web analytics
The Standard

NRT: The problem of SOEs

Written By: - Date published: 3:36 pm, June 20th, 2013 - 7 comments
Categories: activism, business - Tags: ,

A second repost (with thanks) from I/S at No Right Turn. This time on SOEs.


The problem of SOEs

Fifteen years ago, Nicky Hager exposed how state-owned enterprise Timberlands West Coast was spending millions of dollars of taxpayer’s money to fund political operations against its owners, the people of New Zealand. The core problem? An SOE that behaved as if it was a private company, with no democratic responsibilities. Fifteen years on, it looks like Solid Energy had a serious case of the same disease.

In retrospect, the spying on protestors should have been a warning sign. But its only since the company’s collapse that we’ve seen how deep the rot went: a refusal to accept Treasury oversight, and now news that they spent $48,000 hiring lobbyists Saunders-Unsworth to advise them on how to bullshit Parliament:

High-profile lobbyists were called in to help Solid Energy bosses dodge questions from media and opposition MPs about the coal miner’s financial woes, and the advice was also shared with Treasury and ministers.

The company’s $389 million debt was revealed earlier this year, and its bosses sought advice from government relations and lobbying firm Saunders Unsworth before fronting up to a parliamentary select committee in March.

Newly appointed chairman Mark Ford told the committee he was unable to answer questions on the state-owned company’s fall from financial success, saying he had not been there at the time.

However, Labour has obtained documents showing Saunders Unsworth advised Solid Energy’s bosses to keep responses to MPs’ questions as short as possible.

“The longer you talk, the more likely it will be that you trigger a range of questions that will not be pleasant,” the advice said.

As with Timberlands, this displays a fundamental misunderstanding of the relationship between an SOE, Parliament, and the people of New Zealand. These people are supposed to work for us. And that means being monitored by Treasury and fully and frankly answering any questions Parliament asks. Failing to do so isn’t just a contempt of Parliament; its an attack on the entire idea that government entities are accountable to Parliament, and through it, to us.

Sadly, Ministers appear to have colluded in this. That’s disturbing too. Ministers are supposed to be the first layer of oversight on SOE’s, not enablers of their anti-democratic behaviour. By approving Solid Energy’s behaviour, Tony Ryall and Bill English have failed in their fiduciary duty to Parliament to represent our ownership interest of these companies. And that’s just not acceptable.

7 comments on “NRT: The problem of SOEs”

  1. karol 1

    I/S makes very important points about the role of SOEs. Though, maybe it shows that this hybrid form of organisation, a government service that operates like a business, is based on a contradiction in terms.

    I also thought this bit of advice from Saunders-Unsworth was interesting;

    The documents show Solid Energy’s bosses were given advice on dealing with “problematic” Labour MPs Clayton Cosgrove and David Cunliffe.
    The advice was also shared with Treasury, and the offices of Finance Minister Bill English and State-Owned Enterprises Minister Tony Ryall.

    • Draco T Bastard 1.1

      Though, maybe it shows that this hybrid form of organisation, a government service that operates like a business, is based on a contradiction in terms.

      Governments provide services that are paid for through taxes and they do so because it is the most cost effective and efficient way to provide those services (has to do with economies of scale and the simplicity of taxes). Running a business to make a profit is contrary to that with the profits actually being regressive taxes.

  2. AmaKiwi 2

    In a private company the owned, English and Ryall would never tolerate this by their employees.

    How do we fire these people? Their hypocrisy is nauseating.

  3. Ad 3

    Ministers both left and right have been far too coy about using their ability to hire and fire Directors. Firing – or not reappointing – sends a strong cold wind into members of golf clubs and Manufacturers Associations right acros the country of the kind of direction they are seeking. “Serve at the pleasure” being the operative phrase.

    Also poorly used is the Letter of Expectation to guide SOI formation to the Chairs. Mayor Brown uses this to good effect with his CCOs. Mayor Cull is getting into this as well.

    Nor should the threat of full absorbtion be taken away. SOE’s are of course legislated entities. Queenstown Lakes for example has dissolved all of their CCOs over the last 6 months.

    Dunedin is about to release the results of a major review of theirs, and wouldn’t be surprised if there are fewer after that.

    Auckland seems likely to conduct a similar review next year, should the current Mayor get in and the balance of power about the same.

