10. KATHERINE RICH (National) Link to this
to the Minister for State Owned Enterprises
Is he confident that expanding the scope of SOEs will result in broader benefits to the economy when the Treasury, the Government’s main policy adviser, says “the benefits of expansion are unlikely to be substantial”, and CCMAU says “that new initiatives can, and should occur, within the existing operating framework for SOEs”?
Hon TREVOR MALLARD (Minister for State Owned Enterprises) Link to this
Yes, because—unlike the National Party—I do not take everything Treasury says as gospel, and neither comment is correct.
So, in backing this risky plan, what does the Minister know that the combined brains of Treasury, the Crown Company Monitoring Advisory Unit, and the Ministry of Economic Development—all of which have expressed concerns—do not?
Hon TREVOR MALLARD Link to this
I would have thought that, being the day after yesterday, today is a very bad day to put a lot of confidence in people of that background.
Rodney HideI raise a point of order, Madam Speaker. It is very interesting to hear about this day being the day after yesterday, but pointing out that obvious fact cannot possibly be regarded as addressing that question.
Madam SPEAKER
Moana MackeyDoes the Minister believe that the boards of State-owned enterprises have the expertise necessary to give effect to this latest policy change; if so, why?
Hon TREVOR MALLARD Link to this
Yes. The boards of our State-owned enterprises contain a lot of very experienced and talented business people, many of whom were appointed by the previous National Government. I note that John Key has said he believes that board chairs are Labour Party cronies. I wonder whether he told Wayne Brown, Wayne Boyd, Alison Paterson, Brian Corban, or Jim Bolger that they are Labour Party cronies.
Gordon CopelandWhy, when one of the lessons of the 20th century is that Governments are not good at running businesses, does the Minister steadfastly cling to State-owned enterprises having 100 percent State ownership when a minority sale to mum and dad investors has the potential to revitalise those businesses, lift local savings and investment, and advance the transformation of the New Zealand economy?
Hon TREVOR MALLARD Link to this
Looking at Air New Zealand, Telecom, Tranz Rail, and other wonderful assets that were hocked off in the past in a way—[ Interruption]
The Minister cannot be heard. As I said, interjections are permitted, but not barracking to the point whereby other members in the Chamber cannot hear the answer.
Hon TREVOR MALLARD Link to this
This time I would back the governance and management of State-owned enterprises against that of the privatised companies that have not been doing very well recently.
When the Minister has just expressed confidence in the current stable of State-owned enterprise directors, does he share the Ministry of Economic Development’s concerns “about the ability of the current governance arrangements to cope with this new direction”, and that “State-owned enterprises would require greater and different kinds of commercial acumen to that which is currently expected of State-owned enterprises boards and management”; if not, why not?
Hon TREVOR MALLARD Link to this
We have been doing a lot of improving over the last 6 or 7 years. People like Michelle Boag, a former National Party president who is very close to the National Party; Michael Cox, who was the partner of a Minister at the time; Lindsay Tisch, who was at that time a recently failed MP; Margaret Moir, who was in a similar category; John Armstrong; and Graeme Reeves were all hacks who were put on to State-owned enterprise boards, and we are cleaning them out pretty well.
Could the Minister please advise the House, in referring to Telecom, Air New Zealand, and New Zealand Rail, which of those companies, if any, had a partial minority sale down to mum and dad investors of New Zealand?
Hon TREVOR MALLARD Link to this
Telecom was partially a trade sale. There was a float within New Zealand by way of application, and a lot of mums and dads bought into it.
Does the Minister stand by his Cabinet paper that indicates one reason for encouraging State-owned enterprises to diversify is that “… we do not want SOEs to get into a rut, to become too predictable and boring for those who work in and with them.”; and since when has risking taxpayers’ money been about creating a workplace that is not boring or a State-owned enterprise that is not boring to work with?
Hon TREVOR MALLARD Link to this
Frankly, a “steady as she goes”, “no change” approach has caused us to lose some talented State-owned enterprise executives. I would prefer their jobs to be challenging, and sometimes that involves those State-owned enterprises having a bit of skin in the game.
Is the Minister saying that is an OK reason to embark on a risky expansion programme to create a workplace that is not boring, and does the Minister know the difference between a State-owned enterprise and a social club?
Hon TREVOR MALLARD Link to this
Clearly that is not the only reason one moves in that way, but I think if it does hold talented executives in State-owned enterprises, then that is another good reason for doing what is good transformational policy.
Hon Dr Michael Cullen Link to this
Can the Minister confirm that one example, which has already been undertaken, was Meridian Energy’s expansion into Australia, which enabled it to purchase wind power at much reduced cost and also led to a very substantial profit on the sale of those Australian assets?
