Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 23 August 2012. Volume:683;Page:4714. Text is incorporated into the Bound Volume.] 
5. 
Hon CLAYTON COSGROVE (Labour) 
 to the  
Minister for State Owned Enterprises 
: Is it still the Government’s intention for the first partial privatisation of an SOE to occur in the third quarter of this year; if not why not? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the Minister for State Owned Enterprises: Yes that is our intention. As we have always said the precise timing of all the Government’s partial share offers will be subject to market conditions and other factors. In the case of Mighty River Power the first offer we are currently working through issues such as Maori rights and interests in water. The Waitangi Tribunal is due to report on its recommendations tomorrow. We are confident these issues can be resolved. 
Hon Clayton Cosgrove 
: Does he agree with the comments of Rob Cameron head of the Capital Market Development Taskforce that the management of the asset sales programme has been “a disaster”? 
Hon BILL ENGLISH 
: I do not believe that those comments are correctly attributed and if they are I do not agree with them. 
Hon Clayton Cosgrove 
: How is it good management to first ignore then needlessly inflame a dispute over water rights potentially costing the taxpayer millions of dollars from a reduced sale price— 
Hon Trevor Mallard 
: Billions. 
Hon Clayton Cosgrove 
: —billions—and potentially billions more in legal compensation? 
Hon BILL ENGLISH 
: The member is simply wrong. The Government has been aware of Maori rights and interests in water since the day after it took office and it has been working with a wide range of Maori representation on those issues. Those discussions continue in a constructive and positive manner. 
Hon Clayton Cosgrove 
: Given that on 1 August he agreed with the Minister of Finance that the asset sales programme was “on track” how does he reconcile that statement with the news that as Bill English stated Solid Energy will be delayed or even cancelled Meridian Energy is being put over a barrel by tough negotiations by its biggest customer the chair of Air New Zealand says that the price of the company is too low to sell and Mighty River Power is faced with potential court action over disputed water rights? 
Hon BILL ENGLISH 
: Well I just cannot recall exactly what his initial question was but the sales are on track. The member is referring to a list of what are normal commercial risks. In fact his question I think underlines the point that these companies are subject to commercial risks. The fact that they are owned by the Government does not make those go away. Our intention is to get an ownership structure where those commercial risks will be handled more constructively. And actually all I said about Solid Energy was that it is not ready for sale now. 
Andrew Williams 
: Does he agree with the Prime Minister’s 7 August comment that the Government’s asset sales have been hamstrung by the market; if so has he had any discussions with the Prime Minister about shelving the mixed-ownership model? 
Hon BILL ENGLISH 
: No. 
Hon Clayton Cosgrove 
: If the sale of State-owned assets does not meet revenue expectations due to his Government’s mismanagement of the float or floats what actions will his Government take to make up the financial shortfall? 
Hon BILL ENGLISH 
: Any risks to the proceeds from the sales which the Government has specified as being $5 billion to $7 billion will not be to do with the Government’s handling of the sales; they will be to do with companies like Solid Energy having to face the reality that coal prices have dropped and the fact that electricity companies may face flat or falling electricity demand for instance. Those are all real commercial risks and we will not know until we are fairly well through the sales process whether the Government will realise $5 billion to $7 billion. We expect we will realise $5 billion to $7 billion. 
Te Ururoa Flavell 
: Tena koe Mr Speaker. Kia ora tatou katoa. Does the Minister accept that reports of difficult power price negotiations with Rio Tinto jeopardise the timing of the first partial privatisation of a State-owned enterprise and how does this demonstrate the importance of keeping strategic assets in New Zealand control so that the New Zealand economy cannot be held to ransom by foreign-owned businesses? 
Hon BILL ENGLISH 
: Firstly I would point out that the so-called foreign-owned business has provided on average in excess of a thousand jobs in Southland since the early 1960s and not too many other investors have actually done that. So let us keep that in perspective. Secondly of course there is going to be some game playing around what are tough commercial negotiations between the owners of the smelter and Meridian Energy. I have to say that over the period since the mid-1960s every time the aluminium price gets a bit low the owners of that business front up to the Government and try to get the electricity price down. There is nothing new. 
Andrew Williams 
: Does he agree with the other comment made by the Prime Minister on 7 August that “We don’t have lots of flexibility and they are literally October-November of this year or March-April of next year”; if that is the case if Mighty River Power is not sold by March-April next year what effect will it have on the future viability of the mixed-ownership model? 
Hon BILL ENGLISH 
: That is a hypothetical question. The Government is on track for the sale of Mighty River Power this year. We have been working with Maori over water rights and interests for 3 years. Given that that is the principal issue related to Mighty River Power we believe that that issue can be handled in a constructive and positive way as it has been for the last 2 or 3 years.