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Posts Tagged ‘Bill English’

The Rise and Fall of John Key – who will be the next Leader of the National Party?

26 August 2014 6 comments

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john-key-smile-and-wave

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It was all set to go: Teamkey would be the cult of personality that would do Stalin, Mao, Reagan, Thatcher, or any of the Nth Korean Kim Dynasty, proud.  National and it’s “Teamkey” propaganda strategy  would cash-in Big Time on Key’s immense public popularity.

It was a popularity that seemed impervious to all the scandals, stuff-ups, and questionable economic and social policies enacted by this government over the years. Every time a minister stuffed up,  Key’s popularity remained unblemished.

People couldn’t work out how it was being achieved. Despite shitstorms surrounding so many National ministers – many of which resulted in sackings/resignations – Key walked through it, much like Superman might walk through an atomic bomb-blast, barely feeling a tickle.

But Key is no extra-terrestrial super-powered being (despite accusations to the contrary). His seeming talent for invulnerability wasn’t a preternatural super-power. It was wholly manufactured by mere mortals, working in back-rooms, funded by tax-payers, and played out with ruthless efficiency.

The plan, as outlined in Nicky Hager’s expose, “Dirty Politics“, and based on leaked emails, was that Key would be kept “above politics”. Others would do the dirty work, and he would maintain an “apolitical”, almost Presidential style. It was a form of fake neutrality.

When  Key said in January 2011,

“I don’t think it suits me as a person. I’m not a negative person and a lot of Opposition is negative.”

- he wasn’t talking about his own persona, he was reciting a pre-prepared script.

Nicky Hager’s book has stripped away the secrecy to this plan and Key’s closeness to the players in dirty politics has been exposed to public scrutiny.

Russell Norman once pointed out that there is a great deal of similarity between John Key and Robert Muldoon. Russell was half-way correct. Key’s politics was every bit as destructive as Muldoons, attacking, destabilising, and under-mining critics of the government.

The only difference is that Muldoon did his own dirty politics. He never hid behind others.

Dirty Politics” has achieved more than simply revealing  unwholesome machinations between National party apparatchiks, ministers, and halfway-insane right-wing bloggers. The book has explained the nature of Key’s seemingly “Teflon” nature. The secret is revealed; the mystery is stripped away; and now, when Key is confronted by a media pack, the brown smelly stuff is sticking to him.

Result? Key is just another self-serving politician and his bloody-mindedness in continuing to shield Judith Collins is corroding his reputation and public standing. I am guessing this will be reflected in coming polls. It’s game over for this government.

If National loses this election, Key has already made it abundantly clear what his intentions will be;

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Key says he'll quit politics if National loses election

 

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Which then begs the question – who would replace Key?

Of the options available to National, I offer these insights;

Steven Joyce

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joyce

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Style: loud, abrasive, intolerant of dissenting views.

Low points: his “debate” on TV3’s “The Nation“, with Labour’s Grant Robertson, where he continually shouted over his opponant and almost hijacked the show.  Or his veiled threats against protesting tertiary students in September 2011.

Leadership chances: 5/10

Electoral saleability: 3/10

Comment: Joyce alienates people by shouting them down. It is bullying and as a political strategy makes him a liability. His pugnacity is more openly Muldoonesque than any other politician.

Judith Collins

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collins

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Style: abrasive, intolerant of dissenting views, 100% Pure vindictiveness in high-heels.

Low points: her relationship with National’s black-ops team headed by Jason Ede and Cameron Slater; lying about journalist Katie Bradford; dodgy dealings with Oravida; mis-use of ministerial power; etc, etc, etc, etc, etc.

Leadership chances: 2/10

Electoral saleability: 0/10 (nil)

Comment: Collins would be a gift for the Left if she were elected Leader of the National Party. She brings back memories of Jenny Shipley – and didn’t that end ‘well’? The Nats would be unelectable with her as Leader. (In simple terms, her political career is over.)

Bill English

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english

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Style: inoffensive.

Low points: rorting the ministerial accomodation allowance (double dipping) in 2009. A silly thing to do for minimal gain. Mostly forgotten by the general public.

Leadership chances: 7/10

Electoral saleability: 7/10

Comment: English has been mostly untainted by all the scandals swirling around Richard Worth, Phil Heatley, Pansy Wong, Nick Smith, Aaron Gilmore, John Banks, Hekia Parata, Judith Collins, et al. In fact, he distanced himself from Collins’ actions in leaking a civil servant’s personal information to far-right blogger, Cameron Slater, by saying,

“I certainly wouldn’t condone an attack by a blogger on a public servant doing their job.”

If  English is positioning himself for a future leadership bid, it was a good move.

English was Leader of the National Party from 2001 to 2003, and was dumped after the Nat’s worst electoral result in decades. During that time, he’s kept his head down; focused on economic issues; and avoided public controversies.

He comes across as likeable, and the public might be persuaded to give him another shot as a Leader.

Conclusion

The political dramas will only be beginning on 20 September.

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References

NZ Herald: Key says he’ll quit politics if National loses election

Fairfax media:  Key’s staff can’t disprove reptilian theory

NZ Herald:  Norman – Key ‘acting like Muldoon’

TV3:  The Nation – Debate: Grant Robertson and Steven Joyce on the wealth of the nation

NZ Herald: Bill English to pay back part of allowance

Wikipedia: Bill English – Leader of the Opposition

Wikipedia: 2002 General Election

Radio NZ: Key, English distance themselves from Collins

Previous related blogposts

Dear Leader loves you!

It’s official: Political Dissent Discouraged in NZ!


 

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20 september 2014 VOTE

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 21 August 2014

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Radio NZ Debate: Bill English vs David Parker

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20-september

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Check out this excellent debate between National’s Bill English and Labour’s David Parker. Well worth listening to;

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Election Issues debate - Economy - bill english - david parker - radio nz - housing - 2014 election - debate

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Alternative link: Listen to Bill English and David Parker debate the economy on Nine to Noon

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john key is scared of your vote

Above image acknowledgment: Francis Owen/Lurch Left Memes

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The Donghua Liu Affair: Evidence of Collusion between the NZ Herald and Immigration NZ?

25 August 2014 8 comments

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composite header - donghua Liu Affair

1. Prologue

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The Donghua Liu Affair hit  the headlines on 18 June, with allegations that David Cunliffe wrote a letter in 2003,  on  behalf of  business migrant, Donghua Liu.

Four days later, on Sunday 22 June, the Herald ran stories alleging  massive donations to the Labour Party by Liu. Tabloid- style stories of  $100,000 paid for a bottle of wine and $15,000 for a book, along with a $50,000-$60,000 dinner party hosted for then Labour minister, Rick Barker, and a donation to a rowing club, raged for several days.

By Wednesday, on 25 June,  the Herald was forced to retract  Liu’s claims. The “new” story was that Liu’s  “donation” was,

… close to $100,000 and that is my closing comment in my statement…that is how much I believe I have donated in total to Labour and some of their MPs during their last term in Government.”

The so-called Yangtze River boat “dinner for Rick Barker” turned out to be some sort of staff function that Liu had invited the Labour minister to attend.

Only Liu’s donation – of $2,000 – to the Hawkes Bay Rowing Club, was confirmed.  Considering that any “link” between the NZ Labour Party and Hawkes Bay Rowing Club is tenuous at best (Barker’s daughter was a member of the club), the value of this aspect of the Liu Affair is dubious, to put it mildly.

Cunliffe’s 11 April 2003 letter was far from “avocating on Liu’s behalf”. Instead, the eleven year old letter turned out to be a stock-standard inquiry sent to Immigration NZ with the rather banal request ,

I am aware of the difficulties facing the Business Migration Branch of New Zealand Immigration Services in coping with the overwhelming numbers of applicants that have applied for consideration under these categories and the time taken to verify documents. However it would be very helpful to Mr Liu to be advised of an estimated period of time period [sic] in which he could expect a decision on his case.

Requesting “an estimated period of time period” seems a stretch to describe it as advocating.

Accordingly, this blogger lodged a formal complaint with the Herald’s editor-in-Chief, NZ Press Council; and OIAs lodged with Deputy PM,  Bill English; Immigration Minister Michael Woodhouse, and the Office of the Prime Minister.

A letter seeking clarification was also emailed to Herald journalist, Jared Savage, which he has responded to.

The responses thus far, and the next steps taken…

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2. The NZ Herald – formal complaint to the Press Council

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On 28 June, I sent a formal complaint to  Tim Murphy, Editor of the Herald, regarding his paper’s handling of the Donghua Liu story. (See:  The Donghua Liu Affair: responses from NZ Herald and Prime Minister’s Office – Is the PM’s office fudging?)

On 4 July, Mr Murphy responded. I considered his formal response and explanations to be inadequate and in one instance (John Armstrong’s column calling for David Cunliffe’s resignation) no attempt was made to address the issue.

Accordingly, I lodged a formal  complaint to the Press Council  on 5 July.

Two days later, the Press Council referred the complaint to the Herald;

From: Mary Major [mailto:info@presscouncil.org.nz]
Sent: Monday, 7 July 2014 8:27 a.m.
To: Tim Murphy
Cc: Sarah Lawrence
Subject: FW: Online Complaint

Dear Tim and Sarah,

Please see below for a complaint from Frank MacSkasy.  Could we please have
your response within the next 10 working days.

Kind regards,
Mary

On 15 July, the Herald’s editor responded to the Press Council;

From: Sarah Lawrence [mailto:Sarah.Lawrence@nzherald.co.nz]
Sent: Tuesday, 15 July 2014 5:00 p.m.
To: Mary Major
Subject: FW: Press Council complaint – Frank Macskasy

Hello Mary

Please find below a response from Tim Murphy to the Frank Macskasy
complaint.  Also enclosed is the full record of Herald stories for the
Council’s information as mentioned by Tim below (I had to split them into
two parts, hope that’s OK), and also our responses to his initial
complaints.

Thanks so much.

Kind regards

SARAH LAWRENCE
PA to Editor in Chief of Herald Titles
[phones numbers redacted - FM]

—–Original Message—–
From: Tim Murphy
Sent: Thursday, 10 July 2014 10:55 a.m.
To: Sarah Lawrence
Subject: RE: Press Council complaint – Frank Macskasy

Dear Mary
We have corresponded with Fran [sic] Macskasy twice on this issue.  I have
enclosed our two replies, which I believe address his concerns.  The second
reply is to a complaint almost exactly the same as the one below forwarded
to the Press Council.  At this point we believe those responses should stand
as our submission to the Council.  We have included the full record of
Herald stories on the Donghua Liu-Labour donations issue for your reference.
Many thanks

Tim Murphy
Editor-in-chief, New Zealand Herald titles.

A day later, the Press Council contacted me with the Herald’s response;

from: Mary Major <info@presscouncil.org.nz>
to: Frank Macskasy <fmacskasy@gmail.com>
date: Wed, Jul 16, 2014 at 9:51 AM
subject: FW: Press Council complaint – Frank Macskasy

Good morning Frank,

Please see below and attached for the response from the NZ Herald.

You now have the opportunity to make a brief final comment (around 150
words). We would be pleased to receive this comment within the next 10
working days. The complaint will be considered by the Press Council at the
next meeting, which is on August 4, and the decision will be released about
two weeks after that.

Kind regards,
Mary

My final comment (unfortunately, not so brief, because of the complexities of this issue), was made on 19 July;

from: Frank Macskasy <fmacskasy@gmail.com>
to: Mary Major <info@presscouncil.org.nz>
date: Sat, Jul 19, 2014 at 3:01 PM
subject: Re: FW: Press Council complaint – Frank Macskasy

Kia ora Mary,

I have read Mr Murphy’s response to my complaint and I do not believe they are a satisfactory response to the issues I have raised in my complaint.

1. Many of the Herald stories relating to David Cunliffe’s letter to Immigration NZ, regarding Donghua Liu, did not refer to the actual date of the letter (11 April 2003). In several subsequent stories referring to this letter, the Herald omitted any reference to the date, thereby leaving an unknown number of readers with the impression that the letter was recently written. This is a salient, critical fact of the story and it’s omission may have created a mistaken perception in the minds of many readers.

There was simply no valid reason to with-hold that vital fact from subsequent stories.

2. Tim Murphy wrote on 4 July, ” We stand by our report that a book was purchased and expect further ‘evidence’ of this to be made public shortly”.

As of this date (19 July), over two weeks have passed and no ” further ‘evidence’ of this [has been] made public” to date.

The Herald has presented an unsubstantiated claim as fact, thereby mis-representing the truth and giving readers an impression that this claim was verified as true.

Promises of “further evidence” have not materialised. There is no indication when “further evidence” will ever materialise.

3. Regarding the Herald’s “clarification” of Donghua Liu’s claims for $100,000 spent on a bottle on wine.

(A) The “clarification” was inadequate because more coverage was given to the initial (false) claims than the clarification. This is bound to create a lasting impression in the minds of many readers that the initial (false) allegation was correct, being unaware of a subsequent “clarification”

(B) No apology was made to Labour leader, David Cunliffe.

The story was therefore false and only a cursory attempt made to rectify it.

4. I wrote in my complaint that “It is manifestly unfair, unreasonable, and unconscionable that the Herald has not released, in full and verbatim, Liu’s “signed statement” as it did with David Cunliffe’s 2003 letter.”

