Keep Kiwibank Bill

I move, That the Keep Kiwibank Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. I accept from the outset that there is a major philosophical divide between the major parties of the Opposition and the Government, and the minor party of the Government—Mr Seymour, who has been the subject of intense scrutiny tonight—in respect of the retention and/or sale of public assets. This bill is precise and surgical in what it attempts to do. It attempts to protect what is a jewel in the Crown of public assets—that is, Kiwibank.

I note that the history of Kiwibank is one where the incoming Labour Government in 1999 promoted the concept and then put it into operation, under sustained opposition, I have to say, from the National Party members, who, I think, used terms like “communism” and other things in relation to the establishment of Kiwibank. They said it would not work and that it would be an encumbrance to the public purse. On all counts the National Opposition was wrong.

On coming into Government the National Party had a road to Damascus experience and realised that Kiwibank was a public entity with huge support from the public—not just in a philosophical sense but in terms of the thousands of customers who lined up to participate in Kiwibank. And I note the history of Kiwibank in terms of interest rates. It was the first time for many, many decades that a bank occasionally went against the tide and struck an interest rate that was slightly lower than the benchmark of all the other competitors, and in that way it actually created some true competition. So the notion that the State should not have a role in a bank or in certain entities was put asunder.

The Keep Kiwibank Bill, as I said, seeks to protect Kiwibank as an entity. As Kiwibank is a wholly owned subsidiary of New Zealand Post Group, the board of New Zealand Post Ltd could sell all or part of Kiwibank without recourse to Parliament. I acknowledge that the chairman of Kiwibank is one Dr Michael Cullen from my tribe.

💬 Hon Todd McClay: A good man.

A good man. I think it was a good decision by the National Government to appoint him. I know where Dr Cullen sits on these issues. He sits firmly—as he did when he was the Deputy Prime Minister and Minister of Finance—in the camp that is in favour of the retention of these assets. But if the board was packed with National Party cronies with a mandate to flog it off, one man standing alone on the board—one man doing a “Custer’s Last Stand”—could not prevent it. So this bill seeks to put in some basic safeguards.

The bill would ensure that any proposal to partly or wholly privatise Kiwibank would require the support of 75 percent of all members of the House of Representatives or, alternatively, support from a majority of voters in a referendum in order to lawfully proceed. That last provision, I think, seeks to respect the thousands of customers that Kiwibank has now gained and retains and continues to grow.

I note with interest that the week this bill was drawn from the ballot was very apt. That was the week that finally, and sadly and tragically, Solid Energy came a complete gutser in respect of its future, at the hands of National Ministers and a National Government that saw it like a sinking ship just sliding into the sea over many, many years. I remind members of this House of the mixed-ownership model and the promise by Prime Minister Key that that mixed-ownership model would get us $7 billion to $10 billion, which was then revised down to $5 billion to $7 billion. The actual returns, as we know, were short of $5 billion, at $4.7 billion.

I would have thought that if Mr Scott and a few of the other eminent business people over there had forecast that—[Interruption] Well, that member talks about economics. Solid Energy was an export award-winning company under a Labour Government. In fact, we resurrected it again after the last National Government tried to hock it off and drive it into the ground. It was an export award-winner returning solid returns to the taxpayer, and under this Government’s watch—and I mean it was “watched” literally—it came a gutser.

Solid Energy was watched while the Government got advice—thousands of pages of advice—warning that things were going wrong. The Government was warned that Solid Energy was being too expansive, that it could not agree on valuations, and that the board believed that what went up would never come down in terms of the coal commodity price. When every other mining company around the world was immediately circling wagons to protect themselves as their commodity price went down, this Government sat there and did nothing, and that asset has absolutely come a gutser. And now, of course, in the week that this bill was drawn from the ballot, we find out that the sort of last remnants of a deal, to save a few jobs for a few months or a year or so, is to hock off the remaining commercial parts in an asset sale.

We also note that this Government has talked about capital recycling. It is an interesting term. I think it may have authored it or invented it. Certainly it has reinvented it, because now, of course, we know the Government is looking around for $1 billion to $2 billion and that may indeed see further asset sales going ahead. I simply did not believe, with respect, the Minister of Finance when he said: “That’s it.” If that was it, Solid Energy would not have been in the position it was. I would also say to this House that, despite all the conjecture, every opinion poll that I have seen over the years in respect of whether people are in favour of, or against, asset sales has shown overwhelmingly that they are against the sale of assets. I suspect that if you polled people specifically on Kiwibank there would be greater than an 80 percent—80 percent in the last poll I saw—or 90 percent support in respect of retaining Kiwibank.

This piece of legislation is straightforward. There is no impost on the Crown. It simply puts another check and another balance in place so that if the board decided that it wished to hock off Kiwibank, as it can do legally without any parliamentary intervention or ministerial intervention, it would require, as I say, a 75 percent majority of this House or, alternatively, a referendum.

To conclude where I started, I accept there is a divide and a philosophical divide—perhaps an ideological divide—in respect of State assets, but I would wager that it would be an extremely dangerous proposition for any Government to propose the sale or disposal of this asset. We have been through a global financial crisis. We do not know whether there is going to be another global financial crisis or whether the economy is going to turn again—we do not know. We know that New Zealand Post itself is struggling as a group because of the changes in technology. We know it is attempting to combat that. The physical mail in terms of non-parcel mail is deteriorating. Its books are under a certain pressure—and, presumably, will continue to be under pressure—as technology moves. That could indeed provide motivation for, or necessitate, the hocking off and selling of a major asset within that group that is Kiwibank.

