Call to ban ministers from share float

ROB STOCK
Last updated 05:00 24/03/2013

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Three-quarters of Sunday Star-Times readers believe we should follow Australia and prohibit cabinet ministers from buying shares in state-owned companies they decide to sell.

The pre-registration for the Mighty River Power share float closed on Friday with more than 440,000 signed up, but the sale of state assets remains divisive.

We asked our readers if they wanted a similar rule to Australia's "Standards of Ministerial Ethics" that require ministers "to divest themselves of all shareholdings other than through investment vehicles such as broadly diversified superannuation funds or publicly listed managed or trust arrangements".

It's a rule that would prohibit buying into a state-owned asset float while in power and 75 per cent of the 788 people polled were in favour of it.

Cabinet ministers have agreed to a voluntary "moratorium" preventing the purchase of shares by all ministers, and some of their staff, until 90 days after the initial sale.

Finance Minister Bill English's office said: "Cabinet also agreed that ministers and the staff in those offices . . . should use their best endeavours to ensure that their partners and dependent children adhere to the same moratorium."

But our readers say that is not long enough and want a more permanent solution.

As one pro-asset sales reader said, a ban on share purchases would "prove they don't have a vested interest or conflict of interest".

Another said: "It would help to keep our politicians openly accountable to public scrutiny. As corruption and lobbying increases in countries around the world this is just another small way we can try and stay relatively ‘clean' for longer and assists in enhancing our international reputation as an honest country to deal with."

But a conflict of interest in an asset sale would, many felt, last longer than 90 days, and dozens cited fears of insider trading. One reader said: "They would probably have ‘insider knowledge' of how MRP or any other state-owned companies were trading, and if in a downward spiral, would be able to offload them without getting hurt."

Not everyone wants ministers forced to sell all their shares, something that might discourage successful people from standing for office.

Some cited the example of John Key, whose wealth is managed through a "blind trust" over which he says he has no control.

"Good practice would be for all ministers to put their financial affairs into a blind trust type arrangement," one reader said.

Some also felt the suggested rule would do nothing to stop ministers from taking up roles such as directorships on assets they sold even after leaving office.

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The MPs from NZ First, Labour, and the Greens have all pledged not to buy Mighty River Power shares to demonstrate their opposition to the sale.

- © Fairfax NZ News

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