Impressed to read David Farrar’s post the other day stating the “State should not own commercial companies” It made me think for a second what the difference might be between a “commercial” company and any other company, but I couldn’t come up with an answer. He went on to say-
I don’t want my taxes wasted on bailing out state owned companies. I want to choose which companies I invest in, not have the Government do it for me. We should not own Solid Energy, just like we shouldn’t partially own three power generating companies. They are all commercial enterprises that do not need to be owned by the Government, and present risks to taxpayers if they make bad investment decisions. The role of Government should be to set the rules for the industry and promote competition – not to own the companies.
All excellent stuff. I regret that we couldn’t read more comment from Mr. Farrar and the “role of govt”. Conversely, I seem to recall quite a bit from Mr. Farrar in support of Air NZ, TVNZ, Radio NZ, Maori TV, Ultra-Fast Broadband, Crown Fibre Holdings Limited and all the other government businesses? Maybe I’m wrong on that, however many of these companies were set up by National.
They might know now that they should have got out of Solid Energy some time ago, but there’s nothing to say the same kind of outcome will not eventuate with the other state owned companies. Where’s the push within National to do so? From what I can see it doesn’t exist.
The National Party has previously bailed out Solid Energy twice with taxpayer money, to the tune of NZ$258 million. The government contributed NZ$155 million in October 2013, and it agreed to cover the company’s “obligations to remediate old mines” to the value of $NZ103 million.
Coal is down and even well managed companies are struggling. IMHO there’s no way the dead horse that is Solid Energy will ever get up again.
The National Party can’t divest itself of these companies and the risk to the taxpayer, because they can’t sell the idea to an electorate full of LW BS. They should be able to make the case, but apparently they can’t, so due to that inertia, I guess we’ll just have to prepare ourselves for other bailouts down the track.
Lucky the govt has huge amounts of other people’s money to spend aren’t we?