax cuts for the top 10 percent. The Government gave very large amounts of money to the top 10 percent and then said: “Oh there’s a hole in our Budget. We don’t have enough money. We’re going to have to sell assets to cover the hole in our Budget caused by the tax cuts.” So then it said it was going to have to sell some of these assets and it sold about $5 billion worth of assets.Of course who could afford to buy the assets? Well it was not ordinary mums and dads. They could not afford to buy shares in Meridian Energy Genesis Energy and all the rest. They do not have spare cash. Of course the people who could afford to buy the assets were the very same people to whom Bill English and the others gave tax cuts. There was $5 billion transferred from the Crown account to the wealthiest 10 percent in the country and then $5 billion was paid back to the Crown account to purchase the shares in these assets. At the end of it for ordinary people what they find is that their collective assets have been reduced by about half—half of these assets were sold.Of course the very wealthy who got Bill English’s very large and generous tax cuts that did not go to anyone else found themselves in possession of half of the nation’s electricity generating assets. It was straight theft. National orchestrated this straight theft in front of everybody’s eyes of half of the electricity generating assets in the country moved them from the ownership of all New Zealanders and gave them to the very wealthiest people—and of course to the wealthiest corporations. Many of the shares in these assets simply went to large corporations or they went offshore. So it was simply a straight theft—stealing assets in front of everybody. Everybody could see that National was transferring the assets. Hence it was not at all surprising that the overwhelming majority of New Zealanders opposed the theft of their assets by National. We saw that in the referendum and in every opinion poll. None the less National proceeded to steal the assets from the people of New Zealand.Then it had the temerity during this election campaign to offer back some of the money that it raised in the slush fund as election bribes. This is with John Key as the slush fund manager. He is the manager of the slush fund created by the asset sales programme. National sold the people’s assets against the people’s will. Overwhelmingly people were opposed to the sale of these assets. Then after selling the assets it offered back the money that it gained as an election bribe. National members would say to the people in rural New Zealand: “We’ll pick a number of our favourite roading projects across the country and if you vote for us we’ll build those roading projects with the money that we got from stealing your assets.” It is like when someone breaks into your house and against your will steals some of your stuff and then sells it and then says: “Here have some money back. You should like me because here’s some money from me.” Actually it was New Zealanders’ money. It was New Zealanders’ assets that National flogged off and now it is using the cash that it got from selling the assets as an election bribe. It is disgraceful behaviour.Bill English talked about how we should value all the dollars that ordinary people pay in the form of taxes. I agree with Bill English. My question for him then is: why did he waste $748 million on the process of the asset sales? I think it is important for people to realise how empty is the rhetoric of this Government about being fiscally conservative.This is how the Government spent the money. Treasury spent $85 million on the asset sales process itself. It spent $12.6 million just on those ads on TV. You know the ads you saw on TV that were shown to ordinary New Zealanders and that said: “Buy shares in these companies that you used to own. Buy shares in these companies.” Those ads cost $12.6 million. On top of that Treasury outsourced to contractors $65 million worth of work—that is taxpayers had to pay $65 million to these contractors. They were for things like people who were doing public relations work in order to try to massage public opinion. They were people like stockbrokers who were taking a cut out of the proceeds of the asset sale process. Then Treasury spent $8 million internally on the asset sale process. So Bill English who tells us that it is so important that we look after taxpayers’ money spent $85 million just in Treasury on the asset sale process. The companies themselves spent $36 million on preparing themselves for privatisation. So the companies on top of that spent another $36 million.Then we had the incentives. The incentives were the bonus shares whereby National said to its mates: “If you buy a share in this company and you hold on to it for a certain period of time then we will give you extra shares for free.” Of course they are not for free; they are paid for by taxpayers. The bonus shares for Mighty River Power cost taxpayers about $25 million. The Meridian Energy incentive costs taxpayers about $33 million. The Genesis Energy bonus costs taxpayers about $22 million. This is all the money that Mr English told us he is so careful spending and that he does not like to spend it on things that are not important. This is all money that Mr English and National have given away as part of this privatisation process.Then we have the losses on the sale. If you compare the book value of these companies with what National actually brought in when it privatised the assets there is a difference there of about $361 million. It sold the assets for $361 million less than National itself valued them at. So effectively the assets lost $361 million of taxpayer value.On top of that the Government gave Rio Tinto $30 million as part of the sweetener. Remember Rio Tinto had the Government over a barrel because if it did not renew the contract from Meridian Energy or it threatened the contract with Meridian Energy then it would decrease the value of Meridian Energy but particularly all the other assets including Genesis Energy. So Rio Tinto a hugely profitable company was able to force the Government to hand over $30 million as part of the process for the asset sales.So when you add that all up including $9 million on the referendum whereby the people of New Zealand spoke very clearly that they did not want the asset sales process then Bill English who tells us he cares so much about taxpayers’ money wasted $748 million on a process that an overwhelming majority of New Zealanders opposed. This is a Government that prides itself on fiscal rectitude and it is spewing money everywhere in order to force through this incredibly unpopular privatisation process to transfer ownership of these companies from all of us—from all New Zealanders—to a tiny few. That I think demonstrates the true priorities of this Government.It is to create for itself the slush fund. John Key the slush fund manager is managing a slush fund that is $5 million and he hands it out here and there where he thinks it is important to get votes in the election campaign as he manages the slush fund. A big part of the slush fund is guaranteed to go to increased water pollution in the form of the $400 million irrigation fund because the National Party is determined to increase toxic pollution in our rivers and lakes across the country and it is giving $400 million free to the irrigation companies. That is money that ordinary New Zealanders used to have. This is part of the Government’s pollution economy. Instead of having an economic and fiscal strategy that is sustainable it has a different kind of strategy and asset sales are a key part of it.Borrowing of course is a key part of it. This Government borrowed $50 billion—the Government that supposedly knows about money. Well what it really knows about is borrowing lots of money. It is very good at borrowing money. It is excellent at borrowing money. It is very good at asset sales. It forced through the asset sales programme. But of course borrowing and asset sales do not generate any new wealth. When you look at the parts of the economy that the Government is very interested in it is simple commodities: milk powder raw logs; the kinds of things that do not make the country rich. That is the focus for the Government’s economic strategy—its pollution economy.When you look at what it is spending on research and development it is tiny at 1.3 percent of GDP on research and development. That is a tiny fraction. The projections going forward show a 20 percent cut in research and development under this Government’s own projections in the 10 years forward. Instead of having a smart Green economy that invests in innovation and research and development this is a Government that has a pollution economy that pays its bills by selling assets and borrowing money. That is the truth around this Government’s economic strategy.We have put up a number of alternatives to this Government’s failed pollution economy but of course it is only a change of Government that will bring those changes into life. For example the NZ Power proposal put up by the Greens and Labour for a single buyer to create competition in generation and retail. Currently vertical integration of the generator and retail companies means that there is no real competition in the electricity sector. If you want real competition in generation and retail that is what NZ Power will achieve because it puts a horizontal dividing line across the electricity market. There will be real competition and hence innovation in the electricity market under NZ Power whereas in the current system there is none. Then there is our Solar Homes project to make sure that people can access solar photovoltaic panels on their roof to give them some control over their power. A smart Green economy that invests in innovation and research and development is a much better option than the pollution economy and asset sale economy that the National Party is proposing.