Goldsmith Paul: Mixed Ownership Model Bill — In Committee 
Text is incorporated into the Bound Volume 
Goldsmith Paul: Mixed Ownership Model Bill — In Committee 
[Sitting date: 20 June 2012. Volume:681;Page:3164. Text is incorporated into the Bound Volume.] 
PAUL GOLDSMITH (National) 
: 
 It is always interesting to listen to New Zealand First. It is a party of great barefaced ability to say one thing and do the other. We have Winston Peters. This is the man who is recorded as saying when he signed off the sale of Auckland Airport when he was Deputy Prime Minister and Treasurer only a few years ago that he was “very pleased with a most successful public sale—it is popular capitalism in action.” It is also the party where we had Mr Williams talking about how terrible these sales were yet when he was North Shore mayor he was very happy to sell off the former council works depot for $11.4 million. Is that not amazing? So it is one thing when the Government does it; it is a different thing when those members are in power. 
This Mixed Ownership Model Bill—we are on Part 2—is about controlling our destiny. It is about keeping the total amount of Government debt under control in a dangerous global environment. It seems ironic to me that we have heard a lot from the other side about the fear of foreigners—“Aren’t they terrible!”. That is what is behind Supplementary Order Paper 51—a lot of anti-foreigner rhetoric. This puzzles me because any clear assessment would say that the fastest way to have this country lose its independence of action is to have too much international debt at this time. This Government is proposing to sell minority stakes in these companies—we expect mainly though not exclusively—to New Zealand investors. In doing so we reduce our need to borrow more on the international market and that is a good thing. If Labour and the Greens have the courage of their convictions they will commit here right now today to buy back these companies—to go out to the international markets borrow the money and buy them back. They will not because they know that it is a crazy thing to do. 
It is often forgotten that by introducing a share of private sector investment—49 percent as outlined in section 45R in clause 16—this bill will strengthen the companies involved by bringing to those companies private sector scrutiny and governance. Some people would say that is ideological. It is no more ideological than the assumption we have heard expressed relentlessly that State-owned enterprises are somehow better than private sector companies. I have seen no evidence for it and no evidence for Mr Parker’s claim yesterday that State-owned enterprises have a lower cost structure than those in the private sector. Where is the evidence to show that? Any awareness of New Zealand history shows that State-owned enterprises—and trading enterprises back in the 1980s such as forestry telecoms and the like—reveal that the State is not a good runner of business. 
Let us have a listen to what Mr Lange said in 1996. What did Mr Lange say when he talked about the Government’s economic policies? He said: “We had enterprises”—this is the Government—“that were ludicrously overstaffed horribly overcapitalised just embarrassments because they used social services that they provided as a shield against investigation into their wastefulness and inefficiency.” That is what David Lange said about the Government’s trading enterprises in the 1980s—“ludicrously overstaffed horribly overcapitalised just embarrassments”. Today’s State-owned enterprises are infinitely better than that but there is certainly no evidence to suppose as the Greens and Labour blindingly and ideologically believe that State enterprise is more efficient than private enterprise. So it is time you moved on with the times. 
When we look at the electricity market today the Consumer Powerswitch site as we have heard shows that in 14 out of the 21 regions in New Zealand today the cheapest company is privately owned. What those members do not understand is that if a company is always more expensive than the opposition it goes out of business. That is how market capitalism works. We can legislate all we like for social responsibility and other things such as what Supplementary Order Paper 61 talks about but a company will be successful for its shareholders only if it serves its customers well. That is how it works. And to do that it needs to be as efficient as possible and it needs to look after its staff and if it does not some other company will take over. That is how capitalism works. It is bizarre to hear members opposite spitting out the word “profit” as if it were a dirty word. Well profit is the basis of the market economy. The food the clothing the cars the books the TVs the iPods—all the things that we desire—are provided by companies not as a response to some clause on social responsibility but because they want to provide a service and make a well-earned profit. It works well. It is the most natural thing in the world. 
So the relevant question is whether the infusion of this private sector thinking and capital—a minority infusion as outlined in this bill—will be beneficial for these companies. I believe that it will. On that basis I think Part 2 is excellent legislation and I am looking forward to it going further.