Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:673;Page:19143] 
3. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Prime Minister 
: Does he stand by all his answers to oral question number 6 yesterday? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes although I want to take this opportunity to clarify one point. I said yesterday that off the top of my head the cost of the Contact Energy initial public offering as set out in the recent Official Information Act reply to the Leader of the Opposition was 1.9 percent of the total amount raised. It turns out that the cost was only 1.8 percent of the total amount raised. That compares with average initial public offering costs of 7 percent in the United States 3 to 4 percent in Europe and 2 to 10 percent in New Zealand. In this context the cost of the Contact Energy initial public offering was low and my expectation is very strongly that that will also be the case under the mixed-ownership model. 
Hon Clayton Cosgrove 
: Has the cost of advisers’ fees in relation to floating the energy companies and Air New Zealand been factored into the Crown accounts; if so how much? 
Rt Hon JOHN KEY 
: I cannot be 100 percent sure but I would imagine that they were because we have taken ultimately into the Crown Budget the expectation of capital that we would raise and that would be net capital I would have thought. 
Hon Clayton Cosgrove 
: Is it not true that Treasury has advised the Government that recent floats have cost up to 9 percent of the sale price meaning that selling State-owned energy companies and Air New Zealand could cost up to $600 million? 
Rt Hon JOHN KEY 
: No. What it means is that the last time an initial public offering was done by a National Government it cost 1.8 percent and it is my expectation that any other asset sales of a mixed-ownership type would be of the same magnitude. 
Hon Clayton Cosgrove 
: I seek leave to table a memorandum of 17 May 2011 to the Minister of Finance and the Minister for State Owned Enterprises from the Crown Ownership Monitoring Unit which states “In New Zealand large IPOs in recent years have cost around 2 to 9 percent.” 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Clayton Cosgrove 
: Will Kiwi mums and dads on the average wage and facing steadily rising costs of living be able to buy shares in State-owned companies directly? 
Rt Hon JOHN KEY 
: Absolutely they will. They will be buying them not only through their KiwiSaver accounts of which there are 1.7 million but also through many other means. One of the differences between this Government and the Government that the member was part of is that this Government is delivering real wage growth to New Zealanders and under his Government there was no real wage growth to speak of. I know that the Leader of the Opposition is in Greece at the moment checking out its economic policies but I suggest— 
Mr SPEAKER 
: The right honourable Prime Minister was fine until that point but members do not refer to the absence of any member from the House. 
Hon Trevor Mallard 
: Why is the Government engaging international energy capital experts if its priority is to sell to New Zealanders? 
Rt Hon JOHN KEY 
: I do not know which Minister is asking for that advice but I can say that we have laid out very very clearly what our expectations are under the mixed-ownership model. We have made it absolutely explicitly clear that we expect New Zealanders to be at the front of the queue. 
Grant Robertson 
: How? 
Rt Hon JOHN KEY 
: Well I say to Mr Robertson the good news is that Treasury is working on exactly making sure that that happens and I am absolutely confident that the 1.7 million KiwiSaver accounts the billions of dollars invested in the New Zealand Superannuation Fund and the billions of dollars invested in ACC will be invested and that the many thousands of retired New Zealanders who have extra savings and many other New Zealanders will invest in it. I say to those New Zealanders that here is their chance: they can invest in a good New Zealand company or continue to look to Labour which will deliver them a failed finance company or something to invest in. 
Hon Trevor Mallard 
: In light of his acceptance yesterday that some of the shares will be sold offshore are Chinese or Australian investors his priority? 
Rt Hon JOHN KEY 
: That is not what I said yesterday and the member should go back to  
Hansard 
. I refer the member to actually Treasury’s advice to the Government that widespread and substantial New Zealand ownership of assets is achievable. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. No I will leave it Mr Speaker but I will remind you of our discussion yesterday— 
Mr SPEAKER 
: I will listen to the member’s point of order but it needs to be a point of order. 
Hon Trevor Mallard 
: Can I request that you refer to the Standing Orders Committee that answer of the Prime Minister with reference to finding a midpoint between a breach of privilege which involves deliberately misleading— 
Mr SPEAKER 
: I am not happy with that at all because that was a technical way of alleging that the Prime Minister in the member’s view misled the House and that is unacceptable. It is not the way to handle that matter. The only conclusion I can draw is that the member was attempting to score a political point through doing that. The point of order process should not be used for that purpose. When the member asked his question the Prime Minister claimed that his  
Hansard 
 would show that he did not say what the member alleged in his question. The Prime Minister is entitled to do that so I think that is where the matter should end. 
Hon David Cunliffe 
: I seek leave to table a statement of specific fiscal risk from the Budget Economic and Financial Update— 
Mr SPEAKER 
: Is that a document members already have from the Budget documentation? 
Hon David Cunliffe 
: They may or may not but it relates— 
Mr SPEAKER 
: We are not going to seek leave to table it then. The member will resume his seat. 
Hon David Cunliffe 
: I seek leave to table a compilation of data from the company accounts of Meridian Energy Mighty River Power Genesis Energy and Solid Energy which shows they— 
Mr SPEAKER 
: What is the source of this document? 
Hon David Cunliffe 
: The source is the annual company reports pulled together in a composite document. 
Mr SPEAKER 
: Leave is sought to table that document. 
Hon Members 
: Who by? 
Mr SPEAKER 
: I must ascertain who brought the information together. Members deserve to know. 
Hon David Cunliffe 
: The Labour research unit. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon David Cunliffe 
: I seek leave to table a table of dividends supplied by the Parliamentary Library taken from the annual statements of accounts of State-owned enterprises from 1993 to 2010 which shows that the combined dividends of the State-owned enterprises tagged for sale were over $700 million last year. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House.