    Not sure why hiring lobbyists was a broblem – if Ministers didn’t like it the Shareholder Giude and the Letter of Expectation would simply state a “must not act against stated government policy”. After all an SOI has to be agreed by both the SOE Board and the shareholding Minister.

    What’s really missing however is a Treasury unit with sharp teeth. COMU is pretty watered down, and really needs the power to recommend specific disciplinary actions to Ministers. Plus some good attack-dog public servants in there.

    Finally, there has to be a common direction for them all. There is no equivalent of the Auckland Plan for SOE’s to have collective policy targets. Just delivering dividends is poorly insufficient. All SOE’s must be to be told to give effect to a common governmental strategy. For God’s sake don’t call it a vision, but something for the common good besides money.

    Sorry about the rant – this field of NZ politics really pisses me off.

  4. Problem with NRT and liberals in general is they think that things are supposed to work for the people.

    The whole point of SOEs is to corporatise them, bring in private sector people to run them then flog them. This includes running them into the ground. All that is solid melts into air.

    The point is to get the state out of any monopoly or part thereof that is potentially profitable as the bosses are desperate for every last tonne of shit to glob off.

    The left is mired in illusions that the state can step in a fix things up in the name of the people.
    Once such delusion on the liberal left is Keynesian economics.

    Yet Keynesian state aid died in the 1970s. Capitalism is in terminal decline beyond redemption.
    Capitalism is the crisis. Face it. From from Palestine to Syria to Ristanbul to Sao Paulo people are standing up.

    Good interview with Michael Roberts that spikes lots of delusions about how capitalism works.
    “Contours of the Crisis: an Interview with Michael Roberts”
    http://www.thenorthstar.info/?p=9006

    • Draco T Bastard 4.1

      The point is to get the state out of any monopoly or part thereof that is potentially profitable as the bosses are desperate for every last tonne of shit to glob off.

      QFT

      The capitalists are determined to become even bigger bludgers on the working people and they do that by ‘buying’ up the commons so that people become ever more dependent upon the bosses.

  5. Rich 5

    Most of the SOEs could usefully be converted into true worker or worker/customer co-ops, where each employee (including long-term contractors) or retail customer has an equal share and receives and equal dividend and vote to elect the board and CEO. This would give them accountability to the people with a real stake in them, and ensure that any excess profit would go back to the customers and workers.

