14 Apr 2014

Govt accused of leaning on SOEs

7:25 pm on 14 April 2014

Green Party co-leader Russel Norman has accused the Government of leaning on State-owned Enterprises to help get its finances back into surplus next financial year.

Green Party co-leader Russel Norman.

Green Party co-leader Russel Norman. Photo: RNZ

SOEs have been told getting back into surplus is a key priority for the Government, so it is important they advise of any risk to their forecast performance.

In a letter to all government businesses, State Owned Enterprises Minister Tony Ryall criticises some for not making enough money in 2013 and makes it clear that he expects a better result in 2014-15.

In the wake of Solid Energy's financial difficulties, SOEs have also been instructed to tell their lenders that their debt is not guaranteed by the Government.

no caption

Photo: RNZ

Green Party co-leader Russel Norman said the Government's surplus target is entirely a political objective and the National Party is clearly putting pressure on the SOEs.

While they are obliged by law to make a return on investment, he said, "what appears to be happening is that for purely party political reasons the National Party is leading on the SOEs to help the National Party deliver a very slim surplus in order to cover up the years of borrowing."

Prime Minister John Key says while he expects better performance from the SOEs, it's the Government's management of its spending that is getting its books back into shape.

"What we've done over the course of the last five-and-a-half years is manage that expenditure, essentially within broadly the same envelope. That's what makes the difference; it's not actually about a relatively small payment that comes from one small part of the overall revenue equation."

Mr Key said many factors are involved in getting the Government's books back in shape and there is no undue pressure going on SOEs.