Right-o, this has been brewing for a bit. Why on earth are we tolerating SOE’s posting such massive profits? Seemingly every couple of days we have another major SOE in NZ posting millions of dollars profit and reporting increases in the ranges of 15% or better. When we have a wholesale interest rate below 3% and are struggling to climb out of a recession do they really think a big profit grab is actually doing anything for the average Kiwi ? Just going by what is in the paper, we have had dividends totally more than 1 billion NZD paid in the last 6 months by the state power companies and airline. For a country of 4 million people and a viable work pool of less than half that, that represents a colossal rout of funds from the average working citizen. Now you may say that the money goes back to the shareholder who is “the people”. This is true so why pay it in the first place? The culprit is the SOE act which states that an SOE should run and operate as a viable, competitive business and return the same margins as a privately run company. Guess what, it’s a recession... No one else is returning a 15% or better dividend. Most people are lucky to be in business at all at the minute. For once it’s be nice if they looked at the fundamental flaws in legislation like this and re write them into a slightly more fitting role. How about a return that mirrors the current inflation conditions? That would guard against the business becoming worthless. And before I get some ill conceived rant about this being a device of the National party, remember they want to sell the damn things and create a competitive market place with them. Which they should... Then, when they are exposed to the prevailing market conditions they will have to perform without their fluffy protective blanket of legislature. Sell the lot of them and invest in infrastructure. You never know what might happen if we have the means to do things, we might even catch Aussie!
The Dragon
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