Mixed Ownership Model Bill

We move now to Part 2, which is the debate on clauses 12 to 18 and schedules 1 and 2.

Given the speed with which we enter the debate on Part 2—I hope the precedent set in Part 1 is not going to be followed—I want to come directly to new section 45S, “10% limit on holdings by persons other than the Crown”, in clause 16.

It was interesting during the Finance and Expenditure Committee hearings, because we heard from a number of professional, technical submitters who have knowledge in this area. To quote one of them, you could drive a bus through the 10 percent ownership cap. The thing I find interesting—and the grinning Minister in the chair, the Minister for State Owned Enterprises, might be able to shed some light on this—is that nowhere in this piece of legislation is there a penalty for exceeding the 10 percent cap. It does talk about a remedy in new section 45T(1)(b) in that the contravention, essentially, has to be remedied within 60 days, but there is no penalty, monetary or otherwise, for exceeding that.

One of the submitters—and I am trying to recall her name—from a thinktank in New Zealand said that in order to police this 10 percent cap you would have to have some sort of securities police force, I think was the term that was used, actively policing and scrutinising every transaction. In fact, the committee put to the officials an interesting scenario of, say, overseas owners who were mum, dad, and a son, and asked whether there would be some related-party transaction if the son were to buy 10 percent and mum and dad were to buy 10 percent as well. The answer was, essentially, if the son was under the legal age of an adult, then he was under the influence of his parents and there would be. Once he hit the legal age of an adult, he could buy 10 percent, and there would not be a problem. So there are a number of difficulties and problems with the 10 percent cap, such that it is.

The question is in respect of nominee trusts, also. Well, the trustees, corporations, and others that can exceed the 10 percent cap have an exemption, but there were a number of commercial vehicles and scenarios that were put to us by the submitters whereby, especially if they were foreign-owned and outside the New Zealand jurisdiction, you could get round this. So I would like the Minister to give us some sort of assurance. He has not in the past. He has not addressed the issue. Maybe, like other issues in respect of power prices, he has not bothered to ask the question because he does not want the answer, but I would like some assurances around those. We have an amendment in my name, Supplementary Order Paper 49, to limit that cap to 1 percent, and we do that deliberately. We do that deliberately because this so-called cap has actually got to work.

I also want to turn to the provision that relates to the Treaty of Waitangi, new section 45Q. Members will recall, of course, that much was trumpeted by the Māori Party members and others—

💬 Hon Parekura Horomia: That’s right. They’re a disgrace.

They are a disgrace, my colleague says. They are, because they are voting for this Mixed Ownership Model Bill. The Māori Party went around the marae saying that “We will ensure that Māori interests are secured in this bill.” OK, fair go, that is all right. We thought those members were acting in some sort of responsible way, until Tūwharetoa, in the form of the Hon Georgina te Heuheu, a former National Party Cabinet Minister and a respected lawyer, turned up to the committee. Tūwharetoa were armed to the teeth with legal advice, and, essentially, upon questioning, told the committee that the so-called replication clause in this bill, which has been taken from the State-Owned Enterprises Act, with a tweak of course—new section 45Q—did not preserve their Treaty, customary, legal, or property rights. They also told us that very little consultation at that time had occurred with them. So I say to the Māori Party members, who went around the marae and trumpeted that they were the saviour of Māori interests, that they had forced the Government, put its feet to the fire, to put in a replication clause to look after those interests, well, Georgina te Heuheu and Tūwharetoa do not agree with that. They do not agree with that. I argue that it is smoke and mirrors.

It was interesting, because Tūwharetoa made it very, very clear to the committee that they would seek legal remedies in any form—primarily, I believe, through the courts—to ensure that their rights were preserved. It is interesting in respect of the Minister’s officials, because we asked for advice on this, and like many times in that select committee process we had an absurd situation. We posed questions to the officials. And I do not blame the officials; they were under instruction both from the Minister and, we know, from the chair, who instructed them in the select committee to bring their report on the submissions on a particular date ahead of when those submissions had been made. At the direction of the chair, on his own admission—presumably, under instruction from the grinning Minister in the chair—a report was prepared by Treasury on the submissions prior to those submissions being concluded.

One of the issues that we pursued with the officials was whether they were confident that Tūwharetoa’s concerns had been addressed. We found out that, yes, there was consultation with Māoridom. Yes, there was. But when we asked these questions the answers we got back were based on a Cabinet paper that postdated those consultations on the marae but pre-dated Tūwharetoa’s submission to the committee. I assume that the officials, being the diligent and professional souls they are, would have put the factual situation to the Minister, and the Minister would have said scrub that. At that point, we wanted to pursue these issues directly with the officials. At that point, of course, we now know, and the record shows it, and the minutes of the select committee, which the Government members tried to block up until last week, show it—but we got them out anyway, and legally and appropriately; they did not want the public to know that at every step they had blocked questioning—the chairman of the committee moved that the Opposition parties should prepare minority reports. So on the same day that the Government asked the officials about these substantive issues, like Tūwharetoa’s concerns, we were to prepare minority reports and have them submitted to the committee—prior to the officials coming back with those answers.

💬 Hon Lianne Dalziel: That’s outrageous.

That is outrageous. It is outrageous not because it is about politicians, but because the public actually expects us to do a job. That member over there, Mr McClay, I am told—I was not in the Chamber—said that the Opposition members did not ask questions. Well, I tell you we asked questions all right. All of the political parties asked questions. We were permitted to ask only one committee question of most of the submitters, and, regardless of the fact, this bill was reported back to the House 6 weeks in advance. There was no need to rush it. There was no need to write a report before Tūwharetoa’s concerns had been addressed. We raised these issues about the 10 percent cap, and Tūwharetoa, and these substantial questions, and the committee, presumably under the stewardship and instruction of the grinning Minister in the chair, just said: “We don’t want to know. We’ve already written the report. We don’t want to listen to the submitters. Our way or the highway.”

As a result of this, we have vulnerabilities in this bill, and Labour members have put up very serious amendments in respect of the 10 percent cap. I do not believe that Tūwharetoa’s concerns have been even addressed by this Government. We do not know what has been said behind the scenes, and, of course, because we have had no report back from Tūwharetoa and we have not had the officials under instruction seriously consider these issues, we do not whether those rights are going to be preserved or not. We do not know. I say this to the Minister: it will be very interesting, after he has sort of slipped this one through as fast as he possibly can, to see whether it comes a gutser or is stalled because of court action by Tūwharetoa or others. If I were an investor about to participate in a float, I would be putting up a big sort of caution sign, if I knew that that float could be confronted by court action by the tribe, or anybody else. Why would you invest? Then, of course, that affects the market price, and, of course, the taxpayer gets hit both ways.