Mr Murphy replied, “We do not automatically make public documents which we obtain as part of ongoing journalistic inquiries. There are many reasons for this, including the conditions upon which they were obtained from whatever source and the need for us to pursue further matters contained within. While there seems to be an expectation that journalistic inquiry must be ‘open source’ this ignores these conditions and also the competitive nature of news gathering. The Cunliffe letter was obtained under the Official Information Act and was released to all media, so is thus automatically a public document.”

I maintain that Mr Murphy has not provided solid grounds for with-holding Mr Liu “signed statement” except reference to “the competitive nature of news gathering”. This is wholly inadequate and gives only a one-sided view to this story. The public are unable to determine for themselves precisely what is is that Mr Liu has stated.

Given that he has already been shown to be less than credible with his allegation (see Point 3 above), I maintain this is a salient aspect of the story.

It is also worth noting that the media rails against governments of various hues for restricting the flow of information under the guise of “commercial sensitivity” and it is supremely ironic that the Herald – a news media organisation – is now following suit and employing the same tactic.

5. Mr Murphy fails to respond in any way to my complaint regarding John Armstrong’s column on 18 June.

6.

(A) The Herald’s stories regarding former Labour MP, Rick Barker attending a river boat cruise in 2007 were not based on fact, and instead relied on nothing more than hear-say from Donghua Liu – who has already had to retract his allegations of a $100,000 bottle of wine. Mr Murphy stated, “You seem to have accepted without question MP Rick Barker’s claim he attended only a staff party in China. We do not accept this and expect further details of the hospitality for him and others in China to be revealed in due course.”

As Bervan Hurley wrote these allegations on 22 June, it is now one month later and no “further details of the hospitality for him and others in China [have been] revealed in due course”.

In effect, the Herald has made allegations on one man’s unproven assertions and is now promising to “reveal in due course further details”. Mr Murphy offers no hint of when “due course” will arrive.

(B) Mr Murphy writes on the issue of Liu’s $2,000 donation to the Hawkes Bay Rowing Club; “It would be wilfully naïve to assume that the donation to the rowing club associated with an MP, the day after that MP has hosted Liu in the region, is unconnected to that MP. The donation was made and Liu made it with the intent of it being in favour of the MP.”

It is simply astounding that Mr Murphy explains away the story regarding Liu’s donation as “Liu made it with the intent of it being in favour of the MP”. Since when can one man’s intent to “curry favour” be turned into a story implicating Rick Barker and the Labour Party of inappropriate activities? What Mr Liu “intended” cannot be laid at the feet of Mr Barker.

Conclusion.

It is obvious that the Herald relied on one man’s (Donghua Liu) unsubstantiated assertions – of which one has been retracted; one remains unproven; whilst others have been mis-represented.

This was a story predicated on very little, and which has caused untold damage to a main political party* in a critical juncture in election year.

As such, I maintain that the Press Council should act accordingly in fairness and to send a strong signal to the media that unfair and unbalanced stories based on hear-say are grossly irresponsible and unacceptable.

Regards,
-Frank Macskasy

* Note: I am not a Labour Party member or supporter.

Now we wait to 4 August for a decision from the Press Council.

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2. NZ Herald journalist Jared Savage – Clarifications sought

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On 19 June, I lodged an OIA request with Immigration Minister Michael Woodhouse (to be reported in the next chapter of this story; The Donghua Liu Affair: OIA Responses from the PM; Deputy PM; the Immigration Minister, and next steps).

A response from the Minister’s office was received on 17 July.

Within that response were  various pieces of information that required clarification from Herald reporter, Jared Savage, who had been covering much of the Donghua Liu “story”. Accordingly, I wrote to Jared with my questions;

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From: fmacskasy@gmail.com
Sent: Thursday, 17 July 2014 8:52 p.m.
To: Jared Savage
Subject: OIA Request; Donghua Liu; clarification on your involvement

This message has been sent via the NZ Herald Website
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Frank Macskasy
fmacskasy@gmail.com

Kia ora Jared,

I am in receipt of information from Minister Michael Woodhouse’s office released to me under an OIA request.

The information provided requires some clarification on your part.

1. You lodged an OIA request on 16 June 2014 with Minister Woodhouse’s office, seeking, “Any correspondence, including emails, letters or queries, from any Members of Parliament in regards to Donghua Liu’s immigration status prior to 2005″.

2. You received a response, with relevant information, two days later on 18 June 2014.

3. Can you explain why you specifically mentioned “Donghua Liu’s immigration status prior to 2005″? Why did you mention the specific year of 2005?

4. You received material from Minister Woodhouse’s office within 48 hours – an unusually rapid “turn-a-round” time for an OIA request, which normally take weeks, if not months, to complete. Can you shed any light on why you received the information (including the 11 April 2003 letter from David Cunliffe to Immigration NZ) so quickly?

5. Can you confirm that you received a “tip off” to make the OIA, and, specifically, that you were aware of the Cunliffe/Donghua Liu/Immigration NZ letter prior to receiving a copy of it from Minister Woodhouses’ OIA release?

These questions are part of an on-going story I am writing on the Liu Affair. There appears to be unanswered questions surrounding the Herald’s involvement in this issue and any assistance you can provide to clear up unresolved issues will be appreciated.

Regards,
-Frank Macskasy
Blogger

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Jared Savage replied later that day;

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from: Jared Savage <Jared.Savage@nzherald.co.nz>
to: “fmacskasy@gmail.com” <fmacskasy@gmail.com>
date: Thu, Jul 17, 2014 at 11:27 PM
subject: RE: OIA Request; Donghua Liu; clarification on your involvement
mailed-by: nzherald.co.nz

Hi Frank,

Happy to answer questions as I’ve previously answered these on Twitter.

You might recall that prior to writing about Donghua Liu’s links to Labour, I wrote extensively about his links to the Nats.

It all started with queries about his citizenship while the Nats were in power, against advice, specifically after Maurice Williamson writing an email in support in 2010…it eventually led to Mr Williamson’s resignation as a Minister for intervening in a police matter and the discovery that Liu was also lobbying Immigration Minister Woodhouse to change policy.

I’ve also previously written about another citizenship case, Bill Liu (no relation), which was also granted against advice, but this was when Labour was last in Government.

It got me thinking about Donghua Liu’s bid for residency in 2005, which was also granted by Labour against official advice by Damien O’Connor, and whether he was lobbied.

I initially asked for his entire residency file under the OIA on May 8. I note that the next day Minister Woodhouse asked for the file.

I was declined the entire file on privacy grounds on June 16. As I was really only interested in whether MPs were involved in his residency bid, I refined my request to ask for any correspondence from MPs because this is clearly in the public interest.

I specifically mentioned prior to 2005 because this is when Mr Liu was granted residency, against advice. There would not be any correspondence after he gained residency.

Unfortunately, it was clumsily worded because Immigration officials interpreted the word prior to exclude 2005 in the response. I then lodged a further OIA request which revealed Mr O’Connor intervened 3 times in the lead up to residency being granted – including waiving the English language criteria – the day before the 2005 election.

I also wrote that Mr Liu has spent considerable time with Labour Minister Rick Barker in 2007 – the Minister in charge of citizenship under Labour- including hosting him in China and the Hawke’s Bay.

Coming back to the June 16 request, two days later, I received the letters. I have no idea why Immigration released it so quickly. Probably because they had already processed my earlier request of June 16 so the file was available, but you’d have to ask Immigration.

The reason why I asked questions about the potential involvement of MPs in Liu’s residency bid was that I was suspicious in the same way I was suspicious about the involvement of MPs in the citizenship bid.

Does your OIA response focus on Minister Woodhouse’s OIA response to me, solely, or to all media outlets?

Because it was not a Herald reporter asking direct questions of Mr Cunliffe’s potential involvement the day before the release of the letters…

Hope that helps

Jared

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Awaiting information from several OIA requests and a Press Council complaint, I held off responding to Mr Savage. However, I have since received responses to OIA requests lodged with the offices of John Key, Immigration Minister Michael Woodhouse, and Deputy PM Bill English. A decision from the Press Council is due today (21 August).

Today (21 August), I wrote back to Jared Savage, asking for clarification on certain matters;

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from:      Frank Macskasy <fmacskasy@gmail.com>
to:           Jared Savage <Jared.Savage@nzherald.co.nz>
date:       Thu, Aug 21, 2014 at 9:34 AM
subject: Re: OIA Request; Donghua Liu; clarification on your involvement

Kia ora Jared,I am in receipt of your email dated  July 17, 2014 at 11:27 PM, in reply to my email dated earlier the same day. Your prompt response is appreciated. (My own apologies for taking so long to reply.)

I have some follow up questions which, I hope, may clarify the answers you have already provided. (I am still pursuing this story, as I believe there are facts yet to be uncovered, especially in the light of Nicky Hager’s book, “Dirty Politics”.)

1. You write; “Coming back to the June 16 request, two days later, I received the letters. I have no idea why Immigration released it so quickly.”

Question A: Have you, or any other NZ Herald staffer asked Immigration NZ why the letter was released so quickly?
Question B: Was this rapid turn-a-round for an OIA request discussed at NZ Herald, and if so, what was the outcome?

Question C: Do your happen to have a copy of the email from Minister Woodhouse/Immigration NZ and specifically,  the date-time on it?

I would appreciate a copy of the covering letter that accompanied the 2003 Cunliffe-Liu letter. I am assuming that will not break journalistic standards in protecting your sources, as the source of the letter is now public information.
Question D: What other correspondence have you had with Minister Woodhouse, Immigration NZ, or any other Third Party on this matter?

2. You write; “Does your OIA response focus on Minister Woodhouse’s OIA response to me, solely, or to all media outlets?  Because it was not a Herald reporter asking direct questions of Mr Cunliffe’s potential involvement the day before the release of the letters…”

I have searched the internet for prior references to David Cunliffe’s involvement with the  Donghua Liu Affair, and can find only two media reports that *appear* to precede your 18 June Herald story. One is from Interest.Co.Nz (http://www.interest.co.nz/news/70461/cunliffes-labour-leadership-under-pressure-letter-shows-he-advocated-donghua-liu-2003-des), and the other from TV3 (http://www.3news.co.nz/Controversial-Chinese-donor-also-gave-to-Labour/tabid/1607/articleID/348740/Default.aspx). However, they both refer to your newspaper as the source of the story.

The TV3 story does not refer to the Cunliffe 2003 letter.

The Interest.co.nz story by Bernard Hickey referring to  the Cunliffe 2003 letter was published at 1.45pm on 18 June – earlier than your story (http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11276510) at 2.29 and yet still appears to link to your story, published 44 minutes later.
Question E: Can you suggest how Interest.co.nz came to have that information?
I understand that TV3 journalists were putting questions to David Cunliffe on 17 June (one day BEFORE you or anyone else had received the 2003 Cunliffe-Liu letter, via an OIA request)  regarding what contact he had with Mr Liu.Question F: Do you have any idea why they asked those very specific questions, and how they tied in with the 2003 Cunliffe-Liu letter?
 3. You wrote; “It got me thinking about Donghua Liu’s bid for residency in 2005, which was also granted by Labour against official advice by Damien O’Connor, and whether he was lobbied..”

Question G: Where did you first learn about this?

Question H: Were any of O’Connor’s letters already in the public arena? (I can’t locate any  prior to your Herald story.)

Your Editor, Tim Murphy, has stated that there is much more to come on the Donghua Liu Affair, with new evidence to confirm his allegations.Question I: Will there be follow up stories on this issue? Are any in the pipeline?

5. You wrote, “I also wrote that Mr Liu has spent considerable time with Labour Minister Rick Barker in 2007 – the Minister in charge of citizenship under Labour- including hosting him in China and the Hawke’s Bay.”

Question J: Have you had any contact with Simon Lusk (who also happens to  live in the Hawkes Bay area), or any of his associates with regards to this matter?

Question K: Did you recieve a tip-off on Rick Barker’s association with Mr Liu? (I won’t ask you for your sources, for obvious reasons.)

6. Question L: Are there any facts that I may have over-looked in this issue  that may have a bearing on clarifying the story?

Hopefully, you can assist me to clarify these outstanding questions – especially if you can supply me with a copy of  the covering email/letter from Immigration NZ/Michael Woodhouse, including email headers,  which pertains to receipt of the 2003 Cunliffe-Liu letter. I would be interested in receiving a copy of that, in conjunction with an OIA request I have lodged on the matter with relevant Ministeries.

Regards,

-Frank Macskasy

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3. Immigration NZ and NZ Herald – more questions and a suggestion of collusion

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Now, here’s the thing.

In Nicky Hager’s book, “Dirty Politics“, the author’s remarks on the rapid turnaround of OIA requests made by extremist right-wing blogger, Cameron Slater, to various government departments including the secretive SIS;

Documents like the SIS briefing notes are not usually released to the public, under the official information law [OIA]  or otherwise. Someone had overruled the usual practice and then fast-tracked  the release. The released documents were stamped as being declassified on 26 July 2011, the same day that Slater sent off his request.  Where was the time for decision-making and consultations?” – “Dirty Politics”, p40

And,

“[Jason] Ede recommended the wording that Slater use in his official information request: ‘Written and email communications within, to and from, Paula Bennett’s Ministerial office and its staff in relation to Ira Bailey from the beginning of last week til today’ and Slater sent the request that day, using exactly the same words, apart from inserting a bracketed date, ‘Mon 8 October 2012′, after ‘last week’. Slater received the information from Bennett by the following day and was able to publicise it with a government-friendly spin – “Bennett’s office in the clear’ less than two days after Ede wrote to him.” – “Dirty Politics”, p41/42

This blogger can testify to one immutable fact-of-life: OIA requests to Minister’s offices and governments departments can take several weeks, if not more than a month, to fulfill.

