A pre-asset-sale study in 2011 for the Government had highlighted over-optimistic coal price assumptions and questionable alternative fuels investments, which led ultimately to changes to the board and management, he said.
O’Connor said the previous government had supported Solid Energy as a sustainable business that was looking into alternative developments, while National saw it solely as a cash cow which could help it fund tax cuts.
Very nice of Damien to claim credit for the alternative developments which of course failed, and led to the increased debt. Solid Energy did not borrow money to pay dividends. Dividends come out of profits. Debt is used to fund “developments”.
This reinforces for me why the Government should not own commercially risky trading enterprises. If people want to fund “alternative developments” they should do so voluntarily as direct shareholders.Tags: Asset Sales, Damien O'Connor, Solid Energy