10. STUART NASH (Labour) Link to this
to the Minister of Finance
Does the Government’s privatisation plan include parameters which would cause it to cancel sales, such as low sale prices or high dividend yields; if so, what are the parameters?
Hon BILL ENGLISH (Minister of Finance) Link to this
In the first place, the Government is not getting ahead of itself. It has always said it would get a mandate from New Zealanders before proceeding with the detailed plans for the sale. The mixed-ownership model is about achieving long-term value for taxpayers. The Government has said that if it is re-elected, such a programme would be spread over 3 to 5 years, which gives the Government ample flexibility to adjust to market circumstances. In the current environment, demand from New Zealand investors is likely to be strong. The NZX 50 Index has risen 27 percent in the past 18 months, and that looks reasonably favourable, at least at the moment.
Has the record $900 million of dividends returned to the Crown by the State-owned energy companies in the last year, on top of an average rate of return of 17.5 percent over the previous 5 years, caused him to reassess the economic case for selling these highly profitable State-owned assets?
As I pointed out yesterday, of the $900 million the member is talking about, at least $500 million is a one-off capital release as a result of the sale of assets between Genesis and Meridian Energy. The fact is that until this Government came into office and lifted the performance of these State-owned enterprises, they were pretty abysmal. They are better now, and under the mixed-ownership model they will improve further.
Given that 75 percent of New Zealanders earn below the average wage of $50,000, and only 1.5 percent earn above $150,000, what percentage of hard-working Kiwi families does he think will be able to afford $4,000 to directly buy shares in an asset they already own?
New Zealanders will have the opportunity to own these assets in a number of ways. First, the Government will retain 51 percent ownership. Second, we expect significant investment by the New Zealand Superannuation Fund, which holds assets on behalf of all New Zealanders. KiwiSaver funds, which—
I raise a point of order, Mr Speaker. I have listened to the other two answers, and they have really been off the point. This one, really, I do not want to know who will own the shares, I just want to know what percentage it will be. The question asked what percentage of New Zealanders—just a rough percentage—he thinks will be able to afford to buy these shares.
Mr SPEAKERWith respect, the Minister was in the process of explaining why he believes that some percentage of New Zealanders will be able to afford to own them. He was talking about the Government owning 51 percent; I think he was going on to talk about funds owning some of these shares. When the member asks that kind of question, which is a hypothetical question, he cannot expect a precise answer. I think the Minister has some latitude in how he answers it. So far he has been answering the question in terms of why some percentage of New Zealanders should be able to own those shares.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. With all due respect, the question was about direct ownership, not about indirect ownership via funds or via the taxpayer.
I do not recollect the question being quite so specific. It talked about, if I remember correctly, where people with $4,000 could be found to own these shares. The question was hypothetical. It is not the kind of question for which I can insist on any particular answer. I think the Minister was not criticising the questioner; he was explaining why he believes New Zealanders will be able to own these shares. I do not know whether he was arriving at an estimate, but I cannot stop him at this stage, when he has not departed from the Standing Orders in answering the question so far. I ask the Hon Bill English to finish his answer.