It would be quite a prize to sell off. It would presumably get quite a good and nice price given its profitability, given its stability, and given its huge growth over the years. This bill simply seeks to put in safeguards, and if the Government is true to its word that it does not want to dispose of Kiwibank, I would assume that it would see no reason to stand in the way of this bill. I urge the House to support it.

It is a great pleasure to speak on the Keep Kiwibank Bill. I think the first thing we need to look at is the role that Kiwibank plays. Kiwibank is part of the New Zealand Post Group, which is a State-owned enterprise. As a State-owned enterprise, New Zealand Post has its own board—and that board, as we have heard mentioned, has some members on it who have had political experience. But the board, essentially, is the governance body for that organisation of New Zealand Post. The board of New Zealand Post makes the governance decisions in relation to things like Kiwibank as one of its subsidiaries. So Ministers of the Crown themselves do not exactly direct State-owned enterprise operations in the day-to-day sense. That is done through the management of the organisations, but also the board has the governance role, not the actual Ministers who are the shareholding Ministers.

So, effectively, under the current structure of that organisation the board has the ability to wholly or partly divest part of its asset in Kiwibank, as the member who has raised this bill has made known. So that is one point that we need to be aware of. Another point is that the member is requesting a 75 percent threshold of MPs or a referendum to essentially allow any transfer, wholly or in part, of that organisation. I think the important part to look at there is what consistency or any precedent there may be for that approach. It is very difficult to find any precedent in New Zealand law that has that 75 percent requirement. I guess if you were looking at this legislation and taking it to its full effect, then what would happen with the organisation the member just mentioned, Solid Energy, for example? Should that also then have a 75 percent rule? Should KiwiRail have a 75 percent rule? Should some of the other State-owned enterprises have a 75 percent rule? Some members of the Labour Party are nodding, but that is not what this bill does.

So the question is whether that would apply to everything. Even if it did not apply to all those State-owned enterprises, there may be a list that those members want to have a 75 percent rule with, and there may be a list that they do not. There is a lack of consistency there, and I think members of the public would be very interested to find out why this State-owned enterprise subsidiary is seen as any different from Solid Energy or from—

💬 Hon Clayton Cosgrove: Solid Energy is history. Solid Energy doesn’t exist.

It may be history, but the thing is that the 75 percent rule is only being asked to be applied to one organisation. What about something like KiwiRail? Would the 75 percent rule be applied to them? Is that what the member wants as well? If he does not, then that would create an inconsistency in legislation that I am sure members of the public would not want to see this Parliament have as an inconsistency in the way things are done.

Then there are also the impacts of the bill. One of the big things with a bank is there is always the potential for a bank to run into difficulties. We have seen that in the past with things like the BNZ. When a bank gets into difficulties, under the rules that have been set by this legislation there could be some quite difficult time frames involved. For example, if a bank ran into difficulties and then you had to have a referendum, that would take a matter of months, and that would not be enough time for a bank to survive if it was in a matter of difficulty. Also, if Parliament was not sitting—for example, if this bank got into trouble in December and Parliament was not coming back until February, what would happen then for those 2 months? The bank would essentially have a run on funds and go under, and there would be no recompense. Basically, the Crown would have to take that debt in the end. That would be an issue that would have to be considered.

We understand what this member is trying to do here, but there are some issues that you have to take into account. The first one is that New Zealand Post itself has its board. It has its own governance approach, and it is not for Ministers to get involved in and direct that on a day-to-day basis. The second thing is that you need some consistency. There is some inconsistency in the treatment of other State-owned enterprises, especially some organisations like KiwiRail. I just do not know why Opposition members feel that they value Kiwibank more than KiwiRail, for example, and will have this rule around Kiwibank, but not around KiwiRail. They need to work through that inconsistency, which sends the wrong message to corporate New Zealand, or the State-owned enterprises in New Zealand as a particular whole.

Then you have got that third issue: if there are any problems with the bank, and the bank is required to meet certain capital funding regulations from the Reserve Bank, and it relies on the market to do that. If it was unable to access to the market because there was a hamstring on its ability to make decisions or its ability to be able to direct itself to meet the needs that that organisation might have if it ever got into difficulty, then that could be a compromising situation for the Parliament but also for the members who are in that bank. Also, it could compromise parts of our banking system, which nobody wants to do.

So I think when we look at this bill it may be seen as somewhat simplistic in approaching just one part of one State-owned enterprise, but there are many follow-on effects. I look at those follow-on effects for the whole banking system. If a bank like Kiwibank did get into trouble and did fail, that is a big part of our banking system, and you would not want to have that follow-on effect. If there is no ability for decisions to be made, how would that have an effect? There is no ability for decisions to be made, because you would have to wait for Parliament to resume to do that, or you would have to do a referendum. A referendum is quite a time-consuming process. So those are the decisions that would be very difficult, if there was a problem with capital raising or funding of the regulatory requirements of the bank.

