Avoiding "The Debt Trap": Mixed Ownership Programme
Government Briefing on the Mixed Ownership Model by Hon Tony Ryall5th March 2012
By Mark P. Williams
Today Hon. Tony Ryall, Minister for State Owned Enterprises announced the introduction of new legislation in support of the government's mixed ownership programme. He confirmed that the first initial public offering, for Mighty River Power, would take place in the third quarter of this year.
Explaining the rationale for the programme, Tony Ryall explained that the underlying impulse was a desire to avoid the 'debt trap the UK and Europe are in'. The mixed ownership is expected to free between $5 and $7 billion which will go into the Future Investment Fund. There will be restrictions on any one foreign investor owning more than 10 percent and on any one New Zealander owning more than 20 percent.
The Minister took questions:
- on Air New Zealand;
- on whether there would be specific provision for corporate social responsibility in the legislation;
- on changes in the Maori Party position regarding Maori concerns over Section 9 of the SOE Act;
- and on whether further regulation was required to ensure that assets would not be stripped or sold.
The Minister dismissed as 'a fantasy', the idea of scenarios where SOEs would sell off specific energy assets to remain competitive as private companies.