Cosgrove Clayton: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeCosgrove Clayton: Questions for Oral Answer — Questions to Ministers[Sitting date: 12 June 2013. Volume:691;Page:11049. Text is incorporated into the Bound Volume.]10.Hon CLAYTON COSGROVE (Labour)to theMinister for State Owned Enterprises: Does he agree with the finding of the Deloitte report on the Treasury monitoring of Solid Energy that “The removal/refreshment of a Board by Ministers is a crude lever and has a high threshold for use. Notwithstanding this with the benefit of hindsight it is evident such a move may have been warranted”; if not why not?Hon TONY RYALL (Minister for State Owned Enterprises):With the benefit of hindsight yes. As is pointed out in the Deloitte report this would have ideally happened in 2008 when the previous Government could have rejected the company’s statement of corporate intent. I think at that time though the then Labour Government was behind the eight ball trying to minimise its looming defeat. It is worth understanding that the company’s collapse is due to two main reasons: its investment in non-core enterprises that ultimately proved unsuccessful and a 40 percent collapse in world coal prices in the middle of 2012.Hon Clayton Cosgrove: Does his Government take any responsibility for Solid Energy’s bank lenders having “a view that SOEs were backed by an ‘implicit’ government guarantee” as stated on page 52 of the Deloitte report given that in February of this year the finance Minister said in regard to Solid Energy: “We will not let it go into receivership.”?Hon TONY RYALL: It is absolutely clear that there is no guarantee from the Government to the lenders of Solid Energy. Those lenders made their decisions based on the information that the company made available to them and their understanding of the coal industry and the investments made and they must take responsibility for the lending that they made.Hon Clayton Cosgrove: Which of Solid Energy’s five major bank lenders—ANZ ASB BNZ Westpac and the Bank of Tokyo—had a view that the State-owned enterprise was backed “by an ‘implicit’ government guarantee” as found by the Deloitte report?Hon TONY RYALL: That would be a question that would be better put to Deloitte in another format—Hon Clayton Cosgrove: I raise a point of order Mr Speaker. That was a very simple and precise question. It may be the Minister’s opinion that it should go elsewhere but he is the Minister for State Owned Enterprises.Mr SPEAKER: The difficulty with the question is it asked which of the lenders and then it quoted that the banks had understood they had the implicit guarantee. Surely that is a question that only the banks could answer. I cannot see how the Minister could possibly answer it.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With respect the Deloitte report was about the monitoring of Treasury and the involvement of the Minister of Finance and the Minister for State Owned Enterprises in that. It was a report about a Government department and their monitoring. It was not about the banks’ view; it was about statements that were made by a Minister which the banks took account of.Mr SPEAKER: The difficulty is that they may well be so but the member’s question was which of the banks took an implicit guarantee. But if the Minister wants to add further I invite him to do so. [Interruption ] No he does not. Does the member have a further supplementary question?Hon Clayton Cosgrove: Given that all of Solid Energy’s major bank lenders—ANZ ASB BNZ Westpac and the Bank of Tokyo—have interests in State-owned enterprises and proposed mixed-ownership model companies can he rule out there being any flow-on effects from Solid Energy’s dire financial position such as lending constraints or higher lending costs as a result of the realisation that State-owned enterprises and mixed-ownership model companies are not backed by an implicit Government guarantee?Hon TONY RYALL: I think that matter is hypothetical. It is an evident fact that the State-owned enterprises are not backed by a Government guarantee. What lenders have to look at is the success or otherwise of the businesses and their balance sheets. In fact banks may have drawn opinions similar to this opinion that was given to Mr Palmer and Dr Elder and it is a quote: “you’re bringing private sector commercial disciplines and expertise obviously you must be because you’re performing well”. That is a quote that the member opposite made to Dr Elder in April 2012.