Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Mixed Ownership Model Bill — In Committee Speaker Recalled In Committee 
[Sitting date: 19 June 2012. Volume:681;Page:3050. Text is incorporated into the Bound Volume.] 
Mixed Ownership Model Bill 
In Committee 
Part 1 Provisions for companies to cease to be State enterprises and to become mixed ownership model companies 
DAVID SHEARER (Leader of the Opposition) 
: 
 We are getting to the end of what is I think for most New Zealanders an obnoxious piece of legislation the Mixed Ownership Model Bill which overwhelmingly people in this country oppose. In fact consistently overwhelmingly they have opposed the selling-off of our assets—assets that they believed were theirs assets that they believed that their grandparents their parents they themselves and their children would inherit. These are our assets not assets to be flogged off to private interests. 
What we are seeing here is a wholesale shift of property and assets in New Zealand public ownership—things that we enjoy the ownership of—into the hands of a small elite of people who are— 
Hon Chris Tremain 
: I raise a point of order Mr Chairperson. I raise a point of order at this point of time in the debate. This is a tight part clauses 3 to 11. The Leader of the Opposition is taking a very wide-ranging debate. This is the Committee stage of the debate. It is a tight part and tight clauses. He needs to focus very clearly on those clauses in the Committee stage. 
Hon Trevor Mallard 
: That would have been right if we were speaking to clause 3. We are speaking to Part 1 where there are a number of very significant amendments to the State-Owned Enterprises Act the Ombudsmen Act the Official Information Act the Public Finance Act and two parts of a schedule of the Income Tax Act. This is not a narrow debate. This is a broad part one of the two most important parts of this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you and I recognise the contribution that the member has made. 
DAVID SHEARER 
: As I was saying the point about this bill is that it actually shifts ownership through Part 1 out of the State-Owned Enterprises Act to private interests. I can tell the Committee that the bill will not be shifting ownership into the hands of ordinary mums and dads across New Zealand; it will be shifting ownership into the hands of a very small group of people who can afford to buy shares. That will not be everybody in New Zealand. In fact it will not be anywhere close to the majority of New Zealanders—not anywhere close to those people. 
The queue the Prime Minister talks about that New Zealanders will be at the front of is not the queue that I see in my electorate—people queuing to get jobs in the local supermarket. It is not that queue. That queue is for people who are desperate for jobs. They will not be trying to buy shares in these companies. They will be for a small bunch of people who have the financial resources to be able to afford them. 
 The undertaking in this legislation is that somehow New Zealand is going to be better off as a result—better off. Well I can tell the Committee right now that we are not going to be better off. Actually we are going to be $100 million a year worse off. Any of the calculations done by Treasury or done by independent consultants—whomever you want to ask—will tell you that selling off these assets will leave us in a worse financial situation than we are in right now. 
Paul Goldsmith 
: Oh! 
DAVID SHEARER 
: Absolutely! The other point about this is that everybody knows in New Zealand—every single New Zealander knows—that the price of electricity is going to go up. We were asking those very questions today in the House—why the weighted average of State-owned enterprises’ electricity prices across the sector happens to be 13 percent cheaper than that in private electricity company hands. The reason is that it is more expensive in private companies than it is under the State-owned enterprises. We know that as soon as the State-owned enterprises are privatised—under Part 1 of this legislation—the price will go up. 
Every New Zealander whom I have spoken to around the country in the past few months has said to me that that is their greatest concern. This cold snap in the last couple of weeks has indicated to us and shown to us that people are really concerned about the price of electricity and where that price is going to go. If it stops at 13 percent I will be absolutely surprised. We know what is going to happen with this legislation. We know that the three major power companies are actually well run and efficiently run. Treasury says that and independent consultants say that. So the only way that you can get an efficient company to generate more profit is by putting up the price. 
Hon Member 
: How? 
DAVID SHEARER 
: By putting up the price and that is exactly why everybody in New Zealand is fearful of what is going to happen. 
The second thing they are most fearful of is the fact that these companies are going to end up in foreign hands. The Government says that somehow they are going to be protected that ordinary New Zealanders are going to be at the front of the queue and that they are always going to stay in New Zealand hands. Well I can tell the other side that most New Zealanders actually do not believe that and neither do we. We do not believe that either. I can tell you what is going to happen. As soon as New Zealanders get these shares and they get an offer from a foreign company they are going to sell them off. Where is the undertaking in the legislation where is the undertaking in this bill in this part of the legislation—the most relevant part—to ensure that ownership stays in New Zealand hands? 
Kris Faafoi 
: There is none. 
DAVID SHEARER 
: There is none. There is no undertaking there at all. As if to console New Zealanders even less than that the Government has seen fit to take out in this piece of legislation any ability to look to use the Official Information Act or the Ombudsmen Act to ensure that we can see what is actually happening to something that is 51 percent so-called in our name. 
The Crown takes on all the risk. The people of New Zealand do not get to have even a look-in to what might be going on in these companies as a result of this legislation. The Crown takes the risk private holders of shares get the benefits and we the taxpayers do not get even a chance to have a look at what is going on in these three companies. That is a mistake. That is an absolute mistake and it is I believe trampling on the rights and the responsibilities that New Zealanders should enjoy. 
But not only that; let me accentuate one more thing and that is the social responsibility clause. The social responsibility clause ensures that all the actions of these companies would be in the best interests of New Zealand—that has gone. 
Paul Goldsmith 
: What clause is that? 
Kris Faafoi 
: Clause 3. 
DAVID SHEARER 
: It is actually section 4. 
Kris Faafoi 
: It is clause 3 actually. 
DAVID SHEARER 
: Section 4 clause 3. The social responsibility clause which would enable these companies to take responsibility and care for the communities in New Zealand has gone. That has gone. 
So what have we got as a result of this piece of legislation? We know that most of those shares will end up in foreign hands. We know that electricity prices will go through the roof. We know that we will never get a chance to have a look at what is going on in these companies because we have been denied that opportunity to use the Official Information Act and the Ombudsmen Act. The only sense of responsibility that this Act might give to New Zealanders to know that power prices and communities across New Zealand are being looked out for is gone. If that is not enough right now the Government has no clue on how much these companies are going to be sold for—$10 billion $7 billion $6 billion $6.5 billion it went up to— 
Hon Member 
: Have a guess. 
DAVID SHEARER 
: It is a guess and not even a “best guess” to quote the Minister of Finance. In the midst of a global financial crisis this Government has seen fit to sell off our most potent assets our most valuable assets overseas for a price it cannot even get close to guaranteeing. If that is not a shoddy piece of Government policy which New Zealanders will be voting down in the referendum I do not know what is. 
Hon BILL ENGLISH (Deputy Prime Minister) 
: 
 It is good to speak to Part 1 of the Mixed Ownership Model Bill. What the previous speaker David Shearer said about prices is just nonsense. Does he seriously believe that hundreds of thousands of New Zealanders are systematically paying more for their electricity than they could? 
Grant Robertson 
: Yes they are. 
Hon BILL ENGLISH 
: So most New Zealanders are stupid? That theory relies on Labour’s belief that most New Zealanders are stupidly paying 13 percent more for their power than they could if they just chose to pay less. It is just rubbish. 
Through this debate and this Committee stage there is one question that the Labour Party has to answer and until it answers that question its criticism cannot be taken seriously. It is this: if it is elected in 2014 will it borrow $7 billion from foreigners to buy the energy companies back? That is the only question that matters. You see the question is this: can those members persuade themselves about their arguments against the sale? I know they are trying to persuade the public but can they persuade themselves? Can David Shearer who I think is actually not too worried about these sales persuade David Parker who is totally opposed to them? Can they persuade themselves their arguments are so strong that in the middle of the European crisis and global uncertainty they will say to the public that the most important thing a new Labour Government is going to do is borrow $7 billion from foreign lenders to buy back the energy companies? Because until they make that commitment their arguments are meaningless. Until they make that commitment their arguments are meaningless. 
They can say whatever they like about power prices but do they believe that enough to borrow $7 billion from foreign lenders and start paying them interest so that they can lower power prices? If they believe that selling these companies is fiscally bad will they borrow $7 billion from foreign lenders—to whom we are one of the most indebted countries in the world already; we are already one of the most indebted countries in the world to foreign lenders—who are losing money all over Europe and are worried about global instability in a way they have not been in a generation? Labour gives the impression that it might but it has not actually said so. You know what I think? I think come the end of this debate during the leader’s third reading speech David Shearer is going to make a call which will be a change. He is going to make a call in his third reading speech that Labour will buy these assets back and if he does not say that then Labour has no credibility on this argument— 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. This is a wide-ranging debate but I have never heard it allowed in this or in any other Parliament with similar rules where you can get up and say the same old thing 10 times over. 
Hon Parekura Horomia 
: That’s right—15. 
Rt Hon Winston Peters 
: The same thing repeated 10—no 15 times. Surely we are required to have a debate here and for him to say something new after 4 minutes. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! Points of order are to be heard in silence. Can I say it is a debatable issue and the public will judge the speech. 
Hon BILL ENGLISH 
: At least one Labour member is unpersuaded by the argument: David Clark MP who said on TV last week that buying these assets back is “not off the table”. So he is not persuaded by David Shearer and I expect that not many of the others are either actually. That is what we are waiting for at the end of this debate: Labour’s undertaking to borrow $7 billion. You see we would rather pay dividends to New Zealanders; Labour would rather pay interest to foreign banks. We want to pay dividends to New Zealand mums and dads; Labour wants to pay interest to foreign offshore multinational banks. That is its policy. Well that is its policy until it changes. Until it changes that is its policy. Of course what those members could do is agree not to buy them back which would be the logical thing to do and I expect the ground is starting to shift now. I expect their leader will not say that in his third reading speech and they will hope that over the next 18 months it just kind of slips away so they do not have to commit to borrowing $7 billion from foreign multinational— 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on the Government’s Mixed Ownership Model Bill. We will be talking specifically about some of the amendments that the Green Party will be moving to this part but here I want to talk more generally about the essence of the clauses here which is to fundamentally change the ownership structure to remove these companies from being State-owned enterprises to essentially being mixed-ownership model as the Government is calling them. The first thing I think to say about this is that the effect of taking these companies out from the State-Owned Enterprises Act will be to permanently remove the ability of the New Zealand Government to make the New Zealand electricity sector more competitive and I think that has been a missed point in this whole debate. By removing these companies from the State-Owned Enterprises Act so that they are no longer under the control of the Government the Government will remove the ability that it has recently exercised to force these companies to transfer assets around within the system. Because they were State-owned enterprises the Government was able to force Meridian Energy and Genesis Power to move generating assets around in order to meet its idea of what a competitive electricity market would look like. Whatever you might think about that—and I am not convinced that it necessarily did the right thing—by doing this and moving these assets out of the State-Owned Enterprises Act as it does in the clauses in Part 1 it permanently removes the ability of future Governments to alter these ownership structures. Once the Government is a 51 percent owner of these companies it simply cannot direct them to sell some of their generating assets to other companies or sell others of them to buy generating assets from other companies. It is simply not possible because the minority owners in these companies have rights and the directors of these companies are required to consider the best interests of the company as a whole. 
 Once these clauses go through in Part 1 it could well be in the best interests of the company to drive up monopoly prices. In fact that is how you maximise profit in the return to shareholders: drive up monopoly prices. If they were to do that they would be acting in the best interests of the company once these clauses have gone through that move the companies out from the State-owned Enterprises Act. So in fact what the Government is doing is locking into place the current set-up in terms of generating assets within the electricity market by going through with this. If in future we were to discover that in fact the arrangement that we had in terms of the electricity generating assets was not the most competitive arrangement for the electricity market we would no longer have that ability. 
And what we know about the electricity market is that it is deeply uncompetitive. The Commerce Commission in its report in 2009 came to the view that the electricity sector was essentially ripping off the rest of the economy because the way that the market has been established in the sector is deeply uncompetitive. It is not at all surprising: we have a small number of generator-retailers who dominate the market and who have the ability to maximise the price and returns that they get. So by the Government transferring these assets away from being State-owned enterprises and the ability of the Government to put some pressure on them what we are guaranteeing is that these companies can freely pursue their right to charge monopoly rates and monopoly prices. That is what it means. 
When we did the analysis and went through all the different lines companies’ areas and compared the prices that State-owned enterprises charge versus the prices that private companies charge what we found was that basically the private companies are charging around 12 or 13 percent more than the State-owned enterprises. And when you look at the comments from the chief executive officers of the private companies they are very clear that they believe that the State-owned enterprises are undercharging for electricity. When the chief executive officers from TrustPower and Contact Energy have been reported on this issue what they have said is that the State-owned enterprises are undercutting them on price. So by transferring these companies from being in the State-Owned Enterprises Act which is what this Part 1 does and putting them simply as regular profit maximisers as regular companies in the market we remove the anchor that the State-owned enterprises currently provide to the electricity market. In the context of a market that is fundamentally uncompetitive because it is a small market with a small number of dominant players we are removing the anchor that these State-owned enterprises currently provide to price. That is why prices will go up. 
The other argument that this Government has used repeatedly as to why it needs to move them out from being State-owned enterprises is around access to capital. The Government said: “Oh we have to give these companies access to capital and that’s why we have to privatise them or partially privatise them.” But this argument is fundamentally flawed. Think this argument through. What the Government is saying is they need more access to capital. Well who gets the proceeds from the sale? It is not the companies; it is the Government—right? So then how will these companies once they are partially privatised raise more capital? The only way they can do it is to issue more shares. If the Government is to maintain its 51 percent ownership of these companies then half of all the new shares issued have to be purchased by the Crown—51 percent of them have to be purchased by the Crown. Half of all the new capital that will be made available to these companies by issuing new shares has to actually be provided by the Government. 
Is the Government actually going to provide half of all the new capital that these companies want? I think it is very unlikely because the Government has gone on at great length about how it is short of capital how the way the capital has been allocated is extremely irrational and how it does not want to be caught up in these State-owned enterprises and the way they use capital any more. In which case what it means is that the only option is for the Government shareholdings to fall under 51 percent. So all the promises about maintaining 51 percent ownership will come up against the desire of these companies to gain access to more capital and require the Government to provide half of all the new capital which the Government of course will not do. 
The other part about this is the cost of this process of moving these companies from no longer being State-owned enterprises. We asked the Minister of Finance about this today and basically he is saying that we are talking of an initial cost of somewhere in the order of $120 million to $140 million if we get say $7 billion as the Government is proposing. So $120 million will be paid by taxpayers for the privilege of losing control of these companies. For the privilege of giving control of these companies from all of us to a tiny minority of us we are going to have to pay $120 million to $140 million. 
Then on top of that the Government is talking about a loyalty scheme. The way loyalty schemes work is essentially the seller gives away free shares to buyers if the buyers meet certain conditions. In the case of the Queensland Rail privatisation done by the Labor Government in Queensland—of course with the result it got chucked out at the next election—in that example what the Government did was it gave the 16th share for free to those who bought 15 shares and hung on to them for 2 years. That is effectively a 6 percent cost to the seller. If there is a 6 percent cost to the seller in this example in New Zealand if the Government decides to go down the same path then we are talking about up to $400 million that will be forgone as a result of giving away free shares as part of this loyalty programme. When you add that to the $120 million the Government has already confirmed it is planning to spend we are talking about spending somewhere in the order of half a billion dollars of taxpayers’ money in order to sell something that taxpayers already own against the wishes of the vast majority of New Zealanders who are resolutely opposed to the privatisation programme. How can that possibly be the right thing for this Government to do? 
On top of that we have the lost earnings going forward. In the Budget Policy Statement 2011 done by Treasury and the Budget Policy Statement 2012 it said that as a result of the clauses in Part 1 the removal of these companies from being State-owned enterprises and the move to partial privatisation the Government is $100 million a year worse off on its operating balance excluding gains and losses—that is basically the Budget deficit. So it will be $100 million a year permanently worse off year after year after year as a result of the clauses in this bill. If this goes ahead it will add to the Government debt by $100 million a year because the Government debt is fundamentally the result of the addition of all the deficits that this Government runs—and it is a Government that runs very very large deficits. 
So on top of the fact that it is going to have a huge impact in terms of the first round of costs of maybe half a billion dollars of doing the privatisation programme on top of that the Government is worse off by $100 million every year because of the privatisation programme according to Treasury figures in the Budget Policy Statement 2011 repeated again in the Budget Policy Statement 2012. So when the Government says this is fiscally responsible what I suggest people do who are listening to this debate is read the Budget policy statements of 2011 and 2012. Readers will see that this is the most fiscally reckless policy that you could possibly be engaged in in terms of its impact on the Government’s fiscal position. This is really bad policy and it is driven by the fact that they have to pay for the tax cuts for upper-income earners. 
Hon CLAYTON COSGROVE (Labour) 
: 
 Mr Chairman— 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. There is a bit of confusion here about the order. The last thing I want to do is stop my colleague Clayton Cosgrove from speaking but you went from Labour to National then to the Greens so why not New Zealand First? 
The CHAIRPERSON (H V Ross Robertson) 
: The member makes a good point. I did actually consider that before I gave the call. I looked at the whole issue of proportionality and I am going to call Andrew Williams immediately after Clayton Cosgrove. 
Rt Hon Winston Peters 
: No no no—point of order. 
The CHAIRPERSON (H V Ross Robertson) 
: The thing is Mr Peters as you well know once I have made the call and I have called someone I have to stick with that call. 
Rt Hon Winston Peters 
: I raise a point of order Mr Chairperson. With the greatest respect the last thing we should have is a rule where you can make an erroneous decision and the House cannot help you to correct it. You know the House is the master of its own destiny and therefore you could correct it. The real point here is that I do not know how you get the proportionality of it all but I cannot see how in any way that it is worked out you could come to that decision if the Greens were going third. Now honestly if you are going from a sequence—and I have seen the rest of the sequence with the other parts of the bill in this House—I cannot follow this one here and I would hate you to start with a mistake that becomes a precedent which does not serve after all the interests of the minority. And after all your No. 1 job is to look after the minority in this House. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member and refer him to Speaker’s ruling 26/4 and Standing Order 102. I accept what he says and recognise the contribution that he has made. It will certainly not be a precedent. We are in the Committee stage of the House. 
Hon CLAYTON COSGROVE 
: Just acknowledging I am sure that the New Zealand First speaker to follow will make an exceedingly good contribution. Can I just say that I listened to Mr English’s speech and it was very interesting. I listened to it because I was waiting as all New Zealanders have waited since before the election campaign for a justification for a rationale for the case to be made. After all you can spray and pray as it were all over every other political party in this Chamber but at the end of the day the Government is required to make a case for its actions. And no case has been made. In fact the case has been contradicted and the arguments have been contradicted day after day and month after month by this Government. All Mr English succeeded in doing was to reinforce to this Parliament and the people of New Zealand that he has failed—and continues to fail—to make a justifiable case for the sale of these assets. 
After all as the Green colleague said if you go through the history of this—Russel Norman is right—the first justification put up by Mr English was that these assets must be sold because in order to grow they require capital and the Government has no capital. Then Mr English—after I think an interview with me—got out his School Certificate “BusCom” textbook and worked out and looked up in the dictionary a word called “dilution”. He then realised as Tony Ryall did that hang on if the minority then move to make a capital raising and the Government because it said it had no dough—that is why it has to sell—did not move on that in an equivalent way then its ownership would be diluted below 51 percent. And in this House in answer to my question Tony Ryall said that the Government would do whatever it takes—whatever it takes—to maintain its 51 percent ownership including borrowing including taxation including whatever it takes. But I thought Mr English and Mr Ryall came from a position that these assets had to be sold because the Government had no money and was not prepared to borrow or tax to fund the growth strategies of the State-owned enterprises. So that is contradiction No. 1. 
Then we come to another couple of key issues. The Budget Policy Statement—who in their right mind would believe it would be a good proposition to save debt-servicing costs of $266 million per annum and give away profits of $360 million per annum and then make a $100 million loss? Who in their right mind in this Parliament or which business people would see this as a net positive solution a net positive strategy and proposition for a business or for this Parliament? That is contradiction No. 2. 
Then of course we come to the issue of loyalty bonuses. Well here is the problem with loyalty bonuses: loyalty bonuses are an admission of defeat by Tony Ryall John Key and Bill English. They have told us for months and months that they expect that 95 percent or 85 percent of these companies will be purchased by mum and dad Kiwis and then they have demonstrated weasel words because they have talked about ACC and then they have talked about superannuation funds including KiwiSaver and other things. But no no no—we know what the definition of a mum and dad Kiwi is. The admission of defeat is that if you have to give mum and dad New Zealander a loyalty bonus you know that if they purchase at X price and a foreign interest or institution offers them a greater value to sell then they will because Kiwis will do—and I mean no disrespect to Kiwis—what is in their interests to look after themselves. 
All the loyalty bonus does of course is put off the fateful day maybe by 12 months maybe by 2 years. You get your one free share to 15 and you flog the lot off. There is no guarantee in this legislation in any part particularly Part 1 that Kiwi mums and dads will be the first in the queue. There is no guarantee at all. The Minister for State Owned Enterprises has already said of course that he will not stop anybody onselling to anybody. And we know of course as David Shearer said that if foreigners buy just 15 percent of these State-owned assets then that is 100 million bucks a year on top of the $120 million the Government is wasting on consultants and merchant bankers and on top of $100 million it is wasting because its debt-servicing costs are less than the profits they forgo. There is $300 million offshore or wasted or not put back into our communities as they are now. 
Then we come to the 10 percent ownership cap of course. Well here is the difficulty with that. There are no penalties in this legislation. We have had submissions to the Finance and Expenditure Committee that said you could drive a bus through it. You could absolutely drive a bus through that 10 percent ownership cap. 
Drawing on some specific amendments though David Shearer made reference to the Ombudsman and the Official Information Act. Here is the proposition that we have put; it is another contradiction for the Government. One of the alibis for selling these shares is that in selling the State-owned enterprises somehow the metaphorical commercial sphincter muscle on certain people in the State-owned enterprises—the chief executive officers the chairs and the boards—will tighten as it were as they come under scrutiny from this thing called the market and the odd financial analyst. But let me say this to those geniuses over there. A quarterly report an annual general meeting and some good solid business journalism is far less superior in respect of scrutiny than being able to ask that Minister in the House every day questions on State-owned enterprises; than dragging as we did before the Finance and Expenditure Committee the chairs the boards and the chief executives of these State-owned enterprises and grilling them under financial review; than utilising the Official Information Act so that journalists members of the public and members of this Parliament can get information about what is going on; and than utilising the Ombudsman so that journalists and members of Parliament and the public can find out what is happening. Using the quasi-inquisitorial powers of this Parliament to haul them in bring them before a select committee and put their feet to the fire is gone. We cannot be told in this Parliament that somehow a little bit of market scrutiny is going to be more effective than this House. 
It is interesting what Jenny Shipley the chair of Genesis Power said when she came in. I put a question to her. She is a person who is on boards both in the private sector and for a State-owned enterprise. Her board membership is made up of directors who are on boards in the private sector and for a State-owned enterprise. I asked whether it was conceivable that somehow in governing her State-owned enterprise she would use a second-class model. She would walk through the door of a private sector board and say “I’m going to operate to commercial world’s best practice.” but when she walks into the boardroom of a State-owned enterprise she will knock back a notch and operate to a lesser standard. She said no. Asked what difference it would make whether they were sold off or in public hands she said it would make no difference at all. They will operate to world’s best commercial private sector standard. So that is yet another contradiction—yet another contradiction. 
We will be proposing amendments in this debate in respect of removing those State-owned assets from the State-Owned Enterprises Act. We will be proposing amendments in this debate of making them subject to the Official Information Act making them subject to parliamentary processes and making them subject to the Ombudsman so that Kiwis even if all they are left with is the Crown ownership—owning 51 percent—will be able as they are entitled to get answers in a transparent and accountable way. You see the alibi that will be used by this Minister and his Government when they are sold privately is: “Oh no no no—the market will sort it out. The market will scrutinise. The market will find more accountability than this Parliament can.” I cannot find too much more accountability than putting to the fire the feet of the Minister directors and chief executive officers before a select committee before this House utilising the Official Information Act and utilising like Air New Zealand— 
Rt Hon Winston Peters 
: Like KiwiRail. 
Hon CLAYTON COSGROVE 
: —yes indeed KiwiRail—and utilising the Office of the Ombudsmen. So I challenge the Minister to tell me and to tell this Committee that some sort of private sector market scrutiny is going to be harsher and at a higher level than that. You have a former Prime Minister Jenny Shipley who was very much in favour—we did not bother asking her what her view on State-owned enterprise sales would be given her history and lineage—and is the chairman of the board saying it will make no difference whether it was sold private or public. Chris Moller came in and the only point he made—no disrespect to the good man—was that if they are private we might be able to attract a few more highly skilled people into them. Well I have got to say that if that is one of the justifications that is a huge call—a huge call. That may be because the salaries are going to go up. 