Hon TREVOR MALLARD Link to this
From memory it was either $600 million or $800 million in profit, which I think has made a very worthwhile contribution to Auckland roads. I know that members opposite opposed it at the time, but that does not surprise me.
Rt Hon Winston Peters Link to this
Can the Minister confirm, on the question of State-owned enterprise management, sale, or otherwise, whether he recalls the sale of the BNZ, which at that time had 60 percent—[ Interruption] History is important for a young lad like that member. It might pay to learn some.
Rt Hon Winston Peters Link to this
He should be shot out of the House. He intervened while I was asking a question.
The member is actually right. All members are entitled to the courtesy of not being interrupted when asking their question. Would the member please start again.
Rt Hon Winston Peters Link to this
Does the Minister remember the sale of the BNZ in October 1992 by the National Government, which was then led by Jim Bolger, when the BNZ had 60 percent of New Zealanders as banking customers, and the subsequent taking up of the job of heading Kiwibank by one Jim Bolger, and is that evidence that the National Party has learnt something from its past experience or—going by that question today—that it has learnt nothing at all?
The Minister is not responsible for National Party members, but if it is within the responsibility of the Minister, in terms of the chair, and it is addressed in that narrow way, then that should be within the Standing Orders.
Gerry BrownleeI raise a point of order, Madam Speaker. That is a very, very loose interpretation of the Standing Orders. It would lead us to the point where somebody who is sympathetic to a position the Government wanted to advance could ask any old question. A Minister could then attempt at least to give an answer that might placate both the proposer of the question and the Government’s own ends. Question time should be to question Ministers about things for which they are responsible. This is hardly one of those questions.
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. The fact is that Jim Bolger was the National Party Prime Minister who sold the BNZ. He is also the former National Party leader who took a job as the head of Kiwibank. Surely, as he was not included in the list of hacks explained by the Minister, that is a fair question to ask. The question is whether the Minister takes that as evidence that some people learn from their experiences. He made the appointment, after all, not them.
The Minister does not have any responsibility for what National Party members may learn from their experience, so the question from that point of view is out of order.
Hon TREVOR MALLARD Link to this
I raise a point of order, Madam Speaker. I do, though, I think have responsibility for what State-owned enterprise board chairs learn from their experience.
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. That member has made it his responsibility to get up and raise totally nebulous, silly, and irrelevant points of order, and he should not be allowed to get away with it. The fact is that Jim Bolger did sell BNZ, against a lot of opposition in this House. He then took the job as the head of Kiwibank, and my original question related to the matter of experience. After all, that Minister belongs to the Government that made the appointment, and I am entitled to ask whether he thinks it has got anything from it. The fact that the National Party is deeply embarrassed by it is neither here nor there.
Hon TREVOR MALLARD Link to this
I can confirm that Jim Bolger was the chair of New Zealand Post. He subsequently became the chair of Kiwibank. He is a very good chair and is someone who understands the role of State-owned enterprises expanding in order to add economic value. I do know that, both at the time and subsequently, National Party people opposed that expansion, because they just do not like the New Zealand taxpayer owning anything.
Does the Minister guarantee that State-owned enterprises will not diversify into markets already served by private sector businesses?
Hon TREVOR MALLARD Link to this
I suggest that the member reads the Cabinet paper and the press statement.
Hon TREVOR MALLARD Link to this
It is made very clear, both in the press statement and in the Cabinet paper, that there is a requirement for spillover benefits. Shunting a private sector company out of a small niche market is something that just would not be acceptable under those criteria.
Dr Don BrashI raise a point of order, Madam Speaker. Mr Copeland asked the Minister a question during the course of that questioning about whether Telecom had been partially sold down to mum and dad investors. There was quite a lot of noise going on in the House and I am not sure I heard the Minister correctly, but I think he said that, yes, Telecom was sold in part in a trade sale, and in part to mum and dad investors. My recollection is that Telecom was sold outright in 1990 by the Government, of which Helen Clark was Deputy Prime Minister at the time, to a series of large American corporates and a small number of—I think, two—New Zealand wealthy investors.
Hon Dr Michael Cullen Link to this
It would be very helpful to have all the facts. The member got as far as his memory took him; however, he forgot it was a condition of that sale that there was a subsequent on-sale down on the New Zealand sharemarket.
This is all very interesting, but I want to rule on this point of order. They were not points of order, though they were points of information.
I seek leave to table a prospectus for the privatisation of Auckland airport, signed by the Rt Hon Winston Peters.
Rt Hon Winston Peters Link to this
I seek leave to table all the surrounding publicity for that sale, which was exclusively to the New Zealand market, in respect of those shares that went on the market that day at a price way above anybody’s expectations—so one could say it is the only successful privatisation this country has ever seen.