This is an interesting bill, in the sense that it has a particular bent to it. I think that as a Parliament we need to consider these kinds of bills in a very open way, but also consider what the implications actually are for other parts of the State sector and the State Service. In this case, there are some real issues around consistency. It would be creating a precedent around a 75 percent vote, which has not been used in this Parliament for a long time, if ever. That would create an element of inconsistency with other laws, which would be an issue that would have to be considered. And then you have got the flow-on effects—should anything go wrong with the bank, how that would actually be dealt with, in that sense. So I look forward to further discussion on this bill. Thank you.

I learnt a couple of things there. The first is that David Bennett is easily confused, and the second is that the National Party members have not yet decided what they are going to do on this bill. David Bennett did not say—he did not say. I think David Bennett is a leader in the National Party caucus. I think this is the time for him to step up and talk to his colleagues and assure this House that the National Party will be supporting this bill. The only reason he gave, in opposition, was, effectively, that he is easily confused.

There is no inconsistency here. This is a bill about Kiwibank. This is a bill about what has now become an integral part of our banking system. It is an important part of what I now presume both the National Government—I will come back to that in a minute—and parties on this side of the House believe is an important role as part of our State-owned enterprise structure, which is to have a presence in that banking system and to give New Zealanders the chance to be part of a New Zealand - owned bank that has played a very important role in improving the customer experience in banking in New Zealand and giving New Zealanders the chance to know that their money is part of the reinvestment into New Zealand.

The member who resumed his seat, David Bennett, seems very confused about this bill and was worried about the impact on capital raising and meeting its regulatory requirements. Nothing in this bill affects that, at all. The only time when it would mean anything whatsoever would be if the Government wanted to sell it, and that is the problem for the National Party members. In their heart of hearts they have never liked Kiwibank. They have never wanted it to exist. They would sell it if they could get away with it. That is the absolute truth about the National Party’s attitude towards Kiwibank.

It was not that long ago when Bill English—I think he was taped at a National Party conference somewhere—was talking about the fact that Kiwibank would not be able to be sold in the first term, but after that all bets were off. He was caught out. He was caught out telling the truth, and he had to recant from that because the National Party members knew New Zealanders wanted Kiwibank there. This bill is necessary, if for nothing else, because it means the National Party members have to get up now and tell us if they really support Kiwibank. If they really support Kiwibank, if they have really disowned what Bill English wanted to do, all those years ago, then they will back this bill.

Chris Bishop—I will wager this. He is up next, and I will wager that he will not get up and say he is going to support the bill, but he will not say whether they are going to oppose it, either. That is what I will wager. I challenge him to do that. If he says they are going to oppose it, if he says outright that they are going to oppose this bill, then that is the signal New Zealanders know: it is on the block. Kiwibank is on the block, to be sold by a National Government. This is the chance for the National Party members to stand up for an institution that has done good in our banking system and that New Zealanders want to see in front of them.

I have a fear that Chris Bishop will not do that and he will not stand up and back Kiwibank, because the National Government is in trouble. It has got through the Future Investment Fund—the money it made from the asset sales. It has spent it on fixing the Beehive roof and, no doubt, the panel beating on Chris Bishop’s car down in the basement. It has all been used up now because the Future Investment Fund was up for anything. It was meant to be for education and health. That is what we were told. There is still money to be spent within the billion dollars on each, but the Government has spent it. It has exhausted the money. There is nothing left in the Future Investment Fund kitty, and now the Government is talking about capital recycling programmes. Well, it is very, very possible that Kiwibank could be up for a bit of recycling under this National Government.

So this bill is the chance for the National Government to put all of that to bed and to say to New Zealanders: “We believe that this is an important part of our infrastructure in banking and what the New Zealand Government believes is in the best interest of New Zealanders.” If the Government does not, it shows how out of touch it is with where New Zealanders are today. If it does not, it shows that this is still an agenda for the National Party. It has run out of money from the Future Investment Fund and it knows it has got big capital needs in the future. There is going to be a lot more panel beating done on Chris Bishop’s car if he is not careful. The Government has to find that money from somewhere, and unless the Government members get up and tell us in this House that they support this bill, we know that the National Government’s agenda of selling Kiwibank is on the table. That is the challenge, Mr Bishop.

Well, the National Party is not voting for this bill. We do not support it. So that was a challenge that was laid down, and a challenge that was accepted. We are not voting for the bill, because it is not a good bill.

There are generally two types of members’ bills that come before Parliament on a Wednesday. There are genuine bills that are advanced in good faith by members to make, generally, small changes but consequential amendments to Acts that actually make a difference to the lives of people. I have got to say that usually it is the Green Party that advances those sorts of bills. So the bill that is next on the Order Paper, the Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill, I do not necessarily agree with, but it is a bill advanced in good faith by Gareth Hughes to deal with the interesting and important issue for the future of the New Zealand electricity industry about solar electricity. There are other bills in the ballot as well. My colleague Kanwaljit Singh Bakshi has a bill to authorise the use of kirpans, or the carrying of kirpans, on flights, and, of course, David Bennett has the interestingly titled Private International Law (Choice of Law in Tort) Bill, which is a very important bill. I, for one, am looking forward to that being drawn from the ballot and considering that on the Justice and Electoral Committee.

So there are genuine bills, and then there is a second type of bill. That is what I would classify this bill as falling into.

💬 Paul Foster-Bell: The showboating bills.

