8 Dec 2010

Government wants higher SOE returns

2:06 pm on 8 December 2010

The Government wants a greater return on its $28 billion investment in state-owned enterprises.

The first annual report by the Crown Ownership Monitoring Unit shows state-owned enterprises (SOEs) have reinvested $10 billion dollars in the past five years but taxpayers have yet to benefit.

Finance Minister Bill English says the Government wants SOEs to perform better and this may require some restructuring.

Documents obtained by Radio New Zealand under the Official Information Act show the Treasury has suggested SOEs could pay higher dividends by taking on more debt.

An independent consultant on financial accounting, Alan Robb, says profitability shouldn't be the only rationale.

He says it makes no sense for SOEs to borrow heavily, when private companies are trying to get rid of debt.