3. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Is it the Government’s position that a referendum on asset sales is unnecessary and the election later this year will be the public’s chance to make their views on asset sales felt?
Hon STEVEN JOYCE (Associate Minister of Finance) Link to this
The Government’s position in this policy area is in fact in relation to the mixed-ownership model that was pioneered by the previous Government. It is the Government’s position that a referendum on the mixed-ownership model is not necessary, and that voters will have a chance to make their views known on that model later this year.
Hon David Cunliffe Link to this
Does the acting Minister think that the public will be pleased to learn that without any mandate, his Government has budgeted $6 million to spend before the election on preparing to sell these assets, as his colleague Tony Ryall confirmed to the Finance and Expenditure Committee yesterday?
I am sure that the public would expect the Government of New Zealand to take a prudent look at potential future policy areas, and that they would also be very pleased to know that this Government has saved multimillion times more than that in its alterations of waste in the public sector inherited from the previous Government.
Hon David Cunliffe Link to this
Given that it is obviously a fait accompli, does he agree with Mr Ryall’s statement to the Finance and Expenditure Committee yesterday that the Government had no way of preventing the onselling of individual shares to foreign corporates, but that the Government would proceed with sale if re-elected, regardless of that fact?
I appreciate the member’s vote of confidence, but we do not think the election result is a fait accompli. Our view on this matter is that there will be long-term holding of these assets by investors. The sorts of investors that are interested will include KiwiSaver funds. I know that iwi are interested in investing; they are long-term holders of assets. Obviously, the Superannuation Fund is a long-term holder of assets, ACC is a long-term holder of assets, and I am sure mum and dad investors will be long-term holders of those assets, as well.
Hon David Cunliffe Link to this
Can the acting Minister tell the House how much he expects that middlemen and ticket-clippers would cost the taxpayer if the Minister’s privatisation agenda goes ahead, given that in the Contact Energy sale alone, $32 million of taxpayers’ money was spent in fees to consultants and bankers, and that officials yesterday told the Finance and Expenditure Committee that they estimate sales costs to be in the range of 2 to 5 percent of the asset value, which would be between $136 million and $340 million?
I disagree with the member’s question because it is not a privatisation agenda. Again, in relation to the matter of fees, I point out that I was talking to the Minister for Tertiary Education the other day and the amounts the member refers to have been wasted many times by the previous Government in the tertiary education area.
Hon Rick BarkerI raise a point of order, Mr Speaker. I would like you to reflect on that answer. The member asked essentially about the cost of the transfer. What we got was a reply that talked about whether it was privatisation and about tertiary education. The Minister did not address the central theme of the question, which was to comment on the cost of the sale.
Mr SPEAKERThe remedy for that kind of situation is very simple: to use objective language. Had the member asked a question about the cost of the partial sale of shares to investors, I would have insisted on the Minister giving a more precise answer. When members load their questions with their view of the facts, I cannot expect Ministers not to respond if they disagree with that view of the facts.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I now seek your guidance. The word I used that I infer that you may be describing as being in some way loaded was the word “privatisation”. Is it your ruling that selling down 50 percent of a State asset is in some way not a privatisation?
I am not involved in the debate, at all. If the honourable member uses that kind of language, though, Ministers are likely to pick up on it. I cannot help that. If members want to get to the nub of issues, they should keep their language as objective as possible, and I will help them all that I can then.
Hon David Cunliffe Link to this
I will repeat the question, using other words. Can the Minister tell the House how much he expects the cost of sale to be, given that in the Contact Energy sale alone those costs amounted to $32 million in fees to bankers and consultants, and that officials yesterday told the Finance and Expenditure Committee that they estimate sale costs to be in the range of 2 to 5 percent of asset values, which would be between $136 million and $340 million?
The Minister obviously does not know, and neither do the officials know, what it was going to cost at this point, because normally in those situations one has some form of competitive process for assessing the sorts of fees that might be payable. But I remind the member that both the Prime Minister and the Minister of Finance have said in the House that they will be expecting a very competitive, and the lowest possible, price for such an activity.
Hon David Cunliffe Link to this
Given that the Minister is apparently not in possession of the briefing that his own officials gave to the Finance and Expenditure Committee yesterday, and given that only 8 percent of New Zealanders ever bought shares in Contact Energy and only 2.5 percent of them retain any interest in it now, can he tell the House what percentage of New Zealand families he expects would be able to front up with the $4,000 that would be needed to keep their personal share of ownership, at current levels, in the strategic assets he is preparing to sell down?
The Minister would not agree with the member’s characterisation of the current ownership model. But I think the member does touch on a very, very important issue, which is the importance of ensuring the success of the New Zealand sharemarket in the growth story of this country, and the importance of ensuring the opportunity for New Zealanders to invest and hold assets and to receive returns on those assets. I sense that the member is very concerned about that issue, but the reality is that, again, with the KiwiSaver funds, the ACC, iwi who have now had settlements, and other investment funds, I am very sure that they will want to invest in and hold these long-term assets.
Hon David Cunliffe Link to this
I seek leave to table advice from the Parliamentary Library setting out the proportion of New Zealanders who owned shares in Contact Energy and who do now.