1. Hon BILL ENGLISH (Deputy Leader—National) Link to this
to the Minister of Finance
What is the Government’s best estimate of the full and final cost, inclusive of any subsidies, discounts, or loans, of its purchase of Toll NZ’s rail and ferry business?
Hon TREVOR MALLARD (Associate Minister of Finance) Link to this
The best estimate is $665 million. For accounting reasons this will be reflected in an appropriation of $690 million in next week’s Budget.
Does he recall his statement that the rail business the Government has purchased “will deliver serious dividends for our economy”, or would he agree now that a more accurate description would be that the serious dividends will not be for our economy but, in fact, have already been delivered to Toll shareholders in Australia in a several hundred million - dollar increase in the value of their company and apparently to shareholders in Namarong Investments Pty Ltd, who must have anticipated what an easy touch Dr Cullen was?
Hon TREVOR MALLARD Link to this
Yes, no, and the final matter is, of course, something for the Australian Stock Exchange and the Australian Shareholders’ Association.
Can he tell the House which is the most accurate description of his negotiations: his description “We paid more than we liked, Toll got less than they’d like—that’s the nature of any agreement”, or the comment in the Australian financial media that “Toll pulled off the con job of the century.”?
Will the Minister make a commitment now to the transport industry that it will not allow subsidies for Toll Tranz Link, Toll’s trucking business, that are not available to every other operator?
Hon TREVOR MALLARD Link to this
It has already been disclosed that part of this arrangement is access to sheds and other areas close to the track. That is part of the arrangement and part of the reason there is a difference between the $665 million and $690 million.
Darien FentonHas the Minister received any reports about support for the Government’s buy-back of the rail system?
Hon TREVOR MALLARD Link to this
Yes I have. I have received a report from a commentator claiming that he supported the Government’s purchase of the rail track in 2004 even though at the time he said he opposed it vehemently. I have received a report from the same commentator saying he vehemently opposes the Government’s purchase of Toll New Zealand’s rail and ferry assets, accusing those New Zealanders who would not support it of nostalgia, but promising “We would not sell them off.” But then again, this person has flip-flopped on Iraq, on climate change, on Treaty policy, on the overseas ownership of strategic assets, and on asset sales generally. So it is no real surprise when the report comes from John Key.
Will the Minister answer the question he would not answer 2 days ago on whether he will reveal to the public the Government’s best estimate of all the obligations it has taken on in the purchase of Toll; or should we believe much better informed commentators who say: “The Government has underestimated by far the cost it faces in purchasing Toll.”, and who describe Toll as “a pig of a business”?
Can the Minister confirm whether he is proud of the innovative outcome he has produced where for the last 20 years New Zealanders have worried that the Government would get ripped off when it sold assets, and he has been able to show in 1 week that the Government gets ripped off when it buys them?
Hon TREVOR MALLARD Link to this
As all the evidence comes out, the announcements are made, and the ink is dry on this arrangement, the member will be eating his words.
Rt Hon Winston Peters Link to this
Talking about being ripped off, has he received any reports that will act as guidance for the Government in respect of New Zealand Rail, recording the fact that the Booz Allen report stated in 1992 that it was down to make $100 million a year by 1994, but the National Government sold it off to its friends from Fay Richwhite and Wisconsin Central Transportation for $328 million, whereupon they then recapitalised the company, drove the share price down to 28c, and had the taxpayer having to bail it out a second time; does he recall the National Government doing that on 18 June 1993?
Hon TREVOR MALLARD Link to this
I cannot confirm the exact date, but I think the general arrangements the member has described are well within public purview.
Hon Jim AndertonHas the Minister received any reports that when New Zealand Rail was sold by the then National Government it was sold for less than the value of the wooden sleepers?
Rt Hon Winston Peters Link to this
Has the Minister received any reports that the then Government in 1993 claimed that the taxpayer could not retain this asset, because it did not have the $200 million that was going to be injected into it by its friends Fay Richwhite, who never invested one cent, but rather bled the company—
Hon Tau HenareRt Hon Winston Peters Link to this
So I tell Tau that we are not going to let his friends run it again, that is what. I am making sure the public know what National is like when it gets hold of State assets, and how good its promises not to sell are; does the Minister recall that happening, and can he reflect upon how good private enterprise’s promise was then about putting infrastructure into railways?
Hon TREVOR MALLARD Link to this
Further than that I can report that the taxpayer now faces a bill of about $400 million to bring the rail assets alone—the track assets, not the rolling stock—back up to the sort of standard that is necessary for a half-modern railway.
Hon Pete HodgsonCan the Minister recall a debate in this House at the time of the purchase of Air New Zealand by the Government on 13 September 2001 when one member of this House said that the Government had “sent the commercial credibility of New Zealand and New Zealanders down the tube.”, and went on to say: “there is no path ahead for Air New Zealand. It is a crippled airline at the bottom of the world,” and can he confirm that the member who said that was the Hon Bill English?
Hon TREVOR MALLARD Link to this
That member’s credibility was shot on a number of occasions, especially when he lost count. That member has very, very little credibility in these matters, and his lack of understanding, for example, of the fact that companies carry debt is just an indication of how wasted his time in Treasury was.
Rt Hon Winston Peters Link to this
Has the Minister read any reports regarding the sale price of New Zealand Rail jumping $188 million just 24 hours after the National Government sold it to its mates in Fay Richwhite for a lousy—
Rt Hon Winston Peters Link to this
No, I did not, sunshine. Do not lie. That member was not even a member of the party then. That was that member’s second big mistake.
I raise a point of order, Madam Speaker. The member knows he should address all members by their appropriate parliamentary title.
Madam SPEAKERYes. Would the members please be seated for a minute. Obviously, if members make interjections they are likely to receive responses, but those responses should be in terms of the Standing Orders, as well, and “sunshine” is not acceptable to call a member. Please refer to the member’s name.
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. When a member screams out “You voted for it.” like that, knowing that it is a demonstrable, palpable effrontery to the truth, what can a member do to react? He knows that it is not true. Either he withdraws and apologises or I will take a privilege case against him for lying to the House.
That is always for the member to do, if he wishes to do so, but, as I said, we try to keep within the Standing Orders in our exchanges.
Hon Dr Nick Smith Link to this
I seek leave of the House to table the Hansard record showing that in 1993 on the third reading of the bill that sold rail, there was no dissent. The bill was passed unanimously.
Rt Hon Winston Peters Link to this
I seek leave to table the widespread newspaper evidence that suggests that that very week I was winning the Tauranga by-election, unopposed by National, and had not been sworn back into the House, so therefore could not vote.
Rt Hon Winston Peters Link to this
Has the Minister read any reports regarding the share price of New Zealand Rail jumping $188 million just 24 hours after the National Government sold it to its mates, Fay and Richwhite, for a lousy $328 million in 1993; and can he confirm that several people involved in that horrendously irresponsible fire sale of our vital infrastructure are recognisable on the benches opposite today?
Hon TREVOR MALLARD Link to this
I think it is fair to say that I do not have the detail of the exact share price change in my mind, but it is absolutely clear that it was a fire sale, that the conditions around it were just not good enough for the country—
Hon TREVOR MALLARD Link to this
—it did not vote for it, and the member should stop making that up, as well—and that members opposite, especially Bill English, would love to do it again.
Peter BrownWhen will the Minister be in a position to tell the House the name of the new organisation, the governance and management structure, and some specific details around the modus operandi?
Hon TREVOR MALLARD Link to this
As the member acting for the Minister of Finance in the House today, I do not have that information with me.