16 Mar 2009

Pricing is up to state-owned enterprises - minister

2:16 pm on 16 March 2009

State-Owned Enterprises Minister Simon Power says he cannot step in to prevent power generators lifting prices to boost profits.

The heads of boards of all 17 state-owned enterprises have been summoned to the Beehive next month to discuss concerns about their performance.

Mr Power has told the boards that financial targets will be set and they will be held accountable for meeting them.

Accounting changes that saw bottom-line profits reduced in the six months to December will result in a decline in the dividends that state-owned enterprises pay the Government.

The Labour Party's spokesperson on energy, Charles Chauvel, says that can only lead to demands for an increase in profits, and the minister must insist that power companies in particular do not raise prices to achieve this.

However, Mr Power says legislation prevents him directing state-owned enterprises to either raise or lower prices.

"Pricing is a matter that is for the SOEs themselves to consider. The shareholders have a responsibility to the taxpayers of New Zealand to make sure that the $24 billion taxpayers have in these companies is being used wisely, and that is the purpose of the meeting."

However, he says the Government will make clear to the state-owned enterprises the economic times the country is in.

Simon Power says the public expects the Government to demand accountability for performance from each board.