Our money handed over for turkeys and lemons

Last updated 09:56 18/03/2013
Don Elder

HOT SEAT: Former Solid Energy boss Don Elder is grilled by MPs at a Parliamentary select committee.

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Rain, rain, go away! As the country sweats through the drought, the only place encountering storm conditions seems to be Solid Energy's palatial Christchurch headquarters.

OPINION: When Don Elder fronted up to the select committee last week, which he did in a dignified and professional manner, he blamed a "perfect storm" in the form of a high dollar, falling coal prices and increased extraction costs for the company's woes.

The message seemed to be "blame it on the conditions". These currency and commodity price problems were acts of God that could not be changed by mere chief executives raking in over a million a year.

Yet as any climate change scientist will tell you, some of our current weather catastrophes are at least partly caused by humans.

The Solid Energy fiasco, which combines the biggest excesses of Think Big with the worst features of Rogernomics, seems entirely anthropogenic. But it was the assumptions made in front of the select committee that sadly typified the economic approach of our public and private businesspeople over recent years.

Our high exchange rate is not like our immoveable high summer temperatures. It can be lowered if there is political will to do so. I'm not advocating doing so, but in most countries there would at least be a sensible debate about it. But our bland business community, like our Government, sees no alternative to the narrow monetarist line they've been parroting since the 1980s.

Aggrieved miners are blaming Dr Elder for all their woes, while Labour MPs are trying to put as much blame as possible on the Government.

It's obvious that Solid Energy made some dreadful business decisions, but the Government pressuring Solid Energy to extract a high dividend, even if it meant taking on extra debt to do it, can't have helped.

And don't forget that Dr Elder's exorbitant salary had its biggest increase under Labour, who also loudly beat the biofuels drum.

Solid Energy's staff doubled under Dr Elder's reign and the number of people earning more than $100,000 a year mushroomed. And I bet they were marketing types, not people working at the, er, coalface.

Yet, as any neo-liberal will tell you, if you pay peanuts you get monkeys. Trouble is, Solid Energy paid extremely large amounts of our money, and got turkeys and lemons in the form of barren canola farms and worthless biofuel companies.

Perhaps if our SOEs were to pay thousands, not millions, for top staff, instead of getting management wizards in pinstriped suits speaking all the right jargon ("monetise", "negative gearing ratio" - speak English, guys), we would get competent yet ordinary people who would be honoured to work for the public good.

And could they do a worse job? Do such citizens still exist, or does everyone in the business community demand a few hundred thousand just to get out of bed in the morning?

Our public and private organisations all seem to be run by the same sorts of people. They are highly educated, with MBAs and LLBs emanating from every orifice; they have spent time overseas studying at free-market shrines like Harvard and are usually experts on "governance".

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Yet I can't help thinking that if the Solid Energy board had had just one coal consumer or one miner, then when all the company's grandiose schemes were revealed, this normal person might have said "pull up, pull up, stop dreaming, and stick to your knitting".

But this will never happen. Having a coal miner helping to run Solid Energy would be like having a teacher helping to run Novopay or a genuine television viewer on the board of TVNZ.

What this sad affair also shows is the fragility of our economy. We are still focused on primary production and our deluded Government thinks that finite extraction industries like mining are the future.

I wonder whether they worry in Helsinki when the coal price falls or there's a "perfect" drought?

I suspect not, as it doesn't affect the billions of dollars that the smart Finns earn from their smart phones, and other technologies, every single year.

- The Dominion Post


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