Why risk public money?

This comment from Solid Energy chair John Palmer could be used by both sides of the debate on the Mixed Ownership model for state assets:

“Palmer also indicated Spring Creek has been in trouble for some time, and if Solid Energy had been a listed company, it could not have been so patient for as long as it had in trying to reach viability.”

Opponents of the partial sale of a few companies will argue that this shows government ownership provides greater protection for a company in tough times.

Supporters of the policy will say it proves that partial ownership will add extra discipline to the governance and that it is better for decisions to be based on market conditions than politics.

I am in the latter camp.

Why should public money be put at greater risk than private funds?

 

 

 

4 Responses to Why risk public money?

  1. robertguyton says:

    Interesting Ele…you believe the closure of Spring Creek is the result of politics.
    The Government claims a fall in coal prices…

  2. homepaddock says:

    No Robert, persevering as long as the company did was because of politics. To be quite clear I meant the company considering the politics, not politicians interfering.

  3. sallyco says:

    What HP had written was quite clear, but RG doesn’t seem to have the intellect to see that. Alas he has this unhealthy appetite to be constantly twisting what others have written.

  4. Roger says:

    Given there is several private companies mining coal why should the government own a coal mine at all. There is no market failure requiring government intervention.

    Guyton as usual conflates politics with commerce. By continuing to own Spring Creek the government on behalf of all taxpayers has lost millions of dollars of value. We are all poorer as a result.

    This a fabulous example of why the government should not take commercial risk on behalf of all taxpayers in industries where there are many private owners willing to take that risk. themselves.

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