Govt tables privatisation bill; mulls Air NZ options   5 Mar 2012

Draft legislation to allow the partial privatisation of four state-owned energy companies has been tabled today, with its First Reading in Parliament due on Thursday.

As expected, the Bill will transfer existing clauses in the State-Owned Enterprises Act relating to Crown obligations to Maori under the Treaty of Waitangi and to “memorialised” land for settlement of Treaty claims.

However, the companies will no longer be subject to corporate responsibility obligations or to the Official Information Act. Only ministerial decisions relating to the government’s investment in the four companies will be subject to requests for public disclosure, whereas the businesses’ commercial decisions will be shielded from the OIA.

It will also include clauses requiring that the government remain the majority shareholder of the companies, defined as a 51 percent or greater shareholder, and that no other shareholder be allowed to own more than a 10 percent stake in the companies.

SOE Minister Tony Ryall confirmed the first SOE up for partial privatisation will be MightyRiverPower, owner of the Mercury retail electricity brand, “around the third quarter” of this year.

The other energy companies slated for partial sale are electricity generator-retailers Meridian Energy and Genesis Energy, and coal company Solid Energy. Further shares in Air New Zealand, which is already partially privatised, are also to be offered but it is not dealt with under the new legislation.

The government was taking separate legal advice on a further selldown of Air NZ shares, with some 27 percent of the NZX-listed company in public hands “because of the greater complexity around Air NZ’s existing shareholding," Ryall said.

The inclusion of the contentious Section 9 of the SOE Act in the new bill follows consultation with Maori interests following an outcry at suggestions that reference to the Crown’s Treaty obligations be left out of the bill for fear it would deter private investors.

Instead, the bill will include the clause, while making explicit that it applies only to those shares owned by the government.

Also to be replicated will be Section 27A-D to protect Maori interests in memorialised land owned by the partially privatised companies.

SOE Act requirements relating to social and environmental responsibilities will not carry over into the new bill.

“Like most large commercial entities, the mixed ownership companies will continue to build stakeholder trust and public support for their activities in a number of ways, including through their corporate social responsibility polices,” Ryall said.

Continuous disclosure requirements that come with stock exchange listing would require commercial transparency from the partially privatised companies.

“The rationale for selling minority stakes in the SOEs was that New Zealand “must not get into the kind of debt trap the UK and Europe are in," Ryall said.

"The $5 billion to $7 billion we expect to free up by these partial share floats will go into the Future Investment Fund to build priority assets like schools, hospitals and infrastructure.”

The assets for sale comprised less than 3 per cent of the government's total assets.


Add a comment

Bookmark and Share


PM welcomes closer partnership with ASEAN

22 Nov 2015 News
New Zealand Government Rt Hon John Key Prime Minister 22 November 2015   PM welcomes closer partnership with ASEAN Prime ... more

Submissions open for United Nations report

20 Nov 2015 News
Minister for Women Louise Upston welcomes public consultation on a draft report for the United Nations outlining New Zealand’s... more


Increased Canterbury quake costs pushed Tower into the red

20 Nov 2015 Business News By Paul McBeth
Nov. 20 (BusinessDesk) - Tower, the general insurer, says it will report an annual loss next week after raising its provisioning for... more

NZ inflation expectations drift further below 2% mid-point

17 Nov 2015 Business News
Article - BusinessDesk   NZ inflation expectations drift further below 2% mid-point Nov. 17 (BusinessDesk) - Longer term ... more


Awards recognise NZ recreation's top performers

20 Nov 2015 Lifestyle
New Zealand’s recreation industry recognised 10 inspiring individuals and organisations at the New Zealand Recreation ... more

Villa Maria Proves a Huge Hit

16 Nov 2015 Lifestyle
VILLA MARIA PROVES A HUGE HIT TO OPEN SOVEREIGN TRI SERIES The Sovereign Tri Series for 2015/16 is underway with today’s... more


Auckland house price growth slows in Oct as new rules bite

4 Nov 2015 Property By Tina Morrison
  Auckland house price growth moderates in October as new rules introduced Nov. 4 (BusinessDesk) - Auckland house price growth... more

Tenancy bond system moves online

1 Nov 2015 Property
New Zealand Government 1 November 2015 A new tenancy bond service goes online today as part of the Government’s programme of... more


New migrant service launched for New Zealand and Australia

12 Oct 2015 Migration
Those looking for a sense of security when immigrating to New Zealand or Australia, need look no futher than the first inusrance... more

NZ's annual net migration reaches record 60,300 in August

21 Sep 2015 Migration
  NZ's annual net migration reaches record 60,300 in August on Indian, Chinese students By Jonathan Underhill Sept. 21... more


Australia's cloud passports only "conceptual" for now: DIA

29 Oct 2015 Travel & Tourism By Fiona Rotherham
Internal Affairs says Australia's cloud passports only "conceptual" for now   Oct. 29 (BusinessDesk) - The Department of... more

Auckland Airport a 'conductor' for New Zealand tourism: CEO

22 Oct 2015 Travel & Tourism By Fiona Rotherham
  Auckland Airport a 'conductor' for New Zealand tourism, CEO Littlewood says Oct. 22 (BusinessDesk) - Auckland International... more


Richie McCaw retires from rugby

19 Nov 2015 Sport
New Zealand Rugby Union Richie McCaw retires from rugby Richie McCaw has today confirmed he is hanging up his boot... more

Burling and Tuke on top at the mid-way mark

19 Nov 2015 Sailing
Yachting New Zealand Burling and Tuke on top at the mid-way mark at 49er World Champs Peter Burling and Blair Tuke have taken the... more


Gordon Campbell on why IS’s weakness makes it more dangerous

20 Nov 2015 Opinion By Gordon Campbell
Gordon Campbell on why Islamic State’s growing weakness makes it more dangerous One of the great things about writing online... more

Gordon Campbell on Islam and the Paris attacks

17 Nov 2015 Opinion By Gordon Campbell
According to polls, a third of Republican voters in Iowa want Islam to be criminalized. Unfortunately, the c... more

Kiwi Success

Cavalier promotes CFO Paul Alston to top job

20 Nov 2015 Appointments
Article - BusinessDesk   Cavalier promotes CFO Paul Alston to top job By Paul McBeth Nov. 20 (BusinessDesk) - Cavalier Corp, the... more

Employment Court Judge appointed

20 Nov 2015 Appointments
New Zealand Government Hon Christopher FinlaysonAttorney-General 20 November 2015 Kerry Smith, barrister and solicitor of... more


UPDATE: Weaker employment adds to rate-cut case

4 Nov 2015 Recruitment By Johnathan Underhill
Article - BusinessDesk   UPDATE: NZ employment falls in third quarter, adding to case for further RBNZ rate cut (Recasts to... more

Unemployment rises 0.1 per cent

4 Nov 2015 Recruitment
The latest Household Labour Force Survey (HLFS) has reflected the softening of the economy in the first half of the year, with an... more