When we talk about price rises here is something that Mr English never touched on before the Finance and Expenditure Committee nor Mr Heatley today and Mr Ryall refused. They blocked our request at the Finance and Expenditure Committee to have an analysis done on Molly Melhuish’s calculation about price rises—State-owned enterprises mark to mark to the private sector suppliers. They blocked that advice at every step of the way. They refused. Bill English said it was not worth getting the work done and refused to get that advice. I would have thought that if we are wrong they would be racing to Treasury and to their officials the Ministry of Economic Development and the like to get the justification to try to knock us over. Or is it the case that we are right and they do not want explicit advice to their Ministers saying that it is going to be a rough old winter and a rough old winter for the next few years and beyond for the poor old Kiwi consumer? Yet again we are blocked at every turn and this Government at the end of the day must front up— 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 That was a most interesting contribution from Mr Clayton Cosgrove and more interesting by the fact that he mentioned the words “lineage” and “history”. Well let us look at his lineage and history in terms of his involvement in politics. He was one of the key men backing the Rt Hon Mike Moore senior Labour MP in the Government of 1984-1990— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. Although I share the Minister’s respect for the Rt Hon Mike Moore I think I was about 14 years of age and I ask what the hell this has to do with the Mixed Ownership Model Bill. 
The CHAIRPERSON (H V Ross Robertson) 
: It is hardly a point of order but I was going to say to the member that the member is replying to a speech and he is able to do so under Speakers’ ruling 46/2. But of course that goes on for only a limited time. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. He is just not allowed to blatantly mislead the Committee. I am not going to say that the member Clayton Cosgrove looks his age but I think all of us know that he was not in the Minister’s office when the Rt Hon Mike Moore was a Minister and at least for most of that time he was at school. 
Hon Clayton Cosgrove 
: I was indeed. It’s a great school. 
The CHAIRPERSON (H V Ross Robertson) 
: A debatable issue mind you but I appreciate the point that has been made. I am going to call the Hon Tony Ryall. Your time will start again. 
Hon TONY RYALL 
: He was certainly very active out there on the streets in support of Mike Moore. The point is this. Mike Moore Annette King Phil Goff and Trevor Mallard all traipsed through that lobby to sell almost $10 billion of public assets during the 1980s. Mike Moore Annette King and Phil Goff—until recently the shining lights of the Labour Party opposite—together with Trevor Mallard under urgency time and time again went in and flogged off $10 billion worth of public assets. 
Parliament could not be debating the Mixed Ownership Model Bill at a more important time. When you look at what is happening on our television screens every night—what is happening in Greece what is happening in Spain what is happening in Portugal—countries that are not in control of their debt are losing control of their destiny. Unless Governments take decisive action to control their debt then their economic situation gets a lot worse. 
It is worth reflecting on debt because this bill is about helping New Zealand control our debt. Controlling our debt becomes more important by the week when you see what is happening internationally. In 2008 when this Government led this country when it took over we had a national debt of $8 billion. Today it is $52 billion as this Government has moved to soften the sharp edges of recession. In 3 years’ time it will be $72 billion—$72 billion. New Zealand cannot let its debt get out of control and that is the reason why this Government is taking decisive action to do this. It is part of a wider plan that this Government has to help control debt and manage our economy into the future. 
But over the next few hours of this debate members are going to hear a lot of disingenuous arguments from the members opposite. You are going to hear as you did with Mr Norman that this bill does not reduce debt. That is what he said: this does not reduce debt. Well I would just look at the 2012 Budget Policy Statement—he did not mention that—where it says quite clearly: “The overall fiscal impact of mixed ownership is: a reduction in net debt.” So you will hear about that but the fact is that it does help control debt. The proceeds go into a Future Investment Fund which is used to invest in schools hospitals and other assets. 
The second argument which has just come up in the last few days is that this will push up prices. But it is completely inconsistent with the speech that Mr Cosgrove just gave. Mr Cosgrove said he brought the chairmen of the boards before the powerful Finance and Expenditure Committee and they all said they would not do anything different whether the entities were public or private. That is what Mr Cosgrove said. All three chairs said they would do nothing different whether the entities were public or private. But then on the other hand we have got the lefties saying that if they are privately owned the directors are going to put the prices up. So on the one hand they say it does not matter who the owners are and then on the other hand they say that if you change the ownership up go the prices. 
The fact is that there is a highly competitive electricity market in New Zealand today—highly competitive. In the last few months 420000 New Zealanders changed power companies—420000 people changed power companies. The Labour Party says New Zealanders are so dumb they do not know how to change power companies and so they are all being ripped off by private electricity companies. Many of those 420000 people changed to private companies. They changed to all sorts of companies as a result of the power switch and that is very very positive and a good sign. 
 The third thing that members opposite are going to tell you is that these shares are all going to be sold off to foreigners. Did you hear the story today? Mr Shearer said it. These New Zealanders are going to get these shares then they are going to be offered a price and then they are going to sell them to the foreigners. Well I am standing on this side of the Chamber because actually I trust New Zealanders to hold shares. The fact is that that side of the Chamber does not think that ordinary New Zealanders are good enough to own shares. Those members opposite do not think New Zealanders are good enough to own shares. Who do they think these uppity people are who think they can own shares? Who are they—these electricians—who think they might be able to put some of their savings into shares? Who are these uppity tradespeople who may want to buy some shares? They cannot be trusted! They will flog them off at the first opportunity! We in the Government do not believe that. That is the attitude of the Labour Party and the Green Party to ordinary people: they cannot be trusted to own shares. We think they can. 
We think the Port of Tauranga is a perfect example of how sensible New Zealanders make decisions. Port of Tauranga is 55 percent owned by local government which is like central government and 45 percent is owned on the sharemarket. Those shares were issued generally to New Zealanders. If you follow the Labour Party’s line all of those shares would have been sold to foreigners because you cannot trust ordinary people to own shares can you? That is what Labour says. In respect of the Port of Tauranga which is a mixed-ownership model type of company on the New Zealand Exchange the New Zealanders are buying out the foreigners. The New Zealanders are buying out the foreigners because we trust them. 
Scrutiny of the companies is another argument that you are going to hear. The fact is that because the companies will not necessarily appear before the Finance and Expenditure Committee—Air New Zealand does; it is a mixed-ownership model company—there will not be any good scrutiny of these companies. Well they appear once a year before the all-powerful Finance and Expenditure Committee but in the end what is going to hold these companies to the fire is the continuous disclosure required by the New Zealand Exchange and the fact that very smart analysts are going to be looking at these companies to see how they are being managed and are performing and actually are going to be helping to improve the value of the Crown investment as well as the private investment. 
 So this legislation does a couple of things that these people opposite would never want to admit. It legislates 51 percent New Zealand Government control full stop for all time—51 percent full Government ownership for all time full stop—and it puts a limit of 10 percent on any one shareholder. There will be 51 percent Government control and a 10 percent limit on any shareholder. That is important and that is what is being enshrined in this legislation. 
Over the next few minutes and hours members opposite and members listening will hear a lot of arguments but remember that they are being made by the party that sold almost $10 billion of public assets. But here is the difference: Labour never told the public it was going to do it. When Annette King Phil Goff and all the other members on the front bench—David Parker Grant Robertson and Clayton Cosgrove—were out campaigning for Labour in the 1980s did they ever tell the people Labour was going to sell Telecom to the Americans and Fay Richwhite? No. Did they ever go to tell them that it was going to sell a whole lot of the forestry rights to foreigners? No. Did they ever tell them Labour was going to sell the Shipping Corporation to foreigners? No. Labour kept it a secret in the 1987 election—it kept it a secret that it was going to have these sales. 
This Government has done the complete opposite. We campaigned on this issue. We told everybody about this plan and these five companies in January 2011. We were not like Phil Goff Annette King and Trevor Mallard who kept it quiet and never got a mandate for it. This party got a mandate in the election. That party spent its entire campaign—its feckless hopeless campaign—on this single issue and got the lowest vote it has ever had in the history of the Labour Party. It was the lowest vote it has ever had in the history of the Labour Party. This party— 
Paul Goldsmith 
: In 1915 it was worse. 
Hon TONY RYALL 
: Oh in 1915 it got lower. Right but it was the lowest vote ever in the history of the Labour Party. This party got the highest vote ever in the history of an MMP election. So the contrast could not be more stark. When Labour sold $10 billion worth of assets it never told anyone it never got a mandate and it did it under urgency. This party campaigned on it for a year we have been upfront about it and we are not rushing this legislation through. There was a select committee process; there was no select committee process when Labour sold $10 billion worth of assets. This party has followed a very good rigorous publicly endorsed open process and the fact is that this Government is making the important decisions as part of a wider plan to help get this country moving forward. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 I seek leave of the House to table a list of the National caucus and Cabinet in the 1990s when it sold assets including Contact Energy—including Mr Tony Ryall. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is none. 






Document by leave laid on the Table of the House. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I seek the leave of the House to table the report of the select committee—I think it was the Government Administration Committee—on the State-Owned Enterprises Bill when it passed I think in 1988. I sat on that committee and for the member to say it did not exist— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Hon TREVOR MALLARD 
: —just would indicate that he is either mistaken or a liar. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! The member knows you cannot use the last word. He will withdraw the last word that he used. 
Hon TREVOR MALLARD 
: I withdraw. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is. 
ANDREW WILLIAMS (NZ First) 
: 
 I rise on behalf of New Zealand First to oppose the Mixed Ownership Model Bill the bill that is also known as the “Flog Off the Family Silverware Bill”. Firstly can I just put the member from Dipton in his correct place. He stated earlier and he lay down a challenge asking whether any of the Opposition parties would categorically assure the Committee that the State-owned assets that are sold off would be taken back under State control. Can I assure you that New Zealand First in accordance with its past principles of being the one party that has stood up for the retention of State assets and not selling State assets has submitted an amendment in the name of our leader the Rt Hon Winston Peters which provides the right for the Crown in the future to take back these assets and gives the Crown the option to exercise its right to take back the assets—and this is the point—at a price no greater than the assets are sold at. So this is forewarning and the Government is on notice but the people of New Zealand moreover are on notice that when this Government is removed in perhaps 2 years maybe fewer and maybe in a very short space of time and there are new Ministers on the front benches taking control of this country with New Zealand First involved in that we will assure the New Zealand public that we will move to acquire these assets back. That is an assurance we have. We have a precedent here with KiwiRail when New Zealand First worked with Labour to buy back KiwiRail. So there is a precedent and we have managed to get KiwiRail back on its feet as a result. Once again we will buy these assets back. 
I would like to read something. I would like all members including those on the other side of the Chamber to listen to this very carefully and tell me at the end of it who they think may have written this. The words are: “New Zealand’s economy depends on natural resources and energy to survive and thrive.” Are you listening Leader of the House? I want you to work out who said this. “Almost all our exports—from tourism to agricultural produce—have a major component of these in production processing or transport. In a world increasingly starved for available affordable energy and other commodities many countries are threatened—but our indigenous natural resources make us one of the world’s richest nations.” 
It goes on to say—and I hope I have given you enough clues and I hope the National members have had enough clues—that its leading technologies “will provide secure affordable and environmentally acceptable energy and other important products to help make”—and listen to this important point—“our economy one of the most competitive and to support the standard of living New Zealanders expect for many decades into the future.” The source of that statement is Solid Energy on its very own website. The State-owned enterprise of which this Government is about to flog off 49 percent says that for the future of New Zealanders we depend on the assurance of having them. It is amazing that one of our own State-owned energy companies Solid Energy would say how important these resources are to the future of New Zealanders. 
Many New Zealanders do not really realise—they hear this comment about “Oh there’s three power companies being sold off and Air New Zealand.”—but I want to bring it back to what these power companies actually are. Firstly let us think about Mighty River Power. It has hydro power stations on the Waikato River from Taupo all the way down to the lower reaches of the Waikato including great dams like Karapiro and like Atiamuri. Mighty River Power also has four geothermal power stations in the Taupo-Rotorua area and we have all driven through that area of the North Island and seen the wonderful geothermal power stations that are owned by Mighty River Power. It also has a gas-fired power station. It is one of the top 10 companies in the world in geothermal energy production and it has interests in South America in North America and in Europe so it is an internationally recognised company owned 100 percent by the New Zealand people but bringing profits and resources back to New Zealand from its international investments. 
Meridian Energy has seven hydro power stations and again they are iconic names such as Ohau Benmore Aviemore the Waitaki and Manapouri. The Manapouri scheme was you know such a marvellous scheme for New Zealand. They also have four wind farms in New Zealand one in Australia and one in Antarctica. They also have a solar farm in California. That is Meridian Energy. 
Then there is Genesis Energy and it has three hydro power stations including the wonderful Tongariro scheme running through the centre of the North Island the Tekapo scheme down there at Lake Tekapo and the Waikaremoana scheme at Lake Waikaremoana in the Ureweras. Genesis Energy also owns 31 percent equity in the Kupe oil and gasfield in Taranaki and supplies 100 percent of the gas from the Kupe field to the New Zealand gas reticulation system. These are the sorts of incredible assets that this country has which this Government wants to sell 49 percent of. You look at all those hydro power stations you look at all those geothermal power stations you look at the gas-fired power stations the wind farms the solar farms in California and then that supply control but also the major equity interest in the Kupe oil and gasfield and this Government wants to flog those off for between $5 billion and $7 billion for resources that will be there this month next month next year in 10 years’ time in 20 years’ time in 50 years’ time and ongoing. But the Government wants to sell them off now for $5 billion to $7 billion and that $5 billion to $7 billion I will tell all New Zealanders will all be gone in 6 months—gone in 6 months at the rate that this Government is increasing debt from $52 billion to over $70 billion in the next couple of years. 
So Mr and Mrs New Zealand if you are listening to this tell this Government: “In 2 years’ time you will be gone. You will be replaced by responsible members of Parliament who will bring the likes of this amendment into being the Rt Hon Winston Peters and we will take these assets back and we will ensure that these resources and the wonderful generation of power the gas and the fuels that come out of these companies will be returned to New Zealanders where they rightfully belong.” 
As I said at the very beginning this is the “Flog Off of the Family Silverware Bill”. This is a situation where in many countries this would be seen as being a traitorous act of treason on the part of the Government. To sell off your power and to sell off your natural resources is akin to treason. This cannot be condoned. I urge every New Zealander around New Zealand if you have not yet signed the “Keep Our Assets” petition sign it tomorrow sign it this week sign it in the coming week. Tell this Government. Hundreds of thousands of New Zealanders need to sign it. Tell this Government: we want a referendum on this. We want to take you to task. We want to hold you accountable and we will not allow our precious resources and our power schemes and also our national airline—we can throw it in the piece—to be sold off just so that these short-sighted National people can make 6 months’ profit on it. 
Hon DAVID PARKER (Labour) 
: 
 We heard Bill English say repeatedly that there was only one question that mattered and the question that he kept putting to this Committee is what the Labour Party would do if we are re-elected. Not once did he address the issue as to whether this is the right thing to do which is the question that this Government should be asking. 
I am going to put a number of other questions that the Government should be answering on this which are very important and which the Government has not addressed. Will this increase the Government deficit? I want to ask the Minister in the chair the Minister of Commerce whether on Treasury’s advice this plan of the Government to sell off half interests in these State-owned enterprises will increase the Government’s deficit. Will it? Mr Foss is in the chair. Can he answer that question? Will it? It is a very simple question. Is it the advice of Treasury that this will increase the Government deficit the operating balance before gains and losses by about $100 million a year? I can tell the Minister if he will not tell the Committee that it will. I can also tell the Minister that that was hidden from the New Zealand public at the time of the election because his Government and Treasury under this Government’s watch did not account for the loss in profits. Although it said it would bank the money from these State-owned enterprises sales it did not calculate what the loss of profits would be that would increase the Government’s deficit. 
This is another question that I want answered by the Minister in the chair: will over time this increase the current account deficit for this country? Will it increase the current account deficit? Again if the Minister is willing to take a call on that he will have to admit if he is not going to mislead the Committee that it will increase the current account deficit because the interest saved on the money that is not borrowed from overseas is less than the share of profits that will go to those overseas shareholders. Indeed Treasury says that up to 30 percent of the shares being sold—which is a total of 15 percent of the actual company after only half of it is sold—could end up in overseas ownership. 
I want to ask the Government another question that the Minister of Finance did not address. Why is it that the most important part of the Government’s economic plan for these 3 years is changing the ownership of what already exists? You know if this is the central part of the Government’s economic agenda what does that say about the inadequacy of its plan for our economy? The reality is that this sort of ideological burp that we got just before the election was a consequence of the Government being on the ropes and feeling the criticism that it had no adequate plan for the economy because its members are conservatives and all conservatives generally do is trim back on expenditure a little bit fiddle and not really do anything progressive to change the shape of the economy. So in the face of that criticism the Government came up with its so-called plan which is to sell the State-owned enterprises. That does absolutely nothing to improve the output of the New Zealand economy it does not increase our exports and it makes our current account deficit worse as well as the Government deficit. 
Now to the other question that Mr English should have been asking. Instead of the single question that he was asking which was what the Opposition would do post the next election he should have been answering what the effect is going to be on power prices for residential consumers. At the Finance and Expenditure Committee we had not one generator and not one electricity retailer give evidence. We did not hear from the Electricity Authority and we did not hear from the Ministry of Economic Development as to what would be the effect on power prices. The only information that we got on what would be the effect on power prices was from some of the submitters opposed to this provision—notably Molly Melhuish who is well known to many New Zealanders as having been a commentator on these issues whom I hear the National members slinging off about in interjection now. 
Paul Goldsmith 
: I said she was very well known that’s all. 
Hon DAVID PARKER 
: What is that? 
Paul Goldsmith 
: I said she was very well known.  
Hon DAVID PARKER 
: You said that she was very well known. Well thank you for that. She is part of Grey Power and her activism in these areas and her knowledge of the electricity markets goes back many years before her involvement in Grey Power. She gave evidence to the select committee that even now State-owned enterprise power prices are $265 per annum cheaper on average for a residential consumer who gets their power through a State-owned enterprise or one of their subsidiaries compared with those who are buying from the private sector. Mr Ryall stood a second ago and asked whether New Zealanders are so naive that they get power from people when it is more expensive from a private sector participant than a State-owned enterprise. The answer to that is sadly that that is the reality—that New Zealand’s electricity market is not perfectly competitive. Indeed if it was a perfectly competitive market we would not have an Electricity Authority and we would not have rules governing the conduct of the market to at least try to make it a little bit efficient. That book of rules is thicker than the Bible. This is a very complex and uncompetitive market and it surely is not purely competitive. 
Because we did not have any evidence from a power company a power generator we could not ask them whether that data was correct. Because we did not have any evidence or advice from the Ministry of Economic Development to the select committee we could not ask it whether that information was right. So the only way we could verify that information was through asking Treasury officials and when we did that what did National do? It closed down the select committee 5 weeks before we were due to report back so that we could not dig into that. What did we do in response? We asked the Minister of Energy and Resources in the House today whether that information was correct or not. And we asked if it was not correct the average price charged by non - State-owned enterprise deliverers of power to residential consumers compared with State-owned enterprise deliverers of power or retailers. And what did we get? We got blather from the Minister. We got the Minister being criticised by the Speaker for not having answered the second part in a primary question. 
Why is that question not being answered? It is because National knows that the truth is that State-owned enterprise power prices to residential consumers are significantly lower: 12 or 13 percent—$265 per annum—cheaper. And that margin will dissipate if we strengthen the profit maximisation model if we remove the sense of community responsibility or the community responsibility obligations and if we move to a price maximisation model. We are already seeing their cost structures increase. The increase in the salary for the chief executive of Mighty River Power this year was $400000. That is not a salary of $400000; that is an increase in the salary of $400000 from $1.3 million per annum—already an incredibly high salary—to $1.7 million per annum. The Minister of Finance has already acknowledged that that is because Mighty River Power is moving to a more commercial model. Its cost structures are going to go up and its prices will follow. 
This Government is out of touch. It is out of touch on not just this issue; it has been out of touch on other issues. It has not got an adequate plan for the economy and so it is left flailing around doing this sort of ideological thing. This is also going to increase asset inequality. Tony Ryall said: “What’s the problem with New Zealanders owning these companies?”. Well they already do. What is wrong with New Zealanders already owning all of these assets through their Government? There are no efficiencies to be gained here or if there are they are very very minor. There are power price increases that will come as a consequence of this and asset inequality is going to increase because the people who can afford to buy most of these shares are the wealthiest people in society. The people who cannot afford any shares are the poorest people. The wealthiest people in New Zealand of course are plainly whom this Government serves. Forty percent of the income tax cuts went to the top 10 percent of income earners in New Zealand. Those are the people who are going to be acquiring these shares not mums and dads on average incomes. Mums and dads on average incomes do not have the money in their pockets to acquire these shares. 
I think it is an outrage that we have not yet had any acknowledgment from the Government of a matter of fact which is that the State-owned enterprises charge less currently for residential power than their private sector comparators on average. I am going to give you another example of this. Alexandra is a small town. It sits on the banks of the Clutha River right next to the Contact Energy dams on the Clutha River. There is an enormous amount of power produced in that area. Power charges for people in Alexandra are higher—this is not lines charges; this is their power charges—than people pay in Auckland and Christchurch per unit of electricity. How can that be right? How can that be right? That shows that this market is not competitive. Indeed in that area—again in the Alexandra area—31c or 32c per kilowatt hour is charged by Contact Energy. Meridian Energy charges about 28c about 10 percent less in that area. Even now— 
TODD McCLAY (National—Rotorua) 
: 
 What I would say to the last speaker David Parker who raised the issue of process through the Finance and Expenditure Committee is that the time for crocodile tears is over. That member and other members of the select committee had eight long meetings to ask any question they wanted to. The committee gave every opportunity at every meeting for questions to be asked. And what happened? At the eleventh hour when it was time to deliberate they were raised. So when— 
Hon David Parker 
: I seek leave to table the minutes of the Finance and Expenditure Committee— 
The CHAIRPERSON (Eric Roy) 
: Order! The other day I cautioned the member that he should not interrupt a member on his feet. I am not denying the leave being put; I am just saying that there is a convention. 
Hon David Parker 
: Misrepresenting. He invites it. 
The CHAIRPERSON (Eric Roy) 
: Well it is not for the Chair to judge the veracity of the comment. This is a debating chamber. Other members can respond and the member can between speeches seek to table documents. 
TODD McCLAY 
: I recall—and this is a part of my speech not speaking to the point of order—that that was put up last week and members tried to table it. It is time to move on and that was the point I was making. Members opposite are telling us about a rushed process. Well let us put our mind back to the comments that the Hon Tony Ryall made earlier. Let us talk about a rushed process and how people change their mind about what is good one day and not good the next. We heard from Tony Ryall that Phil Goff Annette King and Trevor Mallard were part of this House as Ministers when $10 billion worth of New Zealand assets were sold—not partially sold not 51 percent held and guaranteed in the Crown so that the Crown had the absolute say; no 100 percent were sold. Of course no member opposite who was a member of the Labour Party then or today would say that that process was changed. 
New Zealand Steel was sold in 1986. What was that? It was done under urgency. Petrocorp was done under urgency. For the Post Office the first and second readings were under urgency and there was no select committee stage. It was all right back then but here we are today in this Committee with members opposite saying that they did not have an opportunity to ask important questions that they needed to ask. There were more than eight meetings of the committee where Treasury our advisers was there. Did they raise those issues? Not on the first meeting not on the second meeting not on the third meeting or the fourth or the fifth or the sixth or the seventh—but on the eighth meeting when it was time for the committee to deliberate that is when they decided to stand up and all of a sudden it was important to them. 
Air New Zealand is here as part of this bill today the Mixed Ownership Model Bill and we considered this in the select committee. Air New Zealand—what happened there? Labour got rid of all of it way back in 1987 under urgency—again under urgency. There was not an opportunity for the New Zealand public to come before us—not an opportunity for the New Zealand public to come and have their say. It was done under urgency. And then we have the Tourism Hotel Corporation. Guess what? It was done under urgency. The only thing that was not urgent about that piece of legislation was the service you got at the time from those hotels. And can I tell you as some of them are now in my electorate they do very well. Does the Government own 51 percent of those? No. Labour sold all of them. 
Here is the one you will hear a lot about. You will hear all about service you will hear all about what is wrong and you will hear all about why it should not have happened. In 1990 Telecom Corporation of New Zealand was sold under urgency—100 percent of it was sold under urgency. Can I say to the last speaker that the time for those crocodile tears the time to pretend that you care about New Zealanders is gone. You had an opportunity in our committee; you did not take it. The member opposite did not take it in all of those meetings. 
There is a difference between what we are doing on this side of the Chamber and what members opposite pretend they care about. And what is that? Well it is about debt. They will tell you that this makes no difference at all but look at what has happened in Greece over this last weekend. Look at the challenges that they face all over Europe because of debt. Members opposite will say to us: “It’s OK let’s borrow a bit more; let’s keep investing in assets by borrowing a little bit more. It doesn’t matter.” Actually what they will say to you is “Let’s push the age of retirement up by 2 years.” to pay for the woeful decisions they have made and will make when it comes to spending. But that is not fair to New Zealanders and I recognise that members in other parties in Opposition also believe that it is not fair to New Zealanders to make them work harder for bad economic decisions that that party has made. 
