3. Hon CLAYTON COSGROVE (Labour—Waimakariri) Link to this
to the Prime Minister
Does he stand by all his answers to oral question number 6 yesterday?
Rt Hon JOHN KEY (Prime Minister) Link to this
Yes, although I want to take this opportunity to clarify one point. I said yesterday that off the top of my head the cost of the Contact Energy initial public offering as set out in the recent Official Information Act reply to the Leader of the Opposition was 1.9 percent of the total amount raised. It turns out that the cost was only 1.8 percent of the total amount raised. That compares with average initial public offering costs of 7 percent in the United States, 3 to 4 percent in Europe, and 2 to 10 percent in New Zealand. In this context the cost of the Contact Energy initial public offering was low, and my expectation is very strongly that that will also be the case under the mixed-ownership model.
Hon Clayton Cosgrove Link to this
Has the cost of advisers’ fees in relation to floating the energy companies and Air New Zealand been factored into the Crown accounts; if so, how much?
I cannot be 100 percent sure, but I would imagine that they were, because we have taken ultimately into the Crown Budget the expectation of capital that we would raise, and that would be net capital, I would have thought.
Hon Clayton Cosgrove Link to this
Is it not true that Treasury has advised the Government that recent floats have cost up to 9 percent of the sale price, meaning that selling State-owned energy companies and Air New Zealand could cost up to $600 million?
No. What it means is that the last time an initial public offering was done by a National Government it cost 1.8 percent, and it is my expectation that any other asset sales of a mixed-ownership type would be of the same magnitude.
Hon Clayton Cosgrove Link to this
I seek leave to table a memorandum of 17 May 2011 to the Minister of Finance and the Minister for State Owned Enterprises from the Crown Ownership Monitoring Unit, which states “In New Zealand large IPOs in recent years have cost around 2 to 9 percent.”
Mr SPEAKERHon Clayton Cosgrove Link to this
Will Kiwi mums and dads on the average wage and facing steadily rising costs of living be able to buy shares in State-owned companies directly?
Absolutely they will. They will be buying them not only through their KiwiSaver accounts, of which there are 1.7 million, but also through many other means. One of the differences between this Government and the Government that the member was part of is that this Government is delivering real wage growth to New Zealanders, and under his Government there was no real wage growth to speak of. I know that the Leader of the Opposition is in Greece at the moment, checking out its economic policies, but I suggest—
The right honourable Prime Minister was fine until that point, but members do not refer to the absence of any member from the House.
Hon Trevor Mallard Link to this
Why is the Government engaging international energy capital experts, if its priority is to sell to New Zealanders?
I do not know which Minister is asking for that advice, but I can say that we have laid out very, very clearly what our expectations are under the mixed-ownership model. We have made it absolutely explicitly clear that we expect New Zealanders to be at the front of the queue.
Grant RobertsonWell, I say to Mr Robertson, the good news is that Treasury is working on exactly making sure that that happens, and I am absolutely confident that the 1.7 million KiwiSaver accounts, the billions of dollars invested in the New Zealand Superannuation Fund, and the billions of dollars invested in ACC will be invested, and that the many thousands of retired New Zealanders who have extra savings, and many other New Zealanders, will invest in it. I say to those New Zealanders that here is their chance: they can invest in a good New Zealand company, or continue to look to Labour, which will deliver them a failed finance company or something to invest in.
Hon Trevor Mallard Link to this
In light of his acceptance yesterday that some of the shares will be sold offshore, are Chinese or Australian investors his priority?
That is not what I said yesterday, and the member should go back to Hansard. I refer the member to, actually, Treasury’s advice to the Government that widespread and substantial New Zealand ownership of assets is achievable.
Hon Trevor Mallard Link to this
I raise a point of order, Mr Speaker. No, I will leave it, Mr Speaker, but I will remind you of our discussion yesterday—
Hon Trevor Mallard Link to this
Can I request that you refer to the Standing Orders Committee that answer of the Prime Minister, with reference to finding a midpoint between a breach of privilege, which involves deliberately misleading—
I am not happy with that at all, because that was a technical way of alleging that the Prime Minister, in the member’s view, misled the House, and that is unacceptable. It is not the way to handle that matter. The only conclusion I can draw is that the member was attempting to score a political point through doing that. The point of order process should not be used for that purpose. When the member asked his question, the Prime Minister claimed that his Hansard would show that he did not say what the member alleged in his question. The Prime Minister is entitled to do that, so I think that is where the matter should end.
Hon David Cunliffe Link to this
I seek leave to table a statement of specific fiscal risk from the Budget Economic and Financial Update—
Hon David Cunliffe Link to this
I seek leave to table a compilation of data from the company accounts of Meridian Energy, Mighty River Power, Genesis Energy, and Solid Energy, which shows they—
Hon David Cunliffe Link to this
The source is the annual company reports pulled together in a composite document.
Hon David Cunliffe Link to this
I seek leave to table a table of dividends, supplied by the Parliamentary Library, taken from the annual statements of accounts of State-owned enterprises from 1993 to 2010, which shows that the combined dividends of the State-owned enterprises tagged for sale were over $700 million last year.