Those are the sorts of bills, as my colleague says, that are the showboating bills—the more political bills, ones that are advanced for symbolic value only. They are highly political, and, often, actually, the only real point of the bill is to get the name of the bill into the ballot—for example, Jacinda Ardern’s Child Poverty Reduction and Eradication Bill. I know for a fact that that bill does not do that, but, I mean, who would be opposed to that name? I mean, who is in favour of child poverty? No one, right? Who wants to reduce it? Everyone. Who wants to eradicate it? Everyone. So the name is the point there, and that is the point with this bill, the Keep Kiwibank Bill. It is interestingly titled. It has got a good name.

💬 Kris Faafoi: It’s pretty simple.

It is nice and simple. That is right, Kris. It is nice and simple. Let us all get behind the Keep Kiwibank Bill, except, and this is where the bill falls down, what this bill would do—let us be very clear—is place Kiwibank, a State-owned enterprise, into the same constitutional realm as the entrenched provisions of the Electoral Act 1993. Section 268 of the Electoral Act says you cannot alter the term of Parliament—so from 3 to 4 or 5 years, say—which is one of those fundamental constitutional provisions or, for example, the fact that the voting age is 18, which is of fundamental, critical importance to the democracy that we have in New Zealand. Apparently, the future of Kiwibank is so important that it is equivalent to about five provisions in the New Zealand constitution in the Electoral Act that are entrenched, and it is on par with that, according to Clayton Cosgrove.

💬 Paul Foster-Bell: Ludicrous.

Well, sorry, that cannot be the case. As my colleague Paul Foster-Bell says, that is ludicrous. Mr Cosgrove, in his opening remarks, made reference to Sir Michael Cullen as the chair of Kiwibank. He is a scholar of epic proportions.

💬 Paul Foster-Bell: A knight of the realm.

He is a knight of the realm, as Paul Foster-Bell says—he loves knights of the realm. Sir Michael Cullen is a historian. He is a very learned man. I am going to venture to suggest that a man like Sir Michael Cullen, although he may well believe in the importance of Kiwibank, I highly doubt he thinks that Kiwibank is so important it should be basically entrenched in the New Zealand constitution—I highly doubt that.

The National Party will not be supporting this bill for the reasons that I have advanced and that my colleague David Bennett has advanced. The Labour Party forgets its history of Kiwibank on this bill, it really does. It is a little bit like paid parental leave—forced into it by the Alliance Party after the 1999 election. It was not a policy that the Labour Party advanced, and then all of a sudden it is the greatest thing since sliced bread. And, of course, it forgets the 1980s when the Labour Party advanced important macroeconomic and microeconomic reforms that made a difference to this country when it sold off vast swathes of the New Zealand public sector for the benefit of New Zealanders.

💬 Kris Faafoi: You’re starting to sound like Bennett, sit down! You’re entering the Bennett zone, sit!

It forgets that history, but I think I have said enough at this point. We will not be supporting this bill.

Order! The member’s time has expired. I did not want to interrupt the member in his final flow, but I do want to warn Mr Faafoi. When he insults me like that, it hurts.

The Green Party will be supporting this bill to the select committee. Obviously, we are very much in support of keeping Kiwibank in public ownership. The campaign against the National Government’s planned asset sales last term was a huge focus for the Green Party because we understand the value of keeping assets that have been built up over generations by New Zealanders in the hands of New Zealanders so that they can all benefit in the future. In the case of our Government-owned bank, Kiwibank, it is incredibly important, not only because it is a State-owned asset. I mean, we have other State-owned enterprises that do not necessarily return the same strategic benefits to New Zealand, like, for example, we have a State-owned commercial television station, which does not really make sense. It would make sense to have a television station that actually provided public broadcasting, but owning a television station for the purposes of commercial return does not necessarily make as much sense. I mean, I personally would support public broadcasting on television, which this Government has completely killed and which we probably will not get back as long as it is in power.

But Kiwibank is incredibly important because we have had a long problem in New Zealand with a lack of competitiveness in the banking sector because of the big four Australian banks, which had a very cosy relationship, did not compete on price, and, of course, that all contributed to—it was great for them, there were huge profits that were sucked out of New Zealand back to Australia—our current account deficit, the largest share of which is our investment income deficit. So having the State-owned bank has been incredibly important for New Zealand to ensure that we are not losing all of that profit overseas. Some of it is staying here in New Zealand.

I must comment, as well, that Kiwibank is a great bank. It is kind of like Air New Zealand. I am a client of Kiwibank, and I have actually never had better service from a commercial bank. So I think it is doing a great job for its customers, it is doing a great job introducing competition to the banking sector here in New Zealand, and that is important to our economy.

It is critically important that we retain public ownership because we are too small. When the National Government put up the State-owned energy companies for partial privatisation, of course we saw it was impossible to be sure that the private owners would be here in New Zealand. So if Kiwibank is not kept in public ownership there is an incredible risk, a huge risk, and a very likely risk that we would see Kiwibank slowly becoming yet another foreign-owned bank, which is not what we need.

I have said we will support this bill to select committee, because although we support the aim of the bill, I think it would be interesting in the select committee to tease out whether or not this bill is the best way to achieve that aim, and I can see some potential issues with the way in which the bill has been drafted. In particular, it does seem to tie Kiwibank’s future to New Zealand Post, which may not be the best way for Kiwibank to arrange its business and for us to keep it in public ownership here in New Zealand. But I am open to this bill. I think it is a worthy endeavour, and I do think that it will be interesting, if it makes it to the select committee, to see exactly how it could be improved, potentially, to ensure that we do achieve the aim, which is so incredibly important, of keeping Kiwibank in public ownership.