Our debt level is to peak at 30 percent of GDP. That is right—that is $72 billion of debt that New Zealand will have. Well guess what? We heard when we were in the select committee about how much of New Zealand the Crown owns—$245 billion of assets all over the country. We aim to grow these over the next 4 years to $267 billion of assets. What we have also said to New Zealanders is that there will be 3 percent of those assets that we will offer you the opportunity to purchase—3 percent. Not only that but we will not do what Labour did through the 1990s when it gave away $10 billion of New Zealanders’ assets without any consideration of keeping them for themselves without any care about— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. As the member’s speech finished I was going to invite him as to whether he wants to make a correction now or later as to who was in Government in the 1990s selling assets. I think it was National. 
The CHAIRPERSON (Eric Roy) 
: Order! That is a debatable point. [ 
Interruption 
] Order! The member should not comment. It is not as I said earlier for the Chair to judge the veracity of any comment that is made in this Chamber. This is a debating chamber and sides get equal opportunities to put things. That is how this Parliament actually works. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I seek leave to table the minutes of the select committee which show that we sought advice from Treasury about the effect of power prices. 
The CHAIRPERSON (Eric Roy) 
: I just want to be quite clear about this because we had some time last week ascertaining that when you seek to table the minutes of the select committee it is pertinent only—[ 
Interruption 
] So the member needs to make that clear which I have now ensured. Leave is sought for that purpose. Is there anyone opposed to that course of action? There is. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I rise to speak to Part 1 of this bill the Mixed Ownership Model Bill in the Committee stage. 
Mr Ryall earlier spoke of a mandate for these sales. I think that he did that wilfully knowing that in fact that is not the mood of the nation. The nation is opposed to these sales and is opposed in great numbers. More people in the election in fact voted for parties that opposed this legislation than parties that supported it. At the Finance and Expenditure Committee just 0.6 percent of submissions were in favour of this legislation and we received over 1400 submissions to that select committee. One submitter likened the selling of these assets to selling your kidneys to pay for dialysis. The mood of those submitters was very clear. They wanted to send a very clear message to the Government that the general public do not support these sales. In fact over the weekend somewhere between 1000 and 2000 people in Dunedin the  
Otago Daily Times 
 says were out marching against the sale of these assets. So for Mr Ryall to claim a mandate is a very bold move and I would suggest a foolish one. People are marching in the street against this legislation. 
It was a terribly rushed process. Mr Todd McClay just alluded to the process. He said there had been many many comments about the rushed nature of the process and that is true. Many submitters were clipped questions were limited and they were not allowed more than 5 minutes generally unless they were representing an organisation. 
Todd McClay 
: Rubbish! Young Labour had 30 minutes and I’ll never get that back. 
Dr DAVID CLARK 
: Mr McClay now says that is rubbish. Well I think if we ask the submitters again many of whom complained at the time they would restate that that process was not one that they considered desirable or sufficient in a democratic sense. Teleconferences were called at short notice meaning some people could not attend them. And the legislation was sent 5 weeks early back to the House as David Parker noted without advice from Treasury on some subjects where we thought advice was warranted. These decisions should not be taken lightly particularly where taxpayers are put at risk of additional charges for electricity and also at risk of losing dividends and where Treaty risks exist. These points are all relevant to Part 1 of the legislation and I want to speak to them in a little more detail as I go on. We had no ability to ask questions of Treasury which had in fact already drafted its report before we heard all of the oral submissions. Treasury had drafted its report before we heard all of the submissions. 
Hon Members 
: No no! 
Dr DAVID CLARK 
: Outrageous! That is the kind of process we have seen here. This Government is afraid that its support parties will walk away. It knows that this is not a done deal in the pure sense of the word. It knows that some of its support parties may just walk away because they realise that it is not a process that has been transparent and fair. The Government has put a back-down clause in the legislation and we would say to it that there is a simpler way of doing this: it is simply to back down before the legislation passes. 
I want to speak specifically about the removal of the social responsibility clause from the governance arrangements for these companies. This will have a chilling effect I would suggest on the way these companies operate. No longer will the Crown be able to investigate in the same way any poor practices anything that puts lives at risk in terms of the management of electricity. If brownouts or blackouts affect people in their homes if as we heard one submitter from Grey Power suggest people freeze to death because of this legislation there will be no comeback. In the past when issues have been raised—and I think of the terrible Muliaga situation where a person’s life-support went off with the power—there has been an accountability. The Government was called to account on that matter. That is removed with this change in legislation. There will be no social responsibility clause that says that the Government should be answerable for the power staying on for making sure that people do not freeze to death in their homes. 
It is also true that Treaty obligations are being removed from private investors. Currently the Treaty obligations in the State-owned enterprise legislation apply to the Crown. The Crown has to take Treaty matters into account as it considers its actions as it buys and sells parts of the operation. The risk is that with the sale of individual assets made more possible with a large private stake in these things future settlement options may be sold off. Maori interests have raised this concern with the Government. The Government is putting all of the obligation for these Treaty risks on the taxpayer but it is actually taking away its ability to manage and control them by leaving the private shareholders without that risk open to influencing the decision-making process. Of course there are concerns about kaitiakitanga along with those other concerns about assets being sold off. 
One of the other frightening aspects of the proposed changes is the removal of Official Information Act oversight. The reason given for this by the Government is that these operations should be able to operate commercially as other private commercial operators do. Well they do actually now and the fact is that they have been running and returning good dividends to the Crown with no impediment caused by the Official Information Act. There are indeed commercial protections in that legislation that make sure that the operations are protected in terms of any commercial risks that may otherwise be disclosed through the Act. So we have that protection there already. 
The Ombudsmen took the unusual step of appearing before the select committee to outline the risks of removing the State-owned assets from that legislation. They said that they believe in fair just and transparent scrutiny of majority publicly owned companies and they believe that this should continue. There is no evidence that commercial interests will be harmed by not removing these assets from the Official Information Act. In fact what we heard from several submitters is that there are indeed risks that go along with removing these operations from the Official Information Act. One of those risks is that the companies will act in a way that is not transparent and fair. We will not be able to research as easily as we have been. Members of the public will no longer be able to put in Official Information Act requests to find out how decisions were made even when those operations are majority public-owned. This seems a strange way of going particularly when there are Treaty risks as I have just outlined and social responsibility risks that go with the changing of this legislation. 
 So it was a very rare submission from the Ombudsmen and one that expressed a great degree of concern at the changes. If I quote from the Ombudsmen’s submission the Ombudsmen said: “In our view any possible advantage that may be seen in the [mixed ownership model] companies being removed from the Ombudsmen’s jurisdiction under the OA and OIA appears to be minimal if not illusory and needs to be balanced against the public interest in maintaining their accountability to the public of New Zealand so long as the Crown retains a majority interest in them. We see no reason in principle for their removal particularly given the potential removal of other accountability requirements.” It does not get much stronger than that in terms of the Ombudsmen’s willingness to step in and speak at a select committee process. We heard further from the Ombudsmen around the risks of profitability or otherwise. There just seems to be no reason for doing this. 
We also heard concerns about cronyism in terms of board appointments and the processes that sit behind the board appointments no longer being able to be examined. We also found many researchers willing to say that they were concerned about these changes. 
These are strategic assets that are being sold off. Mr Key gave his personal commitment to keep 85 to 90 percent New Zealand - owned and I will quote him. He said: “We are giving people a commitment that 85 to 90 percent of the entire company will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” He said that in the leaders’ debate in November last year. Well there is no provision for that in the legislation. So not only do we have these concerning removals of social responsibility of Treaty obligation steps and of Official Information Act oversight but we have a commitment from Mr Key that is not worth the words that make it up because there is no mechanism there to ensure that these strategic assets remain in New Zealand ownership. The mechanism simply is not there. 
The Government has inserted the back-down clause and as I said earlier I hope that it uses it. We know that power prices will go up. The private companies have significantly higher power prices and as I said earlier Treasury was not given time to— 
EUGENIE SAGE (Green) 
: 
 The finance Minister said earlier today that many New Zealanders do not know about Mighty River Power and its business. That is enormously patronising. Thousands of New Zealanders understand about the sale of State assets because thousands of New Zealanders are signing the referendum petition. I would like to comment specifically on the removal of the mixed-ownership companies from the purview of the Ombudsmen and the Official Information Act. That is because the Government does not trust its own mixed-ownership model by removing the scrutiny of the Ombudsmen. Clause 6 of the Mixed Ownership Model Bill takes Genesis Power Meridian Energy Mighty River Power and Solid Energy from under the application of the Ombudsmen Act while clause 7 removes Solid Energy from the application of the Official Information Act. The other companies come out from under the Official Information Act by virtue of the fact that they are removed from the State-Owned Enterprises Act. 
This is a major loss of accountability for these new entities. That is particularly because the bill also removes the ability of the Minister of Finance and the Minister for State Owned Enterprises to direct these companies to get information from them and because it means that the social responsibility and good-employer provisions of the State-Owned Enterprises Act will no longer apply. The combined effect of these changes will be to substantially diminish both ministerial and public oversight of the mixed-ownership model and that is totally at odds with New Zealanders’ interest in these companies as the majority shareholder. We have had the Ombudsmen as independent Officers of Parliament separate from the executive having a vital constitutional role for nearly 50 years. They have been a watchdog and a check on the abuse of power by Government departments and State-owned enterprises and they have been a mechanism by which citizens can seek redress against overbearing power and make the State-owned enterprises accountable. They have investigated complaints under the Official Information Act and they have helped improve the way in which State-owned enterprises have dealt with those and with public information requests. 
There was a strong and thoughtful submission from the Office of the Ombudsmen which Mr Clark has referred to opposing the move to remove their oversight. That means that the public will be largely impotent in terms of the accountability of these mixed-ownership companies and so will the Crown. It is very ironic that the role of the Ombudsmen is being removed when in the private sector similar ombudsman roles have been set up in both banking and insurance for the very reason that they are seen as cost-effective and affordable when compared with the cost of litigation in the court. We have a previous major State-owned enterprise Timberlands West Coast where the Official Information Act and the Ombudsmen were both absolutely essential in providing oversight and scrutiny of that organisation. It was because of the information that members of the public and conservation and environmental organisations were able to get using the Official Information Act that there was a major change in Government policy and a cessation of beech logging on the West Coast. Without the Ombudsmen’s involvement without the Local Government Official Information and Meetings Act the public would not have got information on the royalties being paid by Timberlands about the cross-subsidy of its pine business from the logging of rimu forest. The public would not have been able to flush out the detail of the beech logging plans. It would not have got that body of information that was able to achieve a change in Government policy and the protection of those native forests by the direction of the Minister of Finance and the Minister for State Owned Enterprises. 
So it is absolutely critical with these mixed-ownership companies that that role and oversight of the Ombudsmen be returned. That is why the Greens will be supporting a Supplementary Order Paper in the name of Russel Norman to put that oversight back in. It is also inappropriate that that oversight is removed because local authorities’ council-controlled organisations are subject to the Official Information Act and the scrutiny of the Ombudsmen. They are commercial entities. So why is the Government wanting to remove this check this accountability mechanism? Is it because the Government plans to sell off the remainder and to increase the 49 percent to more than 51 percent? If the Government was so confident in this mixed-ownership model it would retain these key constitutional checks and balances these key safeguards instead of doing what it is doing in removing these entities from the oversight of these Officers of Parliament. So this bill is bad. Again the lack of accountability in the mixed-ownership model for these companies is bad. 
The CHAIRPERSON (Eric Roy) 
: I call Iain Lees-Galloway. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Thank you very much Mr Chair. It was a big call I know. Tau Henare thinks that was a pretty good call. 
Brendan Horan 
: I raise a point of order Mr Chairperson. This was brought up earlier— 
The CHAIRPERSON (Eric Roy) 
: Yes. Well— 
Brendan Horan 
: —by the Rt Hon Winston Peters— 
The CHAIRPERSON (Eric Roy) 
: Please sit down. We are not going to have a debate every time I make a call. I am keeping a score of everybody who is here and proportionate to the number of members in the Chamber. The member will see that I deliberated long enough. I saw both members. We are not going to get into points of order in this regard about who gets the call. 
IAIN LEES-GALLOWAY 
: Thank you very much Mr Chair. [ 
Interruption 
] What was that Mr Henare? Would you care to repeat that one for the record? No. Mr Henare I am sure will take a call on National’s asset sales bill the Mixed Ownership Model Bill. That is what we are debating this afternoon—Part 1 of National’s asset sales bill the bill that is robbing the future by selling off something that was paid for in the past. That is what Part 1 of this bill does. It robs future generations of their birthright by selling off the effort of past generations of New Zealanders. That is the one and only thing that this bill does. It is the implementation of National’s irrational ideological obsession with asset sales. It is the one policy that comes up time and time again whenever National is in charge. The only thing it can think to do is to flog off the assets mostly because it is bereft of good ideas but it has to be said also because it has some people in its pockets who will do very well out of the sale of State assets—the taking away of the dividends from those assets that go to all New Zealanders and concentrating those into the 1 percent the few who will actually be able to afford to buy these shares that the Government is putting up for sale. 
Mr Henare has been told off by the whip Louise Upston. He is in a bit of trouble. Louise Upston is a sensible member. She has got Tau Henare under control. That is good to see. 
I would like to address clause 6 of the State asset sales bill. Clause 6 is of course the clause that removes the former totally State-owned enterprises from the purview of the Ombudsman by removing them from the schedules in the Ombudsmen Act. Of course the result of doing this is to remove from New Zealanders the ability to refer concerns they have with these companies to the Ombudsman—to an impartial and independent investigator who will be able to look at any concerns that New Zealanders have with these companies. So not only is the Government taking away New Zealanders’ birthright by giving its mates the opportunity to suck up all the dividends from these assets but also it is removing New Zealanders’ democratic right to have a right of referral to the Ombudsman of any concerns that they might have with these organisations which will now have an element of private control as well as State control. 
The intention of the Crown is that although it is retaining 51 percent of the voting rights—let us be clear about that; no part of this legislation actually ensures that the Crown retains 51 percent of the ownership rights of these companies but it does ensure that the Crown retains 51 percent of the voting rights—this Government thinks that it is appropriate to remove the New Zealand public’s right to refer these companies to the Ombudsman and indeed to apply the Official Information Act to those organisations as well. This diminishes the oversight the public scrutiny and the consumer protection that the Ombudsmen Act and the Official Information Act currently allow for. It makes it impossible for ordinary New Zealanders for members of Parliament and for interested community organisations to hold those organisations to account to monitor the practices of those organisations. For example if they show the same behaviour that we have seen from every privatised organisation—from every privatised power company—and put their prices up in an unreasonable and unjustifiable way the public has no right to refer that issue to the Ombudsman. That is what this Government is taking away from New Zealanders—their democratic rights. That is what is being removed under clause 6 of this bill. 
Of course what we know is that the Government is also taking away the application of the Treaty of Waitangi to the private shareholders in these companies. How that is going to be discerned between the activities of the private shareholders and the activities of the Crown I do not know. But maybe—maybe—one place that you could take that question is the Ombudsman. No! That right is being taken away. So although we look at the application of the principles of the Treaty of Waitangi and look at the requirement for these companies to act in the social good interests of New Zealand there is no option for us to refer questions about those requirements back to the Ombudsman. The Ombudsman is an independent investigator who could have investigated complaints about these companies. 
Those two Acts the Ombudsmen Act and the Official Information Act are the sole security nets or information conduits that are currently available to ordinary New Zealanders in situations where there is concern about the activities or actions of Government organisations or local government organisations. I would point out that the other mixed-ownership model companies that are out there and that this Government has been so pleased to promote actually fall under the purview of the Office of the Ombudsmen as council-controlled organisations. So on the one hand we already have a good example of how the Office of the Ombudsmen could still have jurisdiction in the realm of mixed-ownership model companies but not for this Government. It does not want this scrutiny. It does not want this scrutiny. It is the kind of lack of scrutiny that we see in fully privatised companies. One has to suspect that that is actually where this Government is taking these former State-owned enterprises—to full privatisation. That in fact must be the only reason why clause 6 is sitting inside this bill. 
The Chief Ombudsman Beverley Wakem does not think this is a good idea. She says it is unjustified on commercial grounds and will see a valuable part of the democratic process lost. The sale of a minority shareholding in these companies does not affect the reasoning for their being subject to the independent oversight and accountability provided through the Ombudsmen Act and the Official Information Act. Even Ms Wakem says that there are plenty of safeguards already within the Official Information Act and the Ombudsmen Act to make sure that any issues of commercial sensitivity and disclosure around those Acts can be mitigated. I certainly know this from having tried to get commercial information out of KiwiRail. It constantly cited the clauses of the Official Information Act that said that they were not able to provide that commercially sensitive information. These mixed-ownership model companies would be able to do the same. 
There is no reason no justifiable reason for clause 6 to remain in this bill. Partially privatised council-owned businesses have already proven that ongoing obligations under the Local Government Official Information and Meetings Act and the Ombudsmen Act did not put them at a commercial disadvantage when compared with fully private companies. Ms Wakem says there is no evidence that continued coverage under the Official Information Act would place these companies at a competitive disadvantage. 
So we come back to the question of why clause 6 is even in this bill. It is purely—purely—about removing people’s democratic rights and the right of referral to an independent investigator so that the public has the right to continue monitoring these companies. These companies are still 51 percent owned by the public. These companies will have a huge impact on people’s daily lives due to their ability to set the price of electricity. This will have a massive impact on people’s day-to-day lives. New Zealanders deserve the right to have an independent arbitrator that they can go to to refer any issues that they might have with these companies. The sole reason National is so hell-bent on having clause 6— 
TRACEY MARTIN (NZ First) 
: 
 Kia ora. Firstly can I acknowledge my fan club on the other side of the Chamber. I thank them very much for their support! I rise to speak on Part 1 of the bill and to acknowledge that we have heard an awful lot about mum and dad New Zealanders so I thought it might be a good time to actually hear from one. 
I would like to respond to Minister Ryall’s statement where he said that New Zealand must take this action. So here we go again—New Zealanders must take this action. We have heard this before. It was called the “tina” theory—there is no alternative—once before. This is the only way forward according to National. Back in the 1980s Roger Douglas said the same thing. Back in the 1990s Ruth Richardson said the same thing. 
I notice that both sides of the Chamber have been batting back and forward as to who sold what back in the 1980s and 1990s. However all I can say about that is that they are both as bad as each other. This country needs a New Zealand First - led Government to actually come up with something different—something different something vital and something that recognises that New Zealanders own this nation. They own these assets. They have worked for these assets and it is their interests and all New Zealanders’ interests that should be put first. 
So that is what we are being told. We are being told there is no alternative. That is what the National Government wants us to believe. It wants us to believe that this is not a philosophical stand. This is a philosophical stand because there is always an alternative. You make a decision and then you find a way to bring that decision to fruition. 
If this Government wanted to make a decision to save those assets it could do so. If this Government wanted to sit down and actually work with others to find another pathway to prosperity for this country it could do so. But philosophically it is starved for ideas. This is as good as it gets unfortunately. It has been brought forward by a finance Minister from a previous age and that is a shame. We had an opportunity in this country. We had an opportunity to recognise the faults from the past come up with a new way forward join together and take this nation on that pathway. But that Government refuses to even think outside that box. What a shame. 
As a mum New Zealander who lived through those times—who lived through the damage that was done with no trickle-down with no opportunity for mum and dad New Zealanders like myself to buy anything—this is a farce. This conversation is a farce because no mum and dad New Zealander anywhere near where I live will be able to buy anything from these shares. 
Let us just talk about that—about mum and dad New Zealanders buying back 49 percent of what they already own. I mean the thing is a joke. How can you try to sell that to the people? The people know they own it. The people know they own it now. Yet your spin doctors your marketing are attempting to tell them it is a good thing to buy back your own product. They own it they have always owned it and when New Zealand First repurchases it after National has gone then they will own it once again. 
 But let us just ignore that fact. Let us ignore the fact that somehow the Government is trying to convince the New Zealand public that they need to buy 49 percent of something they already own. Let us just try to ignore the fact that actually the Government is now handing 49 percent of the profits from those assets to whoever it is who buys them with no safeguards that they will stay in the country. 
Let us just go there before Mr Henare stands up and decides to have a go about New Zealand First policy about a partial float of Kiwibank to New Zealanders only so that that bank could grow its business to handle the Government’s business thereby bringing back millions upon millions of dollars’ worth of banking fees currently going offshore to Australia so that we could have that money back in circulation here. 
Let us just get that out of the way shall we Mr Henare so that you cannot bring that up and twist it into something that looks like this model you are trying to sell to the New Zealand public. But let us just ignore all those obvious little things. Let us actually talk about—and I am stunned that the Labour Opposition has not talked about it—the fact that these assets are to serve the New Zealand people. That is what they were built for. They were built to serve the New Zealand people not to provide a profit into a general coffer for funds to be flitted away somewhere else. What would happen if we in this Chamber decided that that was our philosophical stand? 
PAUL GOLDSMITH (National) 
: 
 Look I think it is worthwhile as we are working our way through Part 1 of this Mixed Ownership Model Bill just to step back and take a look at the broader context. The European debt crisis remains the biggest threat to the New Zealand economy by some margin. [ 
Interruption 
] Well aside from the Labour Party and the Greens actually in combination—you are quite right. In particular we are vulnerable to shocks transmitted from Europe through China and Australia and through any tightening of financial markets. So what goes on in Europe is not an isolated event happening on the other side of the world but is highly relevant to us. 
So if I could speak generally this is a very uncertain time for New Zealand New Zealand businesses and New Zealand households. No one is quite sure what is happening in Europe. No one is quite what it means for China and Australia and confidence levels are quite low which reinforces how important it is for us to stick to our economic plan. We need to continue to manage Government spending limit debt and maintain the confidence of financial markets. That is what this legislation is all about. It is about enabling this Government to continue on with its Future Investment Fund and its investment in growing this economy without adding another $5 billion to $7 billion to our overall levels of debt. 
I suppose the question we have to ask the Opposition parties is what they are going to do to get the money in order to make these same sorts of investments. I suppose they do have the option of not spending that $5 billion to $7 billion in capital investments. I suppose they could just not invest in irrigation not put money into the high-tech Crown research institutes and not put money into building new schools or I suppose they could raise the money from elsewhere. They could stick up a capital gains tax but of course that does not give us any money in the next 10 years. They could put up taxes on entrepreneurs but that never works very well or they could make us work longer for our superannuation. Or they could just add more debt. They could go out on to volatile international markets and increase the pool of debt that New Zealand already has and none of those options seem to be very good ones. 
I would like to debunk some of the comments that have been made about power prices. We hear again and again that somehow privately owned power companies are charging more. Well it depends how you slice the figures. Certainly Treasury advises that there are 21 regions listed on Consumer New Zealand’s Consumer Powerswitch website. In 14 of those regions the cheapest electricity company is privately owned in one the cheapest company is owned by the council and in the other six the State-owned enterprise is the cheapest. So it is hardly the most convincing argument that I have heard. When we have got 422256 customers changing electricity retailers in the annual year that shows that there is a huge amount of market flexibility going on. 
I also just wonder about the Greens’ objection that once the Government sells a minority stake in these companies a Government will not be able to fiddle with those companies quite so easily. It will not be able to get these companies to invest in its pet projects around green technology or something like that because minority owners might object. Well that is about as good a reason I can think of to actually go down this path. It seems like an eminently good sensible reason to be selling partial ownership in these companies to stop people like Russel Norman fiddling with these companies and making them ineffective and inefficient. That is one of the main benefits of having a minority stake owned by the private sector as it will bring private sector disciplines and good governance to these organisations. 
So I am not worried about not having access to the Ombudsman. I would far rather have access to the signal sent by market prices in an open market through the continuous disclosure requirements and from market analysts analysing these companies than I would have access to the Ombudsman. That is why that is a far more effective way of doing things. It is far better than having Mr Cosgrove and his colleagues in the Finance and Expenditure Committee asking the odd question. I would far rather have access to continuous disclosure requirements through the stock exchange and the signal that the market price delivers to the quality of these assets. 
I am also interested that Mr Parker suggested that the cost structure would be going up under partially privatised companies. I would love to see some evidence from Mr Parker that shows that State-owned companies have lower cost structures than privately owned companies. I would love to see some evidence from those members to back that claim up. And then we have heard from New Zealand First— 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 Thank you very much Mr Chair— 
Paul Goldsmith 
: Oh hang on—the next Prime Minister’s speaking. 
GRANT ROBERTSON 
: The member who will resume his seat in a minute—thank you—the member who just resumed his seat Paul Goldsmith tells us that we live in uncertain times and that there are things to be concerned about and worried about coming from Europe. I know that is the perfect time to hock off a whole lot of assets! That is a brilliant brilliant economic lesson from Mr Goldsmith to stand up in this Chamber and say: “In the middle of a global financial crisis here’s the bright idea.” 
Hon Member 
: “Mr Sachs”. 
GRANT ROBERTSON 
: “Mr Goldsmith Sachs”. Here is the bright idea from the National Government: let us sell off assets into the most uncertain market we could possibly have. No wonder Bill English can only guess at the price it will get for the assets because he wants to sell them into a market where New Zealanders’ future will be put at risk not just by selling them off but also because the price they will get will be appalling. 
