INDEPENDENT NEWS

Government Needs To Get Its Story Straight

Published: Tue 26 Sep 2000 06:36 PM
Government Needs To Get Its Story Straight
Tuesday 26th Sep 2000 Richard Prebble Media Release -- Economy
The coalition’s attempts to explain a proposed $180 million special dividend from State Owned Enterprises have added to the confusion, said ACT Leader and first Minister of State Owned Enterprises (SOEs), Hon Richard Prebble.
Documents obtained under the Official Information Act show the Government plans to take up to $180 million in “special dividends” from key SOEs to boost rapidly disappearing cash reserves. The SOEs targeted include Transpower, Meridian Energy, Genesis Power, NZ Post and TVNZ
“There is a growing concern in financial markets that this proposal both undermines SOEs commercial independence and is driven by a Government concerned its revenue targets may not be met after a recent BNZ deficit prediction.
“Helen Clark’s statement on Monday that the proposal was ‘a mystery to her’ that had ‘come out of thin air’ shows that there has been no Cabinet discussion on this radical proposal.
“Acting Finance Minster Trevor Mallard’s statement today claiming that this had been well signalled in the Budget adds to the confusion. The Budget comment contained in the Budget Economic and Fiscal Update was ‘The Government is considering reviewing the capital structure of state-owned enterprises (SOEs) to align with best commercial practice. An increase in private sector funding may result in return of capital to the Crown which will decrease Crown net debt.
“There was no suggestion that the Government was looking at a $180 million grab which would clearly change debt to equity ratios, and in the case of TVNZ appear to completely contradict other Ministers claims that the SOE will be making more New Zealand programmes.
“What Trevor Mallard needs to set out is firstly, do the SOE directors agree with this requirement being forced on them to raise more debt, and, is it fiscally prudent? The Government should also state whether the special dividend will be a capital item and used to repay Crown debt or will it be used to increase SOEs dividends thus appearing as revenue.
“If it is the latter the Government is clearly defeating the objective of the Fiscal Responsibility Act and is cooking the books. If it is the former, is the Government being a prudent investor when it can borrow money cheaper than any SOE?
“It is important for the Government to be very open about its proposals as the contradictory statements and lack of transparency are very damaging to the Government’s economic credibility,” 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.

Next in New Zealand politics

Govt Moves On Drug Checking To Keep Young New Zealanders Safer This Summer
By: New Zealand Government
13 Parties Charged By WorkSafe New Zealand Over Whakaari/White Island Tragedy
By: WorkSafe NZ
Progress On Pay Equity For DHB Staff
By: New Zealand Government
Stuff Holds Itself Accountable For Wrongs To Māori
By: Stuff
New Zealand Government To Declare A Climate Emergency
By: New Zealand Government
Crown Accounts Reflect Govt’s Careful Economic Management
By: New Zealand Government
ACT Supports Pill Testing Bill
By: ACT New Zealand
Legal Drug Checking This Festival Season Will Help Protect Our Young People: Green Party
By: Green Party
Timely Decision On Festival Drug Checking Will Save Lives
By: NZ Drug Foundation
Whakaari / White Island Eruption 22nd Death
By: New Zealand Police
Health Minister Priorities Welcomed
By: Association of Salaried Medical Specialists
More Accessible Pay Equity Measures Come Into Force
By: New Zealand Government
Māori Language Commission Welcomes Stuff Announcement
By: Te Taura Whiri i te Reo Maori
Climate Change An Economic Issue; Critical For The Planet’s Future
By: Make Lemonade
Climate Emergency Declaration A Win But Needs Action
By: Greenpeace New Zealand
View as: DESKTOP | MOBILE © Scoop Media