Recent Comments

Recent Posts

  • Time for inquiry into petrol margins
    It’s time for an inquiry into petrol companies as margins are once again at the high levels that prompted concerns late last year, says Labour's Energy Spokesperson Stuart Nash. "Over the December January holiday period, petrol importer margins jumped to… ...
    1 day ago
  • More talk as Auckland congestion worsens
    The main impact of the Government’s agreement with Auckland Council today will be simply to delay still further decisions needed to relieve the city’s traffic congestion, says Labour’s Auckland Issues Spokesperson, Phil Goff. “Government has been aware for more than… ...
    2 days ago
  • Serco inquiry extended
    A two month delay to the Government investigation into prison fight clubs shows the extent of problems within the Serco circus, says Labour’s Corrections spokesperson Kelvin Davis. “My office received a tsunami of complaints so I’m not surprised the terms… ...
    2 days ago
  • Truck Shops ignore consumer laws
    A damning Commerce Commission report out today highlights the failure of the Government to protect poor and vulnerable families from unscrupulous truck shops, says Labour’s Consumer Affairs Spokesperson David Shearer. “The report found that 31 out of 32 firms it… ...
    2 days ago
  • Taihoa at Ihumatao says Labour
    Labour’s housing spokesperson Phil Twyford has called on the Government to rethink its controversial Special Housing Area in Māngere. Auckland Council is today meeting to discuss the development which borders the Otuataua Stonefield Historic Reserve. This project is to get… ...
    2 days ago
  • Figures suggest National deliberately excluded farming
    Figures showing the dairy industry would be categorised as high risk if there were a further five severe injuries within a year, strongly suggests National designed its flawed system to deliberately exclude farming, Labour’s spokesperson for Labour Issues Iain Lees-Galloway… ...
    2 days ago
  • Bleak report on the state of our children
    A damning conclusion by the Children’s Commissioner today that ‘we don’t know if children are better off as a result of state intervention, but the indications are not good’ should make fixing CYFs a top priority for this Government, says… ...
    2 days ago
  • Dodgy data used to justify axing KiwiSaver kickstart
    National’s agenda to run down KiwiSaver has become even clearer from a scathing critique of the Government’s justification for axing the $1000 kickstart, says Labour’s Finance spokesperson Grant Robertson. “Since National came to power they have not only continually undermined… ...
    2 days ago
  • Unsecure website risks Ashley MoBIEson hack
    Experts have raised security concerns that vulnerabilities in MoBIE’s half million-dollar website could lead to a possible Ashley Maddison-style hack, says Labour’s Economic Development spokesperson David Clark. “The real issue here is not what data is immediately available, but what… ...
    3 days ago
  • Democracy still the loser in Canterbury
    The Government has demonstrated once again how arrogant and out of touch it is in denying Cantabrians the same democratic rights as the rest of the country, says Labour’s Environment spokesperson Megan Woods.  “The Environment Canterbury Bill which has been… ...
    3 days ago
  • Waiver cost still a mystery
    The Government still has no idea what it’s going to cost community and voluntary groups to get a waiver from the fees police will charge to carry out checks on their staff and volunteers, says Labour’s Community and Voluntary spokesperson… ...
    3 days ago
  • China exports fall 27 per cent in a year
    Exports to China have fallen by 27 per cent over the last 12 months - showing that the looming economic slowdown should have been expected by the Government, says Labour’s Economic Development Spokesperson David Clark. “The Chinese economic slowdown should… ...
    3 days ago
  • National should support all families for 26 weeks
    Families with multiple babies, and those born prematurely or with disabilities, are the winners from moves to extend paid parental leave to 26 weeks but the Government must give all babies the same head start in life, Labour’s spokesperson for… ...
    3 days ago
  • National’s health and safety shambles puts school camps at risk
    Reports that schools are considering scrapping student camps and tearing out playgrounds highlights just how badly National has managed its health and safety reforms, Labour’s Education spokesperson Chris Hipkins says. “Schools have been left completely in the dark about the… ...
    3 days ago
  • National’s asset stripping agenda hits schools
    National’s fire-sale of school houses and land is short-sighted, mean-spirited, and will have huge unintended consequences that we will pay for in years to come, Labour’s Education spokesperson Chris Hipkins says. Documents obtained by Labour show the Ministry of Education… ...
    3 days ago
  • Takahe massacre supposed to get all New Zealanders involved in conservation
    The Minister’s claim that a  botched cull of one of New Zealand’s rarest birds was a way of getting all New Zealanders involved in conservation is offensive and ludicrous, Labour’s conservation spokesperson Ruth Dyson says.  “An email from Minister Maggie… ...
    4 days ago
  • Serco circus rolls on with revelations of fight club practice
    Further revelations that a Serco prison guard was coaching inmates on fight club techniques confirms a fully independent inquiry needs to take place, says Labour’s Corrections spokesperson Kelvin Davis. “The Minister’s statement today that a guard was coaching sparring techniques… ...
