Shearer David: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Shearer David: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 12 March 2013. Volume:688;Page:8379. Text is incorporated into the Bound Volume.] 
3. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in the Minister for State Owned Enterprises? 
Hon BILL ENGLISH (Acting Prime Minister) 
: 
 Yes he is a hard-working and competent Minister. 
David Shearer 
: When did his Minister for State Owned Enterprises first inform him that the falling coal prices were having a serious effect on Solid Energy and that the company was in financial difficulty? 
Hon BILL ENGLISH 
: The Minister for State Owned Enterprises would have been involved in the initiation of the scoping study into Solid Energy along with the other State-owned enterprises at the beginning of 2011 just after he became the Minister for State Owned Enterprises. He would have received that report which highlighted some concerns about Solid Energy at the same time as the Prime Minister did during 2011. 
David Shearer 
: Why did the Government show a book value of $3.5 billion for Solid Energy in November 2010 when earlier it had been independently valued by Macquarie and Forsyth Barr at $1.7 billion and $1.6 billion respectively? 
Hon BILL ENGLISH 
: The valuation of the company as I understand it was finally determined by the board and that was the board’s valuation. As it has turned out that was based on assumptions about both the coal price and the company’s investments into alternative energy—assumptions that did not eventuate. 
David Shearer 
: Did either of the shareholding Ministers advise him on the scoping report received 3 weeks before the 2011 election which highlighted Solid Energy’s financial problems; if so why was that information not made public? 
Hon BILL ENGLISH 
: The Minister would certainly have brought that report to the attention of the Prime Minister—in fact it had been discussed throughout 2011 well before there was any drop in the coal price. The scoping studies were not made public because they were commercially confidential documents. I might say at the time the Opposition was criticising the Government on the basis that it was going to be ripping these places apart by applying commercial principles; now it is saying that we were not commercial enough. 
David Shearer 
: Why was the Government continuing to pretend publicly that all was rosy at Solid Energy while preparing it for sale when Ministers knew it was actually in financial trouble? 
Hon BILL ENGLISH 
: Because that is not correct. The sequence of events is that the scoping study highlighted a number of areas of concern with Solid Energy later in 2012 those concerns turned into pretty obvious vulnerabilities when the coal price dropped significantly and then Solid Energy lost 25 percent of its export market. The Government was working with the board on these issues well before there was any question of Solid Energy’s financial viability. 
David Shearer 
: Why was the Government battling the Solid Energy board for 18 months to stop it selling part of Solid Energy overseas as the Prime Minister said just a few hours ago when that is exactly what the Government is planning to do when it floats it on the Australian Securities Exchange? 
Hon BILL ENGLISH 
: What the Government was doing was contesting with the board its opinions and views about the direction of the company its opinions about the future track for the coal price and its opinions about the success of the alternative energy investments that it was pushed into by the previous Labour Government.