web analytics

$400 mln xmas gift for banks

Written By: - Date published: 10:30 am, December 24th, 2009 - 21 comments
Categories: corruption, crime, national/act government, tax - Tags:

The banks, who tried to rip us off to the tune of $2.6 billion, have agreed to pay us $2.2 billion.

I don’t get it. We’ve spent tens of millions so far on court cases to get our money. We’ve won every case. The judgments have been damning of the banks. So, why did the IRD agree to settle for 80% of what the banks owe us? Why are we giving the banks a $400 million gift? If we had run through the rest of the court process, we would have got more than $2.6 billion when you add penalty tax and court costs.

I have a sinking feeling that this is a political decision to get the cash in hand now for National’s objectives. There can be no doubt that a decision of such magnitude was approved by ministers.

Bill English, Peter Dunne, and John Key are going to have to answer for this $400 million dollar Christmas gift to the banks.

21 comments on “$400 mln xmas gift for banks”

  1. burt 1

    Yes it is a shame that the banks couldn’t simply validate their theft and move on. Hell if they refused to pay it back like Labour’s special friend Winston then Labour would have probably let them run the country and take anon donations from big business for tax reductions in the banking sector.

    • Pascal's bookie 1.1

      How do you know that’s not what happened?

      ACT and the Nats should really open their trusts.

  2. prism 2

    We must remember when we are trading to ask for the discount that goes with cash payments. The banks have got lots of money, and they know how to get a good deal. We must learn from them, maybe we will get rich too -(shout yourself a Lotto ticket this Christmas as well).

  3. Herodotus 3

    A perspective from someone who has just refinanced $150m that will be why the banks have just slapped an increase in their cost add ons to us by the order of 1.5% to 2%, this is on top of the gloabal credit fee and the increase in industry risk fee. Yet another cut being made to the veins of the economy. Yet they are receiving an increase in their funds acquired internally. They appear to me anyway to be recouping this cost off their client base. Pity all other industries did not have the same ability. Air NZ will have to increase their scheduled flights across the Tasman to copewith the flood of money leaving the country to Aust banks head offices.

  4. gomango 4

    This is a commercial decision – may or may not be a good one, but any settlement takes into account the probability the banks will win on appeal – presumably privy council in this case after a round with the supreme court – so at least 3 to 5 years of waiting for the process to exhaust itself. Do a probability weighted, npv calculation and I’d guess its roughly reasonable. Even if theres only a 5% chance of losing at the Privy council, with costs etc that skews the math very heavily. Very simple solutiopn is to look at what advice the IRD gave to the ministers in terms of settling/not settling. I’ll bet they were in favour of settling. Notwithstanding the cash, if the IRD settles now they look forward to some very strong precedents entrenched in our case law around thin cap transactions. That will mike their life a lot easier for the next decade.

    And herodoltus – you cant look at the current account flows without also looking at the capital account. I think you’ll find that in respect of the banks, the net flows (dividend outflows minus capital inflows) arent skewed like you assume they are.

    • poneke 4.1

      any settlement takes into account the probability the banks will win on appeal presumably privy council in this case after a round with the supreme court

      Appeals to the Privy Council were abolished in 2005. The Supreme Court is, thank goodness, our final appellate court.

      What is likely here is that the four banks have realised they are unlikely to win in the Supreme Court, after the damning and lucid judgements against them in the High Court and Court of Appeal.

      The Supreme Court is not the soft touch for corporates that the Privy Council was. Ask yourself why the biggest supporters of appeals to the Privy Council were corporates and the Business Roundtable.

      The lawyers for the banks will have advised settling for a discount, which the solicitor general agreed to last night, probably to save the cost of years more of litigation (it could take that long to go through the Supreme Court).

      It was an abrupt capitulation as only this very month, those banks got leave to appeal to the Supreme Court.

      Our politicians would not have been involved at all. This country is not corrupt, no matter which party is in power. The deal will have been done by IRD, Crown Law and the lawyers for the banks.

  5. Scott 5

    It’s a perfectly understandable decision by IRD.

    The IRD’s lawyers will have assessed the risk of a successful legal appeal by the banks, concluded there is some risk of an appeal succeeding, and advised the IRD to make the deal.

    Any settlement where the plaintiff still gets over 80% of what was claimed is still a pretty good result.

