Labour is putting pressure on the Government to reveal how many "bonus shares" it will offer under its partial privatisation plans, with claims the plan could cost as much as $1b in lost revenue.

Prime Minister John Key has confirmed the Government will offer a "loyalty bonus" to small shareholders who hang on to their shares for up to three years in the upcoming float of Mighty River Power.

Key this morning signalled it could give one share for every 10 held long-term.

Labour leader David Shearer today said the scheme, which would see shares held back to reward long term holders, could potentially cost $1b.

He pointed to Treasury modelling that showed the Government receiving $6.8b if it sold 49 per cent of the four energy SOEs plus a portion of Air New Zealand. But that fell to $5.5b if only 40 per cent was sold - a $1.3b difference.

"John Key is refusing to say how the so-called loyalty scheme will work and how much it will cost," he said.

"John Key is desperate to live up to his promise that 85-90 per cent of the shares will end up in the hands of 'Kiwi mums and dads'. That's why he's come up with his so-called loyalty scheme."

However, Key has said the 85-90 per cent of shares expected to stay in New Zealand hands would include the 51 per cent held by the Government. Local and overseas investors, as well as small retail buyers, will be offered shares in the 49 per cent sold down. But only retail investors would get the loyalty bonus.

Green co-leader Russel Norman also called on Key to "come clean" on the cost of the "share giveaway".

He said if only a third of the shares were bought by retail investors and there was one free share for every 10 bought, then that would add up to a $200m liability for the taxpayer.

"That would be a $200m subsidy from the vast bulk of New Zealanders to the roughly 5 per cent of the population that the Government expects to buy shares directly. The rich get the subsidy and everyone else gets to pay."

He said the Budget included $56m for direct sales costs and $46.8 million for policy work, advertising, and other middlemen.

"National needs to explain where it claims the authority to spend hundreds of millions of dollars on a share give-away."

Meanwhile the Greens have rejected suggestions the small anti-asset sales protest outside the National Party conference at the weekend showed the steam was coming out of the issue.

A spokesman said the petition calling for a referendum was going well, and the Green Party alone had reached 95,000 signatures - up about 13,000 from the previous week. The party was gathering about 1800 signatures a day from volunteers, members and MP-led collections. People saw the referendum as the best way to stop asset sales, the spokesman said.

The Greens' initial goal was 100,000 signatures and it expected to pass that number by the end of this week.

"We are planning to keep going to reach over 150,000. On the current rate of collection we will reach that target end of August/beginning of September."

The petition organisers were aiming to collect more than 310,000 signatures

KEY BACKS LOYALTY SCHEME

Key has denied a three-year loyalty bonus scheme for asset sales is being considered for political reasons, because shareholders would not be able to sell shares until after the next election.

''People will always try to make that argument,'' he said today.

Key yesterday confirmed $1000 would be the minimum share parcel in the first state-owned energy company to be partially sold - Mighty River Power.

In another measure to encourage local buyers, the Government would guarantee shares to New Zealand investors wanting parcels of up to $2000.

A loyalty scheme, likely to be offered to investors who hold onto their shares for three years, will also be offered.

Critics of the Government's asset sales policy claim the shares will quickly end up in foreign ownership.

Key this morning said the loyalty scheme would only apply to direct investors, not institutional investors such as ACC or KiwiSaver funds.

''The point there is it would be possible for numbers to move around a lot,'' he told TVNZ's Breakfast programme.

''So it's not about politics, it's really about saying for those first-time investors, let's have a concept of them holding shares for a period of time.

''Hopefully they will get used to that and that will become a more natural thing that they do.''

The Government hoped to change New Zealanders' attitude towards investing although people would still be free to sell the shares ''overnight''.

''But we are giving them an incentive to hold on to them.''

Labour and the Greens have dismissed the loyalty scheme, saying say poorer New Zealanders will be subsidising others who can afford to buy the shares.

Key said the Government would want to sell assets even if New Zealand wasn't in debt.

''My view is that the debt element, that it allows us to buy other assets without having to put more debt on the balance sheet, is a compelling argument in its own right.

''But it's only ever been one of a small number of factors. There is a lot of other factors; making the companies perform better, giving people places to invest.''

The Government expects as many as 200,000 people could buy parcels of $2000 or more in shares, around a quarter of the estimated $1.5 billion to $1.8 billion which Key said yesterday was expected from the sale of Mighty River Power.

The Government plans to sell up to a 49 per cent stake in four state-owned power companies and will also sell more shares in Air New Zealand.

- © Fairfax NZ News

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