But, oh no, bloody-minded as it is, National will push it through, with a lack of scrutiny. In fact, you know, even the most cynical politician from time to time, like this crowd, might put on an act and go through the motions. Those members were not even sophisticated enough to do that. It was blatant. It was in your face. It was: “We don’t care. We’ve written it. We’ve done the report. We don’t even take seriously the issues put forward.”—and they were put forward by one of their own former Cabinet Ministers and an eminent lawyer, the Hon Georgina te Heuheu. That tribe came to our committee armed to the teeth with professional, legal advice. So the Minister should place on record, as he—

This part of the Mixed Ownership Model Bill, Part 2, puts in the law a number of the very important features of the whole mixed-ownership model, particularly the 51 percent legislated guarantee—that the Government will retain 51 percent of all shares in these State-owned enterprises—together with the 10 percent cap on any other shareholder. This stands in quite strong contrast to the rules around the sale of State-owned enterprises when a previous Labour Government sold $9.5 billion of public assets in the 1980s—$9.5 billion. There was never a requirement of 51 percent Government ownership. Labour sold 100 percent to the Americans and Fay Richwhite. It sold 100 percent of the Shipping Corporation. It sold 100 percent of Petrocorp. It sold 100 percent of everything to the highest bidder, and ordinary people never got a look in. Under this legislation we are maintaining 51 percent New Zealand control, as a minimum owned by the Government, and a 10 percent cap on any other shareholder.

The important point behind all of this legislation is the need to help our country control its debt, and this is part of a wider plan that this Government has to help control our nation’s debt and grow and protect our economy in the years ahead. With the world economic climate as it is, this Government inherited a national debt of around $8 billion. In our role to protect our economy from the sharp edges of recession, that debt has grown to $52 billion today. It is projected in the next 2½ to 3 years to grow to $72 billion.

💬 Louise Upston: How much?

Seventy-two billion dollars. We must control our debt. If you look at what is happening all around the world in Europe, the United States, and Canada, countries that do not control their debt get themselves into significant trouble. If you look, for example, at Portugal, whose overall debt, public and private, is remarkably similar to where New Zealand is—in that zone, with Portugal, Ireland, Greece, and Spain—Portugal, for example, has announced, I think, an 11 percent cut in its public health budget. This is what happens when countries let their debt get out of control. That is the reason why this Government has a plan, which includes freeing up 49 percent of a range of State-owned enterprises, keeping control at 51 percent, with a 10 percent cap on any other shareholder, and taking those proceeds to put into a Future Investment Fund, which will then allow us to have resources to grow our economy and to grow our investments without having to grow our debt.

That is all at risk. If the Government changes in 2014, we know that the party opposite has said that buying back these assets is not off the table. That is what those members said on television last week: buying back these assets is not off the table. If it is not off the table, it is on our debt, because that is the only way that Labour could buy these back in the unfortunate incident, and that is why 51 percent Government control is so important, as well as a 10 percent cap on any shareholder. That is because we need to make sure that we have this as a part of our plan to protect our economy, control our debt, and move forward in the future.

This bill includes a Treaty of Waitangi clause. The Government undertook a very, very lengthy iwi consultation process of about 10 hui up and down the country. Hundreds of people attended, and I attended a number myself. It gave Māori an opportunity to talk about what interests and concerns they had. As a result of that and discussions with our confidence and supply partner, the Māori Party, we did translate into the legislation the Treaty clause in that legislation, without requiring it, though, to apply to the private shareholders involved in this company. So we did that quite openly.

This legislation has been to a select committee. There has been no urgency in respect of this. We have been quite upfront in our commitments. When the Prime Minister announced in January 2011 that we would have a 51 percent minimum shareholding for the Government and a 10 percent cap on any other shareholder, this was the first time a Government had actually campaigned openly on the sale of part of State assets. Because when $10 billion of assets was sold in the 1980s, the Government never told anybody.

I rise to speak on Part 2 of the Government’s proposed privatisation bill, the Mixed Ownership Model Bill, that is before the Parliament tonight. We have a number of Green Party amendments. There are a number of amendments in my name to this bill. I was not able to get the call again to talk to some of the amendments in the truncated debate on the previous part, which I thought was most unfortunate. Here we are, debating this very serious bill in front of Parliament, but we were not able to have sufficient debate so that you could even get a chance to talk to your amendments. But I guess that is the way this Government likes to work.

So I want to try to get to at least two of my amendments tonight, to talk to them, but I think it is important that we actually have an extended debate on this bill in the Committee tonight, given that it is a fundamental bill. A very important part of New Zealand’s assets is being privatised, and there is enormous public interest in this legislation. There is enormous public opposition, and I would really call on the Government and the Chair to enable maximum debate on this bill because there is maximum interest.

Before I talk about a couple of the amendments, it is worth countering some of the arguments of the Minister, who graced us for a few minutes with his arguments around privatisation and why it is such a good idea. Of course, it was the debt argument that Mr Ryall reached for, which of course has now become the Government’s favourite argument around privatisation. Of course, it was also the favourite argument that was used by Roger Douglas when he talked about the privatisation programme. As Roger Douglas later admitted, it does not make any economic sense to use the debt argument around privatisation, but it makes political sense, and that is why the Government is now trying to use the debt link to privatisation argument. But, of course, in the long run it adds to Government debt because it adds to the Government deficit.

In terms of the Minister’s argument, there was a very interesting, I thought, slip of the tongue in his argument, when he talked about the country’s debt, rather than the Government’s debt. Normally when the Government mounts this argument it tries to talk about it purely in terms of Government debt, but he actually talked about it in terms of the country’s debt. Of course, the reality is that this privatisation programme, to the extent that the shares are bought by New Zealanders, makes no contribution to New Zealand’s net international investment position. The only way that it actually assists with our net international investment position, or rather, in terms of debt in particular, is to the extent that there is overseas purchase of these assets.

In terms of the domestic sector within New Zealand, if there is simply a transfer of these assets between the Crown and the private sector, and then the private sector in return pays for those assets, overall the country is no better off. But when you look at the actual debt projections of the Government, which of course the Minister did not want to talk about, the net international investment position overall in the years ahead is that it gets worse. Regardless of the privatisation programme that we are debating tonight, when you look at the Government’s actual economic forecasts, both those contained in the Budget and those projected by the Reserve Bank, New Zealand’s net international investment position gets worse.