  6. searching 6

    Gomango – get up to date. Appeals to the Privy Council ended with cases decided 31 Dececember 2003.

    A pragmatic result.

  7. randal 7

    searching.
    we are a mature nation of inteeligent people. we dont need anyone like a privy council (I mean who are they) to tell us what to do.
    $400Mil buys a lot of popcorn and toys for infantilised idiotes.

  8. tsmithfield 8

    Net present value of money.

    If the banks had decided to go through the full court process, they probably could have dragged it out for years. Also there was the chance they could have won on appeal to the Supreme Court.

    Receivers/the taxman etc love money in the till.

    • Jenny 8.1

      Where’s the guts to stand up to these fraudsters? I bet if they were facing some real jail time, they wouldn’t be so happy to wait in a cell for the results of some drawn out appeal.

      It beggars me that a solo mother can face jail and separation from her children for a $4 grand and most likely would stay in jail if she appealed her sentence.

      Yet these bank fraudsters can get away with $400 million and return to the beds in their mansions every night.

      Maybe Paula Bennet’s high profile beneficiary bashing can shave some money from the Social Welfare budget to pass on to the banksters.

  9. gomango64 9

    fully aware of the privy council status. I put presumably because I wasnt sure of the timeline and thought these tax cases may have started before abolition of the privy council rights for NZ, but given the timeline i guess thats not true in this case.

    And poneke – just because the banks settle doesn’t mean the crown have to, and if the case was that cut and dried why would they. Its by mutual agreement obviously.

    I do believe this judgement is correct, but as important as the current cases, is the effect it will have on future behavior around NZ as an offshore tax jurisdiction. And whether you buy the arguments or not, the case for the privy council (imo) is more about independence of the judiciary from political influence, and quality of the judges given our very small talent pool.

    And also bear in mind that there was a very significant settlement last year by one foreign owned bank with a stronger case (based on one crucial structural difference) than the aussie banks. That settlement was in excess of 100mm, and under the labour government. I would be surprised if either then (labour) or now (national) the politicians settle on terms that conflict with the advice from the IRD and crown law.

  10. expat 10

    $2.2bn now is better for our balance sheet than maybe $2.6bn some time later.

    Lifes full of these types of compromises, makes me think of the under investment in roading and telecoms and electricity generation and transmission during the Clark years so that the spend-a-thon on social services could go ahead.

    • George.com 10.1

      Correction for expat – the years of under investment in our infrastructure were the Roger Douglas and Jim Bolger years. Clarks govt made big inroads into our infrastructure deficit following those years of neglect under the neo-liberals.

      • Herodotus 10.1.1

        Given both the destruction in the value of money and the volume that had been floating around. It has and still is not that dificult to throw large $$ around. Both govts within the last 10 years can say “WE” are/have spent more on this or that than any other time. The question on all spending should be the quality of that spending and the on-going benefits that have arisen from this.

    • Jenny 10.2

      Why wait for the outcome of an appeal? Stick these thieves in Mt Eden Remand Prison on Friday and the full $2.6 billion would probably be paid by close of business, on Monday. And if not keep them there till it is.

      When they get out they they can still mount an appeal for the the $200 million if they want.

      This is how it works for everyone else.

      • Akldnut 10.2.1

        Good Idea Jenny, the bastards are just thieves – we do that and we go to jail.
        The do it and they go for a holiday for Christmas to someplace like ahhhhh Hawaii.

        The Govt should just throw senior management in the slammer until it’s paid.
        (Thats the ranting side of me coming out, cause I could do with some of that cash as tax relief)

  11. prism 11

    expat I understood that the Clark government tried to follow the right-wing trend demanded by business interests and give more opportunities for business through contracting or privatisation, rather than government doing everything itself.
    The government was committed to maintaining social welfare but also to setting up policies that would lessen the number on benefits. This after the Nat right-wingers had wiped out so many jobs with jolly unconcern, in the belief that the capital released would be more usefully directed to new job-making operations. Like destructive rich children whose parents will replace their broken Christmas presents.

    • prism 11.1

      Wasn’t the British government setting the scene for us in using a political practice called “The third way’ which we were also following, as we trailed behind their Labour government? This was to go down the middle of socialism and capitalism, allowing business to proceed fairly unfettered and ensuring welfare was effective and fair.

