6. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Is the loss of future dividends due to his planned sale of State-owned assets accounted for in the forecast financial statements in his Budget, or is this cost listed as an unquantified fiscal risk?
Hon BILL ENGLISH (Minister of Finance) Link to this
The fiscal forecasts do not include an estimate of the specific transactions proposed under the mixed-ownership model. There are no forecast costs associated with the sale, and no reduction in dividend income or receipt of sale proceeds. Instead, it has been highlighted as a specific fiscal risk pending decisions. Included in the forecast is the Government’s intention to meet the cost of the next five Budgets’ capital allowance off the balance sheet—that is, a zero capital allowance. It is our broad intention that most of this will be funded by mixed-ownership model proceeds. It is worth noting that the Treasury believes that the ongoing operating impact of mixed ownership is likely to be broadly balanced, as any reduction in dividends is likely to be cancelled out by reduced interest payments.
Hon David Cunliffe Link to this
When will the Minister present to the New Zealand public an accurate and detailed statement on the cost of asset sales, and will this be before or after the 2011 general election; or is he trying to keep the truth secret?
That would depend on how we measure the dividends. I notice that while the member and the Labour Party are going around saying the Government would be foregoing $700 million in dividends, if we remove the special Meridian Energy dividends to do with the sale of assets—Crown assets in Australia—under the Labour Government, the average total dividend for the energy companies, excluding Meridian Energy, was under $100 million a year. That is why I questioned yesterday where he got his $700 million figure from.
Mr SPEAKERNo, no. The member will resume his seat. The member knows that that kind of commencement to a question will lead to disorder. He is not the first person to have done that today, but we need to try to avoid the temptation to make that kind of mistake.
Hon David Cunliffe Link to this
Given the Minister’s previous comment, did he read the 2010 financial statements that bear his signature and clearly record that total dividends from State-owned enterprises and Air New Zealand were $831 million in that year; if so, why did he tell this House yesterday that “The true figure for dividends from State-owned enterprises is probably about $350 million,”?
Because I was using a roughly calculated average over the last 7 or 8 years. Under the Labour Government the energy companies, excluding Meridian, produced dividends of less than $100 million a year, which was a disgraceful return on taxpayers’ capital. It showed poor performance and sloppy governance.
Hon David Cunliffe Link to this
Given that the Minister continues to dispute the actual figures released by the State-owned enterprises and compiled by the Parliamentary Library, can he confirm that the total dividend loss across the assets he is planning to sell, on a 5-year basis, is $281 million on a total basis, or $312 million per annum, on average, over the last 5 years, after inflation?
No. The member is picking a number. He could pick a different number. In 2009 total dividends from all State-owned enterprises were $223 million. As I said, the dividends, excluding Meridian’s large dividend from the sale of an asset in Australia, were less than $100 million a year. The State-owned enterprises were badly run under Labour. We have improved things. We are getting a better return on taxpayers’ money, and under the mixed-ownership model that will continue to improve. In the end, we are more interested in paying dividends to Kiwis than interest to foreign lenders, which is his party’s preference.
Hon David Cunliffe Link to this
Is his lack of credibility in accurately booking the proceeds from unmandated asset sales, but not the full costs, one of the reasons why Standard and Poor’s has kept his Government’s credit rating on negative outlook?
No, but I know what Standard and Poor’s might be thinking if Labour got into power and said it was going to borrow a further $15 billion, which is the cost of the promises Labour has made so far, no doubt with more to come.
Hon David Cunliffe Link to this
I seek leave to table data from the Parliamentary Library that shows the 5-year average of dividend flows from the share of assets the Minister is proposing to sell to be $281 million a year, on average, without inflation, or $312 million, inflation adjusted, per annum, on average.
I just want to clarify whether the figures include the special dividend from the billion-dollar - plus sale of an asset in Australia.
That is really a debating point. Leave is sought to table the document from the Parliamentary Library. Is there any objection? There is no objection.
Hon David Cunliffe Link to this
I seek leave to table a further document on dividends of State-owned enterprises paid to the Crown, which shows such data—
Hon David Cunliffe Link to this
Again, it is from the Parliamentary Library and Treasury financial statements.