“Special Dividends” Equals Cooking The Books

Saturday 23rd Sep 2000 R
ichard Prebble M
edia Release -- Governance & Constitution

Revelations today that the Government plans to raid State Owned Enterprises for cash to fund their social programs is further proof Government’s should stay out of business, said ACT Leader and SOE architect, Hon Richard Prebble.

Today’s Dominion publicised documents obtained under the Official Information Act showing the Government planned to take “special dividends” from key SOEs to boost rapidly disappearing cash reserves. The SOEs targeted include Transpower, Meridian Energy, Genesis Power, NZ Post and TVNZ.

“The Government is basically cooking the books.

“While the cash extracted will appear as a “dividend” on the balance sheet, the Government are basically exposing each SOE to higher levels of debt and therefore greater risk.

“SOEs have to perform in a competitive marketplace. Ministerial interference in management decision making jeopardises the ability of the SOE to perform, and places the value of taxpayer owned assets at great risk.

“The only time an SOE should leverage debt is to meet sound strategic objectives, like commercial expansion, that the management team have approved. Capital appropriation by ministers under the guise of dividends, is further proof that ministers cannot be trusted not to play politics with national commercial assets.

“The power of ministers to interfere in the running of SOEs, with no accountability to shareholders or directors, must be removed,“ said Hon Richard Prebble.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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