Why should taxpayers face the risk?

February 21, 2013

Solid Energy’s shareholding ministers, Finance Minister Bill English and Minister for State Owned Enterprises Tony Ryall confirm the Government has been advised that Solid Energy is in discussions with its banks.

“The Solid Energy board is working with Treasury, advisors and the banks with respect to further restructuring options, with the aim of returning the company to a sustainable financial position,” Mr English says.

“World coal prices have dropped significantly which has contributed to the deteriorating financial position that Solid Energy is in now.

“These discussions are required because the position of the state-owned enterprise has continued to deteriorate despite the restructuring that has already taken place,” Mr English says.

State-owned Enterprises Minister Tony Ryall says a number of factors have weighed against the company, in particular world coal prices dropping by 40%.

 “It is facing very serious financial challenges,” Mr Ryall says. Solid Energy’s debt stands at $389 million and its interim result, which is due shortly, will show additional losses.

“The new chair and board are focusing on a return to a core coal business which is viable at current world prices. The public is aware that there had already been restructuring at the company, but more may be required,” says Mr Ryall.  

“The Government appreciates this is a very unsettling time for employees and suppliers and the company’s wider stakeholders but it is a process which must be worked through carefully and properly,” the ministers say.

Opponents of government plans to sell  a minority shareholding in a few state assets talk about what will be lost.

They don’t talk about what will be gained nor do they talk about the risk that comes with running a business which includes loss of capital.

Why should taxpayers face this risk for something that isn’t core government business?


Clothes maketh not the millionaire

July 8, 2012

Some people who thought they were dressed as millionaires protested  outside the Prime Minister’s home yesterday against the proposal to sell a minority share of a few state owned companies .

They dressed that way to make a point and one point they made was about their ignorance.

You don’t have to be a millionaire to buy shares. A lot of people who are of far more modest means will have the good sense to invest some money when the partial floats are done.

They also showed their ideas about how millionaires dress are rooted in fantasy.

Those in the photo in the link above were dressed as any man, regardless of his financial status, might be for a formal occasion.

These clothes aren’t normal day wear for anyone, except perhaps a doorman, and you can’t necessarily judge people’s worth by what they wear.

Few if any at a seminar a couple of months ago would have owned businesses worth at less than a few million dollars. Had they been urban business people they might have been dressed for the office. But these were farmers. The only ones in suits were staff of the bank hosting the seminar, the rest of the people were tidily but  casually dressed.

If only the protesters understood that clothes maketh not a millionaire.

But the reality of ordinary people who through dint of their own ability and hard work have managed to make money from successful businesses  wouldn’t suit their narrative.

Nor would the idea that ordinary people who work for wages and salaries save and will be keen to invest in shares which ought to bring a far better return than leaving it in the bank and far safer than many finance companies.


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