So when the Government tells us, as the Minister did when speaking to his bill just now, that this is part of its plan to reduce debt, it is not. The Government’s plan is to increase debt. The Government’s plan is to increase the current account deficit. The Government’s plan is to increase the net international debt of New Zealand, because that is in its own projections, and that is the lie to the argument around debt.

I did want to talk to the amendment around the referendum. What I have put up here is an amendment to clause 16 for a prohibition on the disposal or issue of shares before the referendum. The basic point of this amendment is to make sure that there is no disposal or privatisation of the shares prior to the citizens initiated referendum either taking place or expiring the amount of time that we have to collect the signatures. This has been, I think, a very important part of the democratic process of New Zealand.

On the one hand the Government says it has a mandate, even though the Government did not get a majority in the House, and, as we have been seeing in the votes on the bill tonight, the vote on this bill is as close as it could possibly be. It was 61 votes to 60 on the last vote on Part 1. So the vote is as close as it could possibly be in this House. There cannot be a closer vote, a more narrow majority, than 61 votes to 60, as we had on Part 1 in this Committee just now. Yet the Government is claiming a 61 to 60 vote, the narrowest possible vote, as a mandate for the privatisation of assets. It is no such mandate.

What this amendment seeks to do, if the Government is so confident of its position on the privatisation of electricity companies, is to put the question and enable this process to go forward with regard to the citizens initiated referendum. This referendum gives New Zealanders the opportunity to force a referendum. It is true that the referendum is not binding on the Government, and we are not proposing to make it binding on the Government through this amendment. But what we are saying is that what is binding on the Government with this amendment is that the actual sale of the shares cannot proceed until the referendum is held.

I believe that once the referendum has taken place, we will find that the vast majority of New Zealanders will not support the Government’s privatisation programme. I was told tonight that the National Party itself is receiving resignations from members of the party as a result of this privatisation programme. Amongst National Party members and voters there is not support for the privatisation of their assets. National Party voters understand, like the voters for all the other parties in this House, that this is a very stupid idea. So National Party voters do not support it.

That is why the polls show a majority of voters from probably pretty much every political party, except possibly ACT, are opposed to the privatisations. This amendment is about giving those people, ordinary mum and dad New Zealanders, mums and dads in New Zealand, and single people as well—I do not know why the Government thinks single people do not count, and it is always mums and dads, but anyway—ordinary New Zealanders, the right to have their voice on this issue. I would ask the Government and I would ask Peter Dunne to support this amendment, because all it takes is one vote.

Everything on this bill is so finely balanced, because there is only one vote in it. We need only one person from the other side of the Chamber to see sense and support an amendment like this and we can go through a process whereby there is a referendum. If we are unable to collect the 350,000 signatures that we need to force a citizens initiated referendum, then the provision would lapse. It would not apply. But I am very confident that we will collect the signatures we need to do this, because New Zealanders are up in arms about this asset sale programme.

I would just like to talk about another part of the Mixed Ownership Model Bill. This Part 2, which we are looking at at the moment, essentially seeks to set up these mixed-ownership model companies. The thing about it is that the impact of setting them up will be that people are going to be colder. I mean, that is the truth, right? We should just admit the truth about what this means. We are in the middle of winter, people are freezing cold all over the country, and they are struggling to pay their electricity bills. What this bill really means is that mum and dad and children New Zealanders—ordinary people and families—will be colder in upcoming winters.

This winter will be OK, while the companies are still owned by the Government, but in future winters mum and dad New Zealanders will be colder as a result of this bill. It is the “You Can Get Colder and Can’t Afford Your Electricity Prices Bill” because that is what the establishment of these mixed-ownership companies under Part 2 of this bill will effectively do, by driving up power prices. That is the result of it.

Of course, although this Government is very keen on bashing beneficiaries, the beneficiaries in this case will be the overseas owners. The Government is not very keen on bashing overseas owners who are going to be buying up a good chunk of these overseas companies. They are the beneficiaries of this bill, who will be forcing up the price of electricity in New Zealand so that they can maximise their profits, which will mean that mum and dad New Zealanders cannot afford to run the electric heaters in their house and keep their kids warm. The beneficiaries—the true beneficiaries—of this bill, which the Government is trying to force through the House tonight, will be the overseas owners.

That is where the protections in this bill are completely inadequate. We will be moving amendments around that as well. The protections are actually just ridiculous. They are not going to work in terms of preventing overseas ownership of these companies. That means that the beneficiaries of this bill—the people who will earn the money as a result of this—will be the overseas investors.

Here we have a bill that on the one hand trades off ordinary mum and dad New Zealanders who cannot afford to buy shares in this company. They will not be buying shares in this company. Those people get colder houses and more expensive electricity bills courtesy of the National Party, the ACT Party, and United Future. The beneficiaries of this bill will be the overseas owners who get to buy up all the shares in the company because the protections in this bill are so weak. The protections in Part 2 are too weak to prevent the overseas buy-up of these companies, which we think is an absolute tragedy.

It is my pleasure to take a call on Part 2 of this bill, the Mixed Ownership Model Bill. In particular, I would like to speak to my Supplementary Order Paper 44 on this part of the bill. I have to say, I was disappointed that the Minister for State Owned Enterprises, when he took his last call, rather than focusing on Part 2 of the bill and the questions that we raised, instead decided to go back through the 1980s and dwell, instead, on other issues. He seems, like most of the National Party members over there, to have an obsession with the 1980s, and says that members on this side of the Chamber have forgotten our own history.

We know our history; we do. I do not often quote Winston Churchill—I do not—but I will. Winston Churchill once famously said: “When the facts change, I change my mind. What do you do, sir?”. Well, the facts are on the table when it comes to asset sales. We learnt our lesson. We have moved on from our alternative position of the 1980s. We learnt our lesson, and now we are challenging the National Government to learn that lesson also, rather than repeat the errors of old.

So I will ask again, in lieu of Mr Ryall having picked up on the questions that we asked to be addressed: why is there no penalty for exceeding the 10 percent cap? That was not covered by Mr Ryall. Also, Tūwharetoa’s concerns—which are extremely legitimate, and which were raised at the Finance and Expenditure Committee—over their rights not being protected by the changes that the Government has made within this bill were not addressed by Mr Ryall as the Minister in the chair. So I ask, instead, whether Minister Tolley would please address for this Committee those two very legitimate concerns that are being raised—in particular, on behalf of the people of Tūwharetoa.

But I would like to speak to the Supplementary Order Paper in my name, which refers to the way in which the companies in question will be referred to or characterised in this bill. That is particularly relevant to Part 2, which even begins with the heading “Ongoing provision for mixed ownership model companies”. My Supplementary Order Paper changes that title, changes the reference to “mixed ownership model companies”, and instead proposes that that be replaced in all areas in which it is referred to with the title “privatisation of public property company”. The reason for that is that we want to bring some transparency to this bill through the way that some of these companies are referred to, because we believe that the use of the word “partial” is quite misleading. I want to delve into why that is in my address.

