Clark David: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Clark David: Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3068. Text is incorporated into the Bound Volume.] 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I rise to speak to Part 1 of this bill the Mixed Ownership Model Bill in the Committee stage. 
Mr Ryall earlier spoke of a mandate for these sales. I think that he did that wilfully knowing that in fact that is not the mood of the nation. The nation is opposed to these sales and is opposed in great numbers. More people in the election in fact voted for parties that opposed this legislation than parties that supported it. At the Finance and Expenditure Committee just 0.6 percent of submissions were in favour of this legislation and we received over 1400 submissions to that select committee. One submitter likened the selling of these assets to selling your kidneys to pay for dialysis. The mood of those submitters was very clear. They wanted to send a very clear message to the Government that the general public do not support these sales. In fact over the weekend somewhere between 1000 and 2000 people in Dunedin the  
Otago Daily Times 
 says were out marching against the sale of these assets. So for Mr Ryall to claim a mandate is a very bold move and I would suggest a foolish one. People are marching in the street against this legislation. 
It was a terribly rushed process. Mr Todd McClay just alluded to the process. He said there had been many many comments about the rushed nature of the process and that is true. Many submitters were clipped questions were limited and they were not allowed more than 5 minutes generally unless they were representing an organisation. 
Todd McClay 
: Rubbish! Young Labour had 30 minutes and I’ll never get that back. 
Dr DAVID CLARK 
: Mr McClay now says that is rubbish. Well I think if we ask the submitters again many of whom complained at the time they would restate that that process was not one that they considered desirable or sufficient in a democratic sense. Teleconferences were called at short notice meaning some people could not attend them. And the legislation was sent 5 weeks early back to the House as David Parker noted without advice from Treasury on some subjects where we thought advice was warranted. These decisions should not be taken lightly particularly where taxpayers are put at risk of additional charges for electricity and also at risk of losing dividends and where Treaty risks exist. These points are all relevant to Part 1 of the legislation and I want to speak to them in a little more detail as I go on. We had no ability to ask questions of Treasury which had in fact already drafted its report before we heard all of the oral submissions. Treasury had drafted its report before we heard all of the submissions. 
Hon Members 
: No no! 
Dr DAVID CLARK 
: Outrageous! That is the kind of process we have seen here. This Government is afraid that its support parties will walk away. It knows that this is not a done deal in the pure sense of the word. It knows that some of its support parties may just walk away because they realise that it is not a process that has been transparent and fair. The Government has put a back-down clause in the legislation and we would say to it that there is a simpler way of doing this: it is simply to back down before the legislation passes. 
I want to speak specifically about the removal of the social responsibility clause from the governance arrangements for these companies. This will have a chilling effect I would suggest on the way these companies operate. No longer will the Crown be able to investigate in the same way any poor practices anything that puts lives at risk in terms of the management of electricity. If brownouts or blackouts affect people in their homes if as we heard one submitter from Grey Power suggest people freeze to death because of this legislation there will be no comeback. In the past when issues have been raised—and I think of the terrible Muliaga situation where a person’s life-support went off with the power—there has been an accountability. The Government was called to account on that matter. That is removed with this change in legislation. There will be no social responsibility clause that says that the Government should be answerable for the power staying on for making sure that people do not freeze to death in their homes. 
It is also true that Treaty obligations are being removed from private investors. Currently the Treaty obligations in the State-owned enterprise legislation apply to the Crown. The Crown has to take Treaty matters into account as it considers its actions as it buys and sells parts of the operation. The risk is that with the sale of individual assets made more possible with a large private stake in these things future settlement options may be sold off. Maori interests have raised this concern with the Government. The Government is putting all of the obligation for these Treaty risks on the taxpayer but it is actually taking away its ability to manage and control them by leaving the private shareholders without that risk open to influencing the decision-making process. Of course there are concerns about kaitiakitanga along with those other concerns about assets being sold off. 
One of the other frightening aspects of the proposed changes is the removal of Official Information Act oversight. The reason given for this by the Government is that these operations should be able to operate commercially as other private commercial operators do. Well they do actually now and the fact is that they have been running and returning good dividends to the Crown with no impediment caused by the Official Information Act. There are indeed commercial protections in that legislation that make sure that the operations are protected in terms of any commercial risks that may otherwise be disclosed through the Act. So we have that protection there already. 
The Ombudsmen took the unusual step of appearing before the select committee to outline the risks of removing the State-owned assets from that legislation. They said that they believe in fair just and transparent scrutiny of majority publicly owned companies and they believe that this should continue. There is no evidence that commercial interests will be harmed by not removing these assets from the Official Information Act. In fact what we heard from several submitters is that there are indeed risks that go along with removing these operations from the Official Information Act. One of those risks is that the companies will act in a way that is not transparent and fair. We will not be able to research as easily as we have been. Members of the public will no longer be able to put in Official Information Act requests to find out how decisions were made even when those operations are majority public-owned. This seems a strange way of going particularly when there are Treaty risks as I have just outlined and social responsibility risks that go with the changing of this legislation. 
 So it was a very rare submission from the Ombudsmen and one that expressed a great degree of concern at the changes. If I quote from the Ombudsmen’s submission the Ombudsmen said: “In our view any possible advantage that may be seen in the [mixed ownership model] companies being removed from the Ombudsmen’s jurisdiction under the OA and OIA appears to be minimal if not illusory and needs to be balanced against the public interest in maintaining their accountability to the public of New Zealand so long as the Crown retains a majority interest in them. We see no reason in principle for their removal particularly given the potential removal of other accountability requirements.” It does not get much stronger than that in terms of the Ombudsmen’s willingness to step in and speak at a select committee process. We heard further from the Ombudsmen around the risks of profitability or otherwise. There just seems to be no reason for doing this. 
We also heard concerns about cronyism in terms of board appointments and the processes that sit behind the board appointments no longer being able to be examined. We also found many researchers willing to say that they were concerned about these changes. 
These are strategic assets that are being sold off. Mr Key gave his personal commitment to keep 85 to 90 percent New Zealand - owned and I will quote him. He said: “We are giving people a commitment that 85 to 90 percent of the entire company will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” He said that in the leaders’ debate in November last year. Well there is no provision for that in the legislation. So not only do we have these concerning removals of social responsibility of Treaty obligation steps and of Official Information Act oversight but we have a commitment from Mr Key that is not worth the words that make it up because there is no mechanism there to ensure that these strategic assets remain in New Zealand ownership. The mechanism simply is not there. 
The Government has inserted the back-down clause and as I said earlier I hope that it uses it. We know that power prices will go up. The private companies have significantly higher power prices and as I said earlier Treasury was not given time to—