23 Jul 2012

Bonus shares waste of money - Opposition

8:24 pm on 23 July 2012

Opposition parties say the Government is wasting taxpayers' money by offering bonus shares to those investors who hold onto their investment in Mighty River Power.

A report from Parliament's finance and expenditure committee says offering bonus shares in all four energy companies the Government intends partially privatising would cost about $360 million.

Prime Minister John Key has announced the Government will offer bonus shares to individual investors who hold onto their Mighty River Power stock for about three years.

But Labour Party leader David Shearer says it's not responsible for the Government to impose another cost on taxpayers, on top of the estimated $120m needed to sell four state-owned energy companies.

"Taxpayers will bear the loss of any loyalty programme, cos it's basically giving shares away to those shareholders. Whose going to pay for them? It has to come from taxpayers. There's no other way it can possibly be paid."

Green Party co-leader Russel Norman says people who can't afford to buy the shares will subsidise those who can.

"In every possible way the Government is throwing taxpayers' money at this scheme, to try to make it work politically for them. And I think it is a grossly irresponsible way to spend taxpayers' money, just to try to suit your own political purposes."