We also heard from Mr Goldsmith the importance of using the money that is gained from these sales for the Future Investment Fund—you know the sort of  
Logan’s Run  
- style future that will be brought to the world. Well the problem with the Future Investment Fund is that the Future Investment Fund involves selling off revenue-generating assets to invest the money in schools and hospitals. These are things that are important but they are not revenue generating—or perhaps that is how the National Government sees them as revenue-generating schools and revenue-generating hospitals. 
We have been there before with National but the logic fails for Mr Goldsmith. Sell off efficient profitable organisations and claim a hoax on the country by saying: “We are going to reinvest that money in schools and hospitals.” Mr Goldsmith it is your Government’s job to invest in schools and hospitals no matter what not just on the basis of selling off things that have been built up by past generations of New Zealanders. The National Government side of this Chamber should take some responsibility and actually invest in schools and hospitals. Do not try to put a cruel hoax on New Zealanders that you are going to transfer this money across. Make the investment because it is worth doing; do not sell off future generations’ revenue-generating assets just to make that kind of hoax. 
The other element of Mr Goldsmith’s presentation that I would like to mention is the question of the efficiency of the private sector in running some of these organisations and the fact that there is just no way that a State-owned outfit could possibly be able to run at the level of efficiency that Mr Goldsmith’s mythical private sector outfit could. Well need I remind Mr Goldsmith of KiwiRail and Air New Zealand the companies that actually had to be bailed out by the Labour Government because the private sector boards failed to run them efficiently? The evidence does not really work for Mr Goldsmith on this one. It does not really work for him. 
Also we have heard from the Auditor-General and we have heard from Treasury that these State-owned enterprises are currently run efficiently. They are currently well run. Why is it that Mr Goldsmith wants to take something that is currently well run is efficiently run and is generating revenue for New Zealanders and hock it off? It is because of ideology and because of failed economic policies from this Government. Make no mistake this bill is a testimony to the failure of this Government. It is a testimony to the failure of this Government to come up with any ideas to actually grow the economy. So having got no ideas to grow the economy— 
Hon Tau Henare 
: That’s why a million people voted for us. 
GRANT ROBERTSON 
: Mr Henare wanted that mining in national parks. That is what he wanted but the Government did not want to go ahead with that so that idea went out the window. Then the economy was going to be grown by turning us into one big call centre for financial services. That idea went out the window. We had the Job Summit. There were more people at it than jobs created by it but that does not matter. Mr Henare’s Government ran out of ideas completely and said: “All right we’ll hock off the family silver.” Well the problem with that argument Mr Henare is that it is “sugar hit” economics. One sugar hit of somewhere between $5 billion and $7 billion and then the assets are gone. It is “sugar hit” economics from that side of the Chamber. It has no economic plan. It is trying to find a way of generating a bit of money for a year—$5 billion to $7 billion—and then the assets are gone and control of those assets is gone. 
Part 1 of the Mixed Ownership Model Bill actually puts in place the system to make sure that these assets can be sold. But what this Government does not want to talk about today is that by taking these sections out of the State-Owned Enterprises Act they take away from New Zealanders the control that New Zealanders expect to have over core infrastructure companies—over things that are absolutely vital to the future of our economy. By taking them out of the State-Owned Enterprises Act that removes a number of key provisions. Firstly it removes the social responsibility provisions that are in the Act. Members on the other side of the Chamber have said: “Well that’s not really relevant. That is not that important.” Yes it is. The whole point of having these companies as State-owned enterprises is the notion that they will be working in the interests of New Zealand and that the revenue will come back to all New Zealanders. 
Tony Ryall stood up in this Chamber in this debate and said that this side of the Chamber does not have confidence in New Zealanders because we do not want them to be able to buy into these assets. Well Mr Ryall we are the ones with confidence because we want these assets to be 100 percent owned by New Zealanders. That side of the Chamber are the people who have lost confidence in New Zealanders because they want to hock off the shares to foreign buyers. This side of the Chamber is the one that is backing New Zealand 100 percent. 
The reason why taking these sections out of the State-Owned Enterprises Act is a problem is that by removing those social responsibility provisions we actually have a situation whereby the things New Zealanders think are important—the security of our infrastructure and the fact that there might actually be a social purpose for having electricity for instance provided in this way in New Zealand—are gone. They are undermined by this bill and they are gone. That social responsibility section will not be there nor will the requirements for good-employer provisions. That is actually covered by a number of amendments that have been put up by the Labour Party to try to remove these companies from this bill and to put them back into the State-Owned Enterprises Act. The good-employer provisions in the legislation are very important. They are missing now. In clause 3 in Part 1 of this bill they are now missing. 
Section 4(2)(c) currently in the State-Owned Enterprises Act says: “the impartial selection of suitably qualified persons for appointment;”. That is a key provision because these are agencies that should be working on behalf of New Zealanders and by removing that by the bill— 
Hon Trevor Mallard 
: It’s a crony clause. 
GRANT ROBERTSON 
: That is right Mr Mallard it is the “crony clause”. It is taken out by this bill to enable the National Government to ensure that the agenda of privatisation can carry on and to ensure that the interests of the private shareholders in this company are going to be what really matters not the New Zealand shareholders. At the moment under the Act we know that there are good-employer provisions and there are social responsibility provisions. New Zealanders can have confidence that these entities are being operated in the best interests of all New Zealanders. Under this proposal by not having those clauses in the bill we no longer have that confidence. What we have is a situation where the National Party’s cronies will be able to be appointed and the privatisation process will go on. 
The other impact of clause 3 of this bill relates to the question around the Treaty obligations. The Government has tried to come back on this. The Government has tried to say: “We made a mistake and we’re now going to be coming back.” But this bill does not protect Maori interests. Mr Henare might want to take a call on this. Get up and tell the Committee— 
Hon Tau Henare 
: Why? 
GRANT ROBERTSON 
: Why? Because he might actually be interested as the chair of the Maori Affairs Committee to get up— 
Hon Tau Henare 
: Oh OK because he’s a Maori. 
GRANT ROBERTSON 
: No as the chair of the Maori Affairs Committee he might actually be able to get up and tell this Committee how the future interests of Maori will be protected in this bill because the section that sits there today is not in the bill. By taking it out of the State-Owned Enterprises Act by taking it out of the provisions that New Zealanders know will actually protect them— 
Hon Tau Henare 
: Listen mate Maori were sold down the drain in 1984 when your lot sold everything. 
GRANT ROBERTSON 
: No. Mr Henare says that. What we learnt during this debate was that John Key did not even understand how section 9 made it into the State-Owned Enterprises Act. He did not even understand the importance that that section has had for protecting Maori interests and what New Zealanders own. There is nothing in this bill that will protect the future interests of Maori in these assets. 
Throughout Part 1 of this bill what we see is the taking away from New Zealanders of all the protections that they have had for these assets that are meant to work on their behalf. What we see in this bill— 
Hon Tau Henare 
: What a shocking performance. 
GRANT ROBERTSON 
: Mr Henare would quite like to take a call and stand up rather than shouting continuously. He could stand up to take a call and say how it is that New Zealanders are losing something that they 100 percent own and something that has been built up by past generations for an ideological “sugar hit” piece of economics. This is a shameful bill from the National Government because it undermines core infrastructure. It takes away in Part 1 everything that it means for a piece of infrastructure an asset to be in New Zealanders’ hands. It takes it away and says it can be sold offshore. There is nothing in Part 1 of this bill that justifies selling these assets. There is nothing in Part 1 of this bill that actually says that New Zealanders can keep their birthright. It is a shameful piece of legislation. 
MOJO MATHERS (Green) 
: 
 I wish to speak to clauses 3 4 and 5 of Part 1 of the Mixed Ownership Model Bill. I am concerned by these clauses because they remove the four energy State-owned enterprises from the State-Owned Enterprises Act and put them in a new schedule under the Public Finance Act. I am particularly concerned that this is being done without replicating the social responsibility clause that all State-owned enterprises are legally bound by. This clause requires State-owned enterprises to show a sense of social responsibility by having due regard to the interests of the community in which they operate—that is all New Zealanders—and by endeavouring to accommodate and encourage these when able to do so. 
Among other things what this clause does is it means that they have to consider the impact of raising the price of power on consumers and acts as a shield to the push to maximise profits because without these clauses they become legally bound to maximise profits. So even if the Government retains a 51 percent majority the risk is that by removing the social responsibility clause if it then tries to stop the minority shareholders from going in and maximising their profits it could get sued. And we already know that this is going to very likely see an increase in the cost of power because private companies at the moment have on average 12 percent higher power prices than the State-owned enterprises. 
What this is going to do is impact most severely on vulnerable New Zealanders. Vulnerable New Zealanders are the elderly the sick the disabled those with young families and those with insecure incomes. Disconnection of power means that these people end up with no heating no hot water no ability to have showers in their homes no cooking no lighting and no internet connection to the world outside. These are very extreme measures and they impact on the health of our vulnerable. We already have fuel poverty in New Zealand. Consumer New Zealand did a survey and it says that last year more than 30000 households were disconnected; 9000 were disconnected during the winter months when they were unable to pay the power bills. 
 In addition to these disconnections more than 37443 households were given hardship grants by Work and Income in order to help them pay their power bills. That is a huge number of New Zealanders affected and it is only just the tip of the iceberg because before you get to disconnection there will often be a cutting back on those using the power in a very extreme way such as not heating their homes. I know because I have been one of these families with young children unable to keep my children warm in my house because I just could not afford the power. 
So what we want to see is clauses 3 4 and 5 deleted so that they remain bound by social responsibility. The Green Party will be supporting the Supplementary Order Paper by Russel Norman to delete these clauses. Thank you. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 There is an old rule in politics that says that when we politicians are sick of saying something for the umpteenth time the folks out there in the real world are only just starting to pick up on it. I was reminded of that this week when I was going to my child’s school and a teacher grabbed me by the arm and said: “Have you heard what that Government is doing? They’re planning to sell off our energy companies. How can they possibly do that? Most people don’t want that to happen.” I said: “You’re absolutely right.” But there is no surprise on that one because that lot have had that evil plan in their minds for some time. This is a very bad idea for a number of reasons: firstly it makes no financial or economic sense; secondly it makes no strategic economic development sense; thirdly it is absolutely rubbish social policy; and fourthly ultimately the politics will come back and bite this Government where it hurts—in the ballot box. 
The essence of this Mixed Ownership Model Bill is in fact contained in the title to Part 1 “Provisions for companies to cease to be State enterprises and to become … companies”. These will not be State-owned enterprises any more. They will not have the social obligations. They will not have the Treaty obligations. They will not have the same obligations to be good corporate citizens. They will not have a no-surprises rule for the smiling Minister in the chair the Minister for State Owned Enterprises there who knows what he is doing to the public of New Zealand. They will not have the power to direct the reserve power that Governments use in extreme circumstances to put the national interest first. Do we believe that these companies should be sold? No. Do we believe that the Government has an obligation to the people of New Zealand to put their interests first? Yes. Why does this not make sense? Well the first reasons are so obviously financial. Privatisation makes the Government’s fiscal deficit worse. Let us say that again: it makes the fiscal deficit worse not better. Why? Because the Government saves about $260 million in borrowing costs and it loses $360 million in dividends on average. That is minus $100 million. What is hard for people to get about that? It is minus $100 million a year. That is how much the fiscal deficit will worsen as a result of this bill. 
But it is not as if the fiscal deficit is the biggest problem in the first place. The OECD the IMF and the rating agencies have all told us the same thing: it is private debt that is high not public debt. That shows up in the current account deficit and it shows up in our net international liabilities. So as a fair question—and I see Mr Ryall smiling to himself because he thinks he might know that answer to this one—what happens to private debt? Well it goes up. It goes up because there will be borrowing from foreigners who are investing in these companies to buy up their share of it and the dividends to those new owners will add to the current account deficit each and every year. So this is a lose-lose. Not only is the Government’s deficit worse; the country’s deficit is worse. There is no financial reason to sell. The third fact on the finance line is that the rate of return on the three energy generators is averaged around 15 percent per annum on a total shareholder basis. That is dividends plus capital gains at 15 percent which is pretty tidy. Mighty River Power is 43 percent which is wonderful. The Crown cost of capital is only 5 percent—probably lower at the moment and closer to 4 percent. Why would you sell an asset that is averaging 15 percent when you are borrowing at 4 percent keeping the difference and not having to tax people? The answer is that it has never been a financial decision. 
This is a political decision because the National Party is linked to people who will get very rich out of this: the ticket clippers the merchant bankers the lawyers and the accountants—the vested interests who are snuffling at the trough of the National Party. This is jobs for mates and it is wrong. It is wrong. It makes no financial sense. It is explainable only in terms of who gets what. Ah that brings us to the famous mum and dad provisions. Am I free to dine at the Ritz? That is one of the oldest issues in economic philosophy. Well if you are not regulated technically you are but not if you have no money! Mum and dad already own these shares. They are being asked to pay again for what they already own when they have no money. People in our constituencies are having trouble feeding their kids and there are 200000 children growing up in poverty. Will those families be able to go and buy a slice of Mighty River Power? Not on your nelly. Not on your nelly. This is not a privatisation to Kiwi mums and dads; this is a privatisation to some rich Kiwi mums and dads in the pocket of the current Government which is selling the birthright of all of us for its political gain. It is wrong. 
From an economic development point of view has nobody told these clowns we face a fossil fuel crisis in the next few years? Has nobody told them the price of oil will go up 50 percent in the next 3 or 4 years? And has nobody told these people that climate change is happening and that the price of carbon will rise? And was there ever a more stupid time to sell a controlling interest in your own energy system? You know we are blessed here. We have 70 percent of our energy produced by hydro. We have a 90 percent renewable energy profile on its way to 95 percent and I hope one day it is 100 percent. I hope one day that we will be able to stand up and say that we are carbon-neutral. Why would we prejudice that strategy by flogging off the engines of development to overseas shareholders who care nothing for “New Zealand Inc.” but care a lot about the dividends they can extract? Why would we do that? What value does it add to take perfectly well-run State enterprises and turn them loose as mixed-ownership companies? 
My colleague Clayton Cosgrove repeated the testimony of the chair of one State-owned enterprise—I think it was Joan Withers—who said: “We will not change behaviour if we are governing a partially privatised entity; we do best practice directing now. That is our legal obligation.” For there to be an upside the Government would effectively be saying that the current directors are not doing their job and are therefore culpable. That is rubbish. These are well-run companies. They turn a tidy profit for the taxpayer. It makes no strategic sense whatsoever to sell them. The counterfactual is Norway a country about our size. It created a future fund for its oil deposits. It has kept its State assets and it has become one of the wealthiest countries in the world. It would not be doing what this Government is doing. Nor would the Danes nor would the Finns whom Gerry Brownlee is so fond of. They invest in innovation they build their assets and they keep them. This makes no social sense; I will close with that. 
We have already noted that New Zealanders already own these companies. We have already noted that most New Zealanders cannot afford to buy them twice. We ask the question of why then is this happening. It is explainable only for the saddest of reasons. National went out on a limb to please what is politely called one of its own core constituencies in the language of the streets—their rich mates: the lawyers the accountants the Goldman Sachs and the Merrill Lynches of the world. Heard of them before? I wonder why that is. They are the people who describe their customers as muppets. This Government is selling New Zealand down the river—down the river—with an irreversible change because it has mistakenly thought that they would harbour a bit of money. But it will lose more dividends than it saves. The Government is creating a fiction out of a Future Investment Fund when we all know it has got capital anyway. One of the members opposite—I think it was Mr Goldsmith—asked how Labour would fund capital investment and the answer is that Labour’s last fiscals had net debt paid off before the Government’s own debt. We did it through tax reform that was pro-growth and fair and that plan would work. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Chair. Nga mihi nui ki a koutou. Kia ora. It is good to follow that fiery speech from David Cunliffe. I rise with some pride that the Green Party is probably the only party in this Parliament that has not been involved in asset sales. We saw the Labour Party and we saw New Zealand First along with the Bolger-Shipley National Government sell the assets. We know the Nats have done it. The only person in this Parliament however who is going to be part of two Governments that sell the assets is Peter Dunne. I would like to point out that both United Future—sorry unfortunately not United Future—both the New Zealand First Party and the Labour Party have seen the errors of their ways. We have learnt from history. The only parties in this Parliament that are not learning from history are the National Party United Future and the ACT Party. We know the errors of our history. We saw $7 billion worth of State assets sold and in the preceding years we have seen $21 billion in dividends not returned to the taxpayer where they should have gone but returned to those private shareholdings. 
It is a privilege to take a call on this bill—this unpopular bill this ideological bill this controversial bill. Let us just look at Part 1 which removes Genesis Meridian Energy Mighty River Power and Solid Energy from numerous legislation—from the State-Owned Enterprises Act the Ombudsmen Act and the Official Information Act. It is a key plank in the Government’s agenda. The Government has got the drill-it plank the mine-it plank and the frack-it plank. We know a lot about the cut-it plank from the Budget last month and here we have got the fifth plank—the fifth plank of the Government’s entire economic plan for the next 3 years which is to sell it. Those are the only ideas it has got. 
But the question is why we are doing this. Why in Part 1 are we having to remove these companies from Official Information Act scrutiny from the important transparency role of the Ombudsmen and from the social responsibility clause? Is it ideological? Is it because the Government has not learnt the lessons from history? It brooded for the 9 years it was in Opposition in part because the decisions it made in Government to flog off BNZ and to flog off Contact Energy earned it such unpopularity with the New Zealand constituency that it was out of Government for 9 years. Is it ideology or is it because the Government has got itself in a fiscal hole with its poor management of the economy? 
We know that the Government has got money to throw at problems. It has got $14 billion to throw at motorways $1.5 billion to subsidise polluters under the amended emissions trading scheme and $2 billion to throw at the wealthiest New Zealanders who got tax cuts that they did not need and that the Government could not afford. The Government has got itself in such a fiscal hole that the only option it has got left is to flog off these assets now. The Government knows it is deeply unpopular. That is why we are seeing this Mixed Ownership Model Bill which does keep 51 percent as the Government’s share. It is called the “MOM Bill” the Mixed Ownership Model Bill—mom. Government members talk about mums and dads but it is not mums and dads who are going to be buying shares; it is those Goldman Sachs bankers whom David Cunliffe was talking about. It is those people who benefited the most from the Government’s tax cuts. It is the mums and dads to whom these assets already belong. They already belong to us as Kiwis. It is their assets their treasures their taonga which we have built up over generations which Kiwis and successive Governments have contributed to and from which we now derive such healthy dividend streams. That is what the Government is quite happy to flog off. 
So in clauses 3 4 and 5 we see these assets built up over generations taken out of the State-Owned Enterprises Act and the crucial part of this is the social responsibility clause in the State-Owned Enterprises Act. The question for the Minister in the chair and I do not know whether Minister Heatley is able to take a call on this is why does the Government need to take the social responsibility clause out of the Act? The Greens do not think there are any good reasons why this should be removed. The Government says there is still going to be majority ownership—51 percent of the shareholding will be controlled by the Government—so what is wrong with social responsibility? We are facing a huge number of problems with these assets as we are at the moment. We have seen electricity prices rise around 70 percent in the last 2 years. We have seen a Government that cannot even argue or answer questions in the House today on the difference between the weighted average between private and public generators and retailers. What we know though from that analysis which the Government cannot critique and to which the Government cannot even provide an answer is that it is crucial to maintain the social responsibility clause because we do want to see cheaper electricity. Around 15 percent of New Zealanders I understand are classed as being in energy poverty. It is a huge cost when you put in the galloping rate of inflation and the rising energy bills that come from oil imports. It is important that we keep this clause. 
It was refreshing to listen to the Hon David Cunliffe talking about climate change and talking about the end of cheap oil. It is good to hear a Labour MP talk about these crucial issues and what we need to do is keep— 
Hon David Cunliffe 
: It’s even in our manifesto Gareth. 
GARETH HUGHES 
: In your manifesto? Well congratulations. It is not the Labour Party of 5 years ago but it is good to see the Labour Party of 2012 talking about these real-world issues. We need to have this social responsibility clause so we can actually do something about it. But I want to know from the Minister what the plan is and what the problem with it is. Is it because business has gone to the Government and said: “Look this contributes to such uncertainty. We don’t want to focus on social responsibility. We want to focus on getting every drop of profit no matter where it comes from so we can increase the dividends for our shareholders.”? What is wrong with social responsibility? Why will the Government not be voting for Russel Norman’s amendment that would take these four assets out of clauses 3 4 and 5? 
When we look at clauses 6 and 7 which remove these assets—Solid Energy in particular—from the Official Information Act and the Ombudsmen Act again we have to ask what the Government’s rationale is for doing this if it is going to be keeping 51 percent majority control. If the taxpayer—if the country—is keeping control what is wrong with having Ombudsmen oversight? What is wrong with having everyday Kiwis being able to lodge an Official Information Act request to find out what is happening with their majority control? When you look at the Ombudsmen’s submission to the select committee you will see that they made the very salient point that in this context it seems highly desirable for the Ombudsmen Act to continue to apply for a number of reasons. They pointed out that there appears to be no necessity for companies currently subject to the Act to cease to be so subject apparently solely on the grounds that up to 49 percent of the shares in those companies are proposed to be made available for the sale to private sector interests. The Ombudsmen came to the committee and said it was a bad idea. They said that they should have control. If we are keeping 51 percent as the Government and United Future reminds us why on earth do we not have Ombudsmen and Official Information Act oversight over the majority of these State-owned assets? 
The fact is we know that this Government’s agenda in respect of asset sales is just so unpopular. There is no sense. We know it is going to cost more. We know that the bills are going to be in the order of $120 million from the taxpayer to subsidise the public relations selling job the spin job. There is likely to be $400 million from loyalty schemes. There may be $100 million in lost dividends in the first year. That is around $600 million that the taxpayer is either forking out or missing out on. In a time of austerity it is outrageous that the Government is going to be wasting our money on asset sales that no one from the whole of New Zealand is going to benefit from. 
It makes no sense because in the long term we will be losing out on the dividend stream which has been healthy and a good rate of return. It is a lot greater than the cost of borrowing. We know that it is not supported. The Government does not have a mandate. Just because the Government continued to talk about a mandate it does not mean that it has one. The only way it can argue convincingly that it has a mandate is if it puts it to the people. That is why we saw such a rushed select committee process. The Government is scared. It is scared of the massive mobilisation that is happening right now with the citizens initiated referendum petition. What we know is the results. Kiwis are missing out on these intergenerational treasures built up over generations. We are going to see higher electricity prices and that is what the evidence says. We are going to see a loss of social responsibility from these very large very influential former State-owned enterprises and we are going to see electricity price rises. 
There must be a better way. Instead of flogging off these assets we could be using them. We could be utilising that capital invested and utilising that experience that expertise and that export stream that is already contributing to our economy. We could be using these assets to drive growth in a green economy. We could be using them to drive exports in clean-energy expertise technology and manufactured exports. There has to be a better way that we can run our country for the sustainable long term so that we can actually contribute to dealing with the challenges as David Cunliffe talked about and deal with the significant fiscal hole we see at the moment. This is no way to run a country. This is no way to run an economy. There is a better way. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I wonder whether I could begin by giving my young friend Gareth Hughes a gentle reminder about history. From 1999 to 2008 there was something called the fifth Labour Government. That Labour Government sold no assets. That Labour Government created Kiwibank because we had had a gutsful of $2.5 billion of money from our banking sector going across the Tasman to Australia. That Labour Government bought back Air New Zealand because the so-called very efficient private board had bankrupted Air New Zealand. We bailed it out and got it back on its feet. And that Labour Government bought back KiwiRail because the so-called efficient private sector had asset-stripped New Zealand Rail run it into the ground and made it impossible for it to fulfil its role as part of the transport sector. That was the fifth Labour Government. 
Mr McClay had a problem with amnesia as well. He forgot it was the National Government in the 1990s that sold assets. You know the difference between us and them is that we learnt the lessons of history and we are getting it right now. I remember Bill English as the Minister of Finance who sold Contact Energy in 1999. I have been in this place long enough to know the time when we passed legislation under the Muldoon administration to build the Clyde Dam. Bill English and the National Party flogged Contact Energy off and what were the consequences of that? The consequences were that over $1.5 billion in dividends went out of New Zealand and across the Tasman to the Australians once again. The consequences were that Contact Energy charged more for electricity prices—higher prices. But this National Government has learnt absolutely nothing. 
The first thing is that this National Government has no mandate for this Mixed Ownership Model Bill—no mandate at all. If it had the courage of its convictions it would take this to a citizens initiated referendum. Why do I say that? I say to the National Party members: these are not your assets to sell. They are not yours to sell. These assets were built by our parents’ generation and our obligation in this House is to pass on our most successful our most efficient and our most valuable assets for our kids and their kids after that. I say to this National Party here: when you flog these assets off what are you left with? Nothing—nothing. You know in 10 years’ time the dividends from those power companies would be the same as the price that you get from flogging them off but the difference in keeping them is we would still have the assets and they would still be providing the dividends year after year for our kids and our grandkids. 
Maggie Barry 
: So will you buy them back Phil? 
Hon PHIL GOFF 
: I say to Maggie Barry you know if flogging off your most valuable assets was a great idea why have the Norwegians not sold their oil wells? Because they are a bit smarter—and the Finns too Mr Brownlee. They are a bit smarter than this thick National Government which thinks it is a great idea to hock off our most valuable assets. 
