9. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
If he expects at least 85 to 90 percent of the State-owned assets he intends to privatise would remain in New Zealand’s ownership, including the Crown’s holding, what percent of the shares he plans to sell would be bought by foreign buyers?
Hon BILL ENGLISH (Minister of Finance) Link to this
It is hard to say, because the percentage acquired by overseas buyers will depend on demand from local investors. We expect that demand from local investors will be strong. Between households, KiwiSaver funds, Crown financial institutions, and other funds, they have the capacity to buy and hold most, or all, of the stock offered if they choose to do so. Moreover, many local investors are likely to take a buy-and-hold approach. For this reason, we expect that the portion eventually bought by overseas bidders is likely to be small, but, as I said, we cannot say for sure what it would be.
Hon David Cunliffe Link to this
If, by his own admission, it is 10 to 15 percent of the total and he is selling only half, is that not 20 to 30 percent of what is actually sold?
Well, it is a bit like the member counting the number of people who are not voting for David Cunliffe in the Labour caucus, is it not? Of course, mathematically that is possible, but when the member puts it that way it makes me realise that the 85 to 90 percent may be too conservative.
Hon David Cunliffe Link to this
Has Minister “2 Percent” reassessed the business case for asset sales in light of the increased $900 million in dividends, excluding Genesis, which is yet to report; and can he confirm that this recent increase in the dividend stream would be lost to the New Zealand taxpayer if his sale programme goes ahead?
No, I cannot. The Government would be the 51 percent owner, so the Government would receive 51 percent of the dividends. The $900 million figure that the member quotes includes a one-off payment associated with the asset swap in the South Island, as do a lot of the previous dividend figures that he quotes. In fact, the underlying dividend is only about $380 million.
David BennettI have already mentioned Air New Zealand, which has operated as a mixed-ownership company for some years, because it was set up that way by the previous Labour Government. Another similar case is the Port of Tauranga, which is 55 percent owned by the Bay of Plenty Regional Council and which has experienced, in recent years, a growing proportion of New Zealand ownership because it is a well-run and profitable company. Its share price has almost doubled in value over the past 3 years, making it close to the best-performing stock on the New Zealand Exchange. The Government would expect that if these companies are floated, they will also be high-performing stocks on the New Zealand Exchange.
Hon David Cunliffe Link to this
Given that the carnage on international sharemarkets has seen New Zealand’s listed energy stocks fall by 20 percent already this year, and given that that is a number the Minister is well acquainted with, has he revised downwards the expected proceeds of selling Genesis, Meridian Energy, and Mighty River Power; if so, by how much?
I think the volatility in those sharemarkets underlines the wisdom of the Government’s decision, which that member has opposed, to borrow billions of dollars and invest New Zealanders’ money on those foreign sharemarkets through the Superannuation Fund. With regard to guesses about the funds that might flow from a float, Treasury made a best estimate some time ago, and the Government would want to make the best of conditions at the time. But, no, we have not revised that estimate.
Hon David Cunliffe Link to this
How much lower would equity markets have to plummet before the Government suspended its asset sales programme, or would it sell at any price, because it is driven by ideology, not value for taxpayers?
The Government is not driven by ideology in this case. In this case it wants to provide opportunities for New Zealand savers to invest and to source capital to invest in hospitals, schools, and broadband, so we do not have to borrow it from foreign lenders and pay them interest.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. The Minister has not addressed the question, which asked by how much lower would equity markets have to fall before—
Mr SPEAKER