I think that, politically at least, National has realised that it cannot sell Kiwibank. That would be incredibly unpopular. It went ahead with the partial privatisation of the energy companies even though that was incredibly unpopular and did not make fiscal sense, did not make economic sense, and did not make strategic sense in the long term. But it went ahead and did it, because it was an election promise that it campaigned on. But I do think that the victory for all those who stood up and supported the Keep Our Assets campaign and who voted in the referendum is that we will not see further privatisation of incredibly important assets like Kiwibank. So there is a partial political victory there for all those people who stood up in the Keep Our Assets campaign.

It is a pleasure to talk on this bill tonight—rather strangely named, I have to say, the Keep Kiwibank Bill. To me this is one of those topics that is very appealing in a conceptual way, but when you start to look inside the technicalities of it, I think it starts to fall apart a little bit. For instance, this whole issue about making sure you retain ownership of Kiwibank—you have to ask yourself: what does actually constitute a sale? Just to give you some examples of what I mean about that, what happens when the directors of New Zealand Post legitimately want to raise cash through the form of issuing new equity to fund an expansion of, for instance, Kiwibank’s operations itself, or maybe other operations within New Zealand Post? That is one example. Secondly, does raising equity to meet increased prudential requirements that the Reserve Bank may legitimately impose on all banks, including Kiwibank, constitute a sale?

Thirdly, if the board of New Zealand Post chooses to sell part of the business, maybe even part of Kiwibank operations, does this constitute a sale, particularly if it is a minority part of Kiwibank’s operation, or if it is in fact a larger portion of the bank’s operations? When does that constitute a sale? And what about the issue of issuing quasi-equity instruments, which hopefully Mr Clayton Cosgrove has a good feeling for, such as—just to give him an example, just to refresh his memory—convertible debt instruments, which are very common instruments in capital markets. In fact, I note that back in April earlier this year Kiwibank was in fact in the process of issuing another round of equity instruments to help fund-raise and meet its ongoing debt-financing requirements.

What I have done is just quoted four examples of where equity may legitimately be issued or sold, and do they constitute a sale? This is obviously something that this bill would need to seriously address, and I do not think it does. But the next question, for me, is: why stop here? We own numerous State-owned enterprises, and so what is so special about Kiwibank? Why not, for example, Landcorp? I am surprised that the member has not put that up. If we were to propose Landcorp as an example, I do note that Assistant Speaker Mallard made a very important speech back in October 2007, when even he acknowledged that selling land, farms that Landcorp owned, was actually a legitimate part of its business. So it is, again, a similar example that I use with Kiwibank. It may be that Kiwibank may want to sell down part of its operations, so we have got a corollary there. I just do not understand what makes Kiwibank so special for the Opposition.

The third thing is: why we should be impeding New Zealand Post? I note in New Zealand Post’s recent profit announcement that it actually achieved a profit of $135 million. This was reported very recently. But of particular interest to me was that of that $143 million, actually, $46 million came from the sale of its Australian business. Again, you know, here we have got this entity, New Zealand Post, which includes Kiwibank, and here we are: just in the last few months, New Zealand Post has been selling down some of its operations. And, of course, everyone is very happy that New Zealand Post is making a profit.

Finally, I cannot understand why we are imposing this rigorous test of a 75 percent majority of this House to approve such a sale. It is an extraordinary test, and my colleague, Mr Chris Bishop, was talking through on this before. Why should this be contemplated? Why is such a test required, which is even more onerous than passing bills through this House? That is what I fail to grasp. Finally, I would have to say: if we were to pass this bill, what does that imply for the governance structure of New Zealand Post? I think that for anyone sitting on that board, to have that inflexibility cuts across the whole role of governance in New Zealand Post, and would, perhaps, impede the ability of directors.

I am very pleased to rise on behalf of New Zealand First to take a call in this first reading of the Keep Kiwibank Bill 2015. This is a good bill and New Zealand First is proud to support it. In fact, if we have one complaint, one criticism at all—and it is not about the bill itself or about this process of lawmaking; we have no issue with that. If we have one complaint about this process, it is that this bill should not actually be necessary. It should not have been necessary for Mr Cosgrove to craft this bill and to put it in the ballot, and to be lucky enough to have it drawn and to bring it to the House. We congratulate him on that, but I fear that it is necessary, and listening to Government members tonight has done nothing to assuage those fears.

As Mr Robertson said when he spoke, if the Government members do not stand up and say unequivocally that they are going to support the bill, or do not confirm that they will be voting against it, that is pretty much as good as saying that, yes, Kiwibank is going to be on the block, at some point in the medium future anyway. It is a way of saying “We do not want to entrench the New Zealand State ownership of this bank, because we want to give ourselves the opportunity to flick it off at some point down the track.”, which is a reasonably safe bet, I would say. It will surprise nobody that the free-market ideologues who seem to run the National Party these days do not have any interest in safeguarding the future of New Zealand’s bank in the hands of New Zealand citizens, voters, and taxpayers.