Case in point: I asked for a copy of the covering letter from Immigration NZ to NZ Herald’s journalist, Jared Savage, on 21 July this year,

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Kia ora Ms Hames/Minister Michael Woodhouse,

Thank you for providing the information I was requesting under the OIA.

I require some further items of information, which I am lodging as an OIA request;

1. The covering email/letter to Jared Savage, of the NZ Herald, pertaining to the release of David Cunliffe’s 11 April 2003 (pertaining to Donghua Liu, to Immigration NZ) letter  to that reporter (or any other person(s) at the NZ Herald or any other media outlet, on or about 18 June of this year.

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It took one month (20 August) for that simple response to be filled. A copy of the letter, from Immigration NZ to Jared Savage, is presented;

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Immigration NZ - letter to jarerd savage - nz herald - donghua liu - 18  June 2014

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Note the date that Mr Savage lodged the OIA request: 18 June 2014.

Note the date that Immigration NZ responded, supplying a copy of the 2003 Cunliffe-Liu letter: 20 June 2014.

Two days.

Yet it took Immigration NZ a month to send the covering Immigration NZ-Savage letter to me.

One cannot escape the conclusion that some form of collusion has taken place between Immigration NZ/Minister Woodhouse and the NZ Herald. Nicky Hager has uncovered how that sort of collusion has taken place between right-wing blogger and National Party-mouthpiece, Cameron Slater and the Prime Minister’s office.

The question now is – has the same collusion been occurring between the NZ Herald and the PM’s office?

Two days for an OIA request to be completed? The Herald has some questions to answer.

 

To be continued: The Donghua Liu Affair: the Press Council’s decision

To be continued: The Donghua Liu Affair: OIA Responses from the PM; Deputy PM; the Immigration Minister, and next steps

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References

NZ Herald: John Armstrong: Cunliffe’s resignation may be in order

Previous related blogposts

The Donghua Liu Affair – Damn lies, dirty tricks, and a docile media

The Donghua Liu Affair threatens to unravel – PM and NZ Herald caught up in a dirty trick campaign?

The Donghua Liu Affair – the impending final act and curtain-fall in this smear-campaign

The Donghua Liu Affair: The first step to a complaint to the Press Council

The Donghua Liu Affair: responses from NZ Herald and Prime Minister’s Office – Is the PM’s office fudging?

 


 

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20 september 2014 VOTE

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 21 August 2014

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Annette King confirmed as Labour’s candidate for Rongotai

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20 September

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NZ, Wellington, 3 May –  The Rongotai Branch of the NZ Labour Party has confirmed current MP, and former minister, Annette King, as Labour’s candidate for the 2014 General Election.

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annette king - labour candidate for rongotai -  wellington - 3 may 2014

Rongotai Labour Party members and invited guests, attending the electorate-selection meeting at Mornington Golf Club.

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In a speech to a packed hall at Mornington Golf Club, in the south Wellington suburb of Berhampore, Ms King was introduced by former Deputy Leader of the Labour Party and MP for Wellington Central, Grant Robertson. His opening comments drew applause and laughter from party members, supporters, and public;

“I get to sit next to Annette in Parliament which is a huge pleasure. One of the things I’ve noticed is that Annette is one of the best multi-taskers in politics. She can simultaneously complete a Soduku and eviscerate Tony Ryall, all at the same time.”

He added,  “the committment that I have seen from Annette that is reflected in the twenty one years as the MP here is without peer, in politics in New Zealand, in my view.” Grant Robertson spoke of her “compassion, true heart, and Labour values”.

Robertson said “she is true to what we believe is a movement that it’s our job to lift the spirits and the prospects of every New Zealander.” Turning to Ms King, he added, “we need you in the  next Labour[-led] government, we need your wisdom, and your experience… and your core values.”

He then seconded her nomination as the Labour candidate for the Rongotai electorate.

With no other nominations, Annette King’s nomination was put to the floor, and was passed unanimously by voice vote.

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Wellington Central MP,  Grant Robertson, discussing issues with Labour Party rank and file members.

Wellington Central MP, Grant Robertson, discussing issues with Labour Party rank and file members.

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A little later, I had a brief one-on-one with Grant Robertson.  I asked him,

“Grant, what is your personal number one for this election?”

He replied,

“The biggest issue for me is jobs. As the Labour Party’s employment spokesperson, I go around the country and I see too many New Zealanders who don’t have work, who want to work, and we have an economy that doesn’t have jobs at the center.

We’re an economy at the moment that’s driven by the bankers and the speculators and what we need is an economy that’s driven by and for people and that will have jobs at the center. So that’s what you’ll hear me talking [about] all through the election.”

I asked Grant Robertson about Labour’s buy-local procurement policy,

“Government procurement is one of the best ways you can stimulate the economy and most of the countries in the world do it and don’t worry about the so-called committments that they’ve got under international agreements… But absolutely, a procurement policy that focuses on encouraging companies that will employ New Zealanders is vital.”

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Annette King, addressing Labour Party members with a good-natured speech.

Annette King, addressing Labour Party members with a good-natured speech.

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Following on, Annette King, addressed Labour Party members with a good-humoured speech, and reaffirmed her determination to promote Labour Party policy and ideals. Ms King said “there was work to be done” and that she “had the passion, the feeling, and the committment” to follow through. She also paid tribute to “new blood” coming through in the Labour Party,

“I do believe that a party needs new talent, we need to bring in the new and rejuvenate. And we’re doing that with members like Grant [Robertson], and Jacinda [Ardern], and David Clark, and Megan Wood, and many of those young people who are coming through showing such talent.”

Ms King also reaffirmed the need for people with institutional memory;  “an experience of knowing what it’s like to be in government. What we want, at this election, is to lead the government again.”

Ms King added,

“The value of fairness to New Zealanders; ensuring that everybody is looked after in this country. Not just the privileged few we see under this government.   There does need to be access to good healthcare; education for our children; and really important, the ability to have a warm, dry, affordable, home. These are some of the  values of our party and so much more.”

In reference to National’s latest scandals, she said,

“We’re going to take the fight to this government, in the next few months. We’ve got twenty weeks to make sure we lead the next government and I believe that we can. What a difference a week makes in politics! Last week a few of us were down at the Newtown market… we were down there and people were walking past us, and looking at us sideways and walking on.

We’d just suffered the fallout of the Shane Jones departure from the party. Today, down at the market, we were surrounded by people. People wanted to talk about policy, to talk about the Labour Party. They wanted to join the Labour Party.  In one week we have seen some really innovative policy coming out of the Labour Party, and people [were] saying ‘Hey, that is the Labour Party we know. A progressive Party that comes up with the real ideas [for] change for New Zealand’.”

There was more than an element of truth when Ms King pointed out,

“All the progressive change in this country came from the Labour Party. This government, and the National governments before, are governments of the status quo. And when you need change, you have a Labour party [government].

And what I could not bear is the thought of three more years of National, and neither could most working people in New Zealand.”

 

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Current MP for Rongotai, Annette King, discussing policy matters with Labour Party stalwarts.

Current MP for Rongotai, Annette King, discussing policy matters with Labour Party stalwarts.

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Annette King is one of the longest-serving MPs in Parliament, having been in office for twentyseven years – twentyone of which have been in the Island Bay/Miramar electorate alone.

In 2000, she was Minister for Health, over-seeing the re-building of the Health portfolio which had been badly under-funded by the previously National-led government. Chronic under-funding in the late 1990s was having a deleterious effect on patients requiring critical life-saving surgery. Many failed to survive the growing waiting lists under Bill English’s watch.

National’s health minister at the time – Southland MP, Bill English – tried to stem the increasing deaths by belatedly injecting extra money for surgery. It failed to address the crisis that had been building over several years of National’s cost-cutting; tax cuts (1996, 1998); and slashing of the public service sector.

One of Ms King’s first moves was a  cash-injection of $1.5 billion into the health sector in December 2001. She said, at the time,

“Unashamedly, the first lot of money will go to those with the greatest need – low income, poor, sick, Maori, and Pacific [people].”

National’s health spokesperson at the time, Roger Sowry, responded with a statement which could only be described as jaw-dropping for it’s sheer hypocrisy.

With National cutting back on funding for services; increasing user-pays; two tax cuts (2009, 2010), and slashing the public service sector, it seems that – unlike the Split Enz song, history does indeed repeat.

Ms King will have her work cut out for her when a new Labour-Green government takes office after 20 September.

Below, Paul Eagle, chatting with Labour Party members;

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    Shrewd strategist and local City Councillor, Paul Eagle (in red shirt), was announced as Annette King's campaign manager.

Shrewd strategist and local City Councillor, Paul Eagle (in red shirt), was announced as Annette King’s campaign manager.

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This blogger took a moment for a brief interview with Annette King, asked her what her priorities would be when a new Labour-Green government took office post 20 September.

I asked Annette King, “what’s really important to you?”

Ms King replied,

“The most important thing for me, and it’s the number one that runs through everything we do, and that is reducing inequalities…”

“Health inequality; housing inequality; education inequality. Inequality in New Zealand is the biggest I’ve experienced in all my years. And I mean, I wasn’t here for the Depression, I’m not that old, but inequality in our society is so great now, that we need a progessive government that’s going to address them. And then you go through the areas. If you take health inequalities; who dies earlier; who dies younger; who has less access.

And you go to low income, Maori, and Pacifica. So that’s my priority.”

Interesting – Annette King’s priorities were remarkably similar to her comments in December 2001 (see above).  Grant Robertson seems to have been correct when he said that her “core values” had not changed.

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(L-R) Paul Eagle, Annette King, and Grant Robertson

(L-R) Paul Eagle, Annette King, and Grant Robertson

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Ms King’s successful nomination was followed by a final ceremony; the awarding of a recognition to long-serving Party members for their contributions to the labour movement.

LEC Chairperson, Peter Franks, presented a gold pin, and life-membership, to Peg Collett and Reatha McInnes (not pictured), for long-term service to the NZ Labour Party;

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LEC Chairperson, Peter Franks, presenting a gold pin,  and life-membership, to Peg Collett and Reatha McInnes (not pictured), for service to the NZ Labour Party.

LEC Chairperson, Peter Franks, presenting a gold pin, and life-membership, to Peg Collett and Reatha McInnes (not pictured), for service to the NZ Labour Party.

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One hopes that people like Ms Collett and Ms McInnes are with us to see the return of this country to the social democratic values for which we were once internationally reknowned for.

We once led the way in women’s rights; anti-atomic bomb testing in the South Pacific; anti-apartheid campaigning; a nuclear-free status; and many other progressive movements for which we can be rightly proud.

The term “punching above our weight” doesn’t even begin to cover the impact that we, as a nation, have had on global affairs.

Today, as the current government would have it, our “reputation” seems fixed on making money from tourism; making money selling logs and dairy powder; and making money with the production of fantasy movies.

“Making money”

Not quite “up there” with engendering the right of women to vote; saving the planet from atomic weapons; and supporting an entire nation to be free from apartheid.

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References

Wikipedia: Annette King

ODT/NZPA: Public Hospital ills blamed on funding

ODT: Acute heart surgery list nearly 400

The Press: Four forced off waiting list die

Sunday Star Times: Anger on heart op delay – English wants answers on cash use

The Dominion: $1.5b injection for Health

NZ Herald:  Prescription fees increase

Fairfax media: 2400 more state sector jobs could go

Metrolyrics: History Never Repeats Lyrics

NZ Herald: NZ inequality at highest level

 

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

 

 


 

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I'm a leftie voting left - join me

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 5 April 2014.

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Radio NZ: Focus on Politics for 21 February 2014

23 February 2014 Leave a comment

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- Focus on Politics -

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- Friday 21 February 2014  -

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- Brent Edwards -

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A weekly analysis of significant political issues.

Friday after 6:30pm and Saturday at 5:10pm

Disagreement about how to reduce poverty and inequality is looming as one of the big debates of election year.

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Radio NZ logo - Focus on Politics

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Click to listen: Focus on Politics for 21 February 2014 ( 16′ 38″ )

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Acknowledgement: Radio NZ

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Confirmed: National welcomes low-wage economy

28 December 2013 2 comments

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English-lower wages-australia

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From the mouth of our Dear Leader, Prime Minister John Key;

We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008

We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.”   – John Key, 6 September 2008

I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009

Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010

We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011

The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more  jobs and higher incomes.” – John Key, 21 December 2011

We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” –  John Key, 19 April 2012

Since 2007, Key has been explicit in his pronouncements; his policy is to see wages rise for New Zealanders. He has made those utterance every year.

Then, on  10 April 2011, on TVNZ’s Q+A, Guyon Espiner interviewed  Bill English and we heard this extraordinary admission from the Finance Minister;

GUYON Can I talk about the real economy for people?  They see the cost of living keep going up.  They see wages really not- if not quite keeping pace with that, certainly not outstripping it much.  I mean, you said at the weekend to the Australia New Zealand Leadership Forum that one of our advantages over Australia was that our wages were 30% cheaper.  I mean, is that an advantage now?

