Crown Entities Ordered To Measure Up
March 19th, 2009
State Services Minister Tony Ryall called in the chairs of Crown entities this week to give them the Govt’s now standard message it expects higher performance from them with fewer resources. The meeting will be followed by another next month when SOE Minister Simon Power and Finance Minister Bill English are to tell the chairpersons of SOEs to focus on commercial performance. Ministers believe both Crown entities and SOEs have concentrated too much on managing the “no surprises” policy, and in managing “relationships” rather than maximising productivity.
While media commentary is directed mainly at the big electricity industry SOEs returning big dividends to the state, under the radar go other Crown businesses which in the private sector would be regarded as financial basket-cases. The venerable Public Trust, for example, got an injection of $20m in additional capital from the Crown, which was sought as a matter of prudence following a loss of $32m in the June 2007/08 year. It made another loss of $11.3m in the December half-year. The return on equity dropped from a negative 99.7% to a negative 67.3%.
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Duncan Cotterill