Cunliffe David: Debate on Crown Entities Public Organisations and State Enterprises — In CommitteeText is incorporated into the Bound VolumeCunliffe David: Debate on Crown Entities Public Organisations and State Enterprises — In Committee[Sitting date: 14 May 2013. Volume:690;Page:9905. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):It is a pleasure to take a call in this Crown entities debate on the very serious situation in Solid Energy Ltd. Firstly may I compliment the members of the Commerce Committee in particular my colleague the Hon Clayton Cosgrove who cannot be in Parliament today on the quality and thoroughness of the report that we have before us. It makes for very sobering reading because it is an absolutely textbook case of how not to govern and manage a State-owned enterprise.If this National Government does not believe in the State-owned enterprises model—quite obviously because it is trying to privatise many of them—it is because it considers itself incapable of exercising the proper governance over it. The Government has been asleep at the wheel of Solid Energy. It has built up $400 million in debt it has cost to date over 400 lost jobs and it has seen a once-proud and innovative company brought to its knees.Let us consider how this occurred but firstly can I just comment on behalf of my colleagues on the difficulties that the Commerce Committee had in bringing Solid Energy to account. Indeed my colleagues believe that Solid Energy misled and obstructed the committee in regard to the availability of Dr Don Elder the former chief executive of the company to be able to testify to the committee. As I understand it from the committee report it was only when Dr Elder’s lawyers wrote to Solid Energy instructing it that if he was not able to appear the company must declare that he was available to appear. Only then did the company relent and allow him to perform his constitutional duty and testify to the committee. By all reports he did so with a straight back as did the outgoing chairman John Palmer.That leaves us with a riddle to solve—a riddle that is very important to New Zealanders because they want to know how come this Government oversaw the loss of half a billion dollars of their taxpayers’ money. Half a billion dollars is a lot of money in real New Zealanders’ terms but this Government—[Interruption] There goes the chairman. There goes the chairman of the Commerce Committee. He is a decent bloke but he was encouraged to stand aside from this hearing because of a potential perceived conflict of interest. His sister had been appointed to the board by the previous Labour Government—a very bipartisan manoeuvre. He was invited to consider and he took advice on whether he should stand aside. He chose not to. That does not mean he is in a position to shout down the Opposition on this matter.Here is the riddle: a company that had a billion dollars’ worth of projects in the pipeline and was carrying less than 35 percent debt suddenly found itself in the situation where the Government was encouraging it to up its debt levels at the very same time that the coal price was plummeting to historic lows. How was that possible? Well it so happens that Treasury was in fact intensively monitoring Solid Energy at the time but Ministers did nothing. Indeed Ministers insisted that the gearing be increased so that the dividend could naturally be increased. And that is like a sailboat sailing into a storm not sheeting its sail but putting up more sails more debt even though it was getting rougher and rougher.It was not bad enough to load up the company with debt at the Government’s behest but the company completely lost control of costs. Do not take our word for it. Here are the facts: $1.8 million was spent on overseas travel—$1.8 million which is more than the Cabinet—in 2011-12 and there was $336000 spent on advertising over a million dollars on communications nearly $200000 on spin doctors and public relations and one that really gets me $200000 on private investigators to run investigations on ecological campaigners. That is a travesty and all at the time—[Interruption] Yes and it reflects this Government’s view of civil rights: “Got a problem with spying? Change the law. Got a problem with sleazy deals? Bind future Parliaments.” Members may smirk. It is not going to take long before the public has a gutsful of that carry-on.