Cunliffe David: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Cunliffe David: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 29 June 2010. Volume:664;Page:12235. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Meridian Energy is one of the three State-owned power generators and is subject to some very similar issues to those debated in the Genesis Power debate. I refer back to the previous Government speaker Gerry Brownlee who said in respect of the Government’s privatisation policy that it would tell voters before the election what it was going to do to them. That would be lovely except that National did not do that last time. What John Key told the voters last time in respect of one State-owned enterprise—Kiwibank—was that a National Government would never ever sell Kiwibank. National said that it would not raise GST and it said the vast majority of Kiwis would be better off after the Budget. But of course the majority is not because the Government forgot to include the rate of inflation in the calculator and that has left average Kiwis $30 to $50 a week worse off even before we take into account other increased costs like those for early childhood care. 
The point is that nobody believes this National Government any more. No a small minority does. But 53 percent of New Zealanders when polled recently said they would not believe any commitment that the Prime Minister might give on State-owned enterprises like Meridian Energy. They believe he will change his mind—again. And which Prime Minister is it: the one who will never ever sell or the one who is dressing up to bring something to the electorate before the election? It is what we expect from this Prime Minister on this subject. This is the same Prime Minister who says Ministers are no longer responsible to him for their behaviour under the  
Cabinet Manual 
 or for their behaviour under the Standing Orders of the House. So as recently as today we saw the extraordinary spectacle of an Attorney-General who once again has been caught out for not giving a full and complete declaration on pecuniary interests. That is a sham but is exactly what we would expect from this Government. 
In respect of Meridian Energy as a major energy generator it is absolutely intimately tied up with the nature of the rules under the Electricity Industry Bill which is soon to be dealt with in Parliament. The Max Bradford reforms of the 1980s were a complete disaster. They were supposed to drive down the long-run price path for electricity. Instead it rose—at least it rose for residential consumers. It went down of course for major industrials like the Tiwai Point smelter. It went up for mum and dad consumers like the old lady across the road from my electorate office who told me that in the first week after the Budget she had found that the rise in her power price more than ate up anything that she was going to get out of superannuation. It more than ate it up. She is typical of New Zealanders up and down the country who are shivering in their cold and musty flats because they cannot afford power. 
New Zealanders cannot afford power because amongst other things this Minister has told companies like Meridian Energy that they must improve their financial performance. Well let us think about that. Meridian Energy as a generator has a bunch of dams and it has power lines running from the dams. It cannot do much other than turn the tap on and off or raise the price. So when the Minister was challenged in front of the Commerce Committee about why he had failed to ask the generators not to raise electricity prices the best that this Minister could say was that pricing was a blunt instrument. We know it is a blunt instrument but why has the Minister not lifted a finger to protect New Zealanders from rampant power increases? Why is he condoning increases above the rate of inflation and above the impact of the emissions trading scheme? The reason is that there is a quiet wink and a nudge with the Minister of Finance that the Government could use the dough. That is the bottom line. I tell the Minister that it is within his power as the Minister for State Owned Enterprises simply to issue a directive under the State-Owned Enterprises Act that would forbid Meridian Energy or Genesis Power from raising prices faster than—take your pick—the general consumer price index the effect of the emissions trading scheme or that plus 5 percent. You name it! The point is the Government has not lifted a finger to protect ordinary New Zealanders from rampant power price increases. 
Ah well we come to part two of the story. What might be the medium-term solution? The Government would say it is to privatise the State-owned generators because doing that will keep prices down. Yeah right! The Government would privatise them so that the boys in Merrill Lynch—the Prime Minister’s old firm—can make a quiet killing on the transaction. What would the effects of privatising Meridian Energy have been if it was privatised 5 years ago? Under the previous Government Meridian Energy invested in certain assets in Australia particularly in Southern Hydro. It made a cool billion dollars profit off those transactions which it returned to the taxpayer. That profit was returned to the Crown in the form of a couple of big cheques when we did the last long-term hold review because Meridian Energy said it should not be its own bank. We said no it should not. We said that money belonged to the taxpayer so Meridian Energy should return the capital. It did that. 
Now let us imagine what would have happened if Meridian Energy had been privatised. It would have returned the profits all right—but to its private shareholders. It would not have gone into the “People’s Bank” or the consolidated account. It would not have been offset against taxes; it would have simply been somebody else’s dividend cheque. We have heard enough of the sham of saying mum and dad Kiwis should not be prevented from buying a few shares in Kiwibank—in something that they already own. Why would mum and dad Kiwis pay twice? They have already paid for Meridian Energy through their taxes and that is why they are already entitled to the dividends—like the billion dollars from Southern Hydro. Meridian Energy is a prime example of an asset that should not be sold. 
Let us move on to the next little story that the Minister has been spinning. He said to the Finance and Expenditure Committee that the performance of our State-owned enterprises has been terrible which was in direct contravention of the previous speaker Mr Brownlee who said the performance of the State-owned enterprises has been just fine. Of course Mr Power was not above quoting the annual results at the depths of the recession last year rather than taking a long-run average because if he had done so he would have found that the performance of the State-owned enterprise portfolio is within a couple of hundredths of a percentage point of the performance of the NZX50—that is apples with apples horses for courses State-owned enterprises are just as good as private businesses already. But admitting that would not suit National’s ideology would it? It would not suit National’s mantra that the only way to get performance is to privatise. That is simply not true; there is simply no evidence for that. It is perfectly possible for companies that are State-owned to perform well. National should ask Air New Zealand about that. Air New Zealand has performed well as a Crown entity under State ownership. So has Meridian Energy; so has Genesis Power. The Minister knows very well that Air New Zealand is largely Crown-owned and would have been sold to the knackers yard had the previous Minister of Finance not intervened. 
Of course the one to take the cake if the public has any doubt about these issues is Kiwibank. It is no wonder that 85 percent of New Zealanders want to retain Kiwibank. They know we have a terrible savings deficit they know we are bleeding red on our international accounts they know very well we have to make our financial sector stronger in the interests of all New Zealanders and they know that Kiwibank is a critical strategic piece on the chessboard. So what does that lot of clowns want to do? The National members want to flog Kiwibank off supposedly to mum and dad Kiwis knowing very well that it will end up in the hands of its Australian competitors. That is a shame. National should be building up the New Zealand financial sector not selling it to the wolves—not selling it to the wolves. I ask why Bill English and John Key cannot agree on this matter. I ask why it is that John Key says “never ever ever” and Bill English comes out the day after the Budget was released and says “What about selling Kiwibank?”. 
Hon Steve Chadwick 
: Because they don’t talk to each other. 
Hon DAVID CUNLIFFE 
: Yeah maybe they do not take tea together. I suspect that might be true. After all who changed his vote in the last leadership run? It is absolutely unconscionable— 
Hon Trevor Mallard 
: It was actually the one before. 
Hon DAVID CUNLIFFE 
: Yes it was the one before. Well we do not know; “Slippery Key” might have changed his vote two or three times. I would not be at all surprised if he had. 
Kiwibank must not be sold. It is not in New Zealand’s interests to sell Kiwibank just as it is not in New Zealand’s interest to sell Meridian Energy Genesis or Mighty River Power because those are crucial strategic monopoly assets in New Zealand. It is a sham that the electricity bill that is to come before this House contains no measures more stringent than simply shuffling a few of the deckchairs on those boats. The Government is simply swapping a power station between a couple of the generators and calling that structural reform. That is absolute bollocks; it is codswallop. The Government really needs to provide a decent regulatory framework that would unmask and deal to the problems identified in the Wolak report.