    4 days ago
  • Government targets put ahead of students’ education
    The Government must urgently reassess the way it sets NCEA targets after a new report found they are forcing schools to “credit farm” and are undermining the qualification, Labour’s Education spokesperson Chris Hipkins says. “A PPTA report released today says… ...
    4 days ago
  • ER patients in corridors as health cuts bite
    Patients are being forced to wait for hours on beds in corridors as cash strapped hospitals struggle to keep up with budget cuts, says Labour’s Health spokesperson Annette King. “People coming to the emergency room and being forced to wait… ...
    4 days ago
  • Not too late to fix Health and Safety for New Zealand’s workers
    The Government and its minor party supporters are showing an arrogant disregard for workers’ lives by not agreeing to a cross-party solution to the botched Health and Safety bill, Opposition leader Andrew Little says. “Yesterday I wrote to the Prime… ...
    4 days ago
  • Speech to the New Zealand Council of Infrastructure Development
    Tēnā Kotou Katoa. Thank you so much for having me along to speak today. Can I begin by acknowledging John Rae, the President, and Stephen Selwood, the chief executive of the Council for Infrastructure Development. ...
    5 days ago
  • Reserve Bank points finger at Govt inaction
    In scathing criticism of the Government’s inaction, the Reserve Bank says Auckland housing supply is growing nowhere near fast enough to make a dent the housing shortage, Labour’s Housing spokesperson Phil Twyford says. Reserve Bank deputy governor Grant Spencer today… ...
    5 days ago
  • Chickens come home to roost on climate change
    The Government’s gutting of the Emissions Trading Scheme has caused foresters to leave and emissions to rise, says Labour’s Climate Change spokesperson Megan Woods. “The release of the Environmental Protection Agency’s Facts and Figures Report for 2014 on the ETS… ...
    5 days ago
  • Website adds to long list of big spends at MBIE
    The Ministry of Business, Innovation and Employment’s $560,000 outlay on its new website is further evidence of excessive spending by Steven Joyce on his pet project super ministry, Labour’s Economic Development spokesperson David Clark says.  “Hot on the heels of… ...
    5 days ago
  • Brownlee warned over EQC repairs but ignored them
    Gerry Brownlee was warned that EQC’s underfloor repairs weren’t being done properly by industry experts, the cross party working group and in public but he arrogantly ignored them all, says Labour’s Earthquake Commission spokesperson Clayton Cosgrove.  “Today’s apology and commitment… ...
    5 days ago
  • Serco wants in on state house sell off
    The Government must keep scandal plagued outsourcing company Serco away from our state housing after their disastrous record running Mt Eden prison, Labour’s Housing spokesperson Phil Twyford says. "Today it has emerged that at the same time Serco was under… ...
    7 days ago
  • Come clean on Pasifika education centre
    Minister Peseta Sam Lotu-Iinga needs to come clean and tell the Pasifika communities if he’s working to save the Pasifika Education Centre or shut it down, Labour’s Pasifika spokesperson Su’a William Sio says.  “I’m gutted the Pasifika Education Centre funding… ...
    1 week ago
  • Time for NZTA to work on alternatives to flyover
    The High Court decision rejecting the New Zealand Transport Agency’s attempts to build the Basin Reserve flyover must now mean that NZTA finally works with the community on other options for transport solutions in Wellington, Grant Robertson and Annette King… ...
    1 week ago
  • Shiny new system leads to record truancy
    Record high truancy rates shows the Government’s much-vaunted new attendance system is an abysmal failure, Labour’s Education spokesperson Chris Hipkins says. “Data released today shows truancy rates have spiked more than 15 per cent in 2014 and are now at… ...
    1 week ago
  • Woodhouse wrong about quarries
      The Minister for Workplace Relations and Safety Michael Woodhouse was wrong yesterday when he said limestone quarries were covered by the farcical Health and Safety legislation, says Labour’s Associate Labour spokesperson Sue Moroney.  “He said he ‘understood’ limestone quarries… ...
    1 week ago
  • Taxpayers money spent on culling one of our rarest birds
    It beggars belief that four endangered takahe were killed by incompetent cullers contracted to the Department of Conservation and the Minister must explain this wanton destruction, says Conservation spokesperson Ruth Dyson. “It must not be forgotten that there are only… ...
    1 week ago
  • Housing NZ must immediately move family
    Housing New Zealand must immediately move a Glen Innes family whose son contracted serious and potentially fatal health problems from the appalling condition of their state house, Labour’s Housing spokesperson Phil Twyford says. “Te Ao Marama Wensor and community workers… ...
    1 week ago
  • No understanding of the value of overseas investment
     The Government has now admitted it has absolutely no idea of the actual value of foreign investment in New Zealand, says Labour’s Land Information spokesperson Stuart Nash.  “It is crucial that the Government starts to understand just what this overseas… ...
    1 week ago
  • Another bridges bribe from Simon Bridges
