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Legislative Assembly for the ACT: 2006 Week 9 Hansard (21 September) . . Page.. 3033..

Questions without notice

Rhodium Asset Solutions Ltd

MR STEFANIAK: My question is directed to the Chief Minister. Chief Minister, yesterday you stated that a reference to a "lack of clear strategic direction"on page 3 of the performance audit of Rhodium was a "gratuitous comment"by the Auditor-General. In fact, the Auditor-General refers to this issue consistently in her report. In the key findings under the governance and accountability section on page 25, the Auditor-General found:

Rhodium has been facing uncertainty since its establishment due to a lack of clear strategic direction from the Shareholders. Consequently, it was difficult for Rhodium to provide and commit to appropriate long-term strategic planning to achieve its business objectives and maximise the returns to the Shareholders.

Why did you refer to the Auditor-General's reference to the "lack of clear strategic direction"by shareholders as a gratuitous comment, when the Auditor-General listed it as a key finding?

MR STANHOPE: I make it perfectly clear that nowhere in the Auditor-General's report in relation to Rhodium does the auditor suggest that any of the adverse findings in relation to failure of management at Rhodium, as revealed most starkly in the report, were a result of any action or lack of action by the shareholders. That is clear; we all accept that. At least I hope we accept that because they are the facts of the matter.

The Auditor-General did not—I repeat—at any stage suggest that those serious and accepted management deficiencies at Rhodium stemmed in any way from a lack of strategic direction by the shareholders. Any such interpretation, or any attempt at putting that spin or gloss on the Auditor-General's findings, would be a gross distortion of the Auditor-General's report.

The Auditor-General's comments about strategic direction relate simply, as I explained yesterday, to the fact that the board has inevitably been required to manage in a quite uncertain environment while the government has considered the sale of Rhodium. It is hardly a surprising finding or suggestion that the shareholders had not provided a long-term strategic direction for Rhodium. The indication that the shareholders had consistently provided—certainly during the course of this year—was that they had a view that Rhodium did indeed not have a future as a territory-owned corporation. Indeed, that decision was ultimately taken in June, when I announced the establishment of a scoping study with a view to the sale of Rhodium.

It is quite logical that the Rhodium board acted in an environment of some uncertainty as a result of decisions taken by the government to sell the business. I am not quite sure how a shareholder that has taken a decision that is probably in the best interests of the shareholders to sell the business—to divest themselves of the undertaking—can at the same time purport to provide long-term strategic direction to that business that it intends to sell. How does one do that? How do you provide long-term strategic direction to a business that you intend to sell? It cannot be done. It is quite obviously such a contradiction to suggest that, in an environment in which one has come to a conclusion

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