Norman Russel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 19 June 2012. Volume:681;Page:3039. Text is incorporated into the Bound Volume.] 
4. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: What is the value of contracts entered into to date for spending on advertising communications and banking services relating to the Government’s asset sales programme? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The actual total amounts of contracts are commercially sensitive and the reason for that is that the Government intends to renegotiate these contracts after each float. As we have said before though costs for all suppliers and contractors across the entire share offer programme—and that is not just the Mighty River Power one—are expected to be around 2 percent of the total programme proceeds which is very low by market standards. To date about $800000 has actually been paid out pursuant to those contracts. 
Dr Russel Norman 
: Does he know the value of the contract signed earlier this year with Clemenger BBDO to provide advertising services relating to the Government’s asset sales programme and why does the public not have a right to know how much the Government is spending with Clemenger BBDO for that advertising? 
Hon BILL ENGLISH 
: In due course of course that will become public. I would expect it is a significant spend because we want widespread ownership of these shares by New Zealanders. Not many New Zealanders actually know about Mighty River Power or about the nature of its business so we would be expecting to spend on an advertising campaign to make sure New Zealanders do know about the opportunity that they have. But I would expect in the long run that those numbers would be available. Bear in mind that in the current environment the Government can get good rates for all these services and we would expect to continually renegotiate the contracts to drive the price down. 
Hon Clayton Cosgrove 
: Are the expensive advertising consultants responsible for the statement on the Government share offer website that “Persons who are accessing this website from within Australia should exit the website immediately”; if so is that all the protection he is planning against these assets being sold off to Australians? 
Hon BILL ENGLISH 
: No and I think the member’s question illustrates the fact that he does not take the securities law of New Zealand seriously. In fact the website has to comply with New Zealand securities law Australian securities law and US securities law because of their requirements not ours. We are as a sovereign obliged to comply with their law whatever they think of it. 
Dr Russel Norman 
: What exactly is the nature of SenateSHJ’s role in the asset sales programme and why is it necessary to have spin doctors from a public relations firm involved when the Government already has press secretaries and Treasury staff working on the asset sale programme? 
Hon BILL ENGLISH 
: I cannot tell the member the detail of the role of that particular contractor. What I can say is that the Government is committed to widespread New Zealand ownership of these companies. They are not as well known in New Zealand as many politicians certainly assume and it is important that we do communicate with the wider public consistent with the securities law about these companies and the nature of their business. 
Dr Russel Norman 
: What is the upper limit that he is willing to spend on loyalty schemes around this privatisation programme given that the loyalty scheme associated with Queensland Rail’s privatisation cost about 6 percent of the proceeds which in the case of his privatisations would be something around $400 million? 
Hon BILL ENGLISH 
: Well we do not want to jump to conclusions about the detail of loyalty schemes because the Government is still considering that option along with others. What we are going to do consistent with what the Government said right back in January last year is make this offer attractive to as many New Zealanders as possible. New Zealanders will be interested in these assets but they will want to understand how the deal works for them and the Government is considering options that would help attract the most possible New Zealanders into the ownership of these assets. 
Michael Woodhouse 
: What reports has he seen about other publicly funded contracts let in relation to the Government’s sales programme? 
Hon BILL ENGLISH 
: I have seen some reports that initially I did not believe actually that the Green Party was using $75000 of public money to pay for people to collect signatures for a referendum to stop the asset sales which I think tells us that most New Zealanders although they may be uncomfortable about the sales are finding that you actually have to pay a public contract to get them to sign a referendum. So they are probably not as motivated as the Green Party would like. 
Dr Russel Norman 
: Thank you Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: Order! I want to hear this supplementary question. 
Dr Russel Norman 
: Given that it is—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the member. I cannot hear the supplementary question. I want to hear it. 
Dr Russel Norman 
: Given that the Green Party has gone on the public record as to how much spending we are doing to oppose the State asset sale programme why is his Government not willing to tell the public how much it is planning to spend on spin doctors advertising and banking fees in the privatisation programme? 
Hon BILL ENGLISH 
: Well of course that information will be available but I think it sums up the difference between the parties. We are getting on to get things done and the Greens as usual are just trying to stop anything happening. In this case they are using public money to try to stop anything happening. Is it not odd that the Greens used to support citizens initiated referenda whereas now we are paying for a Greens initiated referendum? 
Rt Hon Winston Peters 
: Is the public to understand that as well as the $120 million figure that Mr Key gave to Mr Shearer—that is $120 million they are spending on advertising communication and banking services related to selling the assets—to this has to be added the Business and Economic Research Ltd and others’ estimate of $100 million losses that will ensue to the Government’s revenue stream when they are sold even though the man over there with the follicly challenged head does not like it; and—[ 
Interruption 
] Well he is chipping away. And how could any reputable financial manager follow such a course of action? 
Hon BILL ENGLISH 
: The member is welcome to comment on his Labour Opposition any time he likes as far as we are concerned. All I can say is this: if the member believes any of that then we are waiting to hear in this Chamber this week that the Labour Party and New Zealand First are going to buy the assets back. 
Hon Tony Ryall 
: They said it’s not off the table. 
Hon BILL ENGLISH 
: It is not off the table? Or is it on the table? Well by the end of this week that is what we are expecting to hear. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I have been very very reserved today as you will have noticed but I asked him to reconcile a— 
Mr SPEAKER 
: Order! If the member wants to get particular answers to his questions he will just have to be more disciplined. I am not going to support a member in seeking answers to questions if they refer to other members of the House in a disparaging manner. The remedy is in the member’s own hands: avoid unnecessary comments in asking questions and I promise the member I will get answers for him. But I cannot when disparaging comments are made while a question is being asked. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. With the greatest respect to the freedom and character of this House if somebody over there is chipping away at the whole of question time— 
Mr SPEAKER 
: Order! The member is senior enough and has been around the place enough not to let more junior members upset him by the odd interjection around the House. [ 
Interruption 
] Order! I am on my feet. [ 
Interruption 
] I am on my feet and comments will cease. Members have to be disciplined in asking questions if I am to be able to elicit answers for them. 
Dr Russel Norman 
: Given that the Government has already acknowledged that it is spending $120 million on communications public relations and banking services and that in addition to that it could spend another $400 million on loyalty schemes does he believe it is a good use of Government money to spend up to half a billion dollars on the privatisation programme? 
Hon BILL ENGLISH 
: Well I just do not agree with the member’s numbers that he is using. But yes the Government is committed to a process that is going to give us 51 percent Government ownership and 49 percent public float and that will help us to avoid $7 billion more borrowing. We think that is worth an effort to do a good job of it. There will be widespread New Zealand ownership. We would rather pay dividends to New Zealanders as opposed to the Green Party which wants to pay interest to foreigners. That is the difference. 
Dr Russel Norman 
: Is he aware that according to former senior Goldman Sachs executive Greg Smith Goldman Sachs internally described its clients as muppets and hence does that make this New Zealand Government a muppet for using Goldman Sachs to manage the privatisation programme? 
Hon BILL ENGLISH 
: No.