Fran O'Sullivan: Jones' new SOE job spurs unease

There's considerable trepidation brewing within the senior business community on whether Shane Jones' appointment as Associate Minister for State Owned Enterprises signals another round of knuckle-headed Beehive politics.

At issue is whether the NZ First MP will step up his "Trumpian" tactics, which have seen him call out New Zealand corporates for moves he believes hurt regional communities. Or whether Jones will pull his head in, now that he is playing wingman to his leader Winston Peters in the prime SOE portfolio.

Jones makes no apologies for the verbal sprays he launched at Air New Zealand over its cancellation of services from Kapiti airport, or The Warehouse over its tussle with a local landlord, which led the retailer to look at closing its store in Kaikohe.

To him they are almost a badge of honour.

Both these matters became deeply personalised. Jones called for Air New Zealand chairman Tony Carter to resign. He also poured scorn on The Warehouse chair Joan Withers.

Typically, he did not contact either chairperson before launching his attacks.

Both Carter and Withers are former Deloitte Top 200 chairpersons of the year and are considered in the corporate community to have consistently led companies through challenging periods.

I'm not going to repeat Jones' scathing attacks in this column.

But the Regional Economic Development Minister justified his rhetoric by saying, "I'm a politician — my market is the public of New Zealand. I did what I think a provincial champion should do."

It is one thing for Jones to call for the head of the chairman of Air New Zealand when the Cabinet Minister is distant from any direct portfolio responsibility.

But it is quite another thing when he is now in a position to exert direct influence on some Crown commercial companies that might also offend him — although it has to be pointed out here that Air NZ is not an SOE.

When the Prime Minister announced Jones' additional responsibility, she said he would assist the State Owned Enterprises Minister with the detailed work in the portfolio, "bringing the portfolio into alignment with his other ministerial responsibilities for Infrastructure and Regional Economic Development".

This is a considerable expansion of Jones' power base.

At face value it suggests that the "portfolio alignment" will enable Jones to exert influence on SOEs to play a larger role in supporting regional economies. Among the SOEs listed by the Department of Prime Minister and Cabinet are Airways Corporation, AsureQuality, Electricity Corporation (Residual), Kiwirail, Kordia, Landcorp Farming, the Meteorological Service, NZ Post, New Zealand Railways Corporation, Quotable Value, Solid Energy and Transpower.

Other "scheduled organisations" include: Crown Asset Management, Crown Infrastructure Partners, Genesis Energy, Mercury and Meridian Energy — the latter three having been partially privatised under the mixed ownership model (MoM) where the Crown has a controlling 51 per cent stake.

Air New Zealand is also monitored by Treasury but is not an SOE or a MoM but is a company, governed by the Companies Act 1993. The board has legal duties under the Act to "act in good faith and in what the director believes to be the best interests of the company". Finance Minister Grant Robertson is Air NZ's shareholding minister.

Behind the scenes, the Air New Zealand board has begun to deliberate among themselves on the succession plan for when Carter steps down as chairman when his term expires.

It was speculated that Sir John Key — a former National Prime Minister and Tourism Minister — who joined the board after he stepped down from Parliament, would have been the lead runner before the change of Government at the last election.

Jan Dawson, the deputy chair, is clearly a contender, while Dame Therese Walsh is also seen to be a strong contender.

The board will no doubt take soundings from Robertson, who must approve of their decision.

Jones has not been shy when it comes to exerting influence on corporates. In Opposition, the then Labour MP made allegations of "extortion" and "blackmail" under the protection of parliamentary privilege, about supermarket practices in dealing with their suppliers.

The competition watchdog spent nine months investigating allegations that Countdown's Australian-owned parent, Progressive Enterprises, sought retrospective payments from suppliers. It found no evidence of illegal behaviour by the company but the reputational damage was done.

But there are other, more sophisticated ways of achieving results without going nuclear.

For instance, Fonterra was said to have had a "sudden change of heart" when it decided this year to roll back its controversial policy to make small suppliers wait up to 90 days for payment.

Last year, Australia introduced a voluntary code of conduct for big business, binding them to pay small business suppliers within 30 days of receiving a correct invoice.

In January, Small Business Minister Stuart Nash publicly said he was "disappointed" in Fonterra, which at that stage was still adhering to its old policy.

But after he raised the matter directly with Fonterra, the company changed its mind and will revert to the industry norm of paying invoices from trade suppliers on the 20th of the month following the end of the month in which the invoice is received.

Nash simply said he did not generally seek to single out individual businesses but this "positive change" by Fonterra deserved to be acknowledged.