Mr Bennett pretty much said that, of course, National will not interfere in the decisions of New Zealand Post’s board, and that sums up National members’ attitude, I think, generally to State-owned enterprises overall. They would really rather not have them. They would really rather that everything was actually in the hands of the private sector. They do not like the sort of socialist connotations of the taxpayer, through the State, having ownership of what they call businesses, even if these businesses are, in fact, essential parts of the fabric of what makes New Zealand New Zealand. They just regard any kind of State ownership as being anathema to what it is that is the core of their way of thinking about things. So they have come out and flagged that they will not support it.

We will be supporting it, and Labour, obviously, will support the bill, and the Greens have said that they will support it through to select committee. As to the other support parties for the Government, we do not know the mind of the Māori Party. We may not know until the vote. It is a safe bet that Mr Seymour will support it. But we do not know about Mr Dunne. He has surprised us once tonight already, and, who knows, perhaps he might do that again.

Do not get me wrong: New Zealand First is entirely in favour of private enterprise and of private ownership of businesses. But there are times when something more than a simple pure profit motive is required. There are times when a public service is required. There are times when a public good is involved. It is on occasions like that that the State has to be involved, because only the State can be involved, and that really is where the State should be involved. We did that for a long time. We used to own the BNZ, for example. We used to own the Post Office Savings Bank for more than a hundred years. We owned the Post Office Savings Bank, then we owned PostBank, as it was called, and then it got flicked off in 1989 to the Australians, who now own the major slice of the New Zealand commercial banking sector, apart from, of course, Kiwibank, the Taranaki savings bank, the Southland Building Society, and one or two other little minnows.

It is curious that the Australians own almost all of New Zealand’s commercial banking sector when, in fact, for a commercial trading bank to operate in Australia it has to be majority Australian-owned. That seems to be lost on this Rogernomics National Government. If we fast forward from 1989 to now, the pendulum has swung the whole way. National is in power. It was Labour, obviously, that was in power in 1989, when Kiwibank was created. Mr Cosgrove has seen the light, and he has realised the value of holding this valuable asset in the hands of the taxpayer and the State. He has brought this very fine bill to the House. We are proud to support it, and we challenge other parties to do the same.

I stand, along with my colleagues, in rising to oppose this bill. I heard a comment from Mr Prosser, who used the word “anathema”. I just think this is a bit of a constitutional anathema. We do not use the 75 percent provisions in this Parliament for partisan issues like this. We typically use the entrenchment provisions around entrenching and ensuring that there is a greater level of support around the House for ensuring something is not able to be played around with during a political process for things like the Electoral Act. We have entrenchment provisions in the Electoral Act so that a party cannot come in by a bare majority and completely change the electoral system in New Zealand. There is a good reason why you would have the 75 percent provision inserted into legislation.

But when it comes to something like an asset owned by the Government—actually not directly owned by the Government; owned through a company, through a company, and then owned by the Government—that is not a good reason why we should be inserting a provision requiring 75 percent of this House to vote if that asset was ever to be sold. There are no plans by the Government to sell Kiwibank. There are no plans by the Government to look at floating shares through Kiwibank. But that is not a reason why this House should legislate to put in place such a high bar around that.

I see that this issue is a bit of a knee-jerk reaction around the Future Investment Fund and the floating of energy companies that the Government did several years ago. Let us just remind ourselves that that took place after the Government went to the public and asked the public whether or not they supported that policy through an electoral system. The Government put that on the table and people voted for the Government through a general election, knowing very well that that was going to happen. To then come into this House several years later and say that because the Government went and did that, we should put in place such a high bar around one particular company that the Government has ownership in through several other companies—I cannot see why we would need to do that.

I note that there are parties in this Parliament that are voting for this bill and for putting in place such a restriction around Kiwibank. I notice the New Zealand First Party is wanting to put in place this restriction around Kiwibank. I find that quite interesting because it was not that long ago, in the political life of Winston Peters, that he actually wanted to float shares in Kiwibank himself. In an interview with Guyon Espiner in June 2011, Winston Peters actually talked about his previous plans for floating Kiwibank. He was asked by Guyon Espiner: “In 2008, you proposed floating shares in Kiwibank. Is that still your policy?”. Well, he bluffed and blustered around it, as Winston did, but what he said was: “If you want to expand Kiwibank”—

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Assistant Speaker. The member has misled the House. I do not think you ever promoted that, in any capacity you had.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Possibly unlike the member, I did listen to the fact that the member was quoting.

Let me just start again. He was asked by Guyon Espiner about floating shares in Kiwibank, a previous policy of Winston Peters. He said: “If you want to expand Kiwibank and didn’t have the money, and so you were taking, say, from 1 billion to 1.5 billion, floating the second 500 amount—”. Then he was interrupted by Guyon Espiner—Guyon does that from time to time. But the fact of the matter is Winston Peters previously had a policy of floating shares in Kiwibank, a policy that Winston Peters and New Zealand First went to the public on because they felt that was an important option for Kiwibank to have. Having a provision like this put into legislation would stop Winston Peters from being able to float shares in Kiwibank should he ever want to do that again in the future. I think that New Zealand First Party should probably reconsider their position given the previous pedigree that Winston Peters has.

Winston Peters also has some pedigree around selling airports. Airports are important assets, just as banks are important assets. I say to New Zealand First and other parties in this Parliament, when the New Zealand Government sold off Auckland Airport, did 75 percent of this Parliament vote on that? No. Was there a majority of people, through a referendum, voting on that? No. I think we need some consistency on issues like this.