First of all, the use of the words “partial mixed-ownership model company” implies a retention of the status quo, and that somehow the use of “partial privatisation” will still lend itself towards the outcomes that we already have. I think a lot of the debate in Part 1 lent itself to suggesting why that will not be the case for those companies that are addressed in Part 2. Why is that? It is because mixed-ownership models—which, of course, include partial privatisation—by default can often equate to the whole. Changing partially the way something operates can, in effect, change the way the whole beast operates. It does not matter whether it is 40 percent, 51 percent, or 100 percent, that can be the case.

We have some historical examples where that certainly has been the case. I want to reflect on what happened, for instance, with the way that over time the old Forest Service was altered in the way that it operated. The Forest Service, obviously, had been around for some time when in the 1980s it was transferred to the Forestry Corporation. When it was transferred to the Forestry Corporation, which had a different set of objectives that, again, tried to create a bit of a mixed model in a sense, it abandoned the objectives that were set in 1976, which were around the environment, the economy, and employment. In 1976 those were some of the extra things that were added to the old objectives from, I think, something like the 1930s.

But then in the 1980s all of that was dumped. It was dumped for the pure notion of a profit imperative. At that point the partial really overtook the whole in the way that that was going to be managed. Contractors were brought in in place of those who were full-time employees, and assets were sold off. In fact, it gets very, very interesting when we see a debate that happened during this sort of mixed-model event, when debate ensued—and I believe that this was in the very late 1980s and early 1990s—between the newly formed Forestry Corporation and the Government over the value of the forestry on its books, and over the value of the land.

You will be interested to know, Mr Chair and members of the Committee, that the way that the Forestry Corporation, with its pure profit imperative, decided to resolve this dispute it was having with the Government over the value of this land was to just sell it. It was to just sell the land—that was the way that that dispute was resolved. There we had an attempt to bring together some different ways of operating—some different modi operandi. At the end of the day, the overriding imperative at that time was profit. The partial became the whole. That is why we believe that the use of this “mixed ownership model company” turn of phrase implies something that is actually very difficult to achieve.

In the same way, we pointed out that the removal of the Official Information Act provisions is also very difficult to achieve, because even though there is still a State interest in these companies, the overriding interest of shareholders has taken over the way that it will operate. For instance, also, you could potentially get sued if these companies do not pursue the singular goal of the shareholder, which will be profit, again proving that “mixed” does not mean that the imperatives of the State will override the interests of shareholders. It is, again, implying that a mixed-ownership model is very difficult to operate.

If we look into the way that “partial” is referred to in the dictionary—and I thought this would be an interesting exercise; no one else may agree with me—and at people’s common understanding, it says “affecting only a part.” Can you affect only part of a board? Can you affect only part of a dam? It is incredibly difficult to do. I did, in fact, see an example of the use of the word “partial”. Here is a quote to explain the way that partial can be used: “The plans called for the partial deployment of missiles.” I quite like that. How do you partially deploy missiles? How do you partially privatise an asset? Either you privatise or you do not. I think that that has been the point to argue, which is why my Supplementary Order Paper amends—

💬 Hon Members: A little bit pregnant!

A little bit pregnant, yes. That is why my Supplementary Order Paper makes the amendment to replace “mixed ownership model company” with “privatisation of public property companies”. Because there is also an irony in the fact that “partial”, of course, is also a reference to favouring one person or side, and I think that is a point that we have made very strongly in this debate.

But the notion of privatisation, which is what we intend to replace the references to “mixed ownership model companies” in Part 2 with—with “privatisation of public property companies”—is because that plays very much to the understanding of the public over the meaning of privatisation, and that is, of course, the process of transferring ownership from the public sector to the private sector. It does not quibble over the proportion by which you do that, whether or not it is a mixed model, or whether or not there is a partial profit imperative, or a complete loss of social responsibility imperatives. It is the notion of whether or not something is being transferred from one form of ownership to another. That is privatisation, and that is what this bill does. So if we are truly being transparent to the public over what this bill put forward by the Government does, then we should, surely, enact that transparency over the way that these companies are referred to in Part 2 by no longer referring to them as “mixed ownership model companies”, and replacing that with “privatisation of public property companies”.

In fact, I would like to extend a challenge to the Minister in the chair that if, in fact, she stands by these companies still being called mixed-ownership model companies, then give us the difference in definition between the way that a mixed-ownership model company will substantively operate that is different from the way that, for instance, those private electricity retailers currently operate. For example, can she give us the substantive differences between the ways that this model will operate versus those current private electricity retailers in New Zealand? I would be very interested in those differences. If the Minister in the chair cannot demonstrate to us that there are any substantive differences, then my Supplementary Order Paper should stand, and that is for the renaming of the mixed-ownership model companies.

The fundamental question to be asked in respect of Part 2 of this bill, the Mixed Ownership Model Bill, is simply whether it is better to keep these assets and borrow more, or whether it is better to sell these assets and borrow less. It is a matter of assessing that balance. In making that assessment, it is also necessary to simply ask: are these assets, which are proposed to be sold, good investments for New Zealand, or are they not? The Government MPs have made it clear that they do not think that these are good assets to be held by New Zealanders, but they are wrong on that.

Government MPs do not acknowledge that the dividend stream from these assets is greater than the cost of borrowing what those assets are worth. They do not acknowledge, as they should, that in the long term it is better to keep 100 percent of the shares of these assets and all of the dividends that flow from them, and to repay debt over time. It is no different for a private business, where if it sells some of its most essential assets, it will threaten the viability of the business.

It is no different for New Zealand. These are essential assets for New Zealand’s prosperity and future, and simply for that reason alone we should not even consider the sale of them. The receipts from one-off asset sales do not benefit either a business in the long term or, in this case, New Zealand in the long term. These proposed sales will not even result in the surplus the Government has promised us for 2014. So we are going to lose these vital energy assets and get fewer dividends, and still have debt at the end of the process—perhaps a little less debt, but not significant.

I want to turn now to something that the Minister of Finance, Bill English, asked during his speech earlier today. We say that this bill makes so little economic sense that—in answer to that question by Mr English—yes, we would buy these assets back. And we would buy these assets back for the very reasons that I have already stated.

