4. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
What is the Government’s best estimate of the final purchase price for Toll NZ’s rail and ferry business?
Can the Minister tell the House and the public whether that figure includes the Government taking on somewhere around $100 million to $200 million of debt, Toll NZ having access to rent-free depot space in prime locations for 6 years, and, as rumoured, a special discount for Toll NZ’s own freight?
Hon Dr MICHAEL CULLEN Link to this
On the first point, clearly, the company carries some debt. It also has a finance lease over the Arahura. The price being paid is slightly above the per share price with which Toll NZ bought out the minority shareholders, so a premium was paid to obtain control. That share price, of course, reflected also the existence of debt and the Arahura finance lease. On the other matters, the member is free to invent what he likes for the next few weeks; the full details will be released when the final deal is completed, and I think members will discover that a lot of what has been said in the public area is greatly exaggerated.
Hon Mark GoscheHon Dr MICHAEL CULLEN Link to this
Yes. I received a report last week from a Mr John Key stating that he had supported the Government’s purchase of the rail track in 2004. However, at the time he said that he opposed it vehemently, saying it would lead to pork barrel politics. So I am sure the report that National is opposed to Toll NZ’s rail and ferry assets being bought by the Government will be followed by an expression of support—indeed, by his claiming sooner or later that the National Party was responsible for it.
Can the Minister confirm that the reason he has not told the public the full price of the Toll NZ purchase is that although taxpayers are hurting, he has committed well over $1 billion to investment in Toll NZ—to expenditure of taxpayers’ money for purely political reasons?
Hon Dr MICHAEL CULLEN Link to this
I thought it was supposed to be for nostalgia reasons, according to Mr Key, who dismissed rail as a completely out-of-date mode of transport. I note also that the Opposition has committed $1.5 billion to subsidise Telecom as a monopoly provider of fibre-optic cable to the home. The cost of the rail transaction is significantly less than that, and it will lead to profits—if there are any—being retained in New Zealand; it will not lead to continued demands from foreign ownership for increased subsidies, which is what New Zealand was facing under private ownership.
Has he received any reports about New Zealanders supporting the Government’s buy-back of the rail system?
Hon Dr MICHAEL CULLEN Link to this
I continue to receive correspondence from people who support the buy-back of the rail system, and I have no doubt that the public understands why the rail system is so important for the future of the economy. The Leader of the Opposition, however, continues to accuse these people of suffering from nostalgia, and keeps making silly jokes about train sets.
The Minister having raised the matter of subsidies for overseas owners, why did he do a deal—including secret sweeteners—that meant that Australian shareholders benefited from an increase in the value of their shareholdings of a quarter of a billion dollars? As one Australian said, “You get only one Helen Clark moment in your lifetime.”
Hon Dr MICHAEL CULLEN Link to this
I have many of them, almost every day, so that clearly is not true! The ridiculous thing about that statement is that Toll NZ was continuing to seek ever larger subsidies from the Government to operate a business from which it expected to make not a minimal rate of return but a very substantial rate of return, after having received Government subsidies. Mr Key claimed that we should have a national rail access agreement; we have had one for 4 years, and all we have had is endless arguments about what it means and enforcing it.
When will the Minister make public the Government’s best estimates of the new subsidies that will have to apply to the rail system, and its best estimate of the investment requirement that the taxpayer has now taken on, or did he buy this company on a whim because he thought he would get a political headline out of it?
Hon Dr MICHAEL CULLEN Link to this
Clearly, from the way the National Party’s members are going on in the House this afternoon, it has hurt the National Party that we have bought back the rail system. But there is no secret agreement. We are in negotiations on the final details, and when they are concluded—and I assume they will be successful—we will release the full agreement, and, once again, most of Mr English’s many claims will be proven to be wrong.
Does the answer to that question mean that the Minister does not know the answer to the question I asked, which was when the public will reveal the full amount of the subsidy that it will have to apply to the company it now owns, and when he will reveal the full amount of the investment that he has committed on behalf of hard-up taxpayers, so that we can all know how much this reckless decision will cost taxpayers?
Hon Dr MICHAEL CULLEN Link to this
Let me first tell the member that taxpayers support this decision, by a very clear majority; I have to tell him that he is on the wrong side of the tracks on this one. Second, he did not hear what I said. I am certain that the public will not be revealing anything about this! The Government will be telling the public the full details of the agreement when the agreement is finalised. As to the future cost, does the member mean the next 5, 10, or 50 years of investment? One thing I am quite sure of is that the investment in the track, and in measures associated with the track, is actually far higher than the investment in rolling stock that is required over the next 5-year period.
Peter BrownDoes the Minister agree that with the purchase of the rail system and with a positive shipping plan, the Government would be in a position to make a comprehensive assessment of transport infrastructure in this country, incorporating road, rail, sea, and air transport; if he does agree, would he confirm that that is the best way forward, both economically and socially, for this country?
Hon Dr MICHAEL CULLEN Link to this
I agree with the member. The Minister of Transport will be making further announcements around sea freight issues within the near future. Clearly, Government ownership of the rail system, through statement of intent procedures, gives a much greater chance of better integration of road, rail, and sea transport modes.