You know even Treasury God bless it gave that advice in the Budget Policy Statement. What did it say? It said that the cost of keeping those assets is around $266 million a year but the dividends you get from them are $100 million more than that. I ask the National Party members which one of them if they were faced in their family or their business with a difficult economic challenge would decide that the answer to that challenge was to flog off the best assets that they had and the most remunerative. Well maybe Tau Henare would—maybe Tau would. But actually none of them would do that because it simply does not make sense to sell off the assets that are so valuable to us and keep producing dividends for us. 
I remember the time when John Key on the other side of the House was asked the question—I asked it—where the money from our State-owned enterprises goes. He said: “Why it goes to pay for our hospitals and our schools.” Well I say this to Mr Key. First of all it is going to cost him $120 million to flog the assets off. That is the fee we pay to the fat cats and the banks. You know that $120 million? Mr Key that would actually pay for what you were going to spend the money saved from increased class sizes on. We could use that money instead of tipping it down the drain and giving it to the banks—$120 million. 
But I come back to it: there is no mandate for this legislation. There were 1421 submissions heard by the Finance and Expenditure Committee that were opposed to this legislation. Does anybody from the National Party know what percentage of the submissions they were? It was 98 percent. 
Hon Clayton Cosgrove 
: Phil does. 
Hon PHIL GOFF 
: Phil Heatley knows. He is good at maths. He could tell us the weighted average—he could tell us the weighted average. Ninety-eight percent were opposed and do you know there were nine submissions in favour—0.6 percent. There has not been a public opinion poll in this country that has ever shown less than a 2:1 ratio for New Zealanders’ opposition to the sale of these assets. National members are flogging off something that is not theirs without the mandate to do so. 
And then they have the effrontery to say that these assets are going to go to the mums and the dads. You know what I like about our power stations? It is that 100 percent of them are owned by the mums and the dads and everybody else in this country—100 percent. Do you know who National members want to flog them off to? They want to flog them off to a few wealthy mates some big corporates and overseas interests. You know John Key said this during a debate that we had during the election: “We’re giving people a commitment that 85 percent to 90 percent of the entire company”—he means all the power companies—“will be owned by New Zealanders. That is my commitment to them tonight as Prime Minister.” I say to John Key: where in this bill tonight is anything at all to back up that commitment? New Zealanders will be at the front of the queue National said. Where is there anything in this bill to say that that will be the case? 
The losers in this legislation are all New Zealanders. The winners are a few wealthy people and the foreign investors who will jump at buying these shares up. This is typical of a National Government that governs for the few and not the many. I am proud in this Committee tonight to be standing here with the Labour Opposition standing up for the many New Zealanders who are opposed to the outrage of what this bill intends to do. It will make our internal deficit worse. It will make our balance of payments deficit worse as the money flows out of this country. It will push up the price of power—and New Zealanders will be thinking about this right now. The average cost of power because of the sell-off of these assets for a New Zealand family will go up between $200 and $300 a year. Maybe that is not much to John Key or Steven Joyce or the people who sit over there but it is a hell of a lot to the people I represent in this House who tonight will be sitting there with their overcoats on because they are looking at the cost of the power that they are paying for. 
 It was our parents who built those assets our parents who got those dividends that can be returned to New Zealanders and that can ensure that in a market that is not competitive there will at least be reasonable prices for power. [ 
Interruption 
] Tau Henare can say what he likes. He used to be part of New Zealand First and now everything he says in this House is the exact opposite of what he said once in this House. So Mr Henare you be quiet and I will give you the charity of my silence. 
There is another question and that is about accountability. This bill takes away the accountability of the power companies to the Ombudsmen and the Ombudsmen said there is no argument for doing that—no argument at all. It takes away the accountability of the Official Information Act. If it is commercial and secret it is covered anyway under the Official Information Act. But this bill removes accountability from New Zealanders. It removes— 
DAVID BENNETT (National—Hamilton East) 
: 
 That previous speaker Phil Goff said: “These are not your assets to sell.” Those were his words. Well remember the history of the Labour Government. Remember Phil Goff’s history in this Parliament when he came in here and sold asset after asset after asset. At any point during that time Phil did you stand up and say to yourself that these were not your assets to sell? Look at us Phil. Do not look at your papers. Look at the people. You said you were talking about the people and representing the people. Well look at what you said in the past. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. Forgive me I know you were distracted—appropriately. It is appropriate that members are addressed by their correct name and I invite you to instruct— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry. I was distracted. Members know that courtesy prevails. 
Hon Phil Goff 
: Since we are interrupting the debate I seek leave to table this list of all of the assets that were sold under the last Labour Government. For those who cannot see it it is blank. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Leave is sought for that purpose. Is there any objection? There is objection. 
DAVID BENNETT 
: We will come to that list Mr Phil “Past leader of the Labour Party” Goff. But first of all let us go through what you sold— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. With respect I make the same point again. All members are honourable members. 
The CHAIRPERSON (Lindsay Tisch) 
: I heard him say Mr Goff the former leader of the party. [ 
Interruption 
] Well the member must address people by their correct names. If it happens again the member will be in trouble. 
DAVID BENNETT 
: Remember when Labour sold New Zealand Steel to Equiticorp Holdings for $327 million? Remember when Labour sold Petrocorp in 1988 for $801 million? Remember when Labour sold the Post Office Bank to ANZ Banking Group for $665 million? And who was there voting on those? Mr Phil Goff voted on those. Mr Phil Goff came into this House with his mates and voted on those. It is a bit rich coming in here now Phil and trying to—Mr Goff—oppose these bills. 
Hon Clayton Cosgrove 
: He did it again. 
DAVID BENNETT 
: I corrected it. 
Hon David Parker 
: I raise a point of order Mr Chairperson. Again the member transgressed your earlier ruling. 
The CHAIRPERSON (Lindsay Tisch) 
: The member will sit down now. He has lost his right to the call. I am going to call Charles Chauvel. [ 
Interruption 
] 
CHARLES CHAUVEL (Labour) 
: 
 I am astounded by the acclaim that the decision to give me the call is met with from my own colleagues particularly as I am about to praise some of the Supplementary Order Papers that they have lodged in respect of this part. What we have heard in the debate so far is some very good points about what this legislation will do to the carefully calibrated accountability regime that exists in respect of State-owned enterprises. It will do away with that regime completely and it will replace it with something that is untested and about which much concern was expressed at the Finance and Expenditure Committee as can be seen from the report back. 
Let us start with clause 3. Section 4 of the State-Owned Enterprises Act is of cardinal importance to the way in which that legislation is put together. It is the one that requires companies to act in a socially responsible manner. Well every member of this House has to ask why it is that we would have a bill the Mixed Ownership Model Bill before the Committee tonight that removes that obligation—the obligation to act in a socially responsible manner in respect of four major companies in New Zealand. These companies are no longer going to be required to act in a socially responsible manner and that is something that all New Zealanders should be concerned about. 
The other problem with exempting these companies from section 4 of the State-Owned Enterprises Act is that they are not going to be required to be good employers. So not only will they not be required to act in a socially responsible fashion but they will not have any good-employer obligations placed on them either. It pays to remember that in particular the energy companies are amongst the last remaining New Zealand - owned companies of any scale operating in New Zealand. They are some of the few places where clever Kiwis can go and get managerial jobs in businesses that are of an international scale. Why on earth would we take away from them the obligation to be good employers to our clever Kiwi managers who are using their ability to work in these companies to get valuable commercial experience? It just beggars belief. 
Then there are the obligations to Maori that are taken away by this legislation. I know that my colleague Parekura Horomia and others will be addressing the Committee on this crucial point. You see the Crown cannot rely on sections 27A to 27D of the State-Owned Enterprises Act to meet its Treaty obligations because the specific rights protection regime outlined in those sections does not impose the obligations imposed by section 9 of that Act; nor does it protect any of the future or existing Treaty rights of Maori. The partial sale of these power companies will make the prospect of securing a section 27B resumption of any of the assets of the power companies highly unlikely and the question arises just as obligations to act socially responsibly and obligations to be a good employer are removed by this the Mixed Ownership Model Bill why the legislation would seek to diminish the rights of iwi that have been established over time under jurisprudence relating to the State-owned enterprises. The only thing that Maori will be able to do if they suffer a Treaty breach as a result of the actions of what will be partially Crown-owned companies is seek a monetary claim for damages. There will be no ability any more to seek the return of land or assets in the event of a breach. This is yet another removal of the rights of New Zealanders cherished and carefully established over time. 
There are a number of Supplementary Order Papers on the Table of the House in the names of colleagues of mine that deal with this part and I want to speak to some of them because I think they are worth consideration. I hope that we will hear from the Minister in the chair the Minister of Energy and Resources as to the Government’s response on these Supplementary Order Papers because they are put forward in the spirit of attempting to remedy some of the more egregious omissions that this legislation will enact if it is passed in its current form. 
I want to start with Supplementary Order Paper 46 in the name of Chris Hipkins. It is a Supplementary Order Paper that would basically make these mixed-ownership model companies subject to the Official Information Act and it is mirrored by Supplementary Order Paper 54 in the name of my colleague Iain Lees-Galloway. 
The power companies that are subject to this bill are core strategic assets. It is important for the public to be able to continue to have access to information about them. I have sat on the board of Meridian Energy. I know the power of the Official Information Act when it comes to one of these companies. Boards and management take great care about the transparency of their decision-making processes—not because as Mr Goldsmith said of the continuous disclosure obligations that the companies could be subject to if they were listed on the open market because frankly the Official Information Act provides a much more immediate remedy than that. It is backed up by the powers that are provided for in respect of the operation of the Office of the Ombudsmen. But this legislation would take away the application of the Official Information Act to the entities to be privatised. I think for the reasons that we have heard from a number of speakers that that is a retrograde step. It is not going to enhance their accountability—quite the reverse: it is going to limit it. I commend both Supplementary Order Paper 46 and Supplementary Order Paper 54. These would enact improvements to the model that is being proposed to the Committee and they ought to be considered carefully. I think it would be a real shame if we did not hear anything from the Minister in the chair in response. 
The other Supplementary Order Paper that I think is worth mentioning is Supplementary Order Paper 47 in the name of David Parker. This would delay the implementation of the Mixed Ownership Model Bill in order to give sufficient time for the public to actually appreciate the consequences of the legislation and prepare for its consequences. We have heard from speaker after speaker who sat on the Finance and Expenditure Committee about the difficulties they experienced in terms of process: the rushed hearing at the select committee and the fact that Treasury had prepared the departmental report before the public submissions had even closed. This Supplementary Order Paper if accepted by the Committee would in fact remedy that to some extent. It would provide for some proper consideration by the public of what is at stake here. 
It is mirrored in many ways by Supplementary Order Paper 58 in the name of Grant Robertson. That Supplementary Order Paper would send the bill back to the select committee in order to ensure that it has been thoroughly checked for mistakes. How many times have we rushed legislation through the Committee or through the House only to find that a patch-up job is needed in a Statutes Amendment bill or worse some sort of urgent specific legislation? I just do not believe given the speed of the process that that will not be the case here and that it will not be necessary at some point for the House to come back and look at the legislation in detail to ensure that mistakes have not been made. So I think the contents of Supplementary Order Paper 58 are well worth some thought. Again it would be useful to see the Minister in the chair get to his feet and respond to the contents of that Supplementary Order Paper. 
There is another excellent Supplementary Order Paper Supplementary Order Paper 45 in the name of David Clark. That Supplementary Order Paper would alter the title of the bill from the “Mixed Ownership Model Bill” to the “State Asset Privatisation Bill”. If we are after plain language in legislation—legislation saying what it actually means to do—then this would be a very very good Supplementary Order Paper for the Committee to look to with favour. That Supplementary Order Paper would bring honesty to the naming of this legislation and it would call the bill a name by which it can be recognised with some honesty by the public because that is actually the purpose of the legislation. 
There is another very good Supplementary Order Paper Supplementary Order Paper 53 again in the name of Chris Hipkins. What that would do is it would require a 75 percent majority vote in the House before one of these entities could actually be privatised. We have entrenchment provisions in our law; we have them in the electoral legislation. I think it is time for us to consider whether or not in other areas where there is a clear important public interest we should look at the entrenching power that this Parliament undoubtedly has. This must be an occasion given the strength of public opinion where that possibility ought to be contemplated very seriously. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
STEFFAN BROWNING (Green) 
: 
 I rise to talk on Part 1 of the Mixed Ownership Model Bill. The Green Party certainly opposes this bill. I have been out on a number of occasions getting signatures with the volunteers for the petition against this bill. My experience with those volunteers is that the public are very deeply concerned about this bill. You can arrive at a market aim to walk through the market to get signatures and you barely move a few metres because people are coming in their droves wanting to sign that petition—even I note at the Fieldays. It was interesting to walk past the National Party’s stand and there were people coming up to me there wanting to sign the petition because they are so angry and in fact even disgusted with the way this bill and this Government is going in trying to flog off the assets that they really recognise as their own assets. 
For a bit of background on why these people are so angry what they refer to so often is the history of sell-outs and the history of breakdown of stuff that they consider their own. They go right back to Bill Birch’s day and Doug Kidd’s day. In my area a local power company was forced to sell off its own generation plant when the Electricity Corporation was split up in a way that we all know made prices rise and took it away from people—in a way setting up for this craziness that is in front of us now. 
Those same people bring up the issue around the railways—what has happened with the railways and what happened with Petrocorp. Those people of New Zealand eventually got the railways back in a dilapidated state. Then we saw it with Telecom with Fay Richwhite when that disappeared. Was it to mum and dad investors? Well not for too long. But the power companies will be even harder to get back than the railways because we are heading into an era when energy is even more precious. The rewards of keeping it would be much much greater. Energy is becoming constrained Petrocorp is gone and we need to retain our power. 
I notice that TrustPower and other generators are holding back on developing their consent approvals for new generation—no doubt waiting for some gifts from National in cheap cheap energy generation but it is actually very good energy generation that we should be holding on to—so that they can sell New Zealanders their own energy back at a much increased rate than the Kiwi mums and dads whanau elderly and community are actually purchasing it at currently but from their own generation. 
There are other aspects of this ownership that we will cover in the later parts of the bill but that is the background: the volunteers and the people of New Zealand racing to fill those petitions. They want this Government to put the brakes on to hear them and to give them a chance so that they can have an opportunity to convince the Government which has not listened and which has not got the mandate—no matter what it says about the mandate—that there were more people voting against asset sales than for. These people want another go at that at convincing the Government. They are going to sign the petition all the more. We will get there and we will be back. I am looking forward to speaking to the other parts. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to focus on some of the amendments that are sitting to Part 1 of the Mixed Ownership Model Bill—in particular the amendment in my name that will take out Genesis Energy and that in my colleague Chris Hipkins’ name that will take out Solid Energy from the group of assets that are up for sale. The reason I would like to focus on these is that these are the two dirty companies. Genesis Energy is certainly the dirtiest generator around and it is one where it is very important that we get a shift in its attitude and its production over time as far as possible towards renewables. It is part of in the end social responsibility which is another clause that we will be debating by way of amendment in order to keep it in and keep it applying to these companies if in fact my amendment and that of my colleague are unsuccessful. Genesis Energy’s frankly appalling annual report—if one goes to the chairman information it says “A word from the top” and it has a picture of Jenny Shipley—is not quite the image that some of us think is appropriate for a State-owned enterprise but— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon TREVOR MALLARD 
: Before the dinner break I was speaking on my amendment which is set out on Supplementary Order Paper 65. The objective of it is to—within clauses 4 5 and 6 of Part 1—delete Genesis Energy known as Genesis Power Ltd from this piece of legislation. The point that I was making earlier and it is something that I am sure the Leader of the House is aware of from his previous responsibilities is that Genesis is really the Crown’s dirty energy company. It has the Huntly power station. It is one that I think it is fair to say over the 1990s and one could say even into the 2000s had a focus more on non-renewables than was desirable. And it was the one that had the furthest to go. I know there has been some asset swapping around the place with the intention of getting more energy for Genesis in the South Island. But that is not something that from my perspective means that this company is one that should be allowed to go out into the private sector and take its relatively dirty methods further out into the commercial world. I was also associating that with the Supplementary Order Paper from my colleague the intention of which is to take Solid Energy New Zealand Ltd out. I want to try to link these two points which my colleagues I am sure will speak to going forward. 
I was for a period of time the Minister for State Owned Enterprises I think for 3 years. When I got my punishment at one stage I had a number of portfolios that I liked taken off me including sport and Rugby World Cup. I note my colleague smiling there. I was left with the State-owned enterprises portfolio because like the environment and labour portfolios it was seen as a punishment. And dealing with Solid Energy I think was one of the harder jobs but there were some really big decisions. 
One of the decisions which I know my colleagues in the Greens disagreed with but I think was something that was really important was the purchase of the farms with the lignite under them in Southland. My view is that there is a pretty clear choice there around the ownership of those and whether we should have a State-owned enterprise involved in whatever development happens and whether the Government should have influence over that as an owner as well as a regulator. My view has always been that at some stage in the future the energy that is there—there will be the methods developed in order for it to be used in an environmentally sustainable way. It might be 20 years away it might be 40 years away but if we left it to the private sector and if it is privatised in this way what will happen is it will be done on a strictly commercial basis it will be mined very very soon it will be burned in pellets and it will be outrageous. 
We have some choices to make and I disagree with both sides of the House. The Greens say: “Leave it to the private sector to own it and to use it.” The National Party says: “Sell it to the private sector and let them use it.” I disagree with both of them. What I wanted to see was us get to the point where that energy can be taken out and where the emissions can be held underground. There are a number of loose heads in the Greens shaking around. There are a number of loose heads flapping. It is something that may be able to be done in the future but if we do not own it our ability to control it is removed only to the basis of our regulatory ability and that is something that is pretty hard. That is what my amendment is about and that is what my colleagues’ amendments are about. It is about the role of the State in the energy companies and my view is that that is a role that goes well beyond the role of the regulator. 
The other point that I now want to make is that there is on the Table a group of amendments that are what I would describe as fundamental or substantive. They are really big amendments from the Labour Party. They have to do with the Ombudsmen they have to do with individual companies and they have to do with Treaty issues—there are lots and lots of issues there. They are what I call substantive. But I want to say that the member in charge of this bill the Hon Tony Ryall has done a shocking job on the drafting—a shocking job on the drafting of this bill. I think the Attorney-General should be talking to Mr Ryall and trying to get—or Mr English; whose name is the bill in? 
Chris Hipkins 
: Ryall. 
Hon TREVOR MALLARD 
: He should be talking to Mr Ryall and getting him to sort out the drafting. The Labour Party has found hundreds—hundreds—of drafting errors in this bill. There are hundreds of drafting errors bad English English that is not plain things that create doubt. We have mixed feelings on this. Should we help the Government tidy up its legislation by moving a number of amendments to clarify the purpose and to make it clear or should we leave it to stew in its own bad drafting? I am a parliamentarian—a parliamentarian first. Some of these amendments are clearly matters of policy difference and very big policy difference. But as a parliamentarian I cannot let legislation go through the Committee that is so badly drafted and around which the Government is so disorganised. So it is the reverse of the normal saying; it is normally “I’m from the Government I am here to help.” but in this particular case we are here from the Opposition and we are here to help. That is why my colleague Chris Hipkins has on behalf of the Labour Party tabled a number of amendments. I take some care at letting one clerk carry them. There are copies of each of them there. We are doing that in order to make clear to the Government that it is important not only as a matter of principle but also as a matter of proper parliamentary drafting. 
ALFRED NGARO (National) 
: 
 I move  
That the question be now put 
. 
BRENDAN HORAN (NZ First) 
: 
 I rise on behalf of New Zealand First to utterly oppose this bill. If we look at the definitions of stupidity or at one of them it is doing the same thing over and over again and somehow expecting a different result. 
Hon Simon Bridges 
: That’s what you did on the news every night. 
BRENDAN HORAN 
: As I was saying a perfect example of the definition of stupidity—right over there. You will notice that the speeches coming from members on that side of the House have been utterly unconvincing and entirely dull because they realise that they are flogging a dead horse that this did not work in the 1980s that it did not work in the 1990s and with the benefit of hindsight that it is criminal. 
 This piece of legislation the Mixed Ownership Model Bill removes the social responsibility clause that currently governs State-owned enterprises. This means that mixed-ownership companies will be driven entirely by the pursuit of greater profit margins. There will be a lack of public scrutiny because this piece of legislation removes the provisions for members of the public to access information that they previously had access to such as the Official Information Act and the Ombudsmen Act. A person in a legal sense can also mean any trust or company. There is every possibility that an individual person can indirectly own far more than 10 percent of any mixed-ownership company as all they need to do is set up a few trusts. 
This Government has spoken about having a mandate by the people of New Zealand. We constantly hear those members in the House saying that 1 million people voted for them. Well what about the 3 million who did not? I understand that those members on that side of the House have a little bit of difficulty with simple mathematics but they should understand that 3 million is greater than 1 million. I ask where the fiscal responsibility is because we hear them speaking about fiscal responsibility. It is quite an interesting perception is it not? Here we have a National Government that got in 4 years ago and Mr Ryall told us tonight that there was an $8 billion deficit. Somehow these financial geniuses have turned it into a $64 billion deficit. How about that? How does that work? Can you get that maths right there? And it was approximately $17 billion in the past year. I ask if they get $6 billion for these assets which is the figure they have been touting what are they going to do with it? How is it suddenly going to solve the economic problems we have? There is only so much you can blame on the Labour Party and on the economic mess that is happening all over the world today and in Greece. You can try blaming Finland again but that did not work for you. 
When we take a look at these companies and if we consider say Genesis I ask who the chairperson of Genesis is. I googled it—I did not really need to google it but for the benefit of some members I did—and there we see a lady. I saw her a few weeks ago actually over at the Bolton Hotel when John Banks was in trouble and I wondered is that who I think it is? It looks like a cross between a cougar and a dinosaur and I thought “There’s a cougar-saurus!”. But no it was not. Then I found out that this person is also the chairperson of the Financial Services Council of New Zealand and I thought: “We’ve heard from that person today.” Then when I scrolled down it said: “Independent executive director of the China Construction Bank” and I am thinking is there possibly a conflict of interest here? Is there a conflict of interest? I ask whether this is the same person who is getting $1200 a day for the rebuild of Christchurch because I would have thought that that alone would have been a 40-hour-a-week job. But no there seems to be no limits to which this Government will stoop to look after its mates. 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 I want to speak to the fact that section 4 of the State-Owned Enterprises Act is missing from this bill. That is the section in the State-Owned Enterprises Act that requires the four energy companies that we are talking about to behave with the principles of social responsibility in mind. That is one of the criticisms that we have of this bill. By removing the energy companies from the principles of social responsibility this bill and this National Government are doing a terrible disservice to New Zealanders all over the country. 
In fact everybody who pays a monthly electricity bill will pay the cost of this privatisation exercise. There have been a number of statistics discussed in the Chamber today that show the weighted average charge for domestic electricity users buying from State-owned enterprises is $265 a year less than the average for non - State-owned enterprise suppliers. We know and the entire country knows that once you hand over 49 percent of the ownership of these companies to private investors—most likely foreign investors—there is only one direction electricity prices will go and that is up. 
I want to tell the story of someone I know very well who lives in one of the coldest cities of New Zealand. This person lives on an invalids benefit. They rent a flat and pay $40 a fortnight in electricity on a top-up with the local electricity retailer. I visited the person last week living in a one-bedroom flat in freezing conditions at the bottom of the South Island and this person lives with one electric heater in their flat. They do not use that electric heater because the price of electricity is too much to pay because they cannot afford on an invalids benefit to even pay the cost of heating a one-bedroom flat in freezing conditions in a city that you know well Mr Chairperson Roy. That is an unacceptable way for anybody to live in this country but we know that the impact of this privatisation of these companies can only mean that power prices will go up. It is the inevitable consequence of what this National Government is doing and it will mean that the price will be paid by New Zealanders in their electricity bills every single month. 
We know that public ownership keeps prices down. These are natural monopolies we are talking about. They are a licence to print money and if a half-share in these companies is handed over to private ownership it is inevitable that the profit motive will drive up electricity prices. If National had even given consideration to retaining the social responsibility clause in this legislation so that these companies would have to ask themselves before they put up prices whether or not this was a socially responsible thing to do and whether or not it was in the interests of the people of New Zealand then that would have been a good thing but that is clearly so far from being a consideration for National and for this Government. 
The chief executive officer of Contact Energy recently told commercial investors that they should not invest in energy projects until prices rise because a 6 percent return is not enough to cover the desired 8 percent return on capital. Well there are two options. If the Government wants to make sure that this share float is profitable for private buyers it has only two options: it can either raise power prices and boards will be legally obliged to raise power prices if they can to make larger profits or the second option is to discount the shares and get a lower price for the asset and let buyers make a profit on the gains in the share price. 
It is a very simple choice and I submit to you that this Government is doing a grave disservice to New Zealanders by exempting these companies from the social responsibility clause. If they had they might have spared New Zealanders the worst of what is surely to come and that is rocketing electricity prices— 
Hon Gerry Brownlee 
: Why didn’t the member stop the putting up of prices during the 2000s? 
