Partial privatisation bill introduced - with Treaty provision included

Details of legislation opening up four state owned enterprises to private investment will be unveiled by Thursday. 

State owned Enterprises Minister Tony Ryall announced this afternoon the bill will be tabled by the close of business today and it will be officially introduced on Thursday. 

Mr Ryall also confirmed the worst-kept secret in New Zealand: that the company which will be first opened up to private investment will be Mighty River Power. 

UP to 49% of the company will be sold, the same proportion as the other companies being lined up: Genesis, Meridian, Solid Energy, and Air New Zealand. 

The official estimate is that shares in the five companies will gather between $5-7 billion in income,w which will be put into the government's new Future Investment Fund. Recent private sector investment calculations put the likely figure somewhere between $6.2-6.5 billion. 

 "The alternative is a lot more debt that we'd have to borrow on fragile foreign markets at a time when many other countries are struggling under too much debt," Mr Ryall said.

The share offer totals less than 3% of the government's entire asset portfolio, he said.

"The legislation will require the Crown to hold at least 51 per cent of the voting shareholding in each of the mixed ownership energy companies, and restricts other shareholders from holding more than 10 per cent of the voting rights.  

"Before making decisions about Air New Zealand, the Government is seeking further commercial advice on implementing its policy, because of the greater complexity around Air New Zealand's existing shareholding," said Mr Ryall.  

Ministerial decisions relating to the companies will remain subject to the Official Information Act but the companies themselves will not be, although they will come under the continuous disclosure regime of the NZX.

Finance Minister Bill English said the legislation will also include a "replication" of the Treaty of Waitangi clause currently in the State Owned Enterprises Act.

That clause states "Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi. For the avoidance of doubt, [this] does not apply to persons other than the Crown.”

"Replicating section 9 into the new legislation ensures we can proceed with the mixed ownership programme without prejudicing the rights of Maori or the Crown’s ability to settle future Treaty claims.”

The legislation will be referred to the finance and expenditure select committee which will call for submissions.