O'Rourke Denis: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
O'Rourke Denis: Mixed Ownership Model Bill — In Committee 
[Sitting date: 21 June 2012. Volume:681;Page:3241. Text is incorporated into the Bound Volume.] 
DENIS O’ROURKE (NZ First) 
: 
 The whole question of dividing this bill into two raises the whole concept of what is a State-owned enterprise and what is not. I say that making Part 2 a separate bill is inappropriate because firstly it includes in the title the words “Mixed Ownership Model” and secondly Part 2 in its substance does not set out a model that is a genuine mixed-ownership model. In fact I think that the name for Part 2 should simply be the Public Finance Amendment Bill. It should not include the words “Mixed Ownership Model” at all. That is just not correct. 
The reasons for that are these. First of all the model set out is as I have said not a genuine mixed-ownership model at all. I say that in order for the model to be correct it would have to be a fifty-fifty ownership model because that is the only way there could be genuine mixed ownership. I say that mixed ownership can mean only that. Anything other than fifty-fifty is not mixed; it is dominated by one party or the other so it is not mixed. As it is of course as we know the Crown keeps 51 percent which is control and I do not see what is mixed about that. Control is control. You cannot be a little bit pregnant; you cannot be a little bit in control. Fifty-one percent is control; 51 percent is not mixed. 
I will tell members something from my own experience. I chaired a company Transwaste Canterbury Ltd that was a genuine mixed-ownership model. That was able to be called a partnership or could have been called a mixed-ownership model. Whether it was or was not a mixed-ownership model it could still operate as a fully successful commercial business. That is the model that it actually is. In that respect it is absolutely no different from a State-owned enterprise because under the State-Owned Enterprises Act they are required to operate as successful businesses. So I do not see how there is any difference between a State-owned enterprise defined in that way and what these entities will be with 51 percent shareholding residing in the Crown. What is the real difference? 
You could also see that the regime in which these entities will be operating is fully competitive the same as when they were State-owned enterprises having to operate in competition with each other. I further say that the only way they could be different is if the shareholding Ministers enter into shareholders agreements. 
The CHAIRPERSON (H V Ross Robertson) 
: Can I just advise the member that what we are looking at here is the reason why the bill should be divided—why it should be split into the State-Owned Enterprises Amendment Bill or the Public Finance (Mixed Ownership Model) Amendment Bill. The member is able to give reasons why that should happen and— 
DENIS O’ROURKE 
: Or reasons why it should not. 
The CHAIRPERSON (H V Ross Robertson) 
: Or reasons why it should not. The debate is strictly related to the proposal that the bill should be divided. 
DENIS O’ROURKE 
: And the reason I am giving Mr Chair for it not to be divided is because it is a mis-description in Part 2 to call these entities mixed-ownership-model entities when they are in reality not that and I have been giving reasons why that is the case. 
Finally I want to say this. The only way that it could become genuinely a mixed-ownership model is if the shareholding Ministers were to enter into shareholders agreements with the minority to allow the majority of directors to be appointed by the minority. Then you could say it would be a genuinely mixed-ownership model then you could say it would genuinely not be like a State-owned enterprise and then it would be reasonable for this bill to be divided into two parts for those sorts of reasons. But of course the Government would never allow that or should not allow that simply because if it did it would lose actual control and that would be a breach of its undertaking to the public of New Zealand that genuine control would remain with the Crown. 
So for those reasons I say that the mixed-ownership model is a myth. It does not and cannot really exist under this legislation and should not be reflected in a division of these bills on the basis that there is a difference between these entities and State-owned enterprises. 
A party vote was called for on the question that the Committee divide the bill into the State-Owned Enterprises Amendment Bill and the Public Finance (Mixed Ownership Model) Amendment Bill pursuant to Supplementary Order Paper 41.