  12. expat 12

    Buying tranzrail back doesn’t count

Links to post

Recent Comments

Recent Posts

  • Govt to protect jobs and businesses with extra support
    In-principle decision to extend wage subsidy to support businesses and protect jobs Support will be nationwide in recognition of Auckland’s position in NZ economy and the impact of Level 2 Mortgage deferral scheme to be extended to support households The Government is taking action to support businesses and protect jobs ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • National Does the Nation a Disservice
    Deputy Prime Minister Winston Peters today called for National Party and Opposition leader Judith Collins to stop undermining democracy. “New Zealanders are sadly being fed a steady stream of misinformation about the pre-election period from the National Party,” said Mr Peters. “Its effect is to sow doubt about the legitimacy ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Speech at the graduation of Wing 340
    Graduation of Wing 340 2pm, 13 August 2020, The Royal New Zealand Police College [CHECK AGAINST DELIVERY] Introduction Ladies and gentlemen, it is a privilege to be here today to celebrate the graduation of Wing 340. Let us begin by acknowledging the presence of Coalition Government colleague, Police Minister the ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • More Police deployed for COVID efforts
    More Police are being deployed to the frontline to help manage the COVID response, after the graduation today of 56 new officers. “The ceremonies for the graduation of Wing 340 at the Royal New Zealand Police College were trimmed to take account of new Alert Level 2 restrictions in Wellington,” ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Transitional housing provides much needed support for Taumarunui whānau
                                                                     Transitional housing provides much needed support for Taumarunui whānau   New emergency and transitional homes will help ease a housing shortage in Taumarunui and provide whānau with much needed support, say Māori Development Minister, Nanaia Mahuta and Whānau Ora Minister, Peeni Henare.  The Ministers officially opened five two-bedroom units ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government announces plan to tackle problem plastics and seven single-use plastic items
    Following the success of the phase out of single-use plastic shopping bags, the Government now has plans to phase out more single-use and problem plastics to reduce waste and protect the environment announced Associate Minister for the Environment Eugenie Sage. The proposals are to phase-out: some hard-to-recycle PVC and polystyrene ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New opportunities for Kōpū marine facilities
    A commercial and industrial site in Thames-Coromandel will receive $8.2 million to revamp its marine-servicing infrastructure and create new economic development opportunities, Infrastructure Minister Shane Jones has announced. This project is being supported from the $3 billion ‘shovel ready’ fund set aside in Budget 2020 to kick-start the post COVID-19 ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • PM comments on Auckland COVID-19 case
    After 102 days we have our first cases of Covid-19 outside of a Managed Isolation or Quarantine facility in New Zealand. Shortly I will ask Dr Bloomfield to set out the details of the case. While we have all worked incredibly hard to prevent this scenario, we have also planned ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Significant investment in Raukūmara Pae Maunga to prevent Raukūmara forest collapse
    An iwi-Crown approach programme to restore the Raukūmara forest on the East Coast of the North Island and boost employment opportunities for whānau, particularly rangatahi/young people, will receive $34 million funding, Minister of Conservation Eugenie Sage has announced. “Raukūmara Pae Maunga is a partnership with Te Whānau-ā-Apanui, Ngāti Porou, and ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New partnership central to delivering more Māori housing
    Government agencies and partners are working closer together to provide more Māori Housing through the Te MAIHI o te Whare Māori – the Māori and Iwi Housing Innovation Framework for Action (MAIHI). MAIHI is a kaupapa Māori approach that drives a system change to give effect and impact on Māori ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Manawatū Gorge replacement highway drives forward
    Site work is soon to begin on Te Ahu a Turanga: Manawatū Tararua Highway, the project to replace the former SH3 route through the Manawatū Gorge, Transport Minister Phil Twyford said today. Phil Twyford was today in Woodville at the signing of a formal agreement by members of the Alliance ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Pacific Ministers meet to discuss regional economic priorities
    The Pacific Islands Forum Economic Ministers Meeting (FEMM) begins today and will focus on the major economic and social impacts of COVID-19 on the Pacific.  FEMM is an important congregation of Economic Ministers and senior officials from around the region, and for the first time, the annual meeting will be ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Formal apology and payment to George Nepata
    Cabinet has approved a formal apology and ex gratia payment to former soldier George Nepata, announced Defence Minister Ron Mark. This payment is to recognise the New Zealand Defence Force’s failure to provide Mr Nepata with a safe system of work in April 1989 when, as a result of an ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Report into Iain Lees-Galloway’s expenditure