BILL Well, it’s a way of competing, isn’t it?  I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well.
 
GUYON So it’s part of our strategy to have wages 30% below Australia?

BILL Well, they are, and we need to get on with competing for Australia.  So if you take an area like tourism, we are competing with Australia.  We’re trying to get Australians here instead of spending their tourist dollar in Australia.

GUYON But is it a good thing?

BILL Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.

GUYON So let’s get this straight – it’s a good thing for New Zealand that our wages are 30% below Australia?

BILL No, it’s not a good thing, but it is a fact.  We want to close that gap up, and one way to close that gap up is to compete, just like our sports teams are doing.  This weekend we’ve had rugby league, netball, basketball teams, and rugby teams out there competing with Australia.  That’s lifting the standard.  They’re closing up the gap.

GUYON But you said it was an advantage, Minister.

BILL Well, at the moment, if I go to Australia and talk to Australians, I want to put to them a positive case for investment in New Zealand, because while we are saving more, we’re not saving more fast enough to get the capital that we need to close the gap with Australia.  So Australia already has 40 billion of investment in New Zealand.  If we could attract more Australian companies, activities here, that would help us create the jobs and lift incomes.

Source

Key responded in his typical fashion that we are all familiar with by now; he blamed the previous Labour government;

We inherited a mess from Labour and a real recession. We have a plan.”

Source

Considering that the previous Labour government had posted eight straight budget surpluses in a row, and paid down most of the country’s sovereign debt – it is unclear just what “mess” Key was referring to.

But as we all know by now, Key has zero hesitation in blaming others – especially the previous government – to avoid taking responsibility for any of his own shortcomings (which, by now, are legion).

So was English correct? Is it deliberate National Party policy to suppress wages in this country?

One might have accepted that English’s comments on Q+A were “mis-interpreted”.

However, two years later, National Party backbench MP, John Hayes, wrote this on his website,

Australian workers will get a 2.6 per cent rise to $A622.20 a week or $NZ750.50 at the prevailing exchange rate. That’s $A16.37 ($NZ19.75) an hour for Aussies’ 38-hour working week compared with $NZ13.75 an hour or $NZ550 for Kiwis’ 40-hour working week. I note that the Labour Party spokesperson on Labour issues is wringing her hands in despair at this news. I think we should celebrate because a rise in the minimum wage in Australia makes our labour force more competitive and will be helpful in attracting investment and jobs to New Zealand. About 18 months ago CHB Mayor Peter Butler and I approached Australian based food processors with the suggestion of moving across the Tasman to establish plants in New Zealand to process food produced under newly irrigated areas. We established that Australian food processors are interested to do this when our new irrigation is in place. A driver from the Australian perspective is that the New Zealand labour force is well educated, more productive and less unionised than their Australian counterparts.” – John Hayes, National MP, 5 June 2013

Bill English’s contention, that lower wages are a desirable means by which to be “so much more competitive” than Australian workers,was no mistake. It has been confirmed as covert National Party policy.

This is further backed up by National’s recent introduction of legislation to “reform” our labour laws.

Firstly, National reintroduced youth rates, euphemistically called the “Starting Out Wage” to young workers. Taking effect on 1 May 2013, the new youth rate cut wages  for  16-to-19-year-olds to  80% of the minimum wage.

National further disempowered workers and undermined their ability to negotiate by implementing the 90 Day “Trial Period”. First introduced in 2009 for small business of up to 20 employees, it was extended to all companies in 2011.

Unsurprisingly, the introduction of the 90 Day Trial Period had no appreciable effect on creating jobs,

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Source

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One of the most far-reaching aspects of National’s covert agenda to make the country’s workforce  “more flexible” (translation; more exploitable)  is their stated intention to remove Part 6A  of the Employment Relations Act (ERA),  which continues (or transfers under similar conditions and pay) the employment of  low-paid employees such as caretakers, cleaners, catering workers, hospital orderlies and laundry workers,  after a business is restructured or sold.

See: Part 6A – Continuity of employment if employees’ work affected by restructuring

Part 6A gives vulnerable, low-paid workers, the right to keep their jobs on the same terms of employment when  transferred to the new contractor.

See: Labour law changes announced

Then-Labour Minister Kate Wilkinson had assured the public that this law-change would apply only to  small and medium-sized businesses with less than 20 employees.

Which was precisely the same tactic used to implement the 90 Day Trial Period law, by degree,

Trial employment periods for up to 90 days for workplaces with fewer than 20 employees will be available from April 2009.” – Kate Wilkinson,  11 December 2008

See: National policy – 90-day trial period to provide job opportunities

Once National’s so-called “reforms” were bedded in, they changed it, implementing the real policy  they had wanted all along,

The 90-day trial period is to be extended to enable all employers and new employees to have the chance to benefit from it.” – Kate Wilkinson,  18 July 2010

Once Part 6A is removed from the lawbooks, the lowest-paid workers in our communities will be vulnerable. A new employer will  be able to re-write their contracts at whim; reduce  their pay; change their conditions, or dismiss them altogether. There are many such small business and the impact on their workers could be severe (Source).

Green Party industrial-relations spokeswoman, Denise Roche, was 100% on-the nose when she described these – and other “reforms” as,

This decision is straight from the Bill Birch era of industrial relations.”

Source

This is indeed a return to the Employment Contracts Act – by stealth. National is too gutless to present such radical plans to the voting public at election time.

This is indeed what National MP, John Hayes was referring to when he stated, 

…A driver from the Australian perspective is that the New Zealand labour force is well educated, more productive and less unionised than their Australian counterparts.”

And if National MP (Botany) Jamie Lee-Ross gets his way with his even more extreme Bill,  employers would be able to legally hire scab labour to replace striking workers .

Quite brazen in his actions, Jami-Lee Ross  admitted that he had colluded with POAL (Ports of Auckland Ltd) bosses to draft his proposed  strike-breaking amendment, the Employment Relations (Continuity of Labour) Amendment Bill.

On TV3′s The Nation on 22 June 2013, Ross confirmed that he had been in talks with employers during the height of the industrial dispute between the POAL and MUNZ (Maritime Union).  (source)

Ross’s hatred for Unions is on public record,

Up until recently, cool heads and rational people sitting around negotiating tables have meant that little focus has been placed on the role that unions play in society. However, with the bare-faced mockery that the Maritime Union is making of civilised negotiations New Zealanders will soon begin to question what position unions should hold in the modern Kiwi workplace.

Source

None, it would seem, according to Ross.

Though this radical move may be  a step too far, even for the

Make no mistake, National’s secret agenda is for a low wage economy, with minimal collective protections for workers, and as much power in the hands of employers as they can digest.

National has no other means by which to create jobs.

They intend to rely solely on the “market place”, and to do that, this country’s labour must become “more competitive”.

Translation; our wages must be driven down by any and every means possible.

Just ask Messrs English and Hayes.

Postscript

21 February 2013 MEDIA STATEMENT

AUS-NZ Wage Gap Now $180, More Than A Kiwi’s Daily Pay

How To Work A Four-Day Week? Move To Australia

The wage gap with Australia is now so large that Kiwis across the ditch earn a New Zealander’s weekly pay in just four days, says Labour’s Finance spokesperson David Parker

“The median weekly wage gap with Australia has ballooned by $60 to $180 per week under John Key’s leadership, despite National’s promise to close the gap.

“In Australia the median wage is $1067, in New Zealand it’s $887, according to the latest statistics[1]. To make up the difference Kiwis need to work another full day and another hour on top of that. It’s no surprise 182,000 Kiwis have left under National.

Source

National’s Grand Plan is a roaring success;  in July 2010 the wage gap was $22.36.

Source

This blogpost was first published on The Daily Blog on 24 December 2013.

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References

TVNZ Q+A: Bill English

TV3: Key blames Labour for his Govt’s wage gap failings

John  Hayes MP for Wairarapa: From the House: 5 June 2013

ODT: Labour law changes announced

Scoop media: Balloted Bill possibly a bridge too far

Green Party: Vulnerable workers’ rights go under National

Scoop media:  Union biting the hand that feeds – Jamie Lee-Ross

Scoop media: AUS-NZ Wage Gap Now $180, More Than A Kiwi’s Daily Pay

Previous related blogposts

Key’s broken promise on raising wages

Johnny’s Report Card – National Standards Assessment y/e 2012 – incomes

National MP admits collusion with bosses to set up strike-breaking law!!

Hat Tip

Paula Fern

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Solid Energy – A solid drama of facts, fibs, and fall-guys

14 June 2013 4 comments

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Cast of Charachters

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Clayton Cosgrove, Labour Spokesperson on State Owned Enterprises

Clayton Cosgrove, MP, Opposition  Labour Spokesperson on State Owned Enterprises

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Don Elder, CEO, Solid Energy, May 2000 – February 2013

Don Elder, CEO, Solid Energy, 2000 – 2013; avid gardener

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Bill English, MP, Deputy Prime Minister, Minister of Finance and Minister for Infrastructure,  Ministerial Shareholder of Solid Energy

Bill English, MP, Deputy Prime Minister, Minister of Finance and Minister for Infrastructure, Ministerial Shareholder in Solid Energy

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Mark Ford, current chairman of Solid Energy

Mark Ford, current chairman of Solid Energy

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John Palmer, CEO Solid Energy, 2006 -

John Palmer, former Chairman of  Solid Energy, 2006 – 2012

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Simon Power, former MP; former Minister for State-Owned Enterprises, 19 November 2008 – April 2011

Simon Power, former MP; former Minister for State-Owned Enterprises, 19 November 2008 – April 2011

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Tony Ryall, MP, Minister for Health; current Minister for SOEs; Ministerial shareholder in Solid Energy

Tony Ryall, MP, Minister for Health; current Minister for SOEs; Ministerial shareholder in Solid Energy

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Dear Leader, Minister for Funny Hats, Minister for Truth

Dear Leader, Minister for Funny Hats, Minister for Truth

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The story, thus far

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30 June 2008

Nil dividend paid to government, for year ending 30 June 2008.

Source: 2008 Annual Report

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8 November 2008

General Election

National-led government elected.  John Key becomes  New Zealand’s Prime Minister; Simon Power is Minister for State Owned Enterprises; Bill English becomes Minister for Finance.

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May 2009

“The Government, in its first term, looked at SOE [state owned enterprise] balance sheets and decided many of them could carry more debt… it made a decision to allow Solid Energy to take on more debt,” Mr English said.

Mr English acknowledged that in 2009 he signed a letter to Solid Energy approving a higher debt level.

Source:  Solid Energy was allowed to increase debt

The letter, as follows,

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letter from Simon Power to solid energy may 2009

Source: CCMAU & Treasury

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Thus was set in motion a decision that would have serious consequences four years later; the near collapse of an efficient and highly profitable State Owned Enterprise.

Not only did Minister Power demand higher dividends from Solid Energy, and instructed the SOE to borrow heavily  to achieve that goal, Power also demanded that Solid Energy “release all surplus capital to the shareholder as special dividends“.

In case the reader is wondering that that means, in plain english, National Ministers wanted all spare cash to be handed over to the government.

They were looting SOEs.

Accordingly, Solid Energy’s gearing ratio rose from 13.8% cent in 2009 to 41.7% by 2012. National’s demands had been met (see: Ministers pressured Solid Energy, Parliament told ).

Mission accomplished – the pillaging of Solid Energy (and other SOEs)  had begun.

Note: On 26 February 2013, John Key would try to insist that Solid Energy was “out of control” and was borrowing wildly.

He would say, “the Government was worried about Solid Energy’s ambitious investment plans and rosy view of coal prices as far back as 2009 but was unable to order the company to steer a safer course.”

So not only did SOE Minister Simon Power direct Solid Energy to borrow more; pay higher dividends; and hand over all spare cash – but four years later, Key would blame the coal company for the consequences;  it’s inevitable financial melt-down,

The causes of the financial crisis at Solid Energy are the usual suspects in failing businesses – too much debt, unsuccessful investments and no reserves to weather a slump in coal prices.

Prime Minister John Key’s comments yesterday indicated these problems and pointed the finger at an imprudent amount of debt and investments that have not returned any cash yet.

Key said the debt had climbed to $389 million when “typically coal companies do not have a lot of debt on their balance sheets”.

Source: State miner to return to coalface

Powers’ letter also put the lie to National ministers claiming that they were powerless to intervene in Solid Energy’s activities. As Simon Powers’ letter clearly demonstrated, Ministers were  exhibiting a total hands-on control over SOE’s finances, borrowings, investments, and dividend payments.

As Key himself claimed (without evidence) on 25 February 2013,

The government blocked proposals in 2009 from its coal mining company Solid Energy for a billion dollar capital injection to allow it to become “the Petrobras of this country,” Prime Minister John Key says.

National ministers had control alright, no two ways about it.

Power might as well have been sitting in Solid Energy’s Christchurch head office, in the CEO’s chair, with  his fingers in the cash register till.

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30 June 2009

$59.9 million dividend paid to government, for year ending 30 June 2009.

Source: 2009 Annual Report

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30 June 2010

$54 million dividend paid to government, for year ending 30 June 2010.

Solid Energy paid a dividend of $24 million on 30 September 2009. In accordance with the company’s dividend policy, the Board is proposing a dividend of $30 million to be paid by the end of March 2010 bringing total cash dividends paid during the current financial year to $54 million.

