Page 4217 - Week 13 - Thursday, 14 December 2006
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under the obligation imposed by section 16A of that act to inform the Chief Minister and the Deputy Chief Minister, as shareholders of Rhodium, if they, the directors, become aware of any significant events such as new ventures or significant changes to existing activities by Rhodium.
I imagine they must have been kept busy over the past few years performing their statutory duties of informing the Chief Minister and the Deputy Chief Minister. Given that some of the Auditor-General’s key findings were that there were deficiencies in financial reporting and a lack of clear strategic direction from shareholders, and given that the Chief Minister is on the record as saying that he did not and never would involve himself in the day-to-day management of Rhodium and that it would be entirely inappropriate for him to do so, perhaps the directors felt they did not really have to bother shareholders with that particular statutory obligation. Unless they complied with that obligation, even more responsibility for allowing Rhodium’s management to go off on a frolic of its own lies at the feet of the minister.
This bill represents a robust and responsible response to such managerial incompetence or deliberate malfeasance. Get rid of it, sell it off, call it non-core business and let someone else worry about it while reaping one-off profits. Yet another avenue for privatising profits and socialising costs has been extracted from the public domain. The reason behind the sale is that it is not core business. It is funny how that happens every time a government enterprise goes belly-up. When governance arrangements that are meant to oversight and ensure probity and competence in management fail dismally and a government enterprise becomes an embarrassment, suddenly it is not core business—and this is from a Labor government. What about policing, health care, education, communications and transport? What if there is a stuff-up in their management? Will they be privatised? No, not if there are no profits to be made.
The passage of this bill gives us an opportunity to reflect on how a public enterprise was able to lose money when it had assured demand, guaranteed income and had impeccable political connections at the highest level of government. Its board was happy to let it expand into areas as diverse as rugby league sponsorships, laptops and mining equipment, and its shareholders did not so much as grumble when they did not receive dividends year after year.
How could it lose money? Maybe it lost money through diversifying into areas as diverse as rugby league sponsorships, mining, medical, and linen equipment. Perhaps it lost money because its shareholders did not so much as grumble or ask questions when they did not receive any dividends year after year. Perhaps the directors did not notice the Lexus SC430 in the chief executive officer’s car park, the family members that kept multiplying on the staff, or the $10,000 cash advance to a former CEO. Perhaps they did not see anything wrong with Rhodium spending more than $232,000 on corporate entertainment during 2005-06 and entering a deal worth $460,000 to give away cars to football players in return for some signage. I expect that is where the dividends went.
The board met once a month—not annually or quarterly, but monthly. It was not as though they were absentee directors. One might think that the board or individual directors should come in for some criticism from the government, or even lose their
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