The government is being urged to release advice it has received saying it can favour New Zealand investors over foreigners when it comes to selling shares in four state owned energy companies, regardless of New Zealand's international trade and investment agreements.
In Parliament today the Green Party questioned Minister for State Owned Enterprises Tony Ryall on whether the government could favour New Zealand investors in the sell-downs of up to 49% of Mighty River Power, Genesis, Meridian and Solid Energy.
The government has said it expects the companies to be 85-90% New Zealand owned, including the government's own 51% shareholding, once the share sell-downs have taken place. It has said New Zealand investors would be at the 'front of the queue' when it came to allocation of the shares, although demand from foreign investors for the shares would be used in the book-build for pricing tension.
“Both the scoping studies and Crown advisors have confirmed that there is sufficient domestic demand to meet the government’s objectives," Ryall said in Question Time today in response to questions from Green Party co-leader Russel Norman.
“As part of any share float the government has the ability to determine what type of investors are allocated shares, and we will use this ability to ensure widespread and substantial New Zealand shareholding,” Ryall said.
Norman asked how Ryall would ensure that New Zealanders were at the front of the queue, "when New Zealand’s trade and investment agreements state that New Zealand investors cannot be given preference over foreign investors.”
Ryall said those agreements did not override the government’s ability with respect to the share allocation policy.
“We have received advice that those agreements do not prevent the government from insuring widespread and substantial New Zealand ownership of the mixed ownership model companies,” he said.
Norman asked Ryall to release the advice that the government "has no restrictions on giving preference to New Zealand buyers of shares in these companies".
Ryall responded by telling Norman he should make an Official Information Act request for that information, “and I’m sure we would consider it in due course”.
Norman then tabled a document showing Auckland University Professor Jane Kelsey had already requested under the Official Information Act "...all documents relating to the compatibility with New Zealand's obligations in trade and investment agreements of the sale of state assets, including preferences to nationals."
The January 18 reply from Ryall's office said there was a document covered by the request, but that it had been withheld in full.
(Updated with video of the exchange)