1 October 2013

Govt bail-out of Solid Energy privatisation by stealth

The National Government’s proposed bail-out deal for Solid Energy is backdoor privatisation, the Green Party said today.

Four foreign-owned banks – ANZ, BNZ, ASB and Westpac – will take a $75 million ownership stake in Solid Energy in return for writing off debt. The Government will commit a further $155 million believing Solid Energy’s core business model is sound.

“With the stroke of a pen, National has sold a large chunk of Solid Energy into foreign ownership,” Green Party energy spokesperson Gareth Hughes said today.

“The National Government is proposing to give the big four Australian-owned banks approximately 14 percent of Solid Energy, at the very least.

“This is a conversion of debt into ownership; not a true debt write-off, but the detail is still to come.

“On the face of it, John Key has broken a promise he once made saying mum and dad investors could own a stake in our newly privatised energy companies. Instead, he’s put privileged, powerful banking interests ahead of New Zealanders.

Mr Hughes was also critical of the Government’s guarantee of a further $155 million of tax payer money for Solid Energy.

“The National Government need to take responsibility for their mismanagement of Solid Energy and cut their losses,” said Mr Hughes.

“The banks that made risky loans to Solid Energy need to bear the cost of their mistakes.

“Coal is not going to be the fuel of our future if we are to stabilise our climate.

“New Zealanders and Solid Energy workers need a just transition into more sustainable jobs – jobs that don’t fry the planet.

“The longer this Government effectively denies climate change, the more taxpayer money will go to subsidising coal and its foreign backers.”

ENDS

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