Source: Small half year loss for Solid Energy

Source: 2010 Annual Report

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27 August 2010

Treasury Report shoots down Solid Energy National Resource Company’s expansion  proposal

To: Bill English, Gerry Brownlee, Simon Power, Steven Joyce

5. In order for SEL to develop into a NRC, SEL has sought the following:

[...]

• indicative approval for total capital investment (including dividends and cash flow)
of $2-3 billion per annum with cumulative investment of $27 billion…

Source: Treasury Report: Solid Energy National Resource Company Response

Note the figure referred above: $27 billion.  Two and a half years later, Key would refer to that figure.

The question is, does the statement – “SEL [Solid Energy Ltd] has sought the following: indicative approval for total capital investment (including dividends and cash flow) of $2-3 billion per annum with cumulative investment of $27 billionactually state where the $27 billion would be sought from?

Answer: no.

And yet, by 15 March 2013, Key would insist that the Solid Energy chairman, John Palmer, sought $27 billion from the government.

See: Key says Solid Energy papers show $27b plan

John Key’s flexibility with truth is now legendary.

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8 September 2010

Then-SOE Minister Simon Power writes to Solid Energy – states support for developing resources –

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Office of Simon Power
MP for Rangitikei
Minister for Justice
Minister for State Owned Enterprises
Minister of Commerce
Minister Responsibilble for vthe Law Commission
Associate Minister of Finance
Deputy Leader of the House

08 SEP 2010

Mr John Palmer
Chair
Solid Energy New Zealand Ltd
PO Box 1303
CHRISTCHURCH 8140

Dear Mr Palmer

National Resource Company (NRC) Proposal

I would like to thank you and your Chief Executive, Don Elder, for meeting me
on 31 August 2010 to discuss the Government’s response to the Solid Energy
Ltd (Solid Energy) NRC proposal.

Ministers are encouraged by the vision of Solid Energy in developing the NRC
proposal. We also appreciate the efforts of the Solid Energy Board,
management and staff that have gone into preparing  the proposal.

Shareholding Ministers have carefully considered the proposal and at this stage
do not support the development of a single NRC to maximise the value of New
Zealand mineral resources.

Shareholding Mnisters are, however, supportive of Solid Energy developing its
current natural resources, including lignite and unconventional gas. As
discussed with you, we expect that Solid Energy will develop resources on a
project by project basis.

We also expect to be consulted on significant projects, and have the opportunity
to discuss the proposals with you. The proposals should be supported by a
business case and assessed against standard business case investment
criteria.

Yours sincerely

Hon Simon Power
Minister for State Owned Enterprises

cc: Don Elder, Chief Executive Officer, Solid Energy

Source: Letter from Simon Power to John Palmer (NZ Herald website)

Interesting…  The Minister, Simon Power,  was;

A. Supportive of Solid Energy “developing its current natural resources, including lignite and unconventional gas. As discussed with you, we expect that Solid Energy will develop resources on a project by project basis”. No reference whatsoever of the Minister directing Solid Energy not to invest  “developing its current natural resources“.

B. Insisting that he be kept advised  “on significant projects“.  It would be interesting to know if Solid Energy advised National ministers of all projects? Including the ones that have been heavily criticised by Key, English, and Ryall.

.

.

3 June 2011

Key endorses Solid Energy expansion plans

.

Prime Minister John Key speaks at the opening of the WHK building in Invercargill.

Prime Minister John Key speaks at the opening of the WHK building in Invercargill.

.

“At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion,” Mr Key said.

[...]

“We know there is lots of resource there and we know they potentially have the capability [to convert lignite to urea or diesel] and so we will see how that progresses, but the briquette plant is a good starting point.”

Source: PM backs mining south’s lignite

Key is stating  with crystal clarity;  “we want them to expand in areas like lignite conversion” and “…so we will see how that progresses, but the briquette plant is a good starting point“.

Which would be in stark contrast to Key’s statements nearly two years later, when  on 23 February 2013, he condemns Solid Energy’s “… unsuccessful investments” and  ” and pointed the finger at an imprudent amount of debt and investments that have not returned any cash yet”.

Two days later, on 25 February 2013, Keywould again condemn Solid Energy – this time specifically distancing himself from the SOE’s expansion plans,

The government blocked proposals in 2009 from its coal mining company Solid Energy for a billion dollar capital injection to allow it to become “the Petrobras of this country,” Prime Minister John Key says.

It’s hard to keep up with a Prime Minister like John Key.

You have to wonder what his views will be in three, six, or twelve months time?

Key also said  at his  Invercargill speech,

However, Mr Key said companies were controlled by Government regulations and so there were always environmental obligations that needed to be met.

Which, again, totally contradicts what he said on 26 February 2013,

The Government was worried about Solid Energy’s ambitious investment plans and rosy view of coal prices as far back as 2009 but was unable to order the company to steer a safer course, Prime Minister John Key says.

Stories, eh? They’re so hard to keep straight sometimes.

.

.

30 June 2011

$20 million dividend paid to government, for year ending 30 June 2011.

Source: 2011 Annual Report

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.

9 September 2011

Bill English – Don Elder – Opening new Mataura briquette plant

.

Solid Energy chief executive, Don Elder and Hon Bill English at MatauraThe first sod has been turned in the construction of Solid Energy’s demonstration briquette plant near Mataura in Southland. This was undertaken on Friday September 9 by local MP, Bill English who is also Deputy-Prime Minister and Minister of Finance. (source)

Solid Energy chief executive, Don Elder and Hon Bill English at Mataura
The first sod has been turned in the construction of Solid Energy’s demonstration briquette plant near Mataura in Southland. This was undertaken on Friday September 9 by local MP, Bill English who is also Deputy-Prime Minister and Minister of Finance. (source)

.

The Hon Bill English, MP for Clutha-Southland and Minister of Finance, today marked the official start of work at Solid Energy’s Mataura Briquette Plant, by “turning the first sod” at a small event on site with neighbours, local authorities, and other guests.The $25 million Mataura briquette plant is planned to start production by June 2012. It will produce up to 90,000 tonnes a year of low-moisture and higher-energy briquettes from about 150,000 tonnes of lignite mined from Solid Energy’s New Vale Opencast Mine and trucked to the Craig Road site. The plant will use technology developed in the USA by GTL Energy.

Source: Solid Energy starts work at Mataura Briquette Plant

Which demonstrated to anyone (if demonstration was needed) that National was in no doubt about Solid Energy’s expansionary plans.

.

.

4 November 2011

Treasury Scoping study reveals Solid Energy’s financial problems to Government Ministers

Ministers were  officially  made aware of Solid Energy’s severe financial problems. This would not become public knowledge until  two years later,  on  21 February 2013.

See: Treasury Report T2011/2373: Solid Energy New Zealand Scoping Study Report

The Scoping Study is noteworthy on these points,

  1. The considerable  number of redacted items which the reader has no way of knowing what they refer to. They could be sensitive commercial data. Or they could refer to political matters.
  2. In Paragraph 36, the Report states, “The scoping study also recommends that Solid Energy should have no debt at the time of IPO.”
  3. In Paragraph 46, fourth item, the Report states, “Indentified that the company’s free cash flow has been reinvested in the business, particularly the Renewable Energy and New Developments. As a result  dividend payments to the government have been funded by increasing debt.”

In two sentences, Treasury has just confirmed what all the evidence has pointed to; “dividend payments to the government have been funded by increasing debt“.

The very same increased debt demanded by SOE Minister Simon Powers in his letter in May 2009.

.

.

17 February 2012

Bill English – Asset Sales – Proceeds “just a guess”

Finance Minister Bill English is attracting political flak over suggestions that some figures in yesterday’s budget policy statement for the proceeds of share floats of state-owned enterprises were “a guess”.

The Government has long estimated that the sale of up to 49 per cent of five SOEs would collect between $5 billion and $7 billion.

[...]

Mr English said the Treasury “had to pick a number” so they picked the mid-point of the range.

“If we did get $6 billion, that would be a gain of sale [of $800 million] which is just a product of the accounting.

“I just want to emphasise that it is not our best guess; it’s just a guess. It’s just to put some numbers in that look like they might be roughly right for forecasting purposes.

Source: English admits his SOE figures just a guess

Well. Now we know why it was “just a guess”.

Because by now, the Treasury scoping study on Solid Energy had revealed to National Ministers that the SOE’s finances were a mess. There was no way English could’ve responded to journalist’s queries without either telling the truth – or outright lying (which they do anyway, but he would’ve been caught out on this particular ‘porky’).

.

.

18 May 2012

Subsidy on bio-diesel canned – Biodiesel New Zealand – Price increase for bio-diesel

National removed it’s subsidy on bio-diesel – which Solid Energy was producing through one of it’s subsidiaries, as part of it’s   expansion plans.

Biodiesel prices in Queenstown are likely to rise after a Government subsidy to develop production of the fuel was scrapped.

The subsidy, worth 42.5 cents a litre, was introduced by the National-led Government in 2008, but was not renewed in this year’s Budget.

The Queenstown Biodiesel Consortium has more than 20 companies running more than 70 commercial vehicles on the fuel.

The consortium’s provider, Allied Petroleum, is supplied by Biodiesel New Zealand, a Solid Energy subsidiary that makes the fuel out of canola seed and used cooking oil, in Christchurch.

Source: Biodiesel loses subsidy, prices to rise

This thoroughly  undermined Solid Energy’s business projections for income and profits, as they could no longer rely on the subsidy to produce bio-diesel on a viable basis.

So not only were National ministers stripping Solid Energy of it’s cash reserves and demanding higher and higher dividends – they were now tying it’s hands and undermining potentially profitable ventures.

A year later, on 22 February 2013, English (as well as Key and Ryall) would be blaming Solid Energy’s financial collapse on, “… a drop in world coal prices, and spen[ding] too much investigating other sources of energy”.

It would be safe to say that undermining a company’s commercial venture, by moving the goal posts half-way through, and changing rules,  is also not particularly helpful.

.

23 June 2012

Solid Energy Chairperson, John Palmer resigns

John Palmer is quitting as chairman of state-owned Solid Energy because at the age of 65 he is unwilling to stay on and see it through to partial privatisation.

Mr Palmer, who is also chairman of Air New Zealand, took up a strong public position in calling for the partial privatisation of state-owned companies and he welcomed the government’s plan to sell down stakes in electricity companies and Solid Energy.

Source:  Solid Energy chairman quits over asset sales

Palmer  resigned some 18 months before his contract was due to expire. The question, as always, is,

Was he pushed?

Or did he jump?

Writing on 16 March 2013, Tracey Watkins suggested a Great Big Shove helped Mr Palmer on his merry way,

There is, of course, nothing unusual about SOE chairmen and chief executives being subjected to a lengthy interrogation. But it is rare for committees to offer a platform to SOE bosses who have been manoeuvred out of their jobs by the Government.

See: Solid questions still remain unanswered

I tend to agree with her. This has all the makings of a politically-inspired, fall-quietly-on-your-sword, exit.

.

SOE Minister, Tony Ryall comments on Palmer’s resignation – Acknowledges company’s developments

State Owned Enterprises Minister Tony Ryall announced Mr Palmer’s departure from Solid Energy on Friday.

“While it is disappointing to lose such a senior director, I wish to recognise Mr Palmer’s commitment to the company since his appointment in 2006, and the developments the company has made under his leadership,” Mr Ryall said.

Source:  IBID

Two months later, Bill English would be announcing that Solid Energy had  “…some fairly substantial issues” and would not be saleable.

Another six months after that, and the sh*t would be hitting the Big Fan. “Fortuitously”, Palmer would have been long-gone by the time English announced that Solid Energy was insolvent and  $389 million in debt.

Palmer would return, however on 14 March 2013,  for an encore performance before the Commerce Select Committee, to answer some hard questions.

.

.

30 June 2012

$ 30 million dividend paid to government, for year ending 30 June 2012.

Source: 2012 Annual Report

Note that two months before English announced that  “Solid Energy faced “a number of commercial issues” and was “rethinking its business”, National ministers were  still taking dividends from Solid Energy.

Did English, Ryall, and Key not read the  2012 Annual Report which listed Solid Energy  posting a Net Profit after Taxation (NPAT) of  a  $40.2 million loss – on Page 2, under bold headlines, “FINANCIAL PERFORMANCE“???

Even though he maintains that “we wouldn’t be planning to float it any time soon”, they were still taking money out of what would prove to be a financially stricken company. This alone indicated that English and Ryall were being financially irresponsible in their role as Ministerial shareholders. As such,  Key was either ignorant of what was happening under his nose, or was irresponsible in not taking action.

Perhaps his adopted affectation as a “typical, non-political kiwi-bloke” who didn’t get his hands dirty with politics; grinned and shrugged off problems; and left matters to his sub-ordinates – had become a dangerous vulnerability for him? (See Tim Selwyn’s blogpost on John Key’s political/management style:  Rudderless Within The Great Game)

Either way, 30 June 2012 is an important date. This is when National Ministers should’ve known that something was seriously amiss.

.

.

21 August 2012

English announces “issues” with Solid Energy

In August 2012, Bill English announced that Solid Energy had  “…some fairly substantial issues” and was not ready for sale.

Solid Energy “certainly isn’t” in shape for a partial sell-down, Finance Minister Bill English says.

