Minister Lautafi slams public companies
Public trading bodies have failed the Government in generating new capital and investment, says Minister of Commerce, Industry and Labour, Lautafi Selafi Purcell.
Speaking at a gathering of directors at the Tanoa Tusitala Hotel on Tuesday, Lautafi said Government reduced the percentage of dividend from 50 to 35 per cent so that public trading bodies can meet some of their obligations, but the return is still not profitable.
“You may be aware that the recent policy change on the return of equity at the dividend which was recently endorsed by Cabinet, and it wasn’t easy to convince Cabinet to reduce percentage from 50 to 35,” he said.
“Why? Because there have been public bodies that have been struggling and still struggling to meet the 50 percent of the net profit after tax, which is the dividend for trading bodies.
“We have reduced that to 35 percent, so we’ve given you 65 percent for your operations, and Government now expect only 35, so that you can meet some of the obligations.”
Lautafi said the Government’s expectations of the public bodies are high because State owned enterprises contribute significantly to the social and economic well-being of Samoa.
“Government has a significant equity investment in public trading bodies, totally approximately $814 million as of June 2017,” he said.
“The performance as far as dividends are concerned is a mere $3 million, which is equivalent of 0.4 per cent of return of equity. Very significant missed opportunities there to supporting the overall budget in generating new capital for investment in this under performance.
“And I can’t help calling anything else it’s the public trading bodies; it’s under performance, that we have failed what the Government has set for us.”
Lautafi highlighted issues such as poor control, analysis of capital expenditure, cash flow management and asset management impact the achieving of desired results.
“Including asset utilisation and non-core assets, in particular concerns have been raised about the impact of investment decisions for non-financial gains, and no-financial reasons, but it is understood that Government will sometimes make decisions,” he said.
“It is important as director to request management for a vigorous financial assessment and performance analysis to allow the board to make informed decisions.”
As responsible Minister, Lautafi said, moving on he expects full compliance from all public bodies in line with the Public Bodies Act.
He told the gathering that as Directors they must strengthen their roles to improve the productivity of their organisation.
“We do better when we work together,” Lautafi said.