The Government entered into a process of selling shares in some companies that we went to the public on in a general election and asked their permission to do that. There has been a great investment into areas like education, ultra-fast broadband, and Kiwibank because of that. There are no plans to get involved in doing that with Kiwibank but there should not be such a high bar—such a high threshold—put in place. We should use that only for important provisions, important legislation, like the Electoral Act, where you should not have a small majority in Parliament overturning an electoral Act. It should be left for important issues like that.

I rise on this first reading of Clayton Cosgrove’s Keep Kiwibank Bill. I just wanted to commend the last speaker, Jami-Lee Ross, for what was actually a fascinating history lesson on the career of Winston Peters. I am not sure how relevant it was to the substance of the bill but, nevertheless, it was absolutely fascinating.

I would also just like to pick up on some of the comments made by the member Chris Bishop as well, where he started off by saying that there are two types of bills that are entered into the House by members on members’ days, which, generally, are, one, public interest bills—bills that are genuinely designed to advance an interest, perhaps in small ways, sometimes in grand ways—and, two, other bills that are really just political statements and so on. He categorised this bill as a political statement rather than as a bill in the public interest.

I would like to say why I am voting for this bill, which is because Kiwibank is an incredibly important strategic asset to New Zealand. In the darkest days of the great financial crisis, the main banks owned by other banks in Australia, the Australian-owned banks, repatriated most of their cash and stopped lending into the New Zealand market. That threatened the ongoing existence of most of New Zealand’s businesses, especially those small and medium enterprises that make up so much of our economy.

Kiwibank, being a publicly owned bank, stepped into that void and continued to make loans, particularly into the small to medium sized enterprise end of the market. In fact, part of the reason why it is a successful bank today is because during that period time when the Australian-owned banks had stopped lending into the New Zealand market it significantly expanded its loan book, supported the New Zealand economy, and supported all of those small and medium enterprises to keep going. If it had not done that, New Zealand’s version of the crisis would have been a great deal worse than it was.

Our businesses were able to continue trading, they were continually able to have access to credit, they continued to operate, and they continued to buy and sell from each other and to each other throughout that period of time. So the presence of Kiwibank in the New Zealand economy was absolutely critical during that financial crisis. It is not inconceivable that such a crisis will happen again in the not too distant future.

Structurally, its ownership by the public was critical to its decision to continue to do that, to continue to make those loans, not just because it was a bank owned in New Zealand—its shareholding was held in New Zealand—but because it was a publicly owned bank. It has a mission above and beyond profit to its own shareholders. It actually sees itself as a bank in the service of the New Zealand economy and of New Zealanders, above and beyond the dividend that it needs to provide to New Zealand Post and, thereby, to the Crown. So it is an incredibly important strategic asset, and it is critically important that we hold on to it.

This is not a perfect bill. There are a number of provisions in it that are a little clunky and there are things that I think can be worked through, but that is why we have the select committee process. So I think, for those members opposite who are criticising the provisions of the bill, I would then suggest to them that if they are criticising the provisions of the bill rather than the principle of the bill, which is that we hold on to Kiwibank—then they should vote for the bill to move into the select committee so that together we can clean up those provisions and make it work, and so that we can make it work to the satisfaction of both sides of the House.

To me it seems a perfectly rational response to say: “Well, look, the bill isn’t perfect, but if we agree with it in principle, then we should move it forward into the select committee process, and in so doing make sure that what comes out the other side is a much better bill and that it will be workable and that it will preserve that principle—that we hold on to this incredibly important strategic asset to the New Zealand economy.”

I think my colleague Julie Anne Genter, when she spoke on this bill earlier, described the experience that New Zealanders have of Kiwibank. I have spoken mostly about its strategic importance to the New Zealand economy, to our small to medium sized enterprise sector, and so on, but it is also a greatly loved institution in New Zealand. I think that New Zealanders as a whole would want to make sure that it is retained in public hands—in the hands of New Zealand and the Government.

With that, I believe that we should keep Kiwibank, we should support this bill through to the select committee, and the Green Party is delighted to be voting for it to move to the select committee. Thank you.

Thank you for the opportunity to speak on this Keep Kiwibank Bill. My question is to Mr Cosgrove: why Kiwibank? Why just Kiwibank? Why not New Zealand Post and the whole business? Why have you picked on one piece of their business? Why have you restricted the board of directors of Kiwibank from conducting their business in the best interests of their shareholders? Why not the “Keep Landcorp Bill”? Why not the “Keep KiwiRail Bill”? Why not keep—[Interruption] Because KiwiRail is an important piece of New Zealand infrastructure, Mr Cosgrove. I do not understand why you have picked on Kiwibank, as a small piece of the New Zealand Post portfolio.

This bill is part of an attitude that comes from Opposition members, which says that they know best. They know how to run the business. As Mr Cosgrove is on the Finance and Expenditure Committee, I am surprised that he put this bill up. He talks about understanding how governance works, and talks about how the economy works. But then he puts this thing up, which cuts across basic governance, basic company law, and basic property rights.

He is telling people—being the board of New Zealand Post—what to do and how to do it. That is really the fundamental problem with this bill, because it cuts across. It has not been well-thought-out. It cuts across and creates a whole lot of problems that I am sure Mr Cosgrove did not intend to create.