I refer members to the proposed amendment in the name of Winston Peters, who will move that there be an amendment to clause 16, to new section 45R, which will provide the power for shareholding Ministers to require that these shares be purchased back from their owners, require the company concerned to register a transfer of those shares, and decide the terms and conditions and the purchase price. It also says that the purchase price will not be more than the amount paid originally to the Crown for those shares by the original purchasers. So let it be put on notice that if New Zealand First in the future has influence on this matter—and I think we will—and if this part of the bill is passed, we would exercise that right and we would purchase those shares back, and on those terms and conditions, for not more than the amount that was paid for them. We believe that that is what New Zealanders want as well, and so that amendment should be passed.

Government MPs have erroneously said that it is not correct to include capital dividends from these companies in the assessment of whether the dividend stream is worth more than the avoidance of paying for the cost of the servicing of the loans. That is not correct. Capital dividends should be included in the assessment, simply because the source of those funds—capital in the companies concerned—is from accumulated profits, and they are created from the companies’ operations. Therefore, there is really no essential difference between capital dividends and ordinary dividends. People should not be persuaded differently from that simple truth. I do not think the Government is being very honest in the way that it has presented the information about that question.

The funds are the same in the hands of the shareholder, whether they are from capital sources within the companies concerned or by way of ordinary dividends. Companies often restructure their balance sheets and pay capital back to their shareholders simply because it is more expensive to pay dividends than it is to service a loan. Then, of course, the companies are free to borrow more and to restructure their balance sheet. That is also a lesson for the Government. If it is good for companies to do that and to understand that those dividend streams are so valuable, then that should be recognised in this debate, as well.

There is a good comparison here with what was a recent debate in Christchurch over whether Christchurch City should sell some of its valuable assets in order to help defray some of the capital costs of the earthquake. There has been a response published in the Press by Mr Bruce Irvine to Gerry Brownlee and David Carter, who encouraged the sale of those assets. The response by Mr Bruce Irvine, the chair of Christchurch City Holdings Ltd, was simply that it was not wise to sell those assets unless the shareholders so instructed. The council did not, of course, give any such instruction and Christchurch people are very clear in their position that they do not want those assets sold, either. Mr Irvine pointed out the reason. The reason is simply that over the last 10 years—

The CHAIRPERSON (Lindsay Tisch): Part 2.

—those assets—Mr Chairman, this is relevant to Part 2, because it comes back to the question of control and whether, indeed, those assets should be sold or not. The rate of return over the last 10 years of those assets is 15.2 percent, which is very similar to the approximately 16 percent that these particular assets, held by the Government, return to the people of New Zealand. So for the same reason, as I said at the beginning, it is much more valuable economically for the dividend stream to be retained from these assets than to have the process of repaying debt and saving on the debt servicing costs—a much better economic proposition altogether.

Another reason is simply this: why are people so against this proposal? It is simply that they feel that it is an attack on New Zealand sovereignty. The main reason for the opposition by Kiwis is simply that. Much of the figures and facts go over their heads, but they know one thing: they do not want foreigners to own our assets. That must be respected. They are the people who are not able to afford to buy those shares, nor are they able to afford to pay the higher prices for power that will result. They are deeply concerned about foreign control and they know that that will happen. They know it means the loss of resources, they know it includes precious water rights that will be lost to us, they know it means that the flow of dividends will go overseas at their expense, and they know that in the future they will essentially be buying New Zealand - generated power from foreign companies. They know that that inevitably will happen, and they also know that the 49 percent that the Government will sell will, sooner or later, turn into much more than 49 percent and will inevitably be 100 percent. We will see a total privatisation of these companies in due course.

The will of the people of New Zealand should be respected. There is only one way to find out what that is for certain, and that is for this Government to allow the current proposal for a referendum to go ahead. If that does not happen before this bill finally passes, that will be a travesty for New Zealand’s democracy, because the people have made it perfectly clear, in the sheer number who have signed up to this petition so far, that they wish to have their say on this matter. It is utterly idle for this Government to pretend that it has some kind of a mandate because of the results of the last election. There were so many issues in that election you would not know which person voted for which issue or for which party for whatever reason.

It is completely wrong for this Government to claim that it has a mandate. That simply cannot be the case. That is simple dishonesty. The only way to find out for sure what the people of this country believe, for some of the reasons I have already mentioned, is to allow that referendum to go ahead before this bill goes any further, and everybody knows that the Government is trying to push through this bill as fast as it can.

I want to speak to my amendment on Supplementary Order Paper 52, amending clause 16 of this bill, the Mixed Ownership Model Bill. It inserts new section 45Y, which is headed “New Zealand ownership”. I want to read it to the Committee; it is very simple and very clear. It states: “No person (other than the Crown) may have an interest in shares or securities of a mixed ownership model company unless they are registered to pay tax within New Zealand.” Subsection (2) applies the same thing to companies and other entities.

What this does is it says that before we sell the shares there must be an enduring relationship between the person or the organisation that purchases the shares and New Zealand. That means, according to the definition in the Income Tax Act of a “tax resident”, that the person must live in New Zealand for a minimum period of time each year—1 month out of 12. I accept that this amendment is a second-best solution. The best solution is not to sell the shares at all. That keeps the shares publicly owned—owned by all the mums and dads of New Zealand, owned by Kiwis as a whole, and built by our forebears. When I say that, Mr Chairman Tisch, I say that in relation to your electorate, I think, with some real feeling. My wife was born in the Waikato, in a little town called Mangakino. Her dad came back after 4 years as a prisoner of war, and he worked on the Whakamaru Dam. I tell you that Pat Moriarty would turn in his grave if he thought that that asset was being sold. He would turn in his grave twice if he thought it was being sold overseas.

I want to keep this Government honest. I am from the Opposition, and I am here to help the Government. This is what John Key said just a couple of days before the election: “We’re giving people a commitment”—mark that word “commitment”—“that 85 to 90 percent of the entire company”—meaning the power companies—“will be owned by New Zealanders. That is my commitment to them tonight.” I say this: here we are in the Chamber tonight, debating the legislation that the Prime Minister was talking about, and I want one member of that National Government to take the call and tell the House where in this bill this commitment is delivered. It is not. That was pure deceit by the Prime Minister. He promised something to New Zealanders, and he never delivered it. He never delivered it. I know what New Zealanders feel about that. They think they have been had. They accepted the word of the Prime Minister—nice guy, lovely smile. He has broken his word, and he has broken every other promise that he has made to this country.

