24 Jul 2012

Cost of share bonus scheme not known

6:24 pm on 24 July 2012

The Government has conceded it does not know how much a bonus share loyalty scheme for the partial sale of Mighty River Power will cost.

And Prime Minister John Key also says the Government has not decided how bonus shares will be given to individual investors who hold their investment for about three years.

On Sunday, Mr Key said the Government would hold back shares for its loyalty bonus scheme, but it's now possible it might issue new shares.

Mr Key says there's no official estimate of the cost, but he suggested the total cost of bonus shares for all four State energy companies would be only $60 - $80 million.

A report from Parliament's Finance and Expenditure Committee suggested $360 million and a Treasury report put the figure slightly higher.

But Finance Minister Bill English dismissed any estimates of the cost of the scheme, including those from the Treasury.

He says until the Government makes final decisions on how the scheme will work, no one knows what it will cost.

Shares in Mighty River Power will go on the market later this year.

Labour Party leader David Shearer says it is irresponsible of the Government to announce a loyalty scheme without knowing the cost.

He says it is not fair for all taxpayers to subsidise a loyalty scheme that only those who can afford to buy shares will benefit from.