PHIL TWYFORD 
: Every New Zealander knows that power prices have gone up too much—every New Zealander knows that. No one is disputing that. Everyone in this Committee has acknowledged it but if you think that— 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
KEVIN HAGUE (Green) 
: 
 I appreciate the opportunity to make my first contribution in this debate on Part 1 of the Mixed Ownership Model Bill. There are several more specific points that I will be wanting to make later on in the debate but I thought I would begin by just reminding the Committee about this basic point: opinion polls consistently demonstrate that the vast majority of New Zealanders oppose the bill that the Government has in front of the Committee tonight. That is not only New Zealanders in general but also the majority of National Party supporters. So the claim of a mandate is tenuous at best. I think the last opinion poll result that I saw was that 80 percent of people are opposed to this as were 98 percent of the submissions received by the Finance and Expenditure Committee and by now there are many many signatures on the petition—over 80000 already I am told—to try to force a citizens initiated referendum on it. 
Hon Gerry Brownlee 
: The taxpayer paid a dollar each for those signatures. 
KEVIN HAGUE 
: The Leader of the House makes an interesting point that the Green Party has invested in enabling New Zealanders to have access to their democratic rights. The small amount of money we have spent to ensure that that occurs pales against the at least $120 million that the Government is spending to promote the asset sales agenda. I would like to offer a more precise figure for the Government’s spending to promote the asset sales agenda to New Zealanders. Sadly I cannot because the Minister of Finance repeatedly refused to answer the questions in the House today. 
I have advanced data for New Zealanders who oppose the asset sales agenda and the Government responds to those numbers by saying: “Well look we’re the Government. We’re the Government and therefore we have the mandate.” That is kind of a logical flaw is it not? What the Government intends to do is essentially to use the election result—and it is the party I concede with more votes than any other party—as effectively a referendum on every single issue. Well actually that is not how it works. That evidence from the opinion polls which says that even the majority of those who voted for that party actually oppose its asset sales agenda gives the lie to National’s claim. If we actually look at the reasons why people voted for that party there are many different ones. 
I want to come back to Part 1 of the bill because I appreciate that I am speaking in quite a general way. I want to look at what the reasons are for those New Zealanders who oppose this agenda and oppose this bill. The first one which I hear again and again at public meetings up and down the country is that New Zealanders understand that what the Government proposes here is economic nonsense. It is just stupidity. It is a move that by the Government’s own account will actually worsen its fiscal position by approaching $100 million a year. That is right. It does not make any sense does it? 
I campaigned in the campaign last year with Chris Auchinvole from the Government side. He tried to explain the Government’s economic thinking to audiences in this way: he said that as a former business person himself his practice was to get assets to a point of maturity where they were generating really good profits and that was the right time to sell them off. Well I have been in business myself and that is kind of the polar reverse of the business strategy that I pursued. If I had assets generating good returns as these are for the New Zealand taxpayer selling them off is the very last thing I would want to do. I would want to focus on the bottom line: how can I actually get the best return for the New Zealand taxpayer? The best return is generated by retaining these assets. 
New Zealanders also know that the hole that the Government says it is trying to fill by this strategy—a strategy that in fact makes the hole deeper—is actually one of the Government’s own making as well. It is a hole that is caused by the Government’s tax changes in 2009 where those wealthiest New Zealanders got tax cuts. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
KRIS FAAFOI (Labour—Mana) 
: 
 It is no surprise you have given me the call Mr Chair. As we peruse Part 1 of the Mixed Ownership Model Bill there are a plethora of points in this proposed legislation that we could poke holes in. We could look at whether or not this legislation takes power companies and Air New Zealand away from the purview of the Ombudsmen Act or the Official Information Act. But I want to look at clause 3 where this bill before us takes the power companies that we are talking about in this bill away from the State-Owned Enterprises Act and takes away their responsibility to act in a socially responsible manner. 
I think when you get to the guts of why Kiwis are so enraged that these asset sales are going ahead and why they are quite openly coming up to us when we are out in the streets and signing the petition that we are taking around to try to force a referendum to try to stop these asset sales this is really what upsets them about the fact that these assets are being sold. At the moment our State-owned enterprises and State-owned assets our three power companies have to act with a dual motive. Yes they have to make some money but they also have to act in the best interests of the New Zealand people and this bill removes that responsibility from our three power companies. What does that mean? I think this is what upsets Kiwi people so much because Kiwis care about Kiwis. They know that when these power companies get sold off the motivation of these companies changes from people and profits to purely profits. 
A number of arguments have been made already in the Chamber this evening and this afternoon about how much power prices will go up—somewhere around roughly 12 percent. The difference in the amount that Kiwis pay if they are with a private energy company or with a State-owned enterprise energy company is I believe on average— 
Hon Gerry Brownlee 
: What? You mean they are choosing to pay it? 
KRIS FAAFOI 
: —a weighted average Mr Brownlee—$256 per annum. Kiwis know that when the motivation of these energy companies becomes profit one thing is certainly going to happen and that is going to be that our power prices for our average Kiwis—our mum and dad investors as the Government likes to say—are going to be going up. Whom is that going to affect? Whom is that going to affect? It will be the most vulnerable Kiwis in our country who at the moment cannot afford to pay even their power bills let alone buy a stake in their State-owned enterprises. They are struggling to pay the bills to turn the heater on as we speak this winter. This Government wants to sell our assets off so it can make life harder for those vulnerable Kiwis and can put their power prices up. 
This Government ideologically wants to go ahead and say that it is OK to sell our State-owned assets. What is happening here is that our energy companies get hocked off—to mum and dad Kiwi investors this Government says but nowhere in this legislation does it protect our State-owned assets to stay in New Zealand. And our power prices will be going up. The present in this bill for all Kiwis around the country who right now are struggling to pay the bills is higher power prices. There will be higher power prices so it is going to be harder for our elderly and our poor to keep themselves warm in winter as it is now. 
Hon Gerry Brownlee 
: Labour policy. 
KRIS FAAFOI 
: Gerry is fine. He is nice and warm. He is snuggly over there. He is fine. Sorry I should correct myself. Mr Brownlee is nice and snuggly and warm in his seat right now but Kiwis out there who do not have enough money to be watching this tonight so they are probably listening to it on their transistor radios are going to be struggling to pay the bills. They are going to be struggling to pay the bills and this Government wants to put the power prices up. 
These companies are already owned by Kiwis and that is what Kiwis love about them. They are owned by Kiwis so there is social responsibility on those companies to make sure that everyone can afford to pay their power bills—everyone not just those who can afford it but all Kiwis who have a stake in these companies. But with this bill that is going to change. Thank you very much to the National Government for selling our State-owned assets for all our vulnerable Kiwis! It was not enough to whack our elderly and our young in the Budget; the Government is also going to put the power prices up for our elderly and young with this bill. 
I ask that we have a look at a Supplementary Order Paper put in by my colleague Clayton Cosgrove which makes sure that the companies that are in this bill do have to have some form of social responsibility about them. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I move  
That the question be now put 
. 
DARIEN FENTON (Labour) 
: 
 Thank you very much for the opportunity to have a call on Part 1 of this asset sales bill the Mixed Ownership Model Bill. I particularly want to support amendments in the names of various of my colleagues that will remove these assets from the bill. We are totally opposed to them being included in this bill; in fact we are totally opposed to the bill. As many of my colleagues have said there are a number of problems with Part 1. One is the removal of access to the Ombudsman and the Official Information Act. The other one as my colleague Kris Faafoi was talking about is about the social responsibility clause. 
But also the requirements to be a good employer will no longer have to be met by any person—any employer—who buys these assets and the Government will have no responsibility. Let us talk about what “the responsibilities of a good employer” actually means. First of all it means that there have to be good and safe working conditions. That is gone gone—ditched—from this bill. 
Hon Tau Henare 
: Who said they’re gone? What are you talking about? 
DARIEN FENTON 
: Well Tau Henare perhaps you should read the bill. Perhaps the member does not understand exactly what his Minister for State Owned Enterprises is doing. The removal of those companies from the State-Owned Enterprises Act means that the employers no longer have to be good employers. It will also remove the need for an equal opportunities employment programme for the impartial selection of suitably qualified persons and for opportunities for the enhancement of the abilities of these individual employees. 
I just want to go back a little and talk about why these assets were built in the first place. They were not built by private corporations and private companies. The State actually developed the electricity companies—in actual fact the State coalmines as well—because of the inability of the private sector to actually be able to provide low-cost electricity for residential consumers and to support the industry. As my colleagues have said electricity is a fundamental and basic right. It is a basic right to be able to have electricity in your home. It is essential for householders and its price is a significant factor in New Zealanders’ health and their living standards. 
These assets that we are talking about in Part 1—Genesis Power Meridian Energy Mighty River Power and Solid Energy—are assets that not only were bought and paid for by our forebears but also were built by our forebears. They were built and paid for by the sweat and hard work of New Zealanders who thought they were going to be preserved for their children and grandchildren. But the assets in this bill on the chopping block are dams wind farms mines— 
Hon Gerry Brownlee 
: Not on the chopping block. 
DARIEN FENTON 
: They are on the chopping block. 
Hon Gerry Brownlee 
: No they’re not. 
DARIEN FENTON 
: Absolutely on the chopping block and it is very interesting when you look at some of them. Waitaki dam for example is described as the birthplace of the world’s first social welfare system. Manapouri dam is also described as the birthplace of—according to Meridian Energy—our environmental awareness. It took 1800 workers to build that and it was a huge job. It took 1800 workers to do that. 
Hon Tau Henare 
: Oh wowee! Whoop-de-doo! 
Hon Trevor Mallard 
: Lots of them died. 
DARIEN FENTON 
: And lots of them died. It is very interesting here because the other day I dug out a little book here a little book— 
Hon Trevor Mallard 
: Is it the union book? 
DARIEN FENTON 
: It is the union book. It is called  
The Determination Order for the New Zealand Workers’ Industrial Union of Workers 
. What is fairly interesting—apart from the fact this was 1960s and 1970s industrial relations when these workers actually got penal rates—is that they had to have allowances for a whole range of things. They lived in camps like I hear they are proposing that the construction workers of Christchurch live in. They lived in camps and they had to have things like separation allowances for married people because they were separated from their families. 
Some of the things that they had to be paid allowances for are horrific when you read them. When you look at the things that they were paid allowances for under this award it gives you some idea of what those builders the people who constructed our dams and our mines actually went through. They got allowances for things like poisons. They were given an allowance for someone actually mixing and applying poisonous spray. 
Hon TAU HENARE (National) 
: 
 I move  
That the question be now put 
. 
Hon PAREKURA HOROMIA (Labour—Ikaroa-Rawhiti) 
: 
 Mr Chair—[ 
Interruption 
] Thank you thank you. I listened to Dave Currie—I have just come back from the Olympic function—and it is very interesting what he said. He said we go on to the world stage and we utilise our cultural partnership. This legislation the Mixed Ownership Model Bill that is moved in this House tonight is one of the worst pieces of legislation in this country’s history as far as I am concerned as a Maori. It is not just about selling off the State’s assets but it is the cunning little games that are built into it like removing the Treaty rights. That is the constitutional document that agrees that there is a partnership in this country and just in case Gerry Brownlee is short of history I will tell him. In 1832 a Maori carried the Olympic flag. 
Hon Gerry Brownlee 
: 1832? 
Hon PAREKURA HOROMIA 
: In 1832. In 1840 the other people came to this nation and they ripped the land off. They took the land. There were actually wars over it. [ 
Interruption 
] No no no—this is the truth. There were actually wars over it. People fought and there were dastardly things done. Most Kiwis are of a natural conscience. 
Hon Member 
: Fair people. 
Hon PAREKURA HOROMIA 
: Fair people who have tried to reconcile and go forward together. This legislation undermines the whole ethos of that. 
We listened to the Minister of Finance this morning talking. He said 15 times—15 times—“Will you borrow $7 billion to buy them back?”. If that is all this is about—“We will sell the State assets na-na-na-na to see whether you will pay to buy them back when you get in.”—go suck on it. This is outrageous. And as for the Maori Party members in relation to my ex - Minister of Maori Affairs colleague the chair of the Maori Affairs Committee letting this rubbish go into this document in Part 1 what are they thinking? What are they thinking? This is a disgrace. The Maori people respect the Treaty. You have removed it—you have removed it. It is really uncannily very quiet. How the hell can you have a partnership document that is sanctioned in this land that is recognised and etched into this country’s history apply to only 51 percent of the actions? How can you do that? 
Hon Gerry Brownlee 
: What about the Foreshore and Seabed Bill? 
Hon PAREKURA HOROMIA 
: Pardon? 
Hon Gerry Brownlee 
: What about the Foreshore and Seabed Bill? 
Hon PAREKURA HOROMIA 
: Well that is right. But it is still there Gerry. The foreshore and seabed is still there Gerry and that was about protection. That was about protection Gerry. That was about protection. Mr Brownlee it is still there. These assets are going to go. They are going to go with foreigners. 
Hon Gerry Brownlee 
: No they’re not. 
Hon PAREKURA HOROMIA 
: Yes they are. This about the rich pricks. This is about— 
The CHAIRPERSON (Eric Roy) 
: Order! 
Hon PAREKURA HOROMIA 
: —everybody else. 
The CHAIRPERSON (Eric Roy) 
: Order! 
Hon PAREKURA HOROMIA 
: Yes it is. Yes it is Mr Chair. This is a disgrace. 
The CHAIRPERSON (Eric Roy) 
: No. Order! Order! No that is not acceptable. I will terminate that speech. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Eric Roy) 
: The question is that the question be now put. Those who are of that opinion— 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Eric Roy) 
: A point of order the Hon Clayton Cosgrove. 
Hon CLAYTON COSGROVE 
: I will wait for you to sit down. 
The CHAIRPERSON (Eric Roy) 
: Yes. 
Hon CLAYTON COSGROVE 
: Sorry I do not want to break the rules. I just want to bring to your attention a number of issues before you put the question in your deliberations that you should put the question. There are a number of people on this side who have had no call at all and you have seen the enthusiasm I think on all sides to take the call. The second thing I want to put to you—and this is with no disrespect to the Greens—is that because people on this side of the Chamber have been taking many many calls and people on the other side have not been taking calls the calls have simply bounced in many respects between the Greens and Labour and to some extent New Zealand First. That has created a disproportionate— 
The CHAIRPERSON (Eric Roy) 
: Order! I have got the message. [ 
Interruption 
] Order! I am standing. I have taken into consideration all the factors surrounding why the Committee should choose whether this is the time to terminate the debate on Part 1. I have taken all those things into consideration. It has been over 3 hours. I very carefully tried to measure out the speaking calls to as many as I could. I have listened to the substance of the debate and its relevance. I have considered all those factors. The question now is that the question be put. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Eric Roy) 
: I have ruled on this and if the member is trifling with me he will spend some time out of the Chamber. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I raise a point of order Mr Chairperson. I do not wish to trifle and I will not trifle with you but I think I am entitled to make this point. You will be aware that this is an extremely— 
The CHAIRPERSON (Eric Roy) 
: Order! The member will sit. I do not think you are raising any new material. You have had your caution. 
A party vote was called for on the question  
That the question be now put. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Motion agreed to. 
The CHAIRPERSON (Eric Roy) 
: The questions will now be put. We have some amendments. Members I am guided by new Standing Order 303 particularly paragraph (4) which— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. Before you do that I think there is an obligation if the Minister is in the Chamber for him to be in the chair even while you are— 
The CHAIRPERSON (Eric Roy) 
: The member is correct. Thank you for that. The member is correct. To précis it Standing Order 303(4) allows the grouping of a member’s amendments where it does not detract from the intent of the amendments. 
The question was put that the amendments set out on Supplementary Order Paper 68 in the name of Dr Russel Norman to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 65 in the name of the Hon Trevor Mallard to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 63 in the name of the Hon Clayton Cosgrove to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 66 in the name of the Hon David Parker to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 62 in the name of Dr David Clark to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 54 in the name of Iain Lees-Galloway to clause 6 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Eric Roy) 
: Dr Russel Norman’s amendment to delete clause 6 as set out on Supplementary Order Paper 67 is now out of order as it is inconsistent with an earlier decision of the Committee. The Rt Hon Winston Peters’ typescript amendment to delete clause 6 is out of order as it is inconsistent with an earlier decision of the Committee. 
The question was put that the amendment set out on Supplementary Order Paper 46 in the name of Chris Hipkins to clause 7 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 67 in the name of Dr Russel Norman to clause 7 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Eric Roy) 
: At 7.33 p.m. a large number of amendments to Part 1 were lodged in the names of various members of the Labour Party. These amendments seek to alter words or the order of words contained in the part but make no substantive change to the meaning as required by Speaker’s ruling 115/5. Because they do not meet that standard they are ruled out of order. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. I want just to seek your assurance that you have read them and that that is your decision for each of those amendments. 
The CHAIRPERSON (Eric Roy) 
: Yes. I have certainly read them. I may well have skim read them but if the member would be aware I did extend the debate for quite a period of time not only to let me have a look at them but also to let the staff have a look at them and I am very confident in the ruling I have just made. Therefore the question is— 
CHRIS HIPKINS (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. Can I just check that it was Speaker’s ruling 115/5 that you were referring to? 
The CHAIRPERSON (Eric Roy) 
: Correct. I think I have quoted that correctly. 
CHRIS HIPKINS 
: Speaker’s ruling 115/5 talks about the need for amendments to be “drafted with some precision” and I think you will find that our amendments were drafted with some precision; “in a form of words that may be embodied in law.” and I think you will find they meet that criterion; “must offer a serious alternative form of words.” and I think you will find they meet that criterion— 
The CHAIRPERSON (Eric Roy) 
: No they do not. 
CHRIS HIPKINS 
: And “An amendment that is merely an attempt to criticise the provision will not be accepted.” Well they do not do that. So they meet the criteria. 
The CHAIRPERSON (Eric Roy) 
: My ruling is essentially on the basis that they do not offer a serious alternative form of words. 
Hon Trevor Mallard 
: They certainly do. 
The CHAIRPERSON (Eric Roy) 
: No it is my ruling that they do not. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. These amendments have been very carefully drafted. A lot of them make a lot more sense and in fact are better drafting. I do not think it is on for the Chair to say that drafting improvements are not serious alternatives. These amendments in each case—sometimes minor sometimes more significant—make a difference to the meaning. I now want to ask you whether in fact as you have looked at the amendments you have also looked at the Mixed Ownership Model Bill and seen the changes that occur for each of them. 
The CHAIRPERSON (Eric Roy) 
: I have made a ruling and I am standing by that ruling. The amendments that were tabled at 7.33 p.m. are out of order. The question is— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. Are you saying they are out of order or they are to be grouped? Are you saying that the Opposition cannot even offer a drafting amendment to a bill and get a vote on it? That would just be an absolute outrage. If you are ruling that—that where there is a realistic change a significant change albeit minor this Committee is not allowed to vote on it—that would be the first time that I have ever heard anything like that in the Committee. And doing it on this legislation makes it worse still. 
The CHAIRPERSON (Eric Roy) 
: It is my ruling that they do not offer a serious alternative to the words contained in the bill. Therefore I shall put Part 1. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I move  
That the Chairperson report progress to obtain the Speaker’s ruling on the admissibility of amendments that do not offer a serious alternative proposition. 
Motion agreed to. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Eric Roy) 
: Mr Speaker the Committee has elected to call you to return to the Chamber to give some consideration to a ruling that I have given in regard to a number of amendments that were tabled in the Committee. Let me give some context to that event. You will recall that immediately after question time the House went into Committee. It has for the whole time been debating Part 1. When we returned after the dinner suspension we commenced to again debate Part 1. There had been some 48 calls at that point on the Mixed Ownership Model Bill. At 7.33 p.m. I received a bundle of amendments which I will table for you for your consideration. I was at that time of the mind to take a closure given the nature of the debate that had occurred and all of the considerations that one does take. However I delayed for about another 40 minutes while the Clerk at the Table and I gave consideration to these amendments. I also had the Table Office clerk considering the amendments that had been tabled. It is my view that these amendments are not serious amendments in that they have marginal changes to wording in my view or alter the structure of words or the phraseology—if that is a word—around the way in which the construction of the various clauses of the bill are laid out. Accordingly under Speaker’s ruling 115/5 I ruled that they do not substantially make a change to any portion of the bill and in that regard I ruled them out of order. The Committee has expressed some concern about that and has asked you to give a ruling. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Mr Speaker I think the Chair has summarised the factual situation relatively well. The point that I would like to put in front of you and the difference I think the Opposition has with the Chair goes to whether or not the Opposition has the right to move amendments to bring a bill into line with the Legislation Advisory Committee’s recommendations for plain English drafting. It is my view that the Legislation Advisory Committee made—probably 5 or 6 years ago now; it might have even been longer ago—some excellent recommendations many of which have been taken on by parliamentary counsel but they all go in the end towards plain English drafting. If you would like to look at the amendment of Mr Little to clause 7(1) the amendment of Mr Chauvel to clause 8(1) or the amendment of Mr Twyford to clause 10 I think that what you will find in each of those cases—and I have pulled out just a sample from the amendments; members have been working on identifying this marginal drafting over quite a period now and have identified a large number of those—using those as examples I am not going to pretend that they change the direction of the bill but they could well make a significant difference in having a plain English interpretation which would be useful for the public at large and for the courts in the interpretation. 
Mr SPEAKER 
: Do other members of the House wish to draw any matters to my attention? 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I think the previous ruling which is correctly relied on talks about the specificity of the amendments. Mr Mallard has made a case that they were very specifically put together as has Mr Hipkins but in reality where they do not actually lead you to simply understand what the intention is they cannot be precisely prescribed even if you went to Speaker’s ruling 115/4 which talks there about amendments or parts of amendments that are too vague being also out of order. Throughout this bundle of amendments there are references that can only be described as vague. There are also I think amendments that do what is proscribed here in the Speakers’ rulings and merely attempt to criticise the bill and therefore in fact start to deconstruct the bill. It is supposed to be a process that allows amendments to a bill for the betterment of the bill. I do not think that case can be made for some of the many many amendments that are here in front of us. I think the difficulty that this presents is that if we were to get into this sort of situation every Committee stage of every bill in the House would be an opportunity for the deconstruction of a bill and that was never the intention for the Committee stage of any bill’s consideration. 
Mr SPEAKER 
: I thank honourable members. I was listening to the debate with some care actually because I was aware of the potential for concern in this matter. As I looked at the amendments myself—and I had not had the chance to see these because they were brought into the Committee reasonably late—I opened one in the middle of the bundle an amendment in the name of Andrew Little and it says “Subclause 7(1): Subclause 7(1) is amended by inserting the words ‘will amend’ after ‘This Section’ and omitting the word ‘amends’ ”. That is clearly not in keeping with the Speakers’ rulings of the House. That is trifling with words. It is not altering the meaning of the Mixed Ownership Model Bill at all. It is not an alternative form of words that actually have significance in relation to the bill. 
I have not had the time or the chance to go through all of these but I opened up another one and it related to omitting the word “its”. Amendments must propose a serious alternative form of words. As I say the first one I opened would replace “amends” with “will amend” and I think that is not a serious alterative form of words. Proposing amendments that simply seek to change the order of words in a particular clause or to substitute words with the same or very similar meaning—amendments that do not offer any significant change in the meaning of the provision—is simply not in order. That is why I feel that the Chair and the Clerk’s Office officials at the Table who have had the chance to go through all of these have not been unreasonable in coming to a conclusion that they do not offer any significant change to the meaning of the provisions. That is why it has been ruled as I understand it by the Chair that they are not in order and I would have to support that ruling. 
I just flick through the amendments to see what is here I open another one and it simply amends by inserting the word “rightful” after the words “insert in its” omitting the word “appropriate”. They are simply really playing with words and do not alter the meaning of the provisions and they are not in order because of that. That is why I think I have to support the ruling of the Chair. If I could find among them amendments that had significant impact I would look at it much more but I am unable to find any that have such meaning and that is why I think the Chair’s ruling has not been unreasonable. He allowed time. Believing he would be prepared to accept a closure motion shortly after the dinner break he allowed another 40 minutes and he and the officials went through each of these amendments. So his ruling was made after a period of some consideration. That is why I feel that the Chair’s decision is not an unreasonable one and I have to therefore rule accordingly. So I therefore declare the House in Committee for further consideration of the bill. 
In Committee 
Debate resumed. 
Part 1 Provisions for companies to cease to be State enterprises and to become mixed ownership model companies ( 
continued 
)  
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 60 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Part 1 agreed to. 
Part 2 Ongoing provision for mixed ownership model companies 
The CHAIRPERSON (Eric Roy) 
: We move now to Part 2 which is the debate on clauses 12 to 18 and schedules 1 and 2.  
Hon CLAYTON COSGROVE (Labour) 
: 
 Given the speed with which we enter the debate on Part 2—I hope the precedent set in Part 1 is not going to be followed—I want to come directly to new section 45S “10% limit on holdings by persons other than the Crown” in clause 16. 