Just the other day he was talking about class sizes, and he said he would not be so arrogant as to ignore what a majority of New Zealanders thought. Well, I ask the Prime Minister to apply that logic to the question of ownership of New Zealand’s assets. Every public opinion poll has shown two to one that New Zealanders do not want to sell their assets. What is it about that that National does not understand? I was watching the Bay Roskill Vikings play against Manurewa the other night. I acknowledge my colleague from Manurewa; they won by 66 to 10. In the hour and a half that I had to walk down both sides of the sideline I got 123 signatures calling for a referendum so that we do not sell our assets. Ninety-eight percent of them signed—98 percent—and that is really interesting; it is the same percentage of the 1,450-odd submissions to the Finance and Expenditure Committee that oppose this Government selling New Zealand’s assets. They do not want the assets sold. The National Party in Government is doing something against the wishes of New Zealand, and that will come back to haunt it.

That National Government knew all along what it was going to do. I have the Treasury documents here, advising National about the assets. The Treasury report says that significant participation by foreign investors will be essential to achieve the Government’s overall objectives—a significant proportion. When did the Prime Minister acknowledge that in the debates before the election? Where in this bill is there anything that acts on the Prime Minister’s commitment to New Zealanders that maybe only 10 percent of those assets would be sold off? We know that that is not going to happen. There is a 10 percent figure in here. It says that no person should be able to buy more than 10 percent of the entire assets. Do you know what that means? It means that two Russian oligarchs, two Chinese State companies, and one American pension fund could buy up half of New Zealand’s energy companies, not only to own half of the shares but also to effectively control them. That is a farce. That is a disgrace. Those National Party members of Parliament, particularly those who will lose their seats next time, should bow their heads in shame, because they will vote tonight against the commitment that the Prime Minister made to New Zealanders.

Further than that, Treasury says that you have to sell to foreigners because that will push up the price of shares. Yes, that is true. And what happens when you push up the price of shares? It means that people pay more for them and they want a bigger return on their investment, and that means higher electricity prices. I ask any one of those National MPs—the lobby fodder that the backbench represents—whether they will go back into their electorates next week and say: “I went into the lobbies today to vote for a measure to put your power prices up by $300 a year.” Will one of them have the courage to do that and be honest with their electorate? Not on your life.

We know what is going to happen with this sale. Contact Energy was sold by Bill English in 1999, and there were, first of all, 225,000 investors. Within 10 years that was 80,000, but even that does not tell the whole picture. Did you know that 80 percent of the shares of Contact Energy, which was once proudly owned by New Zealand, are owned by 0.1 percent of the owners—not 1 percent; one-tenth of 1 percent of the shareholders own 80 percent of Contact Energy? And which National backbencher thinks that it is a great idea that $1.5 billion in New Zealand funds have left this country as dividends to the new Australian owners? Which one of them is proud of their National Party record in that regard? Which one of them will stand up? It takes only one of you to stand up in the Chamber tonight and vote against your Government, and you can defeat this measure. Which one of you will have the courage to do that?

💬 Hon Members: None of them.

Well, sadly, I fear that that is right.

The Government’s election commitment was not to let most of the shares go into foreign ownership. Nothing in this bill tonight delivers on that commitment. What word do you use for a commitment that you do not intend to keep?

💬 Hon Ruth Dyson: Deceit?

It is deceit. There is another shorter word, but I cannot use it in the Chamber. Pure and simple, that was a deceitful commitment by John Key to the people of New Zealand that he never intended to keep. When the New Zealanders turn out to the polls in 2014, they will remember that they were lied to. They will remember that. They will remember that they were deceived. They will remember that National never delivered on what it promised, and it delivered on a lot of things that it never promised, including the cuts that are happening across the board.

One sign in the 1950s of this country’s progress in moving forward was the building of our hydro dams and our geothermal stations. We did not know then, but we know now, that that is one of the most important strategic assets that we have as a country: clean, sustainable, renewable energy. And what is this National Government going to do with that, with its cling-on supporters ACT and United Future? They are going to sell those assets down the road. They are going to sell them at the bottom of the market so that the people—the foreign investors—who buy them will make a killing. And when they make a killing in selling them, they will not be paying any capital gains tax on it, either. Our parents did not make the sacrifice they did in building up these assets to have them sold out by this National Government, which is a sell-out Government.

That speech from Phil Goff was a little bit like watching the TVNZ Heartland channel in New Zealand—all about the past. Do you know what that speech was a snapshot of? That was a snapshot of the last election campaign here in New Zealand, when the Labour Party went out and campaigned against asset sales. By comparison, John Key and the National Party made a case about the New Zealand economy to the New Zealand people. Cast your minds back to the last day before the election, as John Key, on a bus, was out meeting New Zealanders and talking to them. Phil Goff, the then leader of the Labour Party, was standing by a dam with a sign, with a couple of friends, saying to New Zealanders: “If you vote for them, they will sell these assets.” That is what he was saying.

We hear from the members opposite that this is a rushed process and that New Zealanders did not know what was going to happen. Well, actually, there were a wide number of issues this party campaigned on: first, putting New Zealanders first; second, making sure we made important choices; and, third, telling them what we would do. The members opposite cannot say to us here in this Chamber today, and Mr Goff cannot stand up and say in this Chamber today, that the Opposition did not make an issue of that, because members opposite said to every New Zealander who would listen that this was what would happen. Why is that important? It is because Part 2 of this piece of legislation says that it places limits on ownership of companies named in new schedule 5. Those limits are 51 percent ownership held by the Crown. It is written into the piece of legislation. It cannot change.

In my speech in the Chamber earlier, I read out a very long list of companies that Labour, when in Government in the 1980s, sold. It did not campaign on those. Nobody was standing by a dam then, Mr Goff. Labour did not campaign and tell New Zealanders that it would go and sell them if it was elected.

We made a case to New Zealanders. We gave them guarantees, and today in this Chamber we are meeting those guarantees made to them. Not only that, but there has been no rush as this legislation has gone through.

💬 Hon Clayton Cosgrove: Rot!

There was not any rush, Mr Cosgrove, through the Finance and Expenditure Committee. It had eight full meetings in three parts of New Zealand. On four occasions Mr Cosgrove and his colleagues had an opportunity to ask questions of our officials, and did they ask a single question? No, they did not. Did they ask a single question on 26 April, on 2 May, on 7 May, or on 9 May? Not a single question, but today they come to this Chamber and they expect New Zealanders to believe that they took this process seriously through the select committee. Well, I reject the assertion that this was rushed. The committee had done its job.

We had listened to every submitter. Most submitters were given as much time as they wanted. In fact, Young Labour came here from a university and they were given 30 minutes—30 minutes of their time—and we showed them nothing but courtesy. But you will not hear that from members opposite here in this Chamber today.

