Curran Clare: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Curran Clare: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3166. Text is incorporated into the Bound Volume.] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 This is just typical of this Government: to say one thing and do another to get up here and make soothing noises to reassure us about the Mixed Ownership Model Bill and say everything will be all right and then do another thing. Deceit—that is what it is all about. Deceit. 
My colleague Phil Goff in the Committee last night talked about the deceit of this Government and I want to give this Government a history lesson of its own tonight about downright deceit. It has already practised it on previous legislation and it is going to practise it on this piece of legislation. I am referring to “Mr Smooth” the previous Minister in the chair the Minister for State Owned Enterprises who got up and reassured the Committee tonight about the 10 percent cap on shares and that serious terrible sanctions are going to be applied if anyone breaches them. In effect they are being set up to breach them and if they do breach them they will get away with it. If they do not get away with it the Government will provide a waiver which is what it has done in previous legislation. 
I want to speak tonight to Supplementary Order Paper 50 in my name which would amend Part 2. I also want to show that you just cannot trust this Government. But before I do I would just like to point out that today Otago residents are feeling the impact of electricity price rises as the winter temperatures plummet. Today yesterday the day before and for at least a couple of weeks now there have been freezing temperatures in Otago. It has been estimated that an average-sized household could face increases of $58—at least $58—for the period from June to August taking the price for those 3 months to $779 for an average household. That is a very conservative estimate because so many households in Otago face costs of around $400 to $450 a month for their electricity bill. Any price rise on top of that will make things difficult. And this is before the sale of the assets. As we have heard post the sales the average charges are going to increase. They are going to increase and people simply cannot afford it. Those kinds of price rises and those kinds of costs on the average family are just simply not sustainable and as every member in this Committee knows as every resident in Otago knows and as every household in this country knows the price of electricity is going to go up following the sale of these energy companies. 
I am speaking to clause 16 in Part 2. Section 45T in clause 16 addresses the effect of exceeding a 10 percent limit on shares in the sold-off energy companies. It sets out the effect of a person exceeding the 10 percent cap. We have heard that the person who breaches the cap will have to comply with any written notice from the company to ensure that that 10 percent limit is not exceeded that they will have to remedy it within 60 days and that they may have their voting rights and their shares taken away should they exceed it. Such terrible sanctions they are! But where is the compliance on this? Where are the teeth? This is a toothless piece of legislation. It is a joke. It is cloud-cuckoo-land. There is no serious penalty in this legislation. 
This time last year this House was debating a piece of legislation. It was the Telecommunications (TSO Broadband and Other Matters) Amendment Bill. It was a serious piece of legislation. In that legislation there were significant financial penalties. The Labour Party at the time argued that those financial penalties did not go far enough. We did manage to get them increased from $5 million up to $10 million per breach of the law and we had to argue pretty strongly for that. But that was $10 million—$10 million—for a breach of that legislation by Telecom essentially because the legislation enabled Telecom to be handed $1 billion more or less to roll out ultra-fast broadband. But if Telecom breached the key provisions in the legislation it was going to be handed down a $10 million penalty. 
Supplementary Order Paper 50 in my name requires that there be a $1 million fine—one-tenth of $10 million—if the 10 percent cap is exceeded. One million dollars. I do not think that is unreasonable. Do other members of the Committee think that is unreasonable? It is not unreasonable compared with another piece of legislation that was essentially around another important policy that this Government was pushing out. The fine was $10 million for breaching it. So a $1 million penalty is not unreasonable. If you do not have a financial sanction you do not have a sanction that is going to dissuade people from breaking it. So that is one point I would like to make. 
The second point is that this Government cannot be trusted to follow through on this part of the bill around the 10 percent cap and I would like to tell you why. In early May just this year the Associate Minister of Finance Steven Joyce defended the Crown’s decision to waive the 10 percent Kiwi share restriction for AMP Capital Investors following the Australian-owned company’s decision to lift its stake in Telecom’s spin-off Chorus to 15 percent. This was to 15 percent from the 10 percent cap that was on the Kiwi share. I challenge the Minister in the chair tonight the Minister for Building and Construction to get up and tell us that he will give a guarantee on behalf of his Government that there will be no waivers for the AMPs of the world that come to the Government and put up a good case to lift their 10 percent stake. 
I think Mr Goff in the Chamber last night demonstrated how easy it would be for four or five foreign-owned companies to take that 49 percent. Only one of them would have to come to the Government and put up a case for putting a waiver out so that the company could buy some of those shares from the mums and dads and lift its share to 15 percent. So I challenge this Government to give a guarantee because Steven Joyce in this Chamber this time last year gave this House a guarantee that there would be no breach of the Kiwi share—there would be no breach of the Kiwi share. And what did he do? In May this year it was breached and it went to 15 percent. So how can we and how can the public of New Zealand be reassured that that will not happen with the Mixed Ownership Model Bill and with the sale of our assets? How can we be reassured that the so-called mum and dad shares that are bought up cannot be bought by a company outside of this country or even inside of this country and that a special case cannot be made to the Government whereby the company can actually lift its holding to 15 percent? As I said I challenge the Minister in the chair tonight to get up and give us a guarantee because we have seen it happen under previous legislation and I suspect we will see it happen under this legislation. 
Labour argued and we have put up Supplementary Order Paper 49 in Clayton Cosgrove’s name to keep that cap at 1 percent. That would be a much more sensible thing to do. That would provide much more reassurance for the people of New Zealand that this Government is serious about not allowing outside interests to gain more of a foothold and about allowing and encouraging the so-called mum and dad investors to actually buy those shares. This Government appears not to be listening to that. When we argued for a 5 percent cap in the Finance and Expenditure Committee Government members certainly did not listen. So we know that it looks as if it is going to be 10 percent and it could be 15 percent and if it is 15 percent then we are going to see outside companies gaining more and more of a foothold in our energy assets.