Quote of the day from Q+A:
CORIN And are you confident there will be much better decision-making, that these MOM companies, in general, are going to have better board making decisions?
BILL I think mixed-ownership companies will, but there’s a real challenge for government with the lessons from Solid Energy. When you look ahead, the companies that the government will own all have their challenges – NZ Post with the shrinking postal market, TVNZ and the digital media environment, a coal company if there is still a coal company. And we are going to have to change the way we work with these companies to ensure that we don’t lose taxpayers’ money. Because the taxpayers’ money in these companies doesn’t come out of the sky; it comes from the PAYE and the GST paid by NZ households. And we have a strong responsibility for the stewardship of that money.
How good it is to have a Finance Minister who understands where the money comes from.
Joanne Black has a good case for the Mixed ownership Model for state assets (on-line here next week):
. . . I need think only of Solid Energy’s plans to build a lignite-to-briquette plant to remind myself why ownership of these companies is better left to people who can afford to risk (that is, possibly lose) their money, than to have such investments funded by taxpayers.
I imagine most of us could think of several hundred things on which the government could more urgently and usefully spend our taxes than on finding out whether converting lignite to briquettes actually works. It might not.
that is not a reason for Solid energy to not pursue the project, but it is quite a good reason why someone other than taxpayers alone should pay for it.
Opponents of the MOM have focussed on the income that will be lost when a minority of shares are sold.
They conveniently overlook the costs, and the risks, that will be reduced when they’re shared by other investors.