Do You Trust Treasury, Or Mallard's Mates?

Heather Roy Tuesday, 20 June 2006 Press Releases - Economy

ACT MP Heather Roy is questioning why Treasury officials were forced to take a back seat to a union economist when Cabinet considered allowing State Owned Enterprises to invest outside their core areas of business.

"Today in Parliament I asked why Peter Harris' word was trusted over that of Treasury officials", Mrs Roy said.

"Mr Harris - a well known PSA and CTU economist - was behind recommendations that SOEs should be able to invest outside their core areas of business.

"SOEs are companies owned by government, and funded with taxpayer money.

"Treasury was clearly concerned that SOEs had weak accountability disciplines, that Ministers with multiple objectives had difficulty selecting projects, and that money diverted by SOEs could provide a better return elsewhere.*

"Treasury are our experts on fiscal policy. Mr Harris' background reportedly includes the Labour Party's Policy Council, the Socialist Unity Party and Massey University.

"Yet Trevor Mallard accepted the word of his comrade over the advice of officials.

"If Government isn't going to listen to Treasury's advice, why do they even seek it?

"The current Finance Minister, Michael Cullen, infamously said that Treasury speaks in 'ideological burps'.

"Trevor Mallard may be trying to follow in Dr Cullen's footsteps, but his willingness to ignore Treasury advice is an example of why he should never be Minister of Finance.

"Who should people trust - Treasury, or Trevor Mallard's union mates?", Mrs Roy said.

Peter Harris' recommendations and Treasury's response are available at www.act.org.nz/advice.

ENDS

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