Seymour David: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeSeymour David: Oral Questions — Questions to Ministers[Sitting date: 02 March 2016. Volume:711;Page:9294. Text is incorporated into the Bound Volume.]10.DAVID SEYMOUR (Leader—ACT) to the Minister for State Owned Enterprises: What has been the return on equity for Landcorp over the past 3 years?Mr SPEAKER: Is there a Minister going to answer this question? [Interruption] Order!Hon BILL ENGLISH (Minister of Finance)on behalf of theMinister for State Owned Enterprises: There are a number of ways to measure Landcorp’s performance. The return on equity excluding non-cash fair value adjustments averaged 0.9 percent over the last 3 years.David Seymour: How much lower is that return than the Government’s cost of borrowing at 2.25 percent for Government bonds?Hon BILL ENGLISH: It is significantly lower than the Government’s cost of borrowing when you look at the straight return on equity. Another measure the total shareholder return which takes into account essentially inflation and land values shows that Landcorp has averaged 4.6 percent over the last 5 years. So if you take into account the increase in the value of its assets which may or may not be sustainable it has a return slightly higher than the cost of debt.David Seymour: How much lower is even that return than the Government’s return from the New Zealand Superannuation Fund over the last 3 years at 12.25 percent per annum?Hon BILL ENGLISH: If the member is making the point that Landcorp with a value of well over a billion dollars is making low returns they are certainly lower than the New Zealand Superannuation Fund returns have been and they are likely to drop. Landcorp is one of New Zealand’s largest dairy farmers and as dairy prices have dropped considerably in the last 12 months or so we would expect that Landcorp is probably going to make negative returns in at least the next year. The New Zealand Superannuation Fund may also be heading towards making negative returns. Its high return figures quoted here have been based on an increase in asset values. They have extensive investment in world stock markets and those stock markets have not been doing so well since the beginning of this year.Richard Prosser: Will the Minister guarantee that his Government will not sell Landcorp in whole or in part?Hon BILL ENGLISH: The Government has made it clear it will not sell Landcorp but it does buy and sell farms all the time. In fact you would expect that in current conditions where it is making significant losses and is facing the normal commercial risks that every other farmer is facing and where it has debt levels it needs to deal with it may well sell some farms.David Seymour: How do the returns from Landcorp compare with those from another State-owned enterprise Air New Zealand?Hon BILL ENGLISH: Air New Zealand is technically not a State-owned enterprise; it is only half-owned by the Government. At the moment it is making very significant returns for a number of reasons. One is that fuel prices are very low; secondly it seems to be making good commercial decisions; and thirdly it has the benefit of the Greens who are against carbon dioxide emissions but are spending so much time on our planes.