SOE sale has taxpayers over a barrel

National’s insistence on keeping its doomed asset sales programme on the road at all costs, has the taxpayer over a barrel, says Labour’s State Owned Enterprises spokesperson Clayton Cosgrove.

“State-Owned Enterprises Minister Tony Ryall continues to keep New Zealanders in the dark around the cost of the Government’s subsidy for Tiwai Point, just as he did before Solid Energy collapsed.

“The Minister has a responsibility to explain to the people of New Zealand what is in their best interests, but it is obvious his only motivation is to prop-up the sale of SOEs.

“This botch-up is yet another example of financial mismanagement by Government. Mr Ryall knew that Solid Energy was going down the gurgler but refused to intervene. Now, just hours after the Rio Tinto deal hits the rocks the Government is negotiating a bailout without offering the taxpayer any information about the options.

“Where there are trade-offs with taxpayer coin, there is an absolute need for transparency. We know from the evidence given by Meridian at Select Committee that Government intervention to prop-up the Tiwai Smelter contract would have an effect both on residential power prices and the values that will be obtained for SOEs on sale.

“Mr Ryall was warned about the risks of proceeding with asset sales by analysts, commentators and the opposition before it had concluded a deal with Rio Tinto. He chose to ignore those warnings. And what do you know, as soon as the Government gave the sale of Mighty River Power the green light, Rio Tinto sprang the trap. The Government has been leveraged here by its own mismanagement—they have behaved like a bunch of amateurs.

“Meridian chief executive, Mark Binns, said Rio Tinto had $16 billion US positive cashflow last year. The taxpayer has no idea what a Government subsidy will amount to, but will get stuck with the bill. That’s on top of higher power prices and the cost of buying back shares they already owned.

“The Minister refused to front-up and explain himself this morning – a position that isn’t earning him any brownie points with taxpayers . New Zealand’s deserve the facts before they are expected to pick up the cheque,” Clayton Cosgrove said.

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