The Labour Party says a report into the Treasury's monitoring of Solid Energy proves that government ministers were negligent.
The report by accountancy firm Deloitte has questioned whether the Treasury responded forcefully enough to problems at the state-owned coal company.
Clayton Cosgrove says the company is in debt and jobs have been lost due to the Government's failings. Photo: LABOUR PARTY
The Treasury commissioned the report after Solid Energy reported it was deeply in debt and in talks with the Government and its banks.
It said that, given the company had caused concern for a long time, it did raise questions about whether the Treasury's response had occurred soon enough or been forceful enough.
The report concluded it did not believe that the failure of Solid Energy highlighted material failings in the Treasury's monitoring but recommended that the Treasury take a more active approach in monitoring state-owned enterprises.
Labour's State-owned Enterprises spokesperson Clayton Cosgrove says SOE Minister Tony Ryall and the Finance Minister Bill English didn't act soon enough.
"They could have changed the statement of corporate intent, they could have sacked the board. They are politically and commercially negligent."
Bill English concedes the Government might have been slow to act. Photo: RNZ
Mr Cosgrove says because of the Government's failings, Solid Energy is deep in debt and hundreds of jobs have been lost.
Bill English concedes the Government might have been slow to act.
"You can argue that the Government should have sacked the board sooner. In my view the threshold for that is very high. Bear in mind what happened here was sharp and unanticipated fall in the coal price, a rising exchange rate and that caught the company out."
Mr English says until coal prices started dropping in 2011, Solid Energy had been performing well.
The Treasury says it is putting in place Deloitte's recommendation to more actively manage SOEs.