    A report undertaken by Ministerial Services into Iain Lees-Galloway’s ministerial expenditure has found no evidence of any inappropriate transactions or spending. Ministerial Services undertook a line by line review of all his expenditure, including staff and spouse expenses for the period 1 January 2019 to 30 June 2020.  “I commissioned ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Managed isolation charges to start 11 August
    Managed isolation charges for returnees will come into force from 12.01am Tuesday 11th August, after they passed their last cabinet milestone today, Housing Minister Megan Woods said. “The new charging system balances the rights of New Zealanders to return home and helps reduce pressure on the managed isolation and quarantine ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Update on New Zealand and the Cook Islands travel bubble
    The Prime Minister of New Zealand Jacinda Ardern and the Prime Minister of the Cook Islands Henry Puna have welcomed the completion of phase one in the establishment of a travel bubble between New Zealand and the Cook Island. Negotiations on the text of an ‘Arrangement to Facilitate Quarantine-Free Travel ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • One-stop ‘jobs and training’ shop goes live
    The Government has launched a new online, phone and onsite service to help New Zealanders connect to a range of employment support and products for workers and businesses affected by COVID-19, announced Minister of Education Chris Hipkins and Minister for Social Development Carmel Sepuloni. Connected.govt.nz is a one-stop-shop for jobseekers, ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • MSD security guards to be paid Living Wage
    Security guards contracted to the Ministry of Social Development will be paid at least the Living Wage from next month supporting the Government’s commitment towards fair pay and employment conditions, announced Minister for  Social Development Carmel Sepuloni.   “MSD was  among the first government agencies to pay its employees the living ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • New strategy to ensure nature thrives
    The Minister of Conservation Eugenie Sage today launched Te Mana o te Taiao, the Aotearoa New Zealand Biodiversity Strategy - a way forward that envisions Aotearoa New Zealand as a place where ecosystems are healthy and resilient, and people embrace the natural world. “Many of New Zealand’s plants and wildlife species ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Provider Languages Fund will support Pacific Wellbeing approach
    “Pacific languages, cultures and identity are essential to the health, wellbeing and lifetime success of our Pacific peoples and their communities in Aotearoa. The strength and resilience of Pacific Aotearoa is not only vital to their own prosperity but integral to the prosperity of all New Zealanders, and is particularly ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • COVID-19: More funding for schools and boost to construction sector
    ·       $38 million to help schools cover unexpected costs related to COVID-19 ·       $69 million upgrade for online learning ·       $107 million contingency funding to support school construction suppliers facing additional costs due to the lockdown. The Government is releasing $214 million from the COVID-19 response and recovery fund to ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Stay safe on the tracks – Rail Safety Week
    Despite the Government installing safety upgrades around the country, people should still take care around rail crossings, said Transport Minister Phil Twyford launching Rail Safety Week. Phil Twyford said installing safety infrastructure is crucial, but we are encouraging people to be more careful around trains too. “We’re making good progress ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government backs Manawatū social housing project
    The Government is providing a cash injection to help Palmerston North City Council complete a programme to provide 78 social housing units for vulnerable tenants. The $4.7 million to build 28 units in the Papaioea Place redevelopment comes from the $3 billion set aside for infrastructure in the Government’s COVID-19 ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Major funding boost for Predator Free Banks Peninsula
    A pest free Banks Peninsula/Te Pātaka o Rākaihautū is one step closer with a $5.11 million boost to accelerate this project and create jobs, announced Conservation Minister Eugenie Sage in Canterbury today. “This is a game changer for this ambitious project to restore the native wildlife and plants on Ōtautahi/Christchurch’s doorstep ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Major investment for indoor sports in Hawke’s Bay
    A Government grant of $6.4 million will expand the Pettigrew Arena in Taradale with new indoor courts of national standard. “The project is likely to take 18 months with approximately 300 people employed through the process,” Grant Robertson said. “The expansion will increase the indoor court space up to 11 ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New infrastructure for Far North tourist town
