Legislation enabling the Government to sell down up to 49 per cent of four state-owned enterprises has passed its first reading in Parliament by a single vote.



The Mixed Ownership Model Bill was subject to a boisterous debate and passed by 61 votes to 60. It now goes before the finance and expenditure select committee, where public submissions will be heard, and is due to return to the House before July 16.



As well National's 59 votes, the support of Act's John Banks and UnitedFuture MP Peter Dunne secured passage of the bill.



"This bill is a desperate flailing attempt by a Government bereft of ideas of how to grow the economy," Labour's deputy leader Grant Robertson said.



"The only idea they have is to sell off New Zealanders' future. ... Sell off our key infrastructure and sell off what New Zealanders' already own.''



Green Party co-leader Russel Norman said the bill was designed to "steal'' the assets fully owned by New Zealanders "and to hand it over to a small minority''.



Polling had repeatedly shown most Kiwis were against the idea, he said.



"They have seen it before and it was a failure,'' Dr Norman said.



``When you take peoples' property against their consent, that is called theft. This Government is proposing to steal the assets from 100 per cent of New Zealanders and give it to the 1 per cent.''



But State Owned Enterprise Minister Tony Ryall, who is leading the bill, said the bill was about curbing growing debt.



"No nation can afford to let debt get out of control. Huge debt is at the core of why the United Kingdom, Ireland, Spain, Italy, and Greece are being forced to impose austerity measures,'' Ryall said.



``This bill ... guarantees majority Government control of these four energy companies - at least 51 per cent remains in the Government's hands.''



The Mixed Ownership Model would apply to four energy companies, with Mighty River Power the first to be floated for sale in the third quarter of this year, as long as market conditions permitted. Solid Energy, Meridian Energy and Genesis would follow.

Air New Zealand, currently 73 per cent owned by the Crown, would also be further sold down but that would not be under the legislation passed tonight because there were added complexities with its case. The Government was seeking further commercial advice on Air New Zealand's sell-down, Ryall said.



The bill legislates for a maximum 10 per cent share ownership by any one investor.



However, there is no mandatory requirement in the legislation for New Zealand investors to have priority access to shares. The Government says that is unnecessary because it will be provided through the sales process.



"The Government is confident that 85-90 per cent of the companies will be owned by New Zealanders when floated,'' Ryall said.



The constitutions of the mixed ownership companies would set out the detailed mechanisms required to ensure compliance with the 51 per cent and 10 per cent ownership caps, he said.



It's understood different mechanisms will be used in the sales process of each of the five companies.