It was interesting during the Finance and Expenditure Committee hearings because we heard from a number of professional technical submitters who have knowledge in this area. To quote one of them you could drive a bus through the 10 percent ownership cap. The thing I find interesting—and the grinning Minister in the chair the Minister for State Owned Enterprises might be able to shed some light on this—is that nowhere in this piece of legislation is there a penalty for exceeding the 10 percent cap. It does talk about a remedy in new section 45T(1)(b) in that the contravention essentially has to be remedied within 60 days but there is no penalty monetary or otherwise for exceeding that. 
One of the submitters—and I am trying to recall her name—from a thinktank in New Zealand said that in order to police this 10 percent cap you would have to have some sort of securities police force I think was the term that was used actively policing and scrutinising every transaction. In fact the committee put to the officials an interesting scenario of say overseas owners who were mum dad and a son and asked whether there would be some related-party transaction if the son were to buy 10 percent and mum and dad were to buy 10 percent as well. The answer was essentially if the son was under the legal age of an adult then he was under the influence of his parents and there would be. Once he hit the legal age of an adult he could buy 10 percent and there would not be a problem. So there are a number of difficulties and problems with the 10 percent cap such that it is. 
 The question is in respect of nominee trusts also. Well the trustees corporations and others that can exceed the 10 percent cap have an exemption but there were a number of commercial vehicles and scenarios that were put to us by the submitters whereby especially if they were foreign-owned and outside the New Zealand jurisdiction you could get round this. So I would like the Minister to give us some sort of assurance. He has not in the past. He has not addressed the issue. Maybe like other issues in respect of power prices he has not bothered to ask the question because he does not want the answer but I would like some assurances around those. We have an amendment in my name Supplementary Order Paper 49 to limit that cap to 1 percent and we do that deliberately. We do that deliberately because this so-called cap has actually got to work. 
I also want to turn to the provision that relates to the Treaty of Waitangi new section 45Q. Members will recall of course that much was trumpeted by the Maori Party members and others— 
Hon Parekura Horomia 
: That’s right. They’re a disgrace. 
Hon CLAYTON COSGROVE 
: They are a disgrace my colleague says. They are because they are voting for this Mixed Ownership Model Bill. The Maori Party went around the marae saying that “We will ensure that Maori interests are secured in this bill.” OK fair go that is all right. We thought those members were acting in some sort of responsible way until Tuwharetoa in the form of the Hon Georgina te Heuheu a former National Party Cabinet Minister and a respected lawyer turned up to the committee. Tuwharetoa were armed to the teeth with legal advice and essentially upon questioning told the committee that the so-called replication clause in this bill which has been taken from the State-Owned Enterprises Act with a tweak of course—new section 45Q—did not preserve their Treaty customary legal or property rights. They also told us that very little consultation at that time had occurred with them. So I say to the Maori Party members who went around the marae and trumpeted that they were the saviour of Maori interests that they had forced the Government put its feet to the fire to put in a replication clause to look after those interests well Georgina te Heuheu and Tuwharetoa do not agree with that. They do not agree with that. I argue that it is smoke and mirrors. 
It was interesting because Tuwharetoa made it very very clear to the committee that they would seek legal remedies in any form—primarily I believe through the courts—to ensure that their rights were preserved. It is interesting in respect of the Minister’s officials because we asked for advice on this and like many times in that select committee process we had an absurd situation. We posed questions to the officials. And I do not blame the officials; they were under instruction both from the Minister and we know from the chair who instructed them in the select committee to bring their report on the submissions on a particular date ahead of when those submissions had been made. At the direction of the chair on his own admission—presumably under instruction from the grinning Minister in the chair—a report was prepared by Treasury on the submissions prior to those submissions being concluded. 
One of the issues that we pursued with the officials was whether they were confident that Tuwharetoa’s concerns had been addressed. We found out that yes there was consultation with Maoridom. Yes there was. But when we asked these questions the answers we got back were based on a Cabinet paper that postdated those consultations on the marae but pre-dated Tuwharetoa’s submission to the committee. I assume that the officials being the diligent and professional souls they are would have put the factual situation to the Minister and the Minister would have said scrub that. At that point we wanted to pursue these issues directly with the officials. At that point of course we now know and the record shows it and the minutes of the select committee which the Government members tried to block up until last week show it—but we got them out anyway and legally and appropriately; they did not want the public to know that at every step they had blocked questioning—the chairman of the committee moved that the Opposition parties should prepare minority reports. So on the same day that the Government asked the officials about these substantive issues like Tuwharetoa’s concerns we were to prepare minority reports and have them submitted to the committee—prior to the officials coming back with those answers. 
Hon Lianne Dalziel 
: That’s outrageous. 
Hon CLAYTON COSGROVE 
: That is outrageous. It is outrageous not because it is about politicians but because the public actually expects us to do a job. That member over there Mr McClay I am told—I was not in the Chamber—said that the Opposition members did not ask questions. Well I tell you we asked questions all right. All of the political parties asked questions. We were permitted to ask only one committee question of most of the submitters and regardless of the fact this bill was reported back to the House 6 weeks in advance. There was no need to rush it. There was no need to write a report before Tuwharetoa’s concerns had been addressed. We raised these issues about the 10 percent cap and Tuwharetoa and these substantial questions and the committee presumably under the stewardship and instruction of the grinning Minister in the chair just said: “We don’t want to know. We’ve already written the report. We don’t want to listen to the submitters. Our way or the highway.” 
As a result of this we have vulnerabilities in this bill and Labour members have put up very serious amendments in respect of the 10 percent cap. I do not believe that Tuwharetoa’s concerns have been even addressed by this Government. We do not know what has been said behind the scenes and of course because we have had no report back from Tuwharetoa and we have not had the officials under instruction seriously consider these issues we do not whether those rights are going to be preserved or not. We do not know. I say this to the Minister: it will be very interesting after he has sort of slipped this one through as fast as he possibly can to see whether it comes a gutser or is stalled because of court action by Tuwharetoa or others. If I were an investor about to participate in a float I would be putting up a big sort of caution sign if I knew that that float could be confronted by court action by the tribe or anybody else. Why would you invest? Then of course that affects the market price and of course the taxpayer gets hit both ways. 
But oh no bloody-minded as it is National will push it through with a lack of scrutiny. In fact you know even the most cynical politician from time to time like this crowd might put on an act and go through the motions. Those members were not even sophisticated enough to do that. It was blatant. It was in your face. It was: “We don’t care. We’ve written it. We’ve done the report. We don’t even take seriously the issues put forward.”—and they were put forward by one of their own former Cabinet Ministers and an eminent lawyer the Hon Georgina te Heuheu. That tribe came to our committee armed to the teeth with professional legal advice. So the Minister should place on record as he— 
Hon TONY RYALL (Minister for State Owned Enterprises) 
: 
 This part of the Mixed Ownership Model Bill Part 2 puts in the law a number of the very important features of the whole mixed-ownership model particularly the 51 percent legislated guarantee—that the Government will retain 51 percent of all shares in these State-owned enterprises—together with the 10 percent cap on any other shareholder. This stands in quite strong contrast to the rules around the sale of State-owned enterprises when a previous Labour Government sold $9.5 billion of public assets in the 1980s—$9.5 billion. There was never a requirement of 51 percent Government ownership. Labour sold 100 percent to the Americans and Fay Richwhite. It sold 100 percent of the Shipping Corporation. It sold 100 percent of Petrocorp. It sold 100 percent of everything to the highest bidder and ordinary people never got a look in. Under this legislation we are maintaining 51 percent New Zealand control as a minimum owned by the Government and a 10 percent cap on any other shareholder. 
The important point behind all of this legislation is the need to help our country control its debt and this is part of a wider plan that this Government has to help control our nation’s debt and grow and protect our economy in the years ahead. With the world economic climate as it is this Government inherited a national debt of around $8 billion. In our role to protect our economy from the sharp edges of recession that debt has grown to $52 billion today. It is projected in the next 2½ to 3 years to grow to $72 billion. 
Louise Upston 
: How much? 
Hon TONY RYALL 
: Seventy-two billion dollars. We must control our debt. If you look at what is happening all around the world in Europe the United States and Canada countries that do not control their debt get themselves into significant trouble. If you look for example at Portugal whose overall debt public and private is remarkably similar to where New Zealand is—in that zone with Portugal Ireland Greece and Spain—Portugal for example has announced I think an 11 percent cut in its public health budget. This is what happens when countries let their debt get out of control. That is the reason why this Government has a plan which includes freeing up 49 percent of a range of State-owned enterprises keeping control at 51 percent with a 10 percent cap on any other shareholder and taking those proceeds to put into a Future Investment Fund which will then allow us to have resources to grow our economy and to grow our investments without having to grow our debt. 
That is all at risk. If the Government changes in 2014 we know that the party opposite has said that buying back these assets is not off the table. That is what those members said on television last week: buying back these assets is not off the table. If it is not off the table it is on our debt because that is the only way that Labour could buy these back in the unfortunate incident and that is why 51 percent Government control is so important as well as a 10 percent cap on any shareholder. That is because we need to make sure that we have this as a part of our plan to protect our economy control our debt and move forward in the future. 
This bill includes a Treaty of Waitangi clause. The Government undertook a very very lengthy iwi consultation process of about 10 hui up and down the country. Hundreds of people attended and I attended a number myself. It gave Maori an opportunity to talk about what interests and concerns they had. As a result of that and discussions with our confidence and supply partner the Maori Party we did translate into the legislation the Treaty clause in that legislation without requiring it though to apply to the private shareholders involved in this company. So we did that quite openly. 
This legislation has been to a select committee. There has been no urgency in respect of this. We have been quite upfront in our commitments. When the Prime Minister announced in January 2011 that we would have a 51 percent minimum shareholding for the Government and a 10 percent cap on any other shareholder this was the first time a Government had actually campaigned openly on the sale of part of State assets. Because when $10 billion of assets was sold in the 1980s the Government never told anybody. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I rise to speak on Part 2 of the Government’s proposed privatisation bill the Mixed Ownership Model Bill that is before the Parliament tonight. We have a number of Green Party amendments. There are a number of amendments in my name to this bill. I was not able to get the call again to talk to some of the amendments in the truncated debate on the previous part which I thought was most unfortunate. Here we are debating this very serious bill in front of Parliament but we were not able to have sufficient debate so that you could even get a chance to talk to your amendments. But I guess that is the way this Government likes to work. 
So I want to try to get to at least two of my amendments tonight to talk to them but I think it is important that we actually have an extended debate on this bill in the Committee tonight given that it is a fundamental bill. A very important part of New Zealand’s assets is being privatised and there is enormous public interest in this legislation. There is enormous public opposition and I would really call on the Government and the Chair to enable maximum debate on this bill because there is maximum interest. 
Before I talk about a couple of the amendments it is worth countering some of the arguments of the Minister who graced us for a few minutes with his arguments around privatisation and why it is such a good idea. Of course it was the debt argument that Mr Ryall reached for which of course has now become the Government’s favourite argument around privatisation. Of course it was also the favourite argument that was used by Roger Douglas when he talked about the privatisation programme. As Roger Douglas later admitted it does not make any economic sense to use the debt argument around privatisation but it makes political sense and that is why the Government is now trying to use the debt link to privatisation argument. But of course in the long run it adds to Government debt because it adds to the Government deficit. 
In terms of the Minister’s argument there was a very interesting I thought slip of the tongue in his argument when he talked about the country’s debt rather than the Government’s debt. Normally when the Government mounts this argument it tries to talk about it purely in terms of Government debt but he actually talked about it in terms of the country’s debt. Of course the reality is that this privatisation programme to the extent that the shares are bought by New Zealanders makes no contribution to New Zealand’s net international investment position. The only way that it actually assists with our net international investment position or rather in terms of debt in particular is to the extent that there is overseas purchase of these assets. 
In terms of the domestic sector within New Zealand if there is simply a transfer of these assets between the Crown and the private sector and then the private sector in return pays for those assets overall the country is no better off. But when you look at the actual debt projections of the Government which of course the Minister did not want to talk about the net international investment position overall in the years ahead is that it gets worse. Regardless of the privatisation programme that we are debating tonight when you look at the Government’s actual economic forecasts both those contained in the Budget and those projected by the Reserve Bank New Zealand’s net international investment position gets worse. 
So when the Government tells us as the Minister did when speaking to his bill just now that this is part of its plan to reduce debt it is not. The Government’s plan is to increase debt. The Government’s plan is to increase the current account deficit. The Government’s plan is to increase the net international debt of New Zealand because that is in its own projections and that is the lie to the argument around debt. 
I did want to talk to the amendment around the referendum. What I have put up here is an amendment to clause 16 for a prohibition on the disposal or issue of shares before the referendum. The basic point of this amendment is to make sure that there is no disposal or privatisation of the shares prior to the citizens initiated referendum either taking place or expiring the amount of time that we have to collect the signatures. This has been I think a very important part of the democratic process of New Zealand. 
On the one hand the Government says it has a mandate even though the Government did not get a majority in the House and as we have been seeing in the votes on the bill tonight the vote on this bill is as close as it could possibly be. It was 61 votes to 60 on the last vote on Part 1. So the vote is as close as it could possibly be in this House. There cannot be a closer vote a more narrow majority than 61 votes to 60 as we had on Part 1 in this Committee just now. Yet the Government is claiming a 61 to 60 vote the narrowest possible vote as a mandate for the privatisation of assets. It is no such mandate. 
What this amendment seeks to do if the Government is so confident of its position on the privatisation of electricity companies is to put the question and enable this process to go forward with regard to the citizens initiated referendum. This referendum gives New Zealanders the opportunity to force a referendum. It is true that the referendum is not binding on the Government and we are not proposing to make it binding on the Government through this amendment. But what we are saying is that what is binding on the Government with this amendment is that the actual sale of the shares cannot proceed until the referendum is held. 
I believe that once the referendum has taken place we will find that the vast majority of New Zealanders will not support the Government’s privatisation programme. I was told tonight that the National Party itself is receiving resignations from members of the party as a result of this privatisation programme. Amongst National Party members and voters there is not support for the privatisation of their assets. National Party voters understand like the voters for all the other parties in this House that this is a very stupid idea. So National Party voters do not support it. 
That is why the polls show a majority of voters from probably pretty much every political party except possibly ACT are opposed to the privatisations. This amendment is about giving those people ordinary mum and dad New Zealanders mums and dads in New Zealand and single people as well—I do not know why the Government thinks single people do not count and it is always mums and dads but anyway—ordinary New Zealanders the right to have their voice on this issue. I would ask the Government and I would ask Peter Dunne to support this amendment because all it takes is one vote. 
Everything on this bill is so finely balanced because there is only one vote in it. We need only one person from the other side of the Chamber to see sense and support an amendment like this and we can go through a process whereby there is a referendum. If we are unable to collect the 350000 signatures that we need to force a citizens initiated referendum then the provision would lapse. It would not apply. But I am very confident that we will collect the signatures we need to do this because New Zealanders are up in arms about this asset sale programme. 
 I would just like to talk about another part of the Mixed Ownership Model Bill. This Part 2 which we are looking at at the moment essentially seeks to set up these mixed-ownership model companies. The thing about it is that the impact of setting them up will be that people are going to be colder. I mean that is the truth right? We should just admit the truth about what this means. We are in the middle of winter people are freezing cold all over the country and they are struggling to pay their electricity bills. What this bill really means is that mum and dad and children New Zealanders—ordinary people and families—will be colder in upcoming winters. 
This winter will be OK while the companies are still owned by the Government but in future winters mum and dad New Zealanders will be colder as a result of this bill. It is the “You Can Get Colder and Can’t Afford Your Electricity Prices Bill” because that is what the establishment of these mixed-ownership companies under Part 2 of this bill will effectively do by driving up power prices. That is the result of it. 
Of course although this Government is very keen on bashing beneficiaries the beneficiaries in this case will be the overseas owners. The Government is not very keen on bashing overseas owners who are going to be buying up a good chunk of these overseas companies. They are the beneficiaries of this bill who will be forcing up the price of electricity in New Zealand so that they can maximise their profits which will mean that mum and dad New Zealanders cannot afford to run the electric heaters in their house and keep their kids warm. The beneficiaries—the true beneficiaries—of this bill which the Government is trying to force through the House tonight will be the overseas owners. 
That is where the protections in this bill are completely inadequate. We will be moving amendments around that as well. The protections are actually just ridiculous. They are not going to work in terms of preventing overseas ownership of these companies. That means that the beneficiaries of this bill—the people who will earn the money as a result of this—will be the overseas investors. 
Here we have a bill that on the one hand trades off ordinary mum and dad New Zealanders who cannot afford to buy shares in this company. They will not be buying shares in this company. Those people get colder houses and more expensive electricity bills courtesy of the National Party the ACT Party and United Future. The beneficiaries of this bill will be the overseas owners who get to buy up all the shares in the company because the protections in this bill are so weak. The protections in Part 2 are too weak to prevent the overseas buy-up of these companies which we think is an absolute tragedy. 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to take a call on Part 2 of this bill the Mixed Ownership Model Bill. In particular I would like to speak to my Supplementary Order Paper 44 on this part of the bill. I have to say I was disappointed that the Minister for State Owned Enterprises when he took his last call rather than focusing on Part 2 of the bill and the questions that we raised instead decided to go back through the 1980s and dwell instead on other issues. He seems like most of the National Party members over there to have an obsession with the 1980s and says that members on this side of the Chamber have forgotten our own history. 
We know our history; we do. I do not often quote Winston Churchill—I do not—but I will. Winston Churchill once famously said: “When the facts change I change my mind. What do you do sir?”. Well the facts are on the table when it comes to asset sales. We learnt our lesson. We have moved on from our alternative position of the 1980s. We learnt our lesson and now we are challenging the National Government to learn that lesson also rather than repeat the errors of old. 
So I will ask again in lieu of Mr Ryall having picked up on the questions that we asked to be addressed: why is there no penalty for exceeding the 10 percent cap? That was not covered by Mr Ryall. Also Tuwharetoa’s concerns—which are extremely legitimate and which were raised at the Finance and Expenditure Committee—over their rights not being protected by the changes that the Government has made within this bill were not addressed by Mr Ryall as the Minister in the chair. So I ask instead whether Minister Tolley would please address for this Committee those two very legitimate concerns that are being raised—in particular on behalf of the people of Tuwharetoa. 
But I would like to speak to the Supplementary Order Paper in my name which refers to the way in which the companies in question will be referred to or characterised in this bill. That is particularly relevant to Part 2 which even begins with the heading “Ongoing provision for mixed ownership model companies”. My Supplementary Order Paper changes that title changes the reference to “mixed ownership model companies” and instead proposes that that be replaced in all areas in which it is referred to with the title “privatisation of public property company”. The reason for that is that we want to bring some transparency to this bill through the way that some of these companies are referred to because we believe that the use of the word “partial” is quite misleading. I want to delve into why that is in my address. 
First of all the use of the words “partial mixed-ownership model company” implies a retention of the status quo and that somehow the use of “partial privatisation” will still lend itself towards the outcomes that we already have. I think a lot of the debate in Part 1 lent itself to suggesting why that will not be the case for those companies that are addressed in Part 2. Why is that? It is because mixed-ownership models—which of course include partial privatisation—by default can often equate to the whole. Changing partially the way something operates can in effect change the way the whole beast operates. It does not matter whether it is 40 percent 51 percent or 100 percent that can be the case. 
We have some historical examples where that certainly has been the case. I want to reflect on what happened for instance with the way that over time the old Forest Service was altered in the way that it operated. The Forest Service obviously had been around for some time when in the 1980s it was transferred to the Forestry Corporation. When it was transferred to the Forestry Corporation which had a different set of objectives that again tried to create a bit of a mixed model in a sense it abandoned the objectives that were set in 1976 which were around the environment the economy and employment. In 1976 those were some of the extra things that were added to the old objectives from I think something like the 1930s. 
But then in the 1980s all of that was dumped. It was dumped for the pure notion of a profit imperative. At that point the partial really overtook the whole in the way that that was going to be managed. Contractors were brought in in place of those who were full-time employees and assets were sold off. In fact it gets very very interesting when we see a debate that happened during this sort of mixed-model event when debate ensued—and I believe that this was in the very late 1980s and early 1990s—between the newly formed Forestry Corporation and the Government over the value of the forestry on its books and over the value of the land. 
You will be interested to know Mr Chair and members of the Committee that the way that the Forestry Corporation with its pure profit imperative decided to resolve this dispute it was having with the Government over the value of this land was to just sell it. It was to just sell the land—that was the way that that dispute was resolved. There we had an attempt to bring together some different ways of operating—some different modi operandi. At the end of the day the overriding imperative at that time was profit. The partial became the whole. That is why we believe that the use of this “mixed ownership model company” turn of phrase implies something that is actually very difficult to achieve. 
In the same way we pointed out that the removal of the Official Information Act provisions is also very difficult to achieve because even though there is still a State interest in these companies the overriding interest of shareholders has taken over the way that it will operate. For instance also you could potentially get sued if these companies do not pursue the singular goal of the shareholder which will be profit again proving that “mixed” does not mean that the imperatives of the State will override the interests of shareholders. It is again implying that a mixed-ownership model is very difficult to operate. 
If we look into the way that “partial” is referred to in the dictionary—and I thought this would be an interesting exercise; no one else may agree with me—and at people’s common understanding it says “affecting only a part.” Can you affect only part of a board? Can you affect only part of a dam? It is incredibly difficult to do. I did in fact see an example of the use of the word “partial”. Here is a quote to explain the way that partial can be used: “The plans called for the partial deployment of missiles.” I quite like that. How do you partially deploy missiles? How do you partially privatise an asset? Either you privatise or you do not. I think that that has been the point to argue which is why my Supplementary Order Paper amends— 
Hon Members 
: A little bit pregnant! 
JACINDA ARDERN 
: A little bit pregnant yes. That is why my Supplementary Order Paper makes the amendment to replace “mixed ownership model company” with “privatisation of public property companies”. Because there is also an irony in the fact that “partial” of course is also a reference to favouring one person or side and I think that is a point that we have made very strongly in this debate. 
But the notion of privatisation which is what we intend to replace the references to “mixed ownership model companies” in Part 2 with—with “privatisation of public property companies”—is because that plays very much to the understanding of the public over the meaning of privatisation and that is of course the process of transferring ownership from the public sector to the private sector. It does not quibble over the proportion by which you do that whether or not it is a mixed model or whether or not there is a partial profit imperative or a complete loss of social responsibility imperatives. It is the notion of whether or not something is being transferred from one form of ownership to another. That is privatisation and that is what this bill does. So if we are truly being transparent to the public over what this bill put forward by the Government does then we should surely enact that transparency over the way that these companies are referred to in Part 2 by no longer referring to them as “mixed ownership model companies” and replacing that with “privatisation of public property companies”. 
In fact I would like to extend a challenge to the Minister in the chair that if in fact she stands by these companies still being called mixed-ownership model companies then give us the difference in definition between the way that a mixed-ownership model company will substantively operate that is different from the way that for instance those private electricity retailers currently operate. For example can she give us the substantive differences between the ways that this model will operate versus those current private electricity retailers in New Zealand? I would be very interested in those differences. If the Minister in the chair cannot demonstrate to us that there are any substantive differences then my Supplementary Order Paper should stand and that is for the renaming of the mixed-ownership model companies. 
DENIS O’ROURKE (NZ First) 
: 
 The fundamental question to be asked in respect of Part 2 of this bill the Mixed Ownership Model Bill is simply whether it is better to keep these assets and borrow more or whether it is better to sell these assets and borrow less. It is a matter of assessing that balance. In making that assessment it is also necessary to simply ask: are these assets which are proposed to be sold good investments for New Zealand or are they not? The Government MPs have made it clear that they do not think that these are good assets to be held by New Zealanders but they are wrong on that. 
Government MPs do not acknowledge that the dividend stream from these assets is greater than the cost of borrowing what those assets are worth. They do not acknowledge as they should that in the long term it is better to keep 100 percent of the shares of these assets and all of the dividends that flow from them and to repay debt over time. It is no different for a private business where if it sells some of its most essential assets it will threaten the viability of the business. 
It is no different for New Zealand. These are essential assets for New Zealand’s prosperity and future and simply for that reason alone we should not even consider the sale of them. The receipts from one-off asset sales do not benefit either a business in the long term or in this case New Zealand in the long term. These proposed sales will not even result in the surplus the Government has promised us for 2014. So we are going to lose these vital energy assets and get fewer dividends and still have debt at the end of the process—perhaps a little less debt but not significant. 
I want to turn now to something that the Minister of Finance Bill English asked during his speech earlier today. We say that this bill makes so little economic sense that—in answer to that question by Mr English—yes we would buy these assets back. And we would buy these assets back for the very reasons that I have already stated. 
I refer members to the proposed amendment in the name of Winston Peters who will move that there be an amendment to clause 16 to new section 45R which will provide the power for shareholding Ministers to require that these shares be purchased back from their owners require the company concerned to register a transfer of those shares and decide the terms and conditions and the purchase price. It also says that the purchase price will not be more than the amount paid originally to the Crown for those shares by the original purchasers. So let it be put on notice that if New Zealand First in the future has influence on this matter—and I think we will—and if this part of the bill is passed we would exercise that right and we would purchase those shares back and on those terms and conditions for not more than the amount that was paid for them. We believe that that is what New Zealanders want as well and so that amendment should be passed. 