English today said Solid Energy faced “a number of commercial issues” and was “rethinking its business”.

“We would only take any of these companies to the market if they are in good shape for investment and Solid Energy right now certainly isn’t. It’s got some fairly substantial issues that they have signalled. Whether it ends up being able to be floated would depend on whether they can get in suitable shape for public investors,” English said.

“We wouldn’t be planning to float it any time soon.

[...]

English said Solid Energy needed to be in “considerably better shape than it is now” before it could be floated.”

Source: English: Solid Energy not ready for sale

Perhaps National Ministers should have keep their fingers out of  Solid Energy’s petty cash box?

.

.

9 September 2012

Coalminers redundancies – $200 million revenue shortfall – first mention of a ‘bailout’

Steven Joyce says Government capital for Solid Energy has not been ruled out.

The minister met with the company’s group manager of coal on Friday to discuss the situation. Mr Joyce says he has not promised a bailout, but if Solid Energy has a good business plan there may be funding options.

“Ministers get approached by state-owned enterprises to invest capital at different times. The thing that they would be interested in would be what’s the reason for doing it and what’s the opportunity.

“There’s a number of things that are up in the air with Solid Energy’s business plan at the moment that they need to work through with the new chair.”

Source: No decision on Spring Creek workers – Solid Energy

If National bailed out Solid Energy, they would  – in effect – simply be returning the dividends and spare cash that Simon Powers demanded way back in May 2009.

It would not be “new” money. It would be giving back what was looted from Solid Energy’s coffers, as National desperately tried to balance the government’s books, and return to surplus by 2014/15.

This entire sad, incompetant, wasteful,  exercise has provided no  benefit to anyone. National Ministers have ended up looking inept, manipulative, deceitful, and grasping. All for what?

The sole outcome has been to damage the reputations of businessmen who were hired for their business acumen (and who had been successful in their own fields), and destroy the name of Solid Energy.

In a bizarre twist, by sending Solid Energy into near-bankruptcy, National successfully delayed the partial privatisation of that SOE. Something that asset-sale opponants would welcome with delight.

.

.

21 February 2013

Solid Energy in crisis – debt revealed to the public

The depth of Solid Energy’s financial woes have been laid bare with the Government confirming the company is in talks with bankers over its debt levels.

[...]

State-owned Enterprises Minister Tony Ryall said a number of factors had weighed against the company, in particular world coal prices dropping by 40 per cent.

“It is facing very serious financial challenges,” Ryall said.

Ryall declined to say whether Don Elder received a payout on his departure as chief executive on February 4.

Solid Energy’s debt stands at $389 million and its interim result, which is due shortly, will show additional losses.

Earlier this week Prime Minister John Key said it was very unlikely Solid Energy would be sold in the near future.

Source: Solid Energy in debt crisis talks

Time to duck – the poo has hit the fan.

Watch Ministers scurry for cover; invent fictitious tales; and blame anyone/anything they can think of. John Key’s fingers will be moving at supersonic speeds, pointing at others, to apportion blame.

.

.

22 February 2013

English blames Solid Energy management, bonuses, coal price fall, and expansion projects

Mr English said Solid Energy’s woes have two primary causes: it failed to predict – and adjust to – a drop in world coal prices, and spent too much investigating other sources of energy.

“Four or five years ago they set out on a big programme of expenditure on alternative energy, including researching into lignite down south to coal gasification and other research-based speculation, and that hasn’t turned out the way they thought.”

Source:  No more bonuses at Solid Energy – English

And yet, English and former SOE Minister, Simon Power had actively encouraged Solid Energy to expand. (see comments 8 September 2010 and 3 June 2011)

But if there was a cause for Solid Energy’s financial woes, a $389 million debt most certainly accounted for most of it.

Even the most profitable, efficient, well-managed company will collapse if it is over-geared (borrowed too much) and too much capital is  extracted in dividends (as well as tax).

Therefore, when English blames Solid Energy’s problems on “world coal prices, and spen[ding] too much investigating other sources of energy”; and when Key and Ryall blame Labour; massive debt; bonuses; mis-management; etc – the facts  show otherwise.

.

.

23 February 2013

Key blames too much debt and unsuccessful investments

The causes of the financial crisis at Solid Energy are the usual suspects in failing businesses – too much debt, unsuccessful investments and no reserves to weather a slump in coal prices.

Prime Minister John Key’s comments yesterday indicated these problems and pointed the finger at an imprudent amount of debt and investments that have not returned any cash yet.

Key said the debt had climbed to $389 million when “typically coal companies do not have a lot of debt on their balance sheets”.

Which is  supreme irony – as nineteen days later, a letter will emerge showing that the former SOE minister, Simon Power,  instructed Solid Energy to borrow heavily and pay huge dividends to the National government. National was intent on using Solid Energy as a ‘cash cow’.

Source: State miner to return to coalface

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25 February 2013

Prime Minister discloses Treasury scoping study of Solid Energy

The PM was asked when the government first became aware Solid Energy was accruing big debts, given that such businesses were not normally expected to take on large amounts of debt.

He replied that the government had undertaken a “scoping study” when they were preparing the formulation of the Mixed Ownership Model and that their examination of Solid Energy’s accounts at that time indicated a degree of poor investment, over-valuation of the expected price of coal–which neither the industry nor government agreed with—and related financial problems stemming from this.

Source: PM Press Conference Dominated by Solid Energy Debacle

.

Key claims Solid Energy wanted $1 billion cash injection

The government blocked proposals in 2009 from its coal mining company Solid Energy for a billion dollar capital injection to allow it to become “the Petrobras of this country,” Prime Minister John Key says.

Source: Govt blocked grandiose Solid Energy plans in 2009

Key’s claim is later rejected by ex-Chairman, John Palmer.

Documents released by Key – in an attempt to back up his claims – wound up shooting the Prime Minister in his foot. The documents do not show that Solid Energy (or it’s CEO or Board) asked National ministers for anything.  The documents show only that the government was informed that Solid Energy would have to borrow from somewhere.

As usual, Key had been bending facts to suit himself. (And he thought no one would notice?!?!)

.

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26 February 2013

Ryall confirms Treasury  scoping study

Tony Ryall confirmed that the scoping study was carried out in “late 2011″,

Hon TONY RYALL: The member can repeat whatever he likes. The simple fact of the matter is when Ministers became aware of the issues raised in the scoping study at the end of 2011 we took the appropriate steps to address the issues that were raised. As the member knows, the company now has a new chair and new board, and we are currently dealing with the banks to resolve those issues.

Source: Parliament Hansards – State-owned Enterprises—Commercial Expertise

Despite that Treasury scoping study on 4 November 2011, National was still extracting dividends from Solid Energy, right up to 30 June 2012 ($ 30 million).

.

Key blames Labour

He said his support for the project in 2011 came four months before a scoping study revealed the true state of Solid Energy’s financial woes, and the former Labour government needed to take some responsibility for the situation.

“They can’t wash their hands that from 2003 on they were intimately involved when they purchased the land for lignite,” Key said.

Source: Govt forced to defend handling of Solid Energy

2003?

How far back does this man want to go in history as he tries to deflect responsibility for his government’s incompetance? It seems strange, but one gets the distinct feeling that John Key never learned how to take personal responsibility as a child.

Continually blaming others is not the mark of a mature individual. After a while, the public begins to notice.

.

Key blames Solid Energy’s expansion plans

Mr Key says his Government was cautious about Solid Energy’s expansion and said it could “take some baby steps”.

Really? Key’s government was “cautious”?

Funny, that’s not how it looked on 8 September 2010, when then-SOE Minister, Simon Power, endorsed Solid Energy’s expansion plans in a letter, stating,

Shareholding Mnisters are, however, supportive of Solid Energy developing its
current natural resources, including lignite and unconventional gas. As
discussed with you, we expect that Solid Energy will develop resources on a
project by project basis.

Or on 3 June 2011, when John Key supported Solid Energy’s expansion, when he gave a speech in Invercargill,

“At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion.

We know there is lots of resource there and we know they potentially have the capability [to convert lignite to urea or diesel] and so we will see how that progresses, but the briquette plant is a good starting point.”

Or on 9 September 2011, when,

The Hon Bill English, MP for Clutha-Southland and Minister of Finance, today marked the official start of work at Solid Energy’s Mataura Briquette Plant, by “turning the first sod” at a small event on site with neighbours, local authorities, and other guests.

.

Key blames inability to control Solid Energy

The Government was worried about Solid Energy’s ambitious investment plans and rosy view of coal prices as far back as 2009 but was unable to order the company to steer a safer course, Prime Minister John Key says.

[...]

But after getting advice on the company’s plan, Mr Key said his Government rejected it, “but of course under the SOE Act the company had the right to draw down debt and make investments and could do that without reference to the shareholder”.

Source: Govt worried about Solid Energy in 2009

Two things jump out about that statement,

A.  If  National ministers were so “worried about Solid Energy’s ambitious investment plans ” – why did they not change the Board of Directors? Or issue a new Ministerial Directive?

After all, Simon Power did just that in a letter dated 8 September 2010 (see above), when he issued an instruction to Solid Energy’s Chairman, John Palmer, not to proceed with a specific expansion plan,

Shareholding Ministers have carefully considered the proposal and at this stage
do not support the development of a single NRC to maximise the value of New
Zealand mineral resources.

B. Why did Tony Ryall acknowledge “Mr Palmer’s commitment to the company since his appointment in 2006, and the developments the company has made under his leadership” on 23 June 2012, when John Palmer stood down as Solid Energy’s chairperson – if  “Government was worried about Solid Energy’s ambitious investment plans and rosy view of coal prices as far back as 2009…“?

C.  How can Key state that “the Government was … unable to order the company to steer a safer course” - when legislation states otherwise? As the Crown Ownership Monitoring Unit (COMU) states,

Most SOEs are subject to ministerial direction in relation to the content of certain aspects of the company’s Statement of Corporate Intent and the level of dividend payable to the Crown. Shareholding Ministers may remove board members by shareholder resolution under the Companies Act 1993. Under the Companies Act 1993, an alternative process may be followed if allowed by the company’s constitution.

Source: COMU: State-Owned Enterprises

As stated above, then-SOE Minister Simon Power did just that: issued a Ministerial Directive.

Of course, “steering the company to a safer course” should have included reducing National Minister’s demands for hefty dividends.

That might have helped.

Either Key is grossly ignorant about SOEs and their ministerial oversight – or once again he’s deliberately misleading the public to suit himself.

.

Key Blames Solid Energy

At that point, the company approached his Government seeking a capital injection “in the order of about a billion dollars to turn this company into the [Brazilian state-owned energy company] Petrobras equivalent in New Zealand”, Mr Key said.

Source: IBID

As a 27 August 2010 Treasury report – released on 15 March 2013 – showed,  Key’s claim that Solid Energy approached the government for “a billion dollars to turn this company into the [Brazilian state-owned energy company] Petrobras ” would prove to be false.

As ex Chairman John Palmer was to tell the Select Committee on 14 March,

“Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no.”

.

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14 March 2013

Former chairman John Palmer  and CEO, Don Elder appear before Commerce Select Committee

Now we start to hear the “other side” of the story – and much of it conflicts with what we’ve been hearing from English, Key, and Ryall.

.

National confirms big dividends paid out

For the first time it is publicly acknowledged – Solid Energy has been used as a cash cow by National, to extract big dividends from 2009 onward,

The government concedes the pressure it put on Solid Energy to increase its debt is partly to blame for the company’s financial failures.

The state-owned coal mining company owes $389 million in debt, and is negotiating a rescue package with Treasury and banks.

Government documents reveal that in May 2009, then-State Owned Enterprises Minister Simon Power wrote to Solid Energy’s then-chair, John Palmer, saying he was disappointed its profitability and dividends were forecast to drop over the next three years.

At the same time, the government wanted the company to increase its gearing (debt to equity) levels to 40 per cent and its dividends to 65 per cent of operating cash flow.

A ministerial briefing paper shows Solid Energy’s gearing level in March 2009 was 10 per cent, and was forecast to reach 27 per cent in June 2010, while its dividend was 50 per cent.

Parliamentary Library figures show Solid Energy’s gearing leapt from 9.4 per cent in June 2008 to 34.4 per cent in 2010, dropping back to 29.6 per cent in 2011 and jumping again to 41.7 per cent in 2012 as coal prices began to slump.

Finance Minister Bill English admits the government pressure was perhaps too strong.

Source:  Govt pressure on Solid Energy revealed

National had to come clean, as ex-CEO Don Elder appeared before the Commerce Select Committee to explain what went horribly wrong at Solid Energy. National’s ministers knew that the truth was coming out, and had to pre-empt any public disclosures of massive borrowings and payments of dividends,

Mr English says there was a pushback against the debt increase from Solid Energy, which he expected Mr Palmer and former chief executive Don Elder to explain when they fronted a select committee later on Thursday.

Labour leader David Shearer says the documents show ministers had a greater degree of involvement in Solid Energy’s failure than they were publicly letting on.

Source: IBID

Push back against debt“? By now we all understand that English is lying his arse off to Heaven and back. There was no push back.

The only “push” was to increase dividend payments and gearing up to 40%.

The only reason politicians tell such howling lies is because they do not expect people to remember all the facts; to connect the dots; or for an under-resourced media to tell the whole story as a continuous narrative. Politicians expect people to forget; not hear all the facts; or become confused with too much non-contextual facts and testimony from the main players.

