New Zealand Labour Party

Biggest Government Owned Collapse since DFC, but no proper debate

Just like Donald Trump, Steven Joyce seems to be saying losing a billion dollars is smart business, says Labour’s spokesperson on State Owned enterprises David Parker.

“National is arrogantly denying accountability for the billion dollar loss they caused. The collapse of Solid Energy is the biggest collapse of a company wholly owned by government since the National’s DFC fell in the 1980s.

“Today, the day after the announcement of the sale of Solid Energy’s assets, Minister Steven Joyce said at question time:

  1. Solid Energy’s December 2008 debt of $31 million (5 per cent of assets) had risen to $375 million (41.6 per cent of assets) by December 2012.
  2. Denied their pressure on Solid Energy to increase indebtedness to 40 per cent caused increased dividends and higher debt.
  3. Still asserted their pressure, as owners of Solid Energy, to increase dividends and debt was prudent.
  4. Refused to accept it was imprudent to reject the warning from then Chair John Palmer against high debt for a coal commodity company like Solid Energy.
  5. Could not or would not confirm the total loss to shareholders and lenders to Solid Energy, even to within a hundred million dollars. 

“The arrogance of these denials is shown by the documentary record, which disproves them. National drove Solid Energy into the ground. Their appalling negligence also cost hundreds of jobs.

National’s high-handed denial of responsibility is symptomatic of a government that has been in power too long. Rather than apologise to taxpayers, their response is once again to say there is nothing to see here, says David Parker.