I believe that National has made its case to New Zealanders. We made the case to New Zealanders. None of this is being put through in urgency. Can I say to the members opposite: you may not want to remember history, you may not want to own up to what you did to the New Zealand public in the 1980s, but there are a lot of people who remember that.

I want to ask Todd McClay, the member who has resumed his seat, to reflect on the speech he has just given. The Finance and Expenditure Committee, which I had the privilege to chair for a year in the final year of the fifth Labour Government, is an important committee, just like the other committees of this Parliament. It is a servant of the Parliament. I have to say when I heard the stories that our members reported back as a result of their experience on that committee on this bill, the Mixed Ownership Model Bill, I was shocked, and I think the public will be shocked as well.

Select committees in our unicameral Parliament are designed for one thing and one thing only: to make sure that some scrutiny occurs in respect of important bills. If select committees do not provide that scrutiny, the bills are not going to get it anywhere else. The quality of this debate so far indicates that—if anybody needed any proof of this proposition.

So when a chair of a select committee as important as the Finance and Expenditure Committee simply waves Government legislation through for whatever reason—be it his own personal ambition, or be it because he has been nobbled by the Minister or what have you—when he circumscribes the process by 5 weeks, and when he allows Treasury to have written the report from the department before submissions have closed, what he does is he contributes to that general contempt that many people start to feel about this Parliament and the way we operate. I hope he is proud of himself, because I certainly am not proud of him, having heard that contribution.

There are some excellent Supplementary Order Papers on the Table in respect of this part of the legislation, and I think we ought to do our jobs and give them detailed consideration. We are on TV, we are on the radio, and people are watching, and rather than trade rhetoric across the Chamber or hear the sort of vainglorious claims that come from the other side, it might actually be useful for the Committee to use its time to look at those Supplementary Order Papers and consider their merits. There is an excellent one from Clayton Cosgrove, Supplementary Order Paper 49.

💬 Hon Judith Collins: Ha, ha!

The Minister of Justice thinks that is amusing. Her sense of humour clearly leaves something to be desired. Supplementary Order Paper 49 and Supplementary Order Paper 50 are well worth a careful look. I hope that the Minister in the chair, who is the Minister of Police and the Minister of Corrections, will look at the Supplementary Order Papers with care, take the advice of officials, who are here at 9.40 p.m. on a Tuesday night, and consider whether or not to recommend to her colleagues that these provisions be adopted, because, as has been said, there are precious few safeguards in this legislation.

We heard the Prime Minister stump during the election campaign about the importance of this asset sales policy. The National Government claims a mandate for ramming this through, despite the fact it is doing it on a 60 to 61 vote tonight and otherwise in the House and in the Committee. But what that claim neglects is that the Prime Minister was very careful to talk about mum and dad investors, majority ownership for New Zealanders, and ensuring limits on foreign ownership of those precious assets—all those words that resonated so well during the election campaign. Well, what do we see in the bill? Precious few safeguards to fulfil those promises made to the country. That makes a mockery of the claim that there is a mandate for anyone to do what has been done tonight in the Committee.

Supplementary Order Paper 49 would lower the percentage of any mixed-ownership model company permitted to be held in the hands of any one owner. It would lower the threshold from 10 percent to 1 percent so as to avoid the concentration of ownership in too few hands. We heard from my colleague Phil Goff earlier and from other speakers that it would not take much—it would not take much given the current 10 percent limit for entities that are foreign controlled to acquire a controlling stake in one of these companies. You need only 23, 24, or 25 percent, effectively, of the voting rights to acquire such a stake. That would be very easy to do under a 10 percent limit. It is much harder to do with a 1 percent limit, which is why Supplementary Order Paper 49 is so important.

Supplementary Order Paper 50 complements the provisions of Supplementary Order Paper 49. It would do something that the bill completely fails to do at the moment—provide some teeth for breach of the ownership ceiling provisions. That is why Supplementary Order Paper 50 is well worth consideration. It is why it would be great to hear the Minister in the chair, Anne Tolley, get to her feet and tell us what the Government’s attitude is on this legislation.

Clare Curran has put together a very, very carefully calibrated Supplementary Order Paper, and it would actually institute a financial penalty for breaching the ownership limit applied to the mixed-ownership model companies. Notwithstanding the 1 percent limit that is being proposed on this side, there is nothing to actually require the enforcement of the 10 percent limit except general application of securities law. And I am afraid that many members of the public, having experienced the blunt end of finance company failures, will not have a lot of confidence in that, whereas what Clare Curran’s Supplementary Order Paper would do is actually give some teeth to the law, and it is badly required if we want people to have confidence in the processes that we adopt in this House.

There is another excellent Supplementary Order Paper in the name of Megan Woods—Supplementary Order Paper 61. It would deal with the situation once a mixed-ownership model company has had shares sold to private investors, and where there is a risk that they will put pressure on the company to asset-strip in order to make a return on their investment—and that is clearly a commercial temptation that will lie on investors of any sort of scale in these businesses. The organisations will have been removed from the ambit of many of the Acts ensuring the responsible behaviour of State-owned enterprises, so it is even more important to give the public warning of what these companies are actually doing.

So Megan Woods’ amendment would provide that the companies cannot sell off individual assets like dams and wind farms to private companies in order to accomplish that sort of asset-stripping exercise, which would defeat the purpose of the 51 percent ownership limit clause. Instead, under Megan Woods’ amendment, a mixed-ownership model company would be required to publicly notify that it intended to sell an asset and then seek the approval of the Governor-General by Order in Council in order to accomplish such a sale.

Related Supplementary Order Papers are Supplementary Order Paper 52 in the name of the Hon Phil Goff and Supplementary Order Paper 51 in the name of Kris Faafoi. These attempt to give some teeth to what the Prime Minister promised—but has done nothing to accomplish in the legislation—which is that there would be majority Kiwi ownership in the 49 percent of the assets that were sold. So the provisions of Phil Goff’s Supplementary Order Paper would seek to correct the omission of requiring Kiwi mums and dads to be at the front of the queue. Kris Faafoi’s Supplementary Order Paper would do a similar thing. Phil Goff’s would do it by making sure that the bidders were Kiwi taxpayers; Kris Faafoi’s would do it by ensuring that the bidders were Kiwi passport holders.

These sorts of safeguards are necessary if the National Government wants to claim any sort of mandate for doing what it is doing now—privatising these assets—because there is no way to guarantee that they will be sold to Kiwi investors unless there is some sort of enforcement mechanism such as those that are set out in the Supplementary Order Papers.

