Media statement
For immediate release
Thursday, 9 November 2006

SOE’s a problem for long term electricity security

United Future’s finance and energy spokesperson, Gordon Copeland MP, today expressed deep concern about the place of the state-owned electricity generating companies in New Zealand’s energy future.

He was responding to a statement made today to the Commerce select committee, by the departing Chair of the Electricity Commission, that continued 100% state ownership of the generating companies (Genesis, Meridian and Mighty River) represents a long term problem for the sector.

“When questioned on this point, Mr Hemmingway stated that attracting investment into the New Zealand electricity sector will remain a problem so long as perceptions of political interference in the running of the SOE’s remain,” said Mr Copeland.

“These remarks flowed from Mr Hemmingway’s discussions with international investment bankers and other potential overseas-based investors into the NZ energy sector.

“Government needs to squarely face this reality. If 100% state ownership of the electricity generators is not consistent with creating a favourable investment climate long term then we dare not risk settling for the status quo.

“United Future proposes that 40% of the SOE’s be sold down to mum and dad investors (which would include the NZ Superannuation Fund). However we would put in place a 20% cap in respect of subsequent share sales to non-residents to ensure that an 80% shareholding, and control, always remains in New Zealand.

“A 40% sell down combined with continuing 60% Crown ownership has never been tried in New Zealand. United Future believes it would have huge benefits both in building an ownership society and releasing some $5-7 billion for much needed investment in health and education and the paying down of Crown debt.”

ENDS

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