That’s how they get away with it; we’re not paying close enough attention.

.

Don Elder appears before Commerce Select Committee – Confirmation of Govt wanting Solid Energy to increase debt – endorsed expansion

Firstly,  former Solid Energy chairman, John Palmer,  publicly confirmed that the National Government,

  • wanted Solid Energy to borrow more, and pay higher dividends to government coffers,
  • endorsed Solid Energy’s expansion plans

Labour’s finance spokesman David Parker asked whether the company was in any doubt that the Government wanted them to expand production, increase debt and dividends.

Palmer said it was “self evident” that increased gearing meant increased debt.

The Government was supportive of plans to expand, including into lignite.

Palmer’s comments contradicted Bill English’s comments on 22 February 2013 and John Key’s comments reported on 23 February, 2013, where both politicians lambasted Solid Energy for high debt and expansion plans.

According to Palmer, neither English nor Key were worried about Solid Energy’s expansion programme.

Next,

Palmer said that in late 2011 or early 2012, when it was clear what was going to happen, he spoke to minister Tony Ryall about a $200m revenue hole (twice the annual profits), which would have a dramatic effect on the balance sheet.

Which ties in with Bill English’s announcement on 21 August 2012, that Solid Energy had  “some fairly substantial issues… We wouldn’t be planning to float it any time soon”.

Now we know what he was referring to: Solid Energy was broke. He knew it then, but did not disclose the full nature of Solid Energy’s status until forced  by officials.

.

Ex-CEO rejects Key’s assertion of Solid Energy requesting a $1 billion cash injection

“Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no,” Mr Palmer said.

“A specific $1 billion capital injection, I’m reasonably sure we did not ask for it in exactly those terms.”

However he said the company did have discussions with the Crown about potential large investment in lignite processing but it was also talking to potential overseas partners, “because it made no sense to us to think that Crown as the sole shareholder should finance that”.

He also said the company discussed with the Crown a national resource strategy that would have required large investment.

“My recollection is there was no dollars attached to that proposal.”

Source: Solid Energy opposed Government’s debt plan

.

Curious case of politicians and executives receiving identical media-coaching

Meanwhile, National’s taxpayer funded media-staff had been busy coaching politicians and company executives;

.

Don Elder – Blame,  “Perfect Storm”

This was the perfect storm.”

Source: Palmer: Elder deserves applause

Tony Ryall –  “Perfect Storm” – blames downturn in coal prices – blames wrong investments

“State owned enterprises minister Tony Ryall blames the distressed financial state of Solid Energy on a “perfect storm” of events.

Mr Ryall says a wrong choice of investments, along with a worldwide collapse in coal prices, led to the coal mining company’s current state.”

“A wrong choice in investments, together with the most significant collapse in world coal prices in 2012 led to a perfect storm. The perfect storm has created the situation this company is currently in,” Mr Ryall says.

Source: Ryall blames ‘perfect storm’ for Solid Energy’s crisis

Bill English  – “Perfect Storm”

On TVNZ’s Q+A, on 17 March, English refers – not once, but twice! – to the “perfect storm”,

“That’s right. Look, in retrospect, they would have been better off with lower levels of debt, but as I think Don Elder and John Palmer said at the Select Committee, the board is there to make the decisions about what the actual levels of debt are. Bear in mind, in 2011 their debt had peaked and was declining, and then they got hit by the perfect storm in 2012.”

And a moment later, again,

“…And in 2011 their debt levels were actually declining from that, and then they got hit by the perfect storm…”

Source: TVNZ Q+A

Lotsa ‘stormy weather’ around? I thought we were experiencing a drought.

.

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15 March 2013

Palmer says  Solid Energy did not want to take on high level of debt suggested by the Treasury

 Prime Minister John Key is facing claims he misled the public after former Solid Energy chairman John Palmer said the company resisted Government pressure to take on more debt – the very thing the Prime Minister said caused the company’s problems.

[...]

Appearing the day after Labour revealed former State-Owned Enterprises Minister Simon Power told the company to take on more debt and pay higher dividends, Mr Palmer said the company opposed that request.

The debt levels or gearing suggested by Mr Power and Treasury officials were higher than “we thought was an appropriate level of gearing given the nature of the industry we were involved in”, Mr Palmer said.

Source: Key under fire over Solid Energy claims

.

Key claims Solid Energy wanted $27 billion

Prime Minister John Key this morning released documents detailing Solid Energy’s ambitious expansion plans which would have required capital investment of $2-3 billion a year until 2021 or a total of up to $27 billion.

Key released the papers in response to Labour’s claims he misled the public about Solid Energy approaching his Government about a $1 billion investment to become the “Petrobras” of New Zealand, a request he says his Government turned down.

[...]

Key this morning said the documents showed the proposal “absolutely required, as Treasury pointed out, somewhere between two and three billion dollars of Government money”.

Source: Key says Solid Energy papers show $27b plan

Remember the Treasury report, dated 27 August 2010, referred above? Key is saying that the Solid Energy proposals would have required “between two and three billion dollars of Government money”.

Yet the 27 August 2010 Treasury report said nothing of the sort. Solid Energy could have obtained that money from the same commercial sources  it was already borrowing from.

And don’t forget, Solid Energy had already been borrowing significant amounts – pushing it’s ‘gearing‘ (debt to equity ratio) up:

Solid Energy’s gearing ratio [borrowings] was 13.8 per cent in 2009, but that rose to 34.4 per cent in 2010 and 41.7 per cent last year.

Source: Ministers pressured Solid Energy, Parliament told

To this day, Key continues to mis-represent the truth.

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Key – Solid Energy wanted foreign investment and shareholders

“Key this morning said the documents showed the proposal “absolutely required, as Treasury pointed out, somewhere between two and three billion dollars of Government money”.

He said Palmer proposed selling a stake in Solid Energy to an offshore cornerstone investor “and that would involve taking more than 10 per cent of the company and not putting mums and dads first.”.

“I made it quite clear to him that we had campaigned on a mixed ownership model which didn’t involve someone having more than 10 per cent in the company”.

Solid Energy’s proposal “didn’t involve a situation where kiwi mums and dads would be first and so the only way to get that money was through the Government.”

Source: Key says Solid Energy papers show $27b plan

Now this is yet another contradiction from Key. First he tells us that Solid Energy executives wanted $1 billion (or was it $27 billion?) from Government.

But in the next breath – on the same day – he say Solid Energy wanted foreign investors/shareholders to buy 10% stakes in the SOE.

So which was it Dear Leader?! Government funding? Foreign investors/shareholders? Pixies at the bottom of the garden?

One can only conclude that former CEO, John Palmer, was correct, when he rejected any assertions that Solid Energy was looking to borrow money from government,

“I cannot recall that we have ever asked him explicitly for $1 billion dollars.”

Source: Key Must Front Up With $1 Billion Evidence

It was also interesting to note that Key derided Solid Energy’s plans for 10% foreign investors/shareholders blocks by stating that it contravened National’s policy of putting “kiwi mums and dads would be first“.

Which contradicts a statement that John Key made in a speech in 2005, on 4 March, where a private partner was something that National would welcome,

“In respect of Solid Energy, if an opportunity arose to introduce a private sector partner, we would consider that seriously.”

Source: John Key Speech: State Sector Under National

And how does Key reconcile that with other Public Private Partnerships (PPPs) such as Wiri Prison,

Corrections Minister Anne Tolley says a contract has been signed allowing the SecureFuture consortium to design, finance, build, operate and maintain the new 960-bed public-private partnership (PPP) prison at Wiri, South Auckland.

The new prison will deliver value for taxpayers and support the Government in reaching the target of a 25 per cent reduction in reoffending by 2017.

The 25 year contract is worth approximately $840 million, which is 17 per cent less than if the prison was procured through conventional means, representing a $170 million saving for taxpayers.

Fletcher Construction will build the new facility which will be operated by Serco and maintained by Spotless Facility Services. Construction will begin soon, with the prison set to open in 2015.

“The PPP will allow Corrections to draw on the experience and expertise of SecureFuture’s international partners,” says Mrs Tolley.

Source: Beehive – Contract signed for new PPP prison at Wiri

How many “mums and dads” invested in Wiri Prison?

There are many more PPPs of this nature where “mums and dads” have nil investments, and instead are the sole preserve of corporate investors – many from offshore.

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Palmer denies Solid Energy wanted to borrow $1 billion from government

“Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no,” Mr Palmer said.

“A specific $1 billion capital injection, I’m reasonably sure we did not ask for it in exactly those terms.”

Source: IBID

Palmer is correct. According to the 27 August 2010 Treasury Report (referred to above),  Solid Energy did not ask Government for that money. The money could have been borrowed from any source – just as Solid Energy had already been doing.

This was also confirmed by a spokesperson for Bill English,

“We told them all to improve their performance and that, if they wanted to expand, they had to pay for it off their own balance sheet, rather than asking the cash-strapped taxpayers for money.”

Source: Ministers pressured Solid Energy, Parliament told

So it has becoming apparent that our Dear Leader Key is attempting to re-write recent history to suit his own agenda by shifting the blame elsewhere…

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Key attempts to spin Assumption into “Fact”

“I think it is pretty self explanatory that when you come to the Government with such a very large proposal, we’re the 100% owner, that’s what’s required.”

Source: Details of Solid Energy’s expansion bid released

So let’s get this straight…

(i)  Solid Energy management presented  an expansion plan to National Ministers

(ii) The plan includes figures for said-expansion.

(iii) National Ministers had been encouraging of Solid Energy’s expansion plans (see comments 8 September 2010 and 3 June 2011)

(iv) There was no mention made of where borrowings would be made from – though up till now, Solid Energy had borrowed from private sources, and not the Crown. (See comments 27 August 2010)

(v) And from all that, the Prime Minister suggested that “ it is pretty self explanatory that when you come to the Government with such a very large proposal ” that Solid Energy expected finance from the  Crown?

I have one question: how on Earth did Key manage to amass a personal wealth of $50-$55 million when he  makes up  such fancifuul  “leaps of logic”?!?!

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And the cover-up starts?

The head of the committee that grilled Solid Energy’s former bosses says he is unconvinced a full inquiry is needed.

Opposition MPs are pressuring for a full inquiry into the collapse of the state-owned coalminer, which is now reliant on government support to manage its $389 million debt pile.

Commerce select committee chairman Jonathan Young allowed yesterday’s appearance by former Solid Energy chairman John Palmer and former chief executive Don Elder to run for an hour longer than was originally expected.

Young, the National MP for New Plymouth, said this morning that he believed the committee now had “a very clear picture” of what had happened to Solid Energy, which was hit by falling coal prices, a strong New Zealand dollar and poor investment decisions.

In recent days it has emerged that the Government leaned on the company to take on more debt, after it warned it may pay less dividends.

Young said that “in hindsight we can look back and see if they didn’t have debt they would be in a better situation”.

Despite this, Young said he was yet to be convinced that a full select committee inquiry was needed into the collapse, saying there were “multiple levels of inquiry” already under way, with the company talking to its financiers, and the Government “looking at all of the issues”.

He told TV3′s Firstline: “I am personally yet to be convinced that we are going to uncover anything new or different that wouldn’t be uncovered” anyway.

Source: Solid Energy probe call rejected

“…the National MP for New Plymouth, said this morning that he believed the committee now had “a very clear picture” of what had happened to Solid Energy…”

That statement boggles the mind; drops the jaw to the ground; and is so, so, wrong on many levels. But wholly expected from a National member of Parliament; chairing a Select Committee; stacked with five National MPs out of nine committee members (see: Commerce Select Committee members); supposedly ‘investigating’ wrong-doing/ineptitude by National ministers.

Let’s see… what part of that is wrong? A government investigating itself and coming up with a verdict of nothing-to-see-here-folks-move-along-please? How is Young’s assertion that the Government was “looking at all of the issues” supposed to reassure us?! By what measure of common notions of justice is a  Government  “looking at all of the issues” supposed to be a non-partisan, transparent, and objective investigation into this issue?

It would be like directors of failed companies (many of whom are either in jail or waiting to be tried in Court or sentenced) investigating their own actions and coming up with the same comments as Young made,

“In hindsight we can look back and see if they didn’t have debt they would be in a better situation…”

Directors are “looking at all of the issues”.

“We are  personally yet to be convinced that we are going to uncover anything new or different that wouldn’t be uncovered”

Yeah, right, Mr Young. You can stop putting lipstick on that pig.

Listening to  the main players – especially John Key, Bill English, and Tony Ryall – there are too many conflicting statements to believe that an Inquiry is not needed. National ministers are simply unable to get their stories straight and have contradicted each other (and themselves) on numerous occassions.

Young asserts that the committee now had “a very clear picture” of what had happened.

Bollocks.

The only thing even remotely “clear” about all this is that remains remain to be asked – and answered.

As Tracey Watkins wrote on 16 March 2013,

“But something clearly went seriously wrong if those talks were not enough to stop the collapse of an SOE on an unprecedented scale.

Beneath the flurry of claims and counter claims that is the question which has still not been properly answered.”

See: Solid questions still remain unanswered

Indeed.