There are some other important Supplementary Order Papers on the Table. Clayton Cosgrove has one, Supplementary Order Paper 48, which would apply the principles of the State-owned enterprises to the mixed-ownership model companies. We have seen that the requirement to be a good employer is omitted, the requirement to act socially responsibly is omitted, and the requirement to deal in an appropriate way with the assets of iwi vanishes. Well, Clayton Cosgrove’s Supplementary Order Paper would remedy those omissions, just as Supplementary Order Papers 57, 55, 59, and 60 would deal with further serious omissions in the scheme of the legislation.

Supplementary Order Paper 57 in the name of David Parker would apply Treaty principles to the directors and management of the mixed-ownership model companies. Supplementary Order Paper 55 would ensure that the entire mixed-ownership model structure is subject to Treaty principles—that is in the name of Trevor Mallard. Supplementary Order Paper 59 would ensure that State-owned enterprises with water resources are not eligible to be sold. These are all important provisions.

I think a characteristic of the debate this evening has been the apparent unwillingness of the Government to advance or defend its own legislation. The few contributions we have had have been notable for their volume rather than for their substance. I listened particularly carefully to the earlier contribution of the Minister for State Owned Enterprises to this debate on Part 2. I looked forward to the Minister explaining some of the opaque provisions of this Mixed Ownership Model Bill, because many of them are indeed opaque, and I will particularly talk about this new section 45Q in clause 16 in that context. The Minister, rather than address the substance and elucidate this legislation, chose instead to give us a homily on the evils of indebtedness, which might have carried more weight had we not demonstrated repeatedly from the Greens and from Labour that if this bill goes through, if we sell these assets, this country will be worse off. We will actually lose more than we gain. That is an absolute; we know this.

The Minister then went on to express his concern about the situation in Greece. He had some strong feelings about the Portuguese health system. Although I admire the Minister’s breadth of interest and concern, I would rather he focus rather more tightly on New Zealand. If this bill passes, there will be a noticeable and measureable effect on New Zealanders’ health. Already vulnerable households are struggling to pay their power bills. We know that the provisions of this bill, privatisation of these assets, will increase the cost of power to New Zealanders. We will see a knock-on effect on New Zealanders’ health and it is indefensible that the Government is not willing to stand and persuade us otherwise: that this bill is a good idea, and that New Zealanders will be better off economically, socially, or, indeed, environmentally.

I want to talk specifically about Part 2 and the proposed new section 45Q, the Treaty of Waitangi provision. It is interesting that a couple of the Government’s contributions have been dismissive of references to the history of legislation in our New Zealand history. But I suspect that in the original drafting of this bill, when the reference to the Treaty was completely excluded from the new legislation, perhaps somebody was remembering their history, because we recall that apparently benign section 9 of the original State-Owned Enterprises Act 1986. Nobody, I suspect, thought it would do much harm putting it in there—something of a sop to Māori at the time. The Māori Council, of course, demanded a rather more robust interpretation of section 9 in the State-Owned Enterprises Act and that put a significant handbrake on the privatisation agenda of the 1980s.

I suspect the drafters of this bill had some cognisance of that and endeavoured to completely remove any reference to the Treaty from this bill. There was an outcry against that, and quite rightly so. The Government went searching for its support in Māori communities, and I know from experience that one can spend a very long day in a Māori community searching for somebody who will speak in support of this bill, and you will search in vain. There is no support in Māoridom.

The rather peculiar hybrid solution—that is too strong a word. The response from the Government is to insert this extremely strange clause that says: “Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi (Te Tiriti o Waitangi).” It is a very similar, if not identical, reference as is, indeed, in the original State-Owned Enterprises Act. But it gets rather opaque, as I said, after that: “For the avoidance of doubt, subsection (1)”—which I have just recited—“does not apply to persons other than the Crown.” I would ask the Minister in the chair, the Minister of Police, what the intention of this clause is. Is it the intention of this clause that these new mixed-ownership model companies will not act in a way that is inconsistent with the principles of the Treaty of Waitangi? That question is answerable by a simple yes or no. And if the answer is yes, that these companies, these new entities, will be obliged to act in a way that is consistent with the Treaty of Waitangi, with the principles of the Treaty, then let it say that. I would challenge the Minister to support Supplementary Order Paper 71, in the name of my colleague Russel Norman, which would spell out very clearly that these mixed-ownership companies would be obliged to act in a way that is consistent with the principles of the Treaty of Waitangi.

What is the alternative solution? That 51 percent of the time these new entities will act in a way that is consistent with the principles of the Treaty, and 49 percent of the time they will not? Does it mean that the Government will assert its authority and insist that they must? Then why do we have this avoidance of doubt in subclause (2)? It absolutely makes no sense to me. I challenge the Government to stand and take a call and explain what the intention of this part is. If it is that the companies will be bound by the principles, say that clearly. Do not hide behind this legal nonsense, this drafting nonsense that says you are going to create some strange hybrid creature, the majority of which will be obliged to act in consistency with the principles of the Treaty, and 49 percent of which will not. It makes absolutely no sense.

This is not a trivial issue. What are we talking about when we talk about the power companies, like Solid Energy? We are talking about companies with significant holdings in land and water. We are talking about companies that will have considerable influence over the well-being of our rivers and of our landscape. Solid Energy, Mighty River Power—these are not trivial questions. How do Māori identify themselves? They identify themselves by reference to a mountain and to a river. Will these new companies, these new entities, be obliged to respect Māori relationships with awa and maunga 51 percent of the time, all of the time, or never because they will bow to the minority shareholders in a show of equity or who knows what? These are not trivial questions.

What do the principles of the Treaty actually talk about? This has never been finally demonstrated in law. Since 1987 it has been acknowledged that the Treaty is a living document. Similarly, the principles have been subject to various interpretations. One constant in any definition of the principles of the Treaty is a requirement of consultation, fair dealing, cooperation, and partnership between the Crown and Māori. Are these new entities going to be bound by these principles? Will they be obliged to consult? Or can they simply point to this nonsense for the avoidance of doubt, and say that they are not obliged to consult with Māori, they are not obliged to act in the way of a partnership, and they are not obliged to cooperate with Māoridom when they are making decisions that have a direct and lasting impact on the rivers, on the well-being of the land, on the people who live on it, and on the landscapes?

This makes no sense at all to me, and I invite and, indeed, challenge the Government to explain to me what the intention is. Will or will not these new entities—

Progress reported.

House resumed.

I move, That the report be adopted.

The question is that the report be adopted. Those of that opinion will say Aye, to the contrary, No. The Ayes have it. Party vote? The Clerk will conduct a party vote.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. There was no Aye vote for that, at all.

Well, I heard an Aye, and I am a little bit closer than you. I will conduct a party vote, thank you.