1. Hon PAUL SWAIN (Labour—Rimutaka) Link to this
to the Minister of Finance
What is the Government’s policy on the sale or retention of State-owned enterprises?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
I am happy to put the member’s mind at rest. The Government is committed to retaining State-owned enterprises. We will not sell off State-owned enterprises; indeed, we have bought back the rail-track and a great majority of Air New Zealand, and the Government is seeking an agreement to purchase Toll NZ’s rail and ferry operations.
What reports has he seen on alternative proposals relating to the sale or retention of State-owned enterprises?
Hon Dr MICHAEL CULLEN Link to this
I have seen a surprisingly large number of them. For example, I have seen a report stating that there was no reason why the Government owned the electricity State-owned enterprises or Air New Zealand. I have seen reports indicating support for a partial sell-down of State-owned assets. I have seen a report stating there will be no asset sales in the first term of a hypothetical new Government, but no guarantees. I have also seen a report of a commitment to delay asset sales to inoculate the issue so it could be sorted out in the second term. All of these statements were made by Mr John Key.
R Doug WoolertonCan the Minister confirm that the retention of Auckland International Airport in New Zealand shareholders’ hands will ensure the continued flow of revenue in the order of $101.9 million to the Manukau City Council, the Auckland City Council, and New Zealand individual shareholders, rather than to the Canada Pension Plan?
Hon Dr MICHAEL CULLEN Link to this
The retention of Auckland International Airport in New Zealand ownership will assist in the flow of revenue to New Zealand rather than offshore. It is hard to see how that will be counterbalanced by the potential inflow of capital, as that capital was not required for the expansion of Auckland International Airport.
Hon Bill EnglishHas the Minister seen reports that State-owned enterprises have sold assets they owned in Australia, that there is a range of sale and lease-back arrangements where State-owned asset property has been sold to others who have leased back the assets, and spin-off companies sold by State-owned enterprises, and does he agree with Laila Harré, the political commentator, who said that Labour should get its own house in order before it starts lecturing everybody else about asset sales?
Hon Dr MICHAEL CULLEN Link to this
I understand Mr English’s sensitivity because he does not agree with Mr Key’s latest version of policy in that regard. It is interesting that on this occasion National did not put the monkey up, it put the organ-grinder up. But, of course, to take the first only, Meridian Energy invested in Australian assets under the clear understanding it would sell those at some point, and sold them at a whacking great profit of $800 million over and above valuation.
Has he received any reports on how to dilute public ownership of State-owned enterprises without outright sale?
Hon Dr MICHAEL CULLEN Link to this
Indeed, for example, I saw a report of a call by Mr English for partial floats last year, calls to allow State-owned enterprises to issue equity instruments to the private sector, and calls to issue hybrid debt instruments with some of the features of equity. All of these would significantly weaken public control. Indeed, the suspicion is that the Opposition is promising not to sell the family silver, it is simply exploring the options of how it can melt it down instead.
Heather RoyWhat is the Government’s policy on private investors selling their shares in former State-owned enterprises, like Auckland airport, that were sold when the Rt Hon Winston Peters was Treasurer?
Hon Dr MICHAEL CULLEN Link to this
From my memory, Auckland airport was never a State-owned enterprise; central government held shares in Auckland airport. I am pleased to see that Mr Peters has seen the light on these matters and now opposes the sale of shares offshore.
Rt Hon Winston Peters Link to this
Can the Minister of Finance remember the September speech made by Jim Bolger in 1997 when he referred to “springtime coming”, and without consultation with the coalition partner announced the sale of four State assets being worked on, including Auckland airport, and that the National Party wanted to sell the airport to all and sundry internationally, but at least I made sure that 80 percent—and it should have been 100 percent—went to New Zealanders, and that when that 80 percent was sold—
Rt Hon Winston Peters Link to this
—yeah, but it will get better as it gets longer—it was oversubscribed by 2½ times, as I told those members it would be, but of course they have still not learnt, even now?
Hon Dr MICHAEL CULLEN Link to this
I do indeed, and I also remember the member creating the dissolution of that Government as a result of the proposed sale of Wellington airport shares.
How can the Minister justify the $40 million cost to the Government’s own superannuation fund as a result of his Government’s decision to block the sale of private shares in Auckland airport to a Canadian pension fund, or has the Government just measured the impact in terms of votes won and votes lost?
Hon Dr MICHAEL CULLEN Link to this
What a fascinating question. The notion that Ministers making decisions under the Overseas Investment Act would consider, as a crucial part of that decision making, whether the superannuation fund was going to make a short-term profit or loss on the transaction is a fairly horrendous suggestion.