Ever had that out of control feeling?
Sometimes, you just can’t keep things under control in politics.
You know how it goes – somehow Treasury documents get accidentally posted on websites; somehow the government’s majority ‘control’ over partially privatised state assets just isn’t what you thought it was going to be …
“Importantly, the Government will keep at least 51% control of these five state-owned companies …”
(John Key, 14 September, 2011)
Now, doesn’t that sound reassuring?
But, what’s this … ?
(Deleted section of accidentally leaked Treasury draft on asset sales, reported in New Zealand Herald, 2 February, 2012)
Sounds a bit worrying – but maybe that’s the Herald just trying to be sensationalist. Better look closely at the full comment before we jump to any conclusions.
Here’s the full version of the leaked section:
Deleted section of Treasury Draft
“Ministers will no longer be able to direct the companies to pay dividends“???
“or to change the content of their main accountability document, the Statement of Corporate Intent“???
What ‘control’, then, does the 51% shareholding give the government?
In the lead up to the election, National made much of the 51% shareholding to be retained by the government. From early on, however, Treasury were sceptical of that objective and believed it was one of the ‘trade offs’ against the fiscal objectives.
Specifically in relation to that objective (Objective 6, below) a 4 March report from Treasury refers to “Government ‘control’“, with, significantly, the word ‘control’ in scare quotes.
4 March 2011 Treasury Advice on Mixed Ownership Model
And, in the relevant (undeleted, p. 11) part of the draft report that was accidentally posted, we have this ‘reassurance’ over the kind of control the government will still have left under the mixed-ownership model:
Responsibilities of Ministers
Ministers will have those powers “afforded to shareholders under the Companies Act 1993“.
Further, “Ministers will look to best commercial practice in how they administer those powers.”
Why?
“This is a necessary pre-requisite where the decisions of the Crown as majority shareholder could affect the property rights of minority shareholders … ”
Now, remember that the deleted bit, as pointed out by the Herald and quoted in full above, said:
“Ministers’ powers … will not be as great as the powers they have under the SOE Act …”
That is, mention of the reduction in powers has been removed and, then, been replaced by the ‘positive’ assertion of their powers “under the Companies Act 1993“.
Ever had that feeling that the steering wheel is slipping out of your control?