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17 March 2013

Bill English – TVNZ Q+A

The following is a transcript from  Corin Dann interviewing Finance Minister (and half shareholder in Solid Energy) on 17 March 2013,

CORIN

All right, if we could move on to Solid Energy. Can you give us an update on where things are at with the banks? When will we know whether the government is going to have to bail out Solid Energy?

BILL

Well, that will be some months yet. There’s discussions going on with the banks now about stabilising Solid Energy. Some of the information around its cash flows is a bit more positive than we might have expected. But we will get a period of two to three months through to the end of June where we can look at all the options for recovering value for the taxpayer in the first place and, secondly, to decide whether there is an on-going viable business in the middle of this-

CORIN

Are you saying it’s making a bit more money than you thought now and that it might be able to get itself out of trouble?

BILL

Well, I wouldn’t go that far. All I’m saying is the cash flow numbers are just a bit more positive than we expected. I mean, if you look back, Solid Energy made some very substantial investments in some of its mines. Some of those worked out, such as in Stockton; some of them didn’t, such as in Spring Creek. But where they have invested, they’ve got capacity for production and for value, and if coal prices are at some kind of reasonable level, then there is a business there.

“All I’m saying is the cash flow numbers are just a bit more positive than we expected. ” – In which case, Mr English, keep your sticky hands of that cash.

I sincerely hope that if National Ministers attempt to gouge SOEs again, that Board Directors resign on masse and publicly disclose political attempts at such interference.

The public is entitled to be reassured that politicians will not use SOEs as “cash cows” simply to balance their books.  Especially after two unaffordable tax cuts – a glorified ‘lolly scramble’ – left a gaping hole in government accounts.

CORIN

Do you want the banks to take some of the heat on this?

BILL

Yes, I think that’s really important. They’ve lent money, and as lenders, they take risks. And if they lend to a company that’s affected by a very sharp downturn in coal prices and then loss of a quarter of their export sales, they’ve got the same risks as banks who leant to resource companies all around the world that have got in trouble.

CORIN

You can see the irony in that, though, because you told them to borrow more.

BILL

Well, and you were talking about it as a revelation. We did a press conference back in 2009 about the need for our SOEs to take on-

And it took Labour to advise the public, Mr English. Bill English, Key, and Ryall were more than happy to keep that 2009 letter from Simon Power under wraps.

That was part of National’s ‘spin’ that the massive borrowings and  debt were a ‘creature’ of Don Elder’s and John Palmer’s making. But as Corin Dann pointed out;

CORIN

But you know that timing is everything with these things, and that was a revelation coming at this time, given your government had tried to distance itself from this issue. You even blamed Labour for it, for what they said in 2007.

BILL

No, I don’t agree with that. In 2009, the government was facing a decade of deficits because of the Labour Party and the recession. And we quite reasonably said that our taxpayer-owned companies should contribute more cash to the coffers. That’s the point of owning them. And Solid Energy had paid barely- had paid almost no dividends for the previous five or six years, and they had very low levels of debt compared to their asset value. So, look, in retrospect-

Here we go again; more blame-gaming,

In 2009, the government was facing a decade of deficits because of the Labour Party and the recession.

English blames the recession?

In which case why did National Ministers extract 163.9 million in dividends from Solid Energy, during the worst recession since the 1920s/30s?

Is this what National calls “prudent fiscal management”?

Notice also that  English lied by  blaming “ a decade of deficits because of the Labour Party” – even though Cullen was posting surpluses from 2002-08 Labour-led period?! And paid down sovereign debt from 33.4% of  GDP to 17.4% GDP? (See previous blofpost:  Bill English – do you remember Colin Morrison?)

This is symptomatic of a National-led government that is desperate to avoid all responsibility.

CORIN

But there was a good reason for that, wasn’t there? Because they were a coal company.

BILL

That’s right. Look, in retrospect, they would have been better off with lower levels of debt, but as I think Don Elder and John Palmer said at the Select Committee, the board is there to make the decisions about what the actual levels of debt are. Bear in mind, in 2011 their debt had peaked and was declining, and then they got hit by the perfect storm in 2012.

Look, in retrospect, they would have been better off with lower levels of debt“…   “In retrospect“?!?! Little wonder that Solid Energy’s board and management resisted National’s demands for higher and higher dividends (as English concedes in his next statement).

That statement – ”Look, in retrospect, they would have been better off with lower levels of debt“  – totally destroys the argument put forward by Key, English, and Ryall that Solid Energy’s debt and subsequent crisis was of it’s own making.

Quite simply, National was desperate for cash to pay for the 2009 and 2010 taxcuts, and were prepared to bleed SOEs dry to get it’s hand on their money. Even if those SOEs had to borrow to do it.

This is ministerial incompetance at best – or outright economic sabotage at worst. (No wonder ACT and Libertarians maintain that politicians can’t run businesses. Correction: National politicians can’t run businesses.)

CORIN

But you were telling all SOEs to raise their debt to a 40% gearing, and Solid Energy told you they were not comfortable with that, and there was a good reason: because they were a volatile coal company. Surely that was too much pressure you were applying to them.

BILL

Well, clearly not, because their debt peaked at under 35%, which was the level the board set, which was lower than what the government was expecting. And in 2011 their debt levels were actually declining from that, and then they got hit by the perfect storm. So, yes, would they have been better off with no debt? Yes, just like lots of businesses and households would be better off with no debt. Then they got hit by these circumstances which may well have put the company into trouble even if it had no debt.

Yes Mr English, Solid Energy did get hit by “a perfect storm”. A storm largely made up of rapacious politicians.

It appears that by not gearing up to the full 40% demanded by National, that Don Elder and John Palmer may have done their best to prevent the collapse of Solid Energy.

CORIN

The issue also, of course, has been around their investments. Now, your government must take some responsibility, surely, for the oversight of what they were investing in. You were the one down in Southland turning the first sod with the lignite plant. You knew what they were up to.

BILL

Well, and it’s yet to be seen just whether that particular investment has on-going potential or not. Clearly, some of them don’t. Some of them may do. That’s what’ll happen over the next two to three months. But what you’ve got to keep in mind here is that under the SOE model, politicians are not there to run the companies. We do not make the investment decisions. The boards make the investment decisions, and the weakness in the model is that there’s no market scrutiny of those board decisions, and that is why the partial sell-down of the electricity companies will help with the monitoring and the performance of those companies.

But what you’ve got to keep in mind here is that under the SOE model, politicians are not there to run the companies. We do not make the investment decisions. ” – Really, Mr English? And yet Simon Power felt he had the ministerial authority to write to Solid Energy demanding higher dividends.

In reality, under the State-Owned Enterprises Act 1986, shareholding Ministers can and do issue directives to SOE Boards. So English is being disingenuous when he tries to indicate that Ministers are powerless. They are not powerless,

13.  Powers of shareholding Ministers in respect of new State enterprises
  • (1) Notwithstanding any other provision of this Act or the rules of any company,—

    • (a) the shareholding Ministers may from time to time, by written notice to the board, direct the board of a company named in Schedule 2 to include in, or omit from, a statement of corporate intent for that company any provision or provisions of a kind referred to in paragraphs (a) to (h) of section 14(2); and

    • (b) the shareholding Ministers may, by written notice to the board, determine the amount of dividend payable by any company named in Schedule 2 in respect of any financial year or years,—

    and any board to whom such a notice is given shall comply with the notice.

    (2) Before giving any notice under this section, the shareholding Ministers shall—

    • (a) have regard to Part 1; and

    • (b) consult the board concerned as to the matters to be referred to in the notice.

    (3) Within 12 sitting days after a notice is given to a board pursuant to this section, the responsible Minister for the company concerned shall lay a copy of the notice before the House of Representatives.

Source: State-Owned Enterprises Act 1986 – Section 13

They have the power.

It’s the responsibility for their stuff-ups that seems to elude them.

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.

Source: TVNZ Q+A

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22 March 2013

The NZ Herald reported that “seven years’ worth of documents about Solid Energy have been released by Treasury… It has been released after a number of Official Information Act request centred around how much the Government knew about the financial troubles the state owned coal miner was in“.

Source:  Big Solid Energy document dump from Treasury

[Note: This blogger has viewed only a fraction of documents. There's no telling what other revelations and incriminating evidence is contained therein. Perhaps something to be re-visited on a quiet, wintry evening?]

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25 March 2013

Papers confirm Govt pressure on Solid Energy

A week after English’s attempt to ‘spin’ the collapse of Solid Energy and blame everyone under the sun, Radio NZ reported,

Official papers confirm the Government put pressure on Solid Energy to increase its debt and then appeared later to criticise it for borrowing too heavily as it got into difficulty.

The state-owned coal company is in debt to the tune of $390 million.

The papers released on Friday also show that despite strongly disagreeing with the company’s business plan, the Government left it late to act.

In 2009 the then State-Owned Enterprises Minister, Simon Power, wrote to Solid Energy chair John Palmer recommending the company raise its gearing ratio – a measure of debt – to 40%.

By June 2012, when it was clear the company was in trouble, the ratio had risen to 37% and, according to the Treasury, Solid Energy had taken on significant debt.

It was only at that point, after arguing with the company for three to four years about its business plan, that the Government decided to make changes.

Source: Papers confirm Govt pressure on Solid Energy

By  this time, public attention and media focus had waned. There were other issues and problems to deal with, and National ministers could breath a sigh of relief. They were “off the hook”.

Let us recall that Treasury’s scoping report, released on 4 November 2011, confirmed everyone’s suspicions that National had cash-stripped Solid Energy;

 ”…dividend payments to the government have been funded by increasing debt“.

Source: Treasury Report T2011/2373: Solid Energy New Zealand Scoping Study Report

The ‘up-shot’ of all this?

  • A billion dollar state own enterprise had been milked as a “cash cow” and left to collapse.
  • English, Ryall, Key, et al – off the hook.
  • There would be no ministerial accountability; no resignations; no one held to account.

And for good measure,

  • Blame Labour for everything.

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8 May 2013

Bill English preps public for Solid Energy’s write-off?

In a Radio NZ story (see: English questions viability of Solid Energy), Bill English contradicted his earlier assertion that Solid Energy would not be allowed into receivership,

“We’re not going to keep propping up businesses where we don’t think there’s a long term future. Where we think there there is, we put strong support in. So Kiwirail would be a good example.Where the government’s  already invested around a billion in them in the last 3 or 4 years and they will… all of their,um, surpluses will be reinvested in the business, probably for the next decade. So the taxpayer won’t take anything out of them. But there may be… it’s possible that there’s other businesses, as has been revealed say in the  Solid Energy case where their particular mix may not be viable so we have to look at  whether they can be restructured or whether in the long run there’s a viable proposition there. But at the moment Solid Energy is the only business where that’s in question.”

Listen RNZ interview: Bill English on Morning Report

By questioning the viability of Solid Energy, English is preparing the public for the day when National announces the demise of the company.

Having gutted it of cash and forced it to borrow millions for unsustainable dividends, National is now ready to administer the coup de grâce to finish it off. (If the Nats could eliminate all witnesses to their bare-faced thieving, I bet you they’d be considering it…)

Meanwhile, a week later…

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14 May 2013

$1 billion for KiwiRail

Radio NZ revealed that KiwiRail was receiving government funding to keep operating,

Overall the Government has committed about $1 billion to the effort, and Finance Minister Bill English has said the Government is unlikely to take a dividend for the next decade so KiwiRail can reinvest any profits in the rail service.

Source:  Solid Energy problems pose risk for KiwiRail

See also: Beehive.govt.nz: Next steps in KiwiRail’s Turnaround Plan

How is it that Solid Energy,  a once viable company – earning millions in revenue from overseas exports of coal (admittedly not a very environmentally-friendly product) – may be allowed to go into receivership?

Meanwhile, National is quite happy to keep investing in KiwiRail, which has never generated a profit in modern times. (Though admittedly, KiwiRail is  an environmentally-friendly transport enterprise with a positive future, as we pass the oil peak.)

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A message to businesspeople:

National Ministers are attempting to sheet blame for Solid Energy’s financial crisis to it’s former Chairperson, John Palmer, and CEO, Don Elder.

Key, English, and Ryall  have  resorted to mis-presentation of facts; omission of facts;  exageration; and in some instances, outright lies.

This should serve as a clear warning to businesspeople. Think carefully before accepting managerial or Board positions during a National-led government.

Because if things go wrong – even if caused by political interference – then they will have no hesitation to smear your reputation.  They will hang you out to dry, whether you are at fault or not.

A message to Voters:

National has a reputation as “prudent fiscal managers”.

For the life of me, I cannot understand how they have earned that reputation.

To allow a billion dollar SOE to crash and burn; run into the ground; and now   facing bankruptcy suggests to me that Key, English, Ryall, Brownlee, Joyce, Collins could not run a corner Dairy without getting into financial trouble.

I don’t think these clowns could run a sausage sizzle without losing money by the end of the day.

Perhaps, as a test,  those voters who are disbelieving should keep voting National? Let’s see what other SOE will collapse on their watch, eh?

What the hell. After all, it’s only our property. And tax dollars.

This blogpost was first published on The Daily Blog on 17 May 2013.

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References

Solid Energy: Annual Reports Index

Crown Ownership Monitoring Unit – SOE Disclosures

Treasury: SOE/Solid Energy Disclosures

Previous related blogposts

That was Then, This is Now #18 (24 Feb 2013)

National caught out over Solid Energy – changes story on coal prices, debt, and other matters (13 March 2013

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