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Minister Mitch Fifield gives Sam Dastyari an NBN lesson in bean counting

Colin Kruger, CBD

He's one canny operator is our Communications Minister Mitch Fifield.

His patch includes our tinpot NBN Network and Mitch has found an innovative third way to fund the rural portion of the network by bailing up some of our smaller telcos. 

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To think that just weeks ago Labor's chief nerd – senator Sam Dastyari – thought he was the smarty pants when he tried to give Mitch an accounting lesson at a recent Senate hearing.

Dastyari opened the exchange with a question about whether Mitch would expect a higher rate of return on equity or debt?

Senator Fifield: I am not here to provide a tute, Senator Dastyari.

He obviously didn't want to give his real answer – other people's money – but CBD digresses. 

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Senator Dastyari: You do not know, do you?

Mitch then obliged the senator by providing the tutorial. 

Senator Fifield: There is an internal rate of return which is in NBN's corporate plan. The rate of return for debt is the interest rate. So the answer, in general, would be: it depends. It depends what the internal rate of return is and it would depend what the interest rate is. That is the way these things work.

Senator Dastyari: OK. Minister, earlier this week in the Senate you said that one is equity and one is a loan but you did not go on to explain it. Can you explain your understanding of what equity is?

Senator Fifield: Equity is money that the government contributes to an organisation that, I guess, results in ownership of the company. So, equity is an indicator of ownership. A loan is something that has to be repaid. Equity is not something that is repaid.

Senator Dastyari: What is your understanding of debt?

Senator Fifield: A debt is something that is repaid, a loan is something that is repaid. Equity is something that is not repaid.

Senator Dastyari: And that is your definition of the difference between equity and debt?

Senator Fifield: I think it serves the purpose.

Full points to Mitch who has a great future in our corporate boardrooms. 

Board games 

The silly season is upon us, and so are some curious board appointments for the new year.

Investment house Perpetual Ltd has parachuted in former ASX boss and ASIC chairman Tony D'Aloisio as its chairman-elect. 

He will take the chair from Peter Scott, who retires at the end of next May.

It is one of only two ASX-listed board roles for D'Aloisio who is also a director of Iress Ltd, and stepped down as president of the Winemakers' Federation of Australia last month. 

We'd hate to cause any household tension, but his better half, Ilana Atlas, is having a much better board career. She is currently a director of Coca-Cola Amatil, Westfield, and ANZ Group. 

The happy couple are co-owners of the upmarket winery, Oakridge Estate, which was rather controversially acquired from the Evans and Tate group after its collapse during D'Aloisio's reign as ASIC chairman.  

The other big announcement on Tuesday was from Vocus. The telco's share price has halved in a matter of months, and Vocus decided it needed the skills of "Hamburger" Bob Mansfield on its board to steady the ship. 

The former McDonald's boss, who went on to head Optus and serve as Telstra's chairman, joins Vocus on New Year's Day. 

Let's hope his Vocus stint is more successful than his time on the board of Allco Finance Group. 

Rare stocks 

Lynas Corp, the rare earths group set up by Nick Curtis – father of insider trader, Oliver Curtis – has managed to stay afloat despite these rare earths continuing to attract rather common prices. And it has finally delivered some good news for the latest CEO, Amanda Lacaze.

Her stake in the company rose ten-fold after she was delivered 11.38 million shares on Monday "issued upon exercise of employee performance rights", according to the statement issued to the ASX. 

At the current share price it amounts to around $750,000, but just imagine if the stock manages to track back to the $2.50 it was trading at when investors were deluded into believing these rare earths had some value.  

Got a tip? ckruger@fairfaxmedia.com.au

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