Headline: National was warned against Rio Tinto hand-out
National handed over $30 million of public money to Rio Tinto against official advice in a desperate attempt to save its asset sales agenda
The National Government was warned Rio Tinto’s demands for money should be rejected but National handed over $30 million in a desperate attempt to keep its asset sales programme afloat, Green Party energy spokesperson Gareth Hughes said today.
In papers released today, Treasury advised the Government that “any request by PA [Pacific Aluminium] for Government assistance should be rejected because it would result in a significant transfer of value from New Zealanders to PA and Rio Tinto shareholders”.
The papers make clear that Rio Tinto’s threats to potentially close the Tiwai smelter were “clearly significant” issues for National’s asset sales. Documents reveal that the $30 million payment of public money to Rio Tinto came about following an offer made by Prime Minister John Key over the phone.
“National handed over $30 million of public money to Rio Tinto against official advice in a desperate attempt to save its asset sales agenda,” said Mr Hughes.
“The documents clearly show that the Government was very concerned to sort out the Tiwai smelter issue so that its asset sales could continue on schedule. The Government ignored Treasury advice not to give Rio Tinto a hand out and warnings that Ministers should stay clear of the bargaining.
“National’s asset sales obsession gave Rio Tinto enormous bargaining power and ultimately resulted in phones calls from the Prime Minister and Finance Minister offering Rio Tinto $30 million of public money to play nice.
“This is no way for a responsible government to administer the public’s money. There should have been a robust and transparent process, not a political deal done over the phone.
“We need an independent assessment of the value of the smelter against the value of lower electricity prices to the country; not a government that hands over $30 million for purely political considerations.
“This is becoming a pattern. Again and again the supposed financial geniuses in National find themselves backed into a corner when negotiating with a big corporation, and the public ends up paying the price,” said Mr Hughes.
Documents referred to in this release:
http://www.treasury.govt.nz/publications/informationreleases/nzas/pdfs/nzas-2394495.pdf
http://www.treasury.govt.nz/publications/informationreleases/nzas/pdfs/nzas-2448686.pdf
http://www.treasury.govt.nz/publications/informationreleases/nzas/pdfs/nzas-2598711.pdf
http://www.treasury.govt.nz/publications/informationreleases/nzas/pdfs/nzas-2597050.pdf
http://www.treasury.govt.nz/publications/informationreleases/nzas/pdfs/nzas-2596077.pdf (“It has also surprised us that the Meridian timing is also driven by an external matter; the impending float of Mighty River Power”)
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