Ryall Tony: Urgent Debates — State-owned Energy Companies Sales—Delay of Mighty River Power Sale 
Text is incorporated into the Bound Volume 
Ryall Tony: Urgent Debates — State-owned Energy Companies Sales—Delay of Mighty River Power Sale 
[Sitting date: 11 September 2012. Volume:683;Page:5068. Text is incorporated into the Bound Volume.] 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 This is a snap debate about the Government’s announcement that we are deferring the float of Mighty River Power until March till June next year—market conditions. I thought the point that I would make in this debate is to address not only where the mixed-ownership model sits in terms of the Government’s wider economic plan but also the specific issues of why the Government took the decision that it did last Monday in respect of the need to consult further with Maori on a very small and specific issue raised by the Waitangi Tribunal. 
The mixed-ownership model the Government share float should be seen within the Government’s wider plan to control debt and support the New Zealand economy. This Government has been taking action across a whole range of areas in order to support the economy. If there is one thing this Government is on about it is securing and building our economy for the future. So we have been making changes across a whole range of areas: better public services to get better value for taxpayers making sure taxes are more competitive for New Zealanders such that the vast majority of New Zealanders now pay only 17.5c in every dollar in taxation changes we are making to the Resource Management Act in terms of business compliance and changes we have made to ensure that interest rates are low and that the cost of living and inflation are kept low. These are all part of a wider plan to build and secure the New Zealand economy so that people have confidence to invest in the future. It is really that investment that will underpin the growth and the improved prosperity that New Zealanders want. 
Fundamental to making sure we have low interest rates have low inflation and have an economy with low compliance and lower regulation is to make sure that we have our debt under control. What we know is that over the next 2 to 3 years debt is going to rise from about $54 billion now to $72 billion. Keeping it under 30 percent of GDP is important. That is the reason why the Government proposed the sale of a minority stake in these five State-owned enterprises in order to free up cash which can then be used to invest in important social infrastructure that helps our economy continue to grow. Those minority stakes are about 3 percent of New Zealand’s assets so it is part of—it is not the be-all and end-all—a wider plan the Government has to control debt and to support the growth of the New Zealand economy. 
The mixed-ownership model programme has been going through a stage by stage approach since the Government started this after the last election. We went through a reasonably comprehensive consultation with Maori in February involving 10 hui up and down the country attended by a number of Ministers to talk to Maori about their rights and interests in water and in this process and make sure that we listened to those. We listened to those comments such that the Government saw section 9 of the State-Owned Enterprises Act in respect of the Treaty principles being brought into the new legislation. That would apply to the mixed-ownership model Crown shareholding and the Crown’s responsibilities—not to the private shareholders but to the Crown’s responsibilities. 
We know that the New Zealand Maori Council took a claim to the Waitangi Tribunal. An indicative interim report was provided. The Government thought that that did not provide sufficient clarity on the concerns that were being raised by the Waitangi Tribunal such that another report came. That report made very interesting reading because it indicated that the positions that the Government had taken before the tribunal were pretty clear and pretty much accepted by the tribunal. But there was this one small area “shares plus” that was new and the tribunal has put it out there. The Government’s very strong view—and we took legal advice on this—is that we decided that it was important that on that one issue of “shares plus” we needed to consult with Maori in order to explain to them the reasons that the Government was adopting the position that it was adopting. 
Clearly there are some significant concerns around “shares plus”. I do not think the vast majority of New Zealanders believe that any one particular class of shareholder should have veto rights responsibilities or powers different from the others so that is clearly why the Government has a number of concerns around this area. 
We have made it clear to Maori in our correspondence that there are five areas where we think “shares plus” is not a viable option. The first is that we do not think that it is in the national interest for any group within the shareholder base to have the specific rights that were detailed in the tribunal’s “shares plus” arrangement. Secondly we actually think that all the forms of redress that the Waitangi Tribunal was proposing could if a Government wanted be addressed in other ways. Thirdly the relationship of “shares plus” to decision making and strategic decisions would not work in practice. Fourthly the company would be less attractive to investors because of this inequity of power amongst shareholders. And following careful consultation with Maori early this year a very careful and deliberate decision was made to ensure that the Crown’s obligation under the Treaty rested with the Crown and not with the companies as I said earlier on. 
So having looked at all of that and taken the advice that we have we have made this decision that it is in the interests and it is a prudent step to put the Mighty River Power float into the next window that was available and to spend the next 4 to 5 weeks consulting in order to show Maori that we have addressed this issue that was raised by the Waitangi Tribunal and that we think there are legitimate arguments for the position that we have made and also to give an opportunity for Maori to raise any issues that they themselves want to raise in response to the Government’s position. 
What we know is that there are about two windows each year when floats of this size could take place. One is in that March-April-May window and there is another in the September-October-November window. Clearly we have missed that September window and that is the reason why we have now made it clear in the Prime Minister’s statement that we will be having the first float in the first window of next year. Then there will be another public float and we will be asking the public to participate with the Government in that in the second half of 2013. 
This makes sense for New Zealanders. There are opportunities for New Zealanders in taking a stake with the Government in these companies. We think it is an opportunity for New Zealanders to consider saving in a different way. There are opportunities for KiwiSaver and other Crown financial institutions to be involved and indeed for Maori themselves to participate as shareholders. We think it also gives New Zealanders an opportunity to invest in a large local company. What we know is there are over $100 billion of savings on term deposit and many of those New Zealanders may in fact see that there are opportunities elsewhere with this. 
So the Government is pretty clear on the reason why we have taken this action. I think it is very prudent. It is very sensible. It is in the interests of taxpayers that we add as much certainty as possible in respect of the float. The Ministers are about to begin a series of consultations around the countryside. That material is available on the Treasury website in terms of our correspondence to the various iwi and I think it is also an opportunity for New Zealanders to reflect upon the fact that the Government share floats are part of a wider plan that the Government has in order to control debt and invest in the New Zealand economy. Every night on our television screens we see what happens when Governments do not control their debt and our country does not want to be in the position of some of these European and other countries. That is the reason why we want to continue to get ourselves in a position to control debt and invest in the future and that is certainly how the mixed-ownership model should be seen as part of that wider economic plan. 
The debate having concluded the motion lapsed.