    Simon Bridges is embroiled in another bridges-for-votes controversy after admitting funding for a replacement bridge in Queenstown is “very much about… the 2017 election”, Labour’s Transport spokesperson Phil Twyford says. “The Transport Minister is today reported as telling Queenstown locals… ...
    1 week ago
  • Saudi tender process reeks of SkyCity approach
    The tender process for the $6m investment in a Saudi sheep farm reeks like the SkyCity convention centre deal and once again contravenes the government’s own procurement rules, says Labour’s Export Growth and Trade spokesperson David Parker. “The $6m contract… ...
    1 week ago
  • Maori Party should stand up for workers
    The Government’s proposed Health and Safety Reform Bill does not go far enough to protect those in specific industries with the highest rates of workplace deaths, says Maori Development Spokesperson Nanaia Mahuta. “We are told that Maori workers are more… ...
    1 week ago
  • Minister must explain budget blowout
    Māori Development Minister Te Ururoa Flavell must explain a budget blow out at Te Puni Kokiri, after the organisation spent more than 2.5 million dollars over their budget for contractors, says Labour’s Associate Māori Development spokesperson Peeni Henare.  “For the… ...
    2 weeks ago
  • Successful effort to raise the issue of GE trees in proposed standard
    Many thousands of people submitted on the proposed National Environmental Standard –  Plantation Forestry (NES-PF).  A vast majority of the public submissions were particularly focussed on the NES having included GE trees in its mandate. People want these provisions removed,… ...
    GreensBy Steffan Browning MP
    2 weeks ago
  • Fair Share Friday – Thoughts and Reflections
    As part of our Fair Share  campaign, Green MPs have been doing a series of visits to community groups across the country to have conversations about inequality in New Zealand and what communities are experiencing on the ground. I visited… ...
    GreensBy Denise Roche MP
    2 weeks ago
  • Crucial Auditor General investigation welcomed
    The Auditor General’s decision to investigate the Saudi sheep scandal is important, necessary and welcome, Labour’s Trade and Export Growth spokesperson David Parker says. “The independent functions of the Auditor General are a cornerstone of the New Zealand system of… ...
    2 weeks ago
  • KiwiSaver sign-ups continue to fall
    New KiwiSaver sign-ups in July were 45 per cent below the monthly average, despite John Key saying axing the kickstart “will not make a blind bit of difference to the number of people who join KiwiSaver”, says Labour’s Finance spokesperson… ...
    2 weeks ago
  • Contact bows to pressure
    Contact Energy’s decision to cut its pre-pay rates to be in line with its customers who pay monthly is good news and the company deserves credit for responding so quickly, says Labour’s Consumer Affairs Spokesperson David Shearer.  “Two months ago… ...
    2 weeks ago
  • I’m pushing for a ‘fair go’ for solar
    My Fair Go For Solar Bill was pulled from the Members’ Ballot last week and is set for a vote in Parliament. In this blog post I explain some of the background to the bill and how it aims to… ...
    GreensBy Gareth Hughes MP
    2 weeks ago
  • Key must explain why Health and Safety Bill pulled
    John Key must explain why his Government is delaying the Health and Safety Bill when Pike River families have travelled to Wellington specifically to register their opposition, Opposition Leader Andrew Little says. “Yesterday afternoon John Key suggested the bill may… ...
    2 weeks ago
  • Diving for sustainable scallops
    Last week, there were calls for scallop dredging to be banned in the Marlborough Sounds, following scientific report saying that 70% of the Sounds had been lost from dredging, trawling, and sedimentation from forestry. At the same time we see… ...
    GreensBy Steffan Browning MP
    2 weeks ago
  • Backdown whiff in state house leasing option
    Bill English’s admission that the Government is looking at leasing large numbers of state houses to non-government providers has the whiff of a backdown, Labour’s Housing spokesperson Phil Twyford says. “This is an acknowledgement by Bill English that he has… ...
    2 weeks ago
  • Housing crisis downgrade threatening banking sector
    The out of control Auckland housing market is now threatening the banking sector, with Standard and Poor’s downgrading the credit rating of our banks out of fear of the bubble bursting, Labour’s Finance spokesperson Grant Robertson says. “Today we have… ...
    2 weeks ago
  • Good money after bad for failed experiment
    The National government are throwing good money after bad with their decision to pump even more funding into their failed charter school experiment, Labour’s Education spokesperson Chris Hipkins says.  “There are already major problems with several of the first charter… ...
    2 weeks ago
  • National borrows Labour’s idea on urban development
    Labour's Associate Environment spokesperson Phil Twyford says he welcomes the Government's adoption of Labour's policy for a National Policy Statement on urban development, and has called on the Government to take up Labour's offer to work together on these issues.… ...
    2 weeks ago
  • Toothless OIO never refused a single farmland sale
    The Overseas Investment Office has approved more than 290 consents from foreign investors to buy sensitive land in New Zealand, but has not turned down a single application says Labour’s Land Information spokesperson Stuart Nash  “The Minister of Land information,… ...
    2 weeks ago

Public service advertisements by The Standard

Current CO2 level in the atmosphere