Government MPs have erroneously said that it is not correct to include capital dividends from these companies in the assessment of whether the dividend stream is worth more than the avoidance of paying for the cost of the servicing of the loans. That is not correct. Capital dividends should be included in the assessment simply because the source of those funds—capital in the companies concerned—is from accumulated profits and they are created from the companies’ operations. Therefore there is really no essential difference between capital dividends and ordinary dividends. People should not be persuaded differently from that simple truth. I do not think the Government is being very honest in the way that it has presented the information about that question. 
 The funds are the same in the hands of the shareholder whether they are from capital sources within the companies concerned or by way of ordinary dividends. Companies often restructure their balance sheets and pay capital back to their shareholders simply because it is more expensive to pay dividends than it is to service a loan. Then of course the companies are free to borrow more and to restructure their balance sheet. That is also a lesson for the Government. If it is good for companies to do that and to understand that those dividend streams are so valuable then that should be recognised in this debate as well. 
There is a good comparison here with what was a recent debate in Christchurch over whether Christchurch City should sell some of its valuable assets in order to help defray some of the capital costs of the earthquake. There has been a response published in the  
Press 
 by Mr Bruce Irvine to Gerry Brownlee and David Carter who encouraged the sale of those assets. The response by Mr Bruce Irvine the chair of Christchurch City Holdings Ltd was simply that it was not wise to sell those assets unless the shareholders so instructed. The council did not of course give any such instruction and Christchurch people are very clear in their position that they do not want those assets sold either. Mr Irvine pointed out the reason. The reason is simply that over the last 10 years— 
The CHAIRPERSON (Lindsay Tisch) 
: Part 2. 
DENIS O’ROURKE 
: —those assets—Mr Chairman this is relevant to Part 2 because it comes back to the question of control and whether indeed those assets should be sold or not. The rate of return over the last 10 years of those assets is 15.2 percent which is very similar to the approximately 16 percent that these particular assets held by the Government return to the people of New Zealand. So for the same reason as I said at the beginning it is much more valuable economically for the dividend stream to be retained from these assets than to have the process of repaying debt and saving on the debt servicing costs—a much better economic proposition altogether. 
 Another reason is simply this: why are people so against this proposal? It is simply that they feel that it is an attack on New Zealand sovereignty. The main reason for the opposition by Kiwis is simply that. Much of the figures and facts go over their heads but they know one thing: they do not want foreigners to own our assets. That must be respected. They are the people who are not able to afford to buy those shares nor are they able to afford to pay the higher prices for power that will result. They are deeply concerned about foreign control and they know that that will happen. They know it means the loss of resources they know it includes precious water rights that will be lost to us they know it means that the flow of dividends will go overseas at their expense and they know that in the future they will essentially be buying New Zealand - generated power from foreign companies. They know that that inevitably will happen and they also know that the 49 percent that the Government will sell will sooner or later turn into much more than 49 percent and will inevitably be 100 percent. We will see a total privatisation of these companies in due course. 
The will of the people of New Zealand should be respected. There is only one way to find out what that is for certain and that is for this Government to allow the current proposal for a referendum to go ahead. If that does not happen before this bill finally passes that will be a travesty for New Zealand’s democracy because the people have made it perfectly clear in the sheer number who have signed up to this petition so far that they wish to have their say on this matter. It is utterly idle for this Government to pretend that it has some kind of a mandate because of the results of the last election. There were so many issues in that election you would not know which person voted for which issue or for which party for whatever reason. 
It is completely wrong for this Government to claim that it has a mandate. That simply cannot be the case. That is simple dishonesty. The only way to find out for sure what the people of this country believe for some of the reasons I have already mentioned is to allow that referendum to go ahead before this bill goes any further and everybody knows that the Government is trying to push through this bill as fast as it can. 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I want to speak to my amendment on Supplementary Order Paper 52 amending clause 16 of this bill the Mixed Ownership Model Bill. It inserts new section 45Y which is headed “New Zealand ownership”. I want to read it to the Committee; it is very simple and very clear. It states: “No person (other than the Crown) may have an interest in shares or securities of a mixed ownership model company unless they are registered to pay tax within New Zealand.” Subsection (2) applies the same thing to companies and other entities. 
What this does is it says that before we sell the shares there must be an enduring relationship between the person or the organisation that purchases the shares and New Zealand. That means according to the definition in the Income Tax Act of a “tax resident” that the person must live in New Zealand for a minimum period of time each year—1 month out of 12. I accept that this amendment is a second-best solution. The best solution is not to sell the shares at all. That keeps the shares publicly owned—owned by all the mums and dads of New Zealand owned by Kiwis as a whole and built by our forebears. When I say that Mr Chairman Tisch I say that in relation to your electorate I think with some real feeling. My wife was born in the Waikato in a little town called Mangakino. Her dad came back after 4 years as a prisoner of war and he worked on the Whakamaru Dam. I tell you that Pat Moriarty would turn in his grave if he thought that that asset was being sold. He would turn in his grave twice if he thought it was being sold overseas. 
I want to keep this Government honest. I am from the Opposition and I am here to help the Government. This is what John Key said just a couple of days before the election: “We’re giving people a commitment”—mark that word “commitment”—“that 85 to 90 percent of the entire company”—meaning the power companies—“will be owned by New Zealanders. That is my commitment to them tonight.” I say this: here we are in the Chamber tonight debating the legislation that the Prime Minister was talking about and I want one member of that National Government to take the call and tell the House where in this bill this commitment is delivered. It is not. That was pure deceit by the Prime Minister. He promised something to New Zealanders and he never delivered it. He never delivered it. I know what New Zealanders feel about that. They think they have been had. They accepted the word of the Prime Minister—nice guy lovely smile. He has broken his word and he has broken every other promise that he has made to this country. 
Just the other day he was talking about class sizes and he said he would not be so arrogant as to ignore what a majority of New Zealanders thought. Well I ask the Prime Minister to apply that logic to the question of ownership of New Zealand’s assets. Every public opinion poll has shown two to one that New Zealanders do not want to sell their assets. What is it about that that National does not understand? I was watching the Bay Roskill Vikings play against Manurewa the other night. I acknowledge my colleague from Manurewa; they won by 66 to 10. In the hour and a half that I had to walk down both sides of the sideline I got 123 signatures calling for a referendum so that we do not sell our assets. Ninety-eight percent of them signed—98 percent—and that is really interesting; it is the same percentage of the 1450-odd submissions to the Finance and Expenditure Committee that oppose this Government selling New Zealand’s assets. They do not want the assets sold. The National Party in Government is doing something against the wishes of New Zealand and that will come back to haunt it. 
That National Government knew all along what it was going to do. I have the Treasury documents here advising National about the assets. The Treasury report says that significant participation by foreign investors will be essential to achieve the Government’s overall objectives—a significant proportion. When did the Prime Minister acknowledge that in the debates before the election? Where in this bill is there anything that acts on the Prime Minister’s commitment to New Zealanders that maybe only 10 percent of those assets would be sold off? We know that that is not going to happen. There is a 10 percent figure in here. It says that no person should be able to buy more than 10 percent of the entire assets. Do you know what that means? It means that two Russian oligarchs two Chinese State companies and one American pension fund could buy up half of New Zealand’s energy companies not only to own half of the shares but also to effectively control them. That is a farce. That is a disgrace. Those National Party members of Parliament particularly those who will lose their seats next time should bow their heads in shame because they will vote tonight against the commitment that the Prime Minister made to New Zealanders. 
Further than that Treasury says that you have to sell to foreigners because that will push up the price of shares. Yes that is true. And what happens when you push up the price of shares? It means that people pay more for them and they want a bigger return on their investment and that means higher electricity prices. I ask any one of those National MPs—the lobby fodder that the backbench represents—whether they will go back into their electorates next week and say: “I went into the lobbies today to vote for a measure to put your power prices up by $300 a year.” Will one of them have the courage to do that and be honest with their electorate? Not on your life. 
We know what is going to happen with this sale. Contact Energy was sold by Bill English in 1999 and there were first of all 225000 investors. Within 10 years that was 80000 but even that does not tell the whole picture. Did you know that 80 percent of the shares of Contact Energy which was once proudly owned by New Zealand are owned by 0.1 percent of the owners—not 1 percent; one-tenth of 1 percent of the shareholders own 80 percent of Contact Energy? And which National backbencher thinks that it is a great idea that $1.5 billion in New Zealand funds have left this country as dividends to the new Australian owners? Which one of them is proud of their National Party record in that regard? Which one of them will stand up? It takes only one of you to stand up in the Chamber tonight and vote against your Government and you can defeat this measure. Which one of you will have the courage to do that? 
Hon Members 
: None of them. 
Hon PHIL GOFF 
: Well sadly I fear that that is right. 
The Government’s election commitment was not to let most of the shares go into foreign ownership. Nothing in this bill tonight delivers on that commitment. What word do you use for a commitment that you do not intend to keep? 
Hon Ruth Dyson 
: Deceit? 
Hon PHIL GOFF 
: It is deceit. There is another shorter word but I cannot use it in the Chamber. Pure and simple that was a deceitful commitment by John Key to the people of New Zealand that he never intended to keep. When the New Zealanders turn out to the polls in 2014 they will remember that they were lied to. They will remember that. They will remember that they were deceived. They will remember that National never delivered on what it promised and it delivered on a lot of things that it never promised including the cuts that are happening across the board. 
One sign in the 1950s of this country’s progress in moving forward was the building of our hydro dams and our geothermal stations. We did not know then but we know now that that is one of the most important strategic assets that we have as a country: clean sustainable renewable energy. And what is this National Government going to do with that with its cling-on supporters ACT and United Future? They are going to sell those assets down the road. They are going to sell them at the bottom of the market so that the people—the foreign investors—who buy them will make a killing. And when they make a killing in selling them they will not be paying any capital gains tax on it either. Our parents did not make the sacrifice they did in building up these assets to have them sold out by this National Government which is a sell-out Government. 
TODD McCLAY (National—Rotorua) 
: 
 That speech from Phil Goff was a little bit like watching the TVNZ Heartland channel in New Zealand—all about the past. Do you know what that speech was a snapshot of? That was a snapshot of the last election campaign here in New Zealand when the Labour Party went out and campaigned against asset sales. By comparison John Key and the National Party made a case about the New Zealand economy to the New Zealand people. Cast your minds back to the last day before the election as John Key on a bus was out meeting New Zealanders and talking to them. Phil Goff the then leader of the Labour Party was standing by a dam with a sign with a couple of friends saying to New Zealanders: “If you vote for them they will sell these assets.” That is what he was saying. 
We hear from the members opposite that this is a rushed process and that New Zealanders did not know what was going to happen. Well actually there were a wide number of issues this party campaigned on: first putting New Zealanders first; second making sure we made important choices; and third telling them what we would do. The members opposite cannot say to us here in this Chamber today and Mr Goff cannot stand up and say in this Chamber today that the Opposition did not make an issue of that because members opposite said to every New Zealander who would listen that this was what would happen. Why is that important? It is because Part 2 of this piece of legislation says that it places limits on ownership of companies named in new schedule 5. Those limits are 51 percent ownership held by the Crown. It is written into the piece of legislation. It cannot change. 
In my speech in the Chamber earlier I read out a very long list of companies that Labour when in Government in the 1980s sold. It did not campaign on those. Nobody was standing by a dam then Mr Goff. Labour did not campaign and tell New Zealanders that it would go and sell them if it was elected. 
We made a case to New Zealanders. We gave them guarantees and today in this Chamber we are meeting those guarantees made to them. Not only that but there has been no rush as this legislation has gone through. 
Hon Clayton Cosgrove 
: Rot! 
TODD McCLAY 
: There was not any rush Mr Cosgrove through the Finance and Expenditure Committee. It had eight full meetings in three parts of New Zealand. On four occasions Mr Cosgrove and his colleagues had an opportunity to ask questions of our officials and did they ask a single question? No they did not. Did they ask a single question on 26 April on 2 May on 7 May or on 9 May? Not a single question but today they come to this Chamber and they expect New Zealanders to believe that they took this process seriously through the select committee. Well I reject the assertion that this was rushed. The committee had done its job. 
We had listened to every submitter. Most submitters were given as much time as they wanted. In fact Young Labour came here from a university and they were given 30 minutes—30 minutes of their time—and we showed them nothing but courtesy. But you will not hear that from members opposite here in this Chamber today. 
I believe that National has made its case to New Zealanders. We made the case to New Zealanders. None of this is being put through in urgency. Can I say to the members opposite: you may not want to remember history you may not want to own up to what you did to the New Zealand public in the 1980s but there are a lot of people who remember that. 
CHARLES CHAUVEL (Labour) 
: 
 I want to ask Todd McClay the member who has resumed his seat to reflect on the speech he has just given. The Finance and Expenditure Committee which I had the privilege to chair for a year in the final year of the fifth Labour Government is an important committee just like the other committees of this Parliament. It is a servant of the Parliament. I have to say when I heard the stories that our members reported back as a result of their experience on that committee on this bill the Mixed Ownership Model Bill I was shocked and I think the public will be shocked as well. 
Select committees in our unicameral Parliament are designed for one thing and one thing only: to make sure that some scrutiny occurs in respect of important bills. If select committees do not provide that scrutiny the bills are not going to get it anywhere else. The quality of this debate so far indicates that—if anybody needed any proof of this proposition. 
So when a chair of a select committee as important as the Finance and Expenditure Committee simply waves Government legislation through for whatever reason—be it his own personal ambition or be it because he has been nobbled by the Minister or what have you—when he circumscribes the process by 5 weeks and when he allows Treasury to have written the report from the department before submissions have closed what he does is he contributes to that general contempt that many people start to feel about this Parliament and the way we operate. I hope he is proud of himself because I certainly am not proud of him having heard that contribution. 
There are some excellent Supplementary Order Papers on the Table in respect of this part of the legislation and I think we ought to do our jobs and give them detailed consideration. We are on TV we are on the radio and people are watching and rather than trade rhetoric across the Chamber or hear the sort of vainglorious claims that come from the other side it might actually be useful for the Committee to use its time to look at those Supplementary Order Papers and consider their merits. There is an excellent one from Clayton Cosgrove Supplementary Order Paper 49. 
Hon Judith Collins 
: Ha ha! 
CHARLES CHAUVEL 
: The Minister of Justice thinks that is amusing. Her sense of humour clearly leaves something to be desired. Supplementary Order Paper 49 and Supplementary Order Paper 50 are well worth a careful look. I hope that the Minister in the chair who is the Minister of Police and the Minister of Corrections will look at the Supplementary Order Papers with care take the advice of officials who are here at 9.40 p.m. on a Tuesday night and consider whether or not to recommend to her colleagues that these provisions be adopted because as has been said there are precious few safeguards in this legislation. 
We heard the Prime Minister stump during the election campaign about the importance of this asset sales policy. The National Government claims a mandate for ramming this through despite the fact it is doing it on a 60 to 61 vote tonight and otherwise in the House and in the Committee. But what that claim neglects is that the Prime Minister was very careful to talk about mum and dad investors majority ownership for New Zealanders and ensuring limits on foreign ownership of those precious assets—all those words that resonated so well during the election campaign. Well what do we see in the bill? Precious few safeguards to fulfil those promises made to the country. That makes a mockery of the claim that there is a mandate for anyone to do what has been done tonight in the Committee. 
Supplementary Order Paper 49 would lower the percentage of any mixed-ownership model company permitted to be held in the hands of any one owner. It would lower the threshold from 10 percent to 1 percent so as to avoid the concentration of ownership in too few hands. We heard from my colleague Phil Goff earlier and from other speakers that it would not take much—it would not take much given the current 10 percent limit for entities that are foreign controlled to acquire a controlling stake in one of these companies. You need only 23 24 or 25 percent effectively of the voting rights to acquire such a stake. That would be very easy to do under a 10 percent limit. It is much harder to do with a 1 percent limit which is why Supplementary Order Paper 49 is so important. 
 Supplementary Order Paper 50 complements the provisions of Supplementary Order Paper 49. It would do something that the bill completely fails to do at the moment—provide some teeth for breach of the ownership ceiling provisions. That is why Supplementary Order Paper 50 is well worth consideration. It is why it would be great to hear the Minister in the chair Anne Tolley get to her feet and tell us what the Government’s attitude is on this legislation. 
Clare Curran has put together a very very carefully calibrated Supplementary Order Paper and it would actually institute a financial penalty for breaching the ownership limit applied to the mixed-ownership model companies. Notwithstanding the 1 percent limit that is being proposed on this side there is nothing to actually require the enforcement of the 10 percent limit except general application of securities law. And I am afraid that many members of the public having experienced the blunt end of finance company failures will not have a lot of confidence in that whereas what Clare Curran’s Supplementary Order Paper would do is actually give some teeth to the law and it is badly required if we want people to have confidence in the processes that we adopt in this House. 
There is another excellent Supplementary Order Paper in the name of Megan Woods—Supplementary Order Paper 61. It would deal with the situation once a mixed-ownership model company has had shares sold to private investors and where there is a risk that they will put pressure on the company to asset-strip in order to make a return on their investment—and that is clearly a commercial temptation that will lie on investors of any sort of scale in these businesses. The organisations will have been removed from the ambit of many of the Acts ensuring the responsible behaviour of State-owned enterprises so it is even more important to give the public warning of what these companies are actually doing. 
So Megan Woods’ amendment would provide that the companies cannot sell off individual assets like dams and wind farms to private companies in order to accomplish that sort of asset-stripping exercise which would defeat the purpose of the 51 percent ownership limit clause. Instead under Megan Woods’ amendment a mixed-ownership model company would be required to publicly notify that it intended to sell an asset and then seek the approval of the Governor-General by Order in Council in order to accomplish such a sale. 
Related Supplementary Order Papers are Supplementary Order Paper 52 in the name of the Hon Phil Goff and Supplementary Order Paper 51 in the name of Kris Faafoi. These attempt to give some teeth to what the Prime Minister promised—but has done nothing to accomplish in the legislation—which is that there would be majority Kiwi ownership in the 49 percent of the assets that were sold. So the provisions of Phil Goff’s Supplementary Order Paper would seek to correct the omission of requiring Kiwi mums and dads to be at the front of the queue. Kris Faafoi’s Supplementary Order Paper would do a similar thing. Phil Goff’s would do it by making sure that the bidders were Kiwi taxpayers; Kris Faafoi’s would do it by ensuring that the bidders were Kiwi passport holders. 
These sorts of safeguards are necessary if the National Government wants to claim any sort of mandate for doing what it is doing now—privatising these assets—because there is no way to guarantee that they will be sold to Kiwi investors unless there is some sort of enforcement mechanism such as those that are set out in the Supplementary Order Papers. 
There are some other important Supplementary Order Papers on the Table. Clayton Cosgrove has one Supplementary Order Paper 48 which would apply the principles of the State-owned enterprises to the mixed-ownership model companies. We have seen that the requirement to be a good employer is omitted the requirement to act socially responsibly is omitted and the requirement to deal in an appropriate way with the assets of iwi vanishes. Well Clayton Cosgrove’s Supplementary Order Paper would remedy those omissions just as Supplementary Order Papers 57 55 59 and 60 would deal with further serious omissions in the scheme of the legislation. 
Supplementary Order Paper 57 in the name of David Parker would apply Treaty principles to the directors and management of the mixed-ownership model companies. Supplementary Order Paper 55 would ensure that the entire mixed-ownership model structure is subject to Treaty principles—that is in the name of Trevor Mallard. Supplementary Order Paper 59 would ensure that State-owned enterprises with water resources are not eligible to be sold. These are all important provisions. 
DAVID CLENDON (Green) 
: 
 I think a characteristic of the debate this evening has been the apparent unwillingness of the Government to advance or defend its own legislation. The few contributions we have had have been notable for their volume rather than for their substance. I listened particularly carefully to the earlier contribution of the Minister for State Owned Enterprises to this debate on Part 2. I looked forward to the Minister explaining some of the opaque provisions of this Mixed Ownership Model Bill because many of them are indeed opaque and I will particularly talk about this new section 45Q in clause 16 in that context. The Minister rather than address the substance and elucidate this legislation chose instead to give us a homily on the evils of indebtedness which might have carried more weight had we not demonstrated repeatedly from the Greens and from Labour that if this bill goes through if we sell these assets this country will be worse off. We will actually lose more than we gain. That is an absolute; we know this. 
The Minister then went on to express his concern about the situation in Greece. He had some strong feelings about the Portuguese health system. Although I admire the Minister’s breadth of interest and concern I would rather he focus rather more tightly on New Zealand. If this bill passes there will be a noticeable and measureable effect on New Zealanders’ health. Already vulnerable households are struggling to pay their power bills. We know that the provisions of this bill privatisation of these assets will increase the cost of power to New Zealanders. We will see a knock-on effect on New Zealanders’ health and it is indefensible that the Government is not willing to stand and persuade us otherwise: that this bill is a good idea and that New Zealanders will be better off economically socially or indeed environmentally. 
I want to talk specifically about Part 2 and the proposed new section 45Q the Treaty of Waitangi provision. It is interesting that a couple of the Government’s contributions have been dismissive of references to the history of legislation in our New Zealand history. But I suspect that in the original drafting of this bill when the reference to the Treaty was completely excluded from the new legislation perhaps somebody was remembering their history because we recall that apparently benign section 9 of the original State-Owned Enterprises Act 1986. Nobody I suspect thought it would do much harm putting it in there—something of a sop to Maori at the time. The Maori Council of course demanded a rather more robust interpretation of section 9 in the State-Owned Enterprises Act and that put a significant handbrake on the privatisation agenda of the 1980s. 
 I suspect the drafters of this bill had some cognisance of that and endeavoured to completely remove any reference to the Treaty from this bill. There was an outcry against that and quite rightly so. The Government went searching for its support in Maori communities and I know from experience that one can spend a very long day in a Maori community searching for somebody who will speak in support of this bill and you will search in vain. There is no support in Maoridom. 
The rather peculiar hybrid solution—that is too strong a word. The response from the Government is to insert this extremely strange clause that says: “Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi (Te Tiriti o Waitangi).” It is a very similar if not identical reference as is indeed in the original State-Owned Enterprises Act. But it gets rather opaque as I said after that: “For the avoidance of doubt subsection (1)”—which I have just recited—“does not apply to persons other than the Crown.” I would ask the Minister in the chair the Minister of Police what the intention of this clause is. Is it the intention of this clause that these new mixed-ownership model companies will not act in a way that is inconsistent with the principles of the Treaty of Waitangi? That question is answerable by a simple yes or no. And if the answer is yes that these companies these new entities will be obliged to act in a way that is consistent with the Treaty of Waitangi with the principles of the Treaty then let it say that. I would challenge the Minister to support Supplementary Order Paper 71 in the name of my colleague Russel Norman which would spell out very clearly that these mixed-ownership companies would be obliged to act in a way that is consistent with the principles of the Treaty of Waitangi. 
What is the alternative solution? That 51 percent of the time these new entities will act in a way that is consistent with the principles of the Treaty and 49 percent of the time they will not? Does it mean that the Government will assert its authority and insist that they must? Then why do we have this avoidance of doubt in subclause (2)? It absolutely makes no sense to me. I challenge the Government to stand and take a call and explain what the intention of this part is. If it is that the companies will be bound by the principles say that clearly. Do not hide behind this legal nonsense this drafting nonsense that says you are going to create some strange hybrid creature the majority of which will be obliged to act in consistency with the principles of the Treaty and 49 percent of which will not. It makes absolutely no sense. 
This is not a trivial issue. What are we talking about when we talk about the power companies like Solid Energy? We are talking about companies with significant holdings in land and water. We are talking about companies that will have considerable influence over the well-being of our rivers and of our landscape. Solid Energy Mighty River Power—these are not trivial questions. How do Maori identify themselves? They identify themselves by reference to a mountain and to a river. Will these new companies these new entities be obliged to respect Maori relationships with awa and maunga 51 percent of the time all of the time or never because they will bow to the minority shareholders in a show of equity or who knows what? These are not trivial questions. 
What do the principles of the Treaty actually talk about? This has never been finally demonstrated in law. Since 1987 it has been acknowledged that the Treaty is a living document. Similarly the principles have been subject to various interpretations. One constant in any definition of the principles of the Treaty is a requirement of consultation fair dealing cooperation and partnership between the Crown and Maori. Are these new entities going to be bound by these principles? Will they be obliged to consult? Or can they simply point to this nonsense for the avoidance of doubt and say that they are not obliged to consult with Maori they are not obliged to act in the way of a partnership and they are not obliged to cooperate with Maoridom when they are making decisions that have a direct and lasting impact on the rivers on the well-being of the land on the people who live on it and on the landscapes? 
 This makes no sense at all to me and I invite and indeed challenge the Government to explain to me what the intention is. Will or will not these new entities— 
Progress reported. 
House resumed. 
The CHAIRPERSON (Lindsay Tisch) 
: I move  
That the report be adopted 
. 
Mr DEPUTY SPEAKER 
: The question is that the report be adopted. Those of that opinion will say Aye to the contrary No. The Ayes have it. Party vote? The Clerk will conduct a party vote. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. There was no Aye vote for that at all. 
Mr DEPUTY SPEAKER 
: Well I heard an Aye and I am a little bit closer than you. I will conduct a party vote thank you. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Report adopted.