web analytics
The Standard
Advertising

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.

Important links

Recent Comments

Recent Posts

  • Stuart’s 100 #3: Plane Tree Avenues
    Stuart Houghton’s 100 ideas for Auckland continues 3: Plane Tree Avenues Franklin Road, with its historic plane trees, is one of the most loved streets in Auckland. What if plane tree avenues defined all the major city fringe streets? This...
    Transport Blog | 30-07
  • Too Much some recent articles on Inequality
    click here for these...
    Closing the Gap | 30-07
  • From truffle to light crude; oil doesn’t come cheap
    The Governments oil salesman Simon Bridges just can’t catch a break these days. Whether it’s having to admit that he’d never even heard of NZ’s largest forest park (Victoria FP) which he’d just opened up to drillers or getting stick...
    Greenpeace NZ blog | 30-07
  • Submit on the Draft Parking Discussion Document
    Auckland Transport have had their Draft Parking Discussion Document (2mb file) out for consultation over the last couple of months, but this closes at midnight on Thursday. This covers the full range of parking issues around the city, including on-street, off-street and park...
    Transport Blog | 30-07
  • Reaching out to voters
    This is going to be the biggest grassroots campaign we’ve ever run. A couple of weeks ago I shared some of the stats from our voter outreach programme with the media. It’s campaign activity that’s often hidden from view, but...
    Labour campaign | 30-07
  • Scrapped
    Wellington City Council has scrapped its "alternative giving" campaign. Good. As the article notes, the campaign was an expensive failure, with $40,000 spent to raise just $3,500 for the homeless. But despite that, its architects are still trying to pretend...
    No Right Turn | 30-07
  • Following in illustrious footsteps
    Gaylene Nepia is campaign manager for both the national Māori campaign and for her brother Adrian Rurawhe - Labour’s candidate for the Te Tai Hauāuru electorate. Mr Rurawhe and Mrs Nepia are great grandchildren of Tahupotiki Wiremu Ratana, founder of the...
    Labour campaign | 30-07
  • Seeing life through a Maori lens
    Meka Whaitiri, MP for Ikaroa-Rawhiti, is contesting the seat for the first time at a general election. She entered Parliament through a by-election in June last year, following the death of her predecessor Parekura Horomia....
    Labour campaign | 30-07
  • Bribery
    So, it turns out that the government blew $240,000 on hosting eleven oil company executives for a four-day junket during the 2011 rugby world cup. In Parliament today Energy Minister Simon Bridges admitted that $22,000 of that spending was on...
    No Right Turn | 30-07
  • All other things being equal… except they aren’t
    US Supreme Court Chief Justice John Roberts likes to say that “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race", a sentiment ACT leader Jamie Whyte would applaud going by...
    Pundit | 30-07
  • Celebrating a great talent pool
    I've been an MP since the 1996 election, first for Te Tai Hauauru and then for Tainui, which became Hauraki-Waikato after boundary changes. I'm seeing a real energy around Labour among Māori. The talent pool that Labour is fielding in both...
    Labour campaign | 30-07
  • Labour on wages
    Great to see positive, progressive policy from Labour on wages today. The core points are: Increase the minimum wage by $2 an hour in our first year, to $15 an hour in our first hundred days in government, and increased...
    Polity | 30-07
  • Inequality: Balancing the Extremes from Credit Suisse Research Institute
    click here for this youtube clip...
    Closing the Gap | 30-07
  • Labours policies a step change for working people
    “After six long years of working life getting tougher in New Zealand workers have been given a real choice today with the announcement of Labours Industrial Relations policy package.” CTU President Helen Kelly said...
    CTU | 30-07
  • Inequality and Its Consequences Stiglitz and Feldstein
    click here for this youtube discusioon...
    Closing the Gap | 30-07
  • Australia’s corruption cover-up
    Wikileaks strikes again:A sweeping gagging order issued in Australia to block reporting of any bribery allegations involving several international political leaders in the region has been exposed by WikiLeaks. The prohibition emerged from a criminal case in the Australian courts...
    No Right Turn | 30-07
  • A bottom-up plan for inequality
    Labour released its "work and wages" policy today. The headlines? Abolishing the 90-day law and increasing the minimum wage by $2 to $16.25 an hour by April 2015. Those are fairly obvious ways of delivering to their core constituency, but...
    No Right Turn | 30-07
  • World News Brief, Wednesday July 30
    Top of the AgendaU.S., EU to Toughen Sanctions on Russia...
    Pundit | 30-07
  • Where are Labour’s billboards?
    On Sunday, I drove from Gisborne to Katikati, through Opotiki, Te Puke and Tauranga. Yesterday afternoon/evening, I made the return journey. One thing I noticed is that National Party billboards popped up regularly, mixtures of individual candidates’ billboards (simply stating...
    Occasionally erudite | 30-07
  • “Improving”
    End-of-Year process positive for Novopay, Steven Joyce, 17 January 2014:Minister Responsible for Novopay Steven Joyce says a 100 per cent completion rate for schools involved in the End-of-Year process and an accompanying low error rate are tributes to the hard...
    No Right Turn | 30-07
  • Farmers don’t set out to pollute our rivers
    It can be easy to vilify farmers. But no farmer sets out to create pollution, and the evidence suggests that many farmers are either already acting responsibly or that they are lifting their game. In particular, dairy farmers are acting....
    Gareth’s World | 30-07
  • Guide to economic evaluation part 3: What is agglomeration?
    Debates over major transport investments often get caught up in arguments over benefit-cost ratios, or BCRs. In recent years, projects such as the Transmission Gully and Puhoi to Warkworth motorways and the City Rail Link have been criticised for their...
    Transport Blog | 30-07
  • Where to now for Colin and the Conservatives?
    It’s (almost*) official – there’s no deal for Colin Craig in East Coast Bays. Murray McCully will not be knifed, thrown under a bus or given concrete shoes to go swimming in. Given that Mr Craig had already accepted he...
    Occasionally erudite | 29-07
  • Real men say sorry
    There are a couple of universal truths that all men should be aware of. Firstly, it takes a bigger man to walk away. Of course men can be accused of being weak if they don't confront their problems with violence,...
    The Jackal | 29-07
  • Why my children took part in a playful protest against LEGO’s partner...