Mr Bayly gave the example of New Zealand Post possibly needing some cash to support Kiwibank, perhaps, or perhaps to support the New Zealand postal delivery service. What are the directors supposed to do? Are they able to go and raise funds from offshore? Would that be allowed—to take on some offshore shareholders?

This bill also sniffs of xenophobia, because this also talks about the importance of having to have a bank owned by the Government. It is not necessary.

💬 Hon Clayton Cosgrove: How is that xenophobia?

Because Mr Cosgrove does not want anyone else to own Kiwibank, other than New Zealand Post. That is a ridiculous situation to be in. There are lots of building societies out there. If you want to bank with a 100 percent locally owned building society, bank, what have you, you are able to do that. But there is no reason to restrict the directors of New Zealand Post from conducting their business. The nanny State attitude coming from the Labour Party is alive and well. The Government Superannuation Fund is also something that Mr Cosgrove has wanted to interfere with, and control and influence.

As soon as we get politicians involved in businesses, it begins a slippery slope of conflicts of interest. That is why I cannot support this bill, because if it would enable Grant Robertson to decide what—is Grant Robertson going to use Kiwibank under his control to fund his housing projects in Auckland, perhaps? This is the beginning of the end, the beginning of a slippery slope of political interference in what should be independently run State-owned enterprises, and that is why I do not support this bill.

I raise a point of order, Mr Speaker. I have a concern that Mr Ross may have misled the House in his comments about Winston Peters. I wonder whether you might like to invite him to withdraw and apologise around comments about the sale of airports, particularly.

Yes—the member will sit down. There is an appropriate time to take that point of order, and, in any case, if a member is suggesting that someone deliberately misled the House, it is a matter of privilege and has to be addressed in a particular way. If the member thinks that it was an accidental misleading and that the member responsible should correct it, then the proper thing to do, it now being so late, is to go and have a discussion with that member and see whether he does want to make that change.

I thank members for their contributions tonight. I have got to say that even those who oppose the bill, by and large, have made pretty good contributions and have made some valid points.

To the point that was made repeatedly—I think Mr Bishop was the first person to make it—he is right. It is very rare that we would seek to use entrenchment provisions in a wide-ranging way, apart from many of the Acts—the Electoral Act and others—that he mentioned. It is rare. It is unusual. And the point about it is: it has come to this. That is why. It has absolutely come to this. Those guys over there would sell their grandmother for sixpence if they could—they could. They have revealed tonight that all bets are off. And I agree with Mr Bishop: in an ordinary time, with a conventional Government that listens to the people and that does not fire money away or sell assets in a fire sale, as these guys—saying they would get $10 billion, they ended up getting $4.7 billion. We would not be here. We would not have this provision, and we would not be trying to promote it in the Parliament.

I would say to Mr Scott the same thing, “But it has come to this”, because Mr Scott and his ilk just fundamentally believe that they have a right to flog everything off. Mr Shaw made some very pertinent comments from his professional background, in terms of the impact and value of Kiwibank during the global financial crisis. But Mr Scott comes from a place where he says that anything goes. But I do agree with him on this point, and I have always maintained this point: that it is not appropriate for politicians to be stuck in and hands-on with State-owned enterprises.

But this bill does not do that. This bill, of course, does not prevent Kiwibank and New Zealand Post from taking a whole host of any commercial decisions that it deems appropriate under the State-Owned Enterprises Act or the statement of corporate intent. So all this sort of scaremongering and bunkum from Mr Scott, whom I think is better than that—perhaps Mr Bennett we expect it from; Mr Bennett may have written his speech for him—but I actually think Mr Scott is better than the speech he gave. He knows damn well, and other members do, that under the State-Owned Enterprises Act nothing is precluded apart from if that entity wanted to sell Kiwibank. That is the only decision.

So all this sort of scaremongering and the bunkum about the Superannuation Fund and nanny State and the Labour Party wanting to get its hands on State-owned assets and interfere—well, the problem Mr Scott has got is the history of that. The history of Labour Ministers of State-owned enterprises is exactly the opposite, actually. It is exactly the opposite.

So all this does—as is self-evident—is that it puts a safeguard, another check and balance, another blockage in the way, and another check for some parliamentary scrutiny—75 percent majority of Parliament or a referendum—if it was trying to dispose of this asset. We know there is motivation to do it—we have heard a bit of it tonight—the capital recycling and the attempt to source $1 billion to $2 billion for other projects, given that it has run out of money from the Future Investment Fund. We know that these guys, if they could get away with it—if public opinion would tolerate it—would sell it. So I just simply say, it has come to this. It is unusual; we should not have to propose measures like this to protect strategic assets, but there it is, we are.

The other point that has been made is why Kiwibank and not others? I simply say to members of Parliament, I am happy to take an amendment as we go through to cover all State-owned assets, if they think that is a good idea. Mr Scott thinks we should cover Landcorp—I am with him. Other assets—I am with him; very happy to do that.

💬 Alastair Scott: KiwiRail.

KiwiRail—I am with him on that. The same with Mr Bishop—if they want to propose amendments, I am very happy to cooperate to expand the scope of this bill so that the remaining assets that New Zealanders have are protected. This is not inconsistent. This is basically a very precise and surgical bill to ensure that a vital strategic asset for New Zealand is secured and maintained, and that this Parliament, as representatives of New Zealanders, will decide what happens, not a few National Party cronies working against public opinion with their own interests in play and not those of the citizenry. I commend the bill to the House.