    The Far North tourist destination of Mangonui is to receive Government funding to improve waterfront infrastructure, open up access to the harbour and improve water quality, Infrastructure Minister Shane Jones has announced. A total of $6.5 million from the $3 billion set aside in the COVID-19 Response and Recovery Fund ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government remains committed to Women’s Cricket World Cup
    The Government has re-affirmed its commitment to supporting the hosting of the ICC Women’s Cricket World Cup, which the ICC has delayed from 2021 to 2022. “This is obviously a disappointing decision for cricket players and fans around the world and for the White Ferns and their supporters here at ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Green light for Te Awa River Ride in $220m nationwide cycleways investment
    Cyclists and walkers will now have a safer way to get around Taupō, Tūrangi, and between Hamilton and Cambridge, with funding for shared paths and Te Awa River Ride, Associate Minister of Transport Julie Anne Genter announced today. “The Te Awa River Ride is the latest part of massive growth ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Six major ‘shovel-ready’ cycleways funded in Christchurch
    Six major cycle routes will be completed in Christchurch thanks to funding from the Government’s investment in shovel-ready infrastructure as part of the COVID-19 recovery Associate Minister of Transport Julie Anne Genter announced today. $125 million will be invested to kick-start construction and fund the completion of the following cycleway ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Police facilities for Whanganui
    Plans are underway for a brand new state-of-the-art hub for Whanganui’s justice and social agencies, following confirmation the ageing Whanganui Central Police Station is to be replaced. Police Minister Stuart Nash has announced $25 million in new infrastructure spending to improve facilities for the wider community, and for staff who ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Relativity adjustment for Waikato-Tainui and Ngāi Tahu
    An adjustment payment has been made to Waikato-Tainui and Ngāi Tahu under the relativity mechanisms in their 1995 and 1997 Treaty of Waitangi settlements, Minister for Treaty of Waitangi Negotiations Andrew Little announced today. The latest payments to Waikato-Tainui and Ngāi Tahu are $2,700,000 and $2,600,000 respectively to ensure the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Auckland rail upgrades pick up steam
    Deputy Prime Minister Winston Peters and Transport Minister Phil Twyford today kicked off the start of the Auckland NZ Upgrade Programme rail projects which will support over 400 jobs and help unlock our biggest city. Both ministers marked the start of enabling works on the third main rail line project ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • PGF support for Wairoa creates jobs
    The Provincial Growth Fund (PGF) investment of $3.78 million in Wairoa will create much needed economic stimulus and jobs, Under-Secretary for Regional Economic Development Fletcher Tabuteau announced today. PGF projects announced today include: $200,000 loan to Nuhaka Kiwifruit Holdings Ltd (operated by Pine Valley Orchard Ltd) to increase the productivity ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Public and Māori housing to trial renewable energy technology
    Tenants in public and Māori housing may be benefiting from their own affordable renewable energy in future – a fund to trial renewable energy technology for public and Māori housing has today been announced by Energy and Resources Minister Megan Woods and Associate Minister for Housing (Māori Housing) Nanaia Mahuta. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • $2.7m for Hokianga infrastructure
    Hokianga will receive $2.7 million to redevelop four of its wharves and upgrade its water supply, Regional Economic Development Minister Shane Jones has announced. Far North District Council will receive $1.8 million from the Provincial Growth Fund for the work on the wharves. “The work will include the construction of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New fund to support housing and construction sector
    A $350 million Residential Development Response Fund is being established to support the residential construction sector and to minimise the economic impact from COVID-19, the Housing Minister Dr Megan Woods has announced. “The Residential Development Response Fund will help to progress stalled or at-risk developments that support our broader housing ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government investment to boost Auckland’s community recycling network
    As part of a broader plan to divert waste from landfill, the Government today announced $10.67 million for new infrastructure as part of the Resource Recovery Network across the Auckland region. “This key investment in Auckland’s community recycling network is part of the Government’s Infrastructure Reference Group ‘shovel ready’ projects ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Te Papa transformation starts at Cameron Road
    The Government is investing $45 million in the first stage of an ambitious urban development project for Tauranga that will employ up to 250 people and help the region grow, Urban Development Minister Phil Twyford announced today. Phil Twyford says the funding has been allocated out of the $3 billion ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • PGF supports Hawke’s Bay community and environmental projects
    The Government is investing more than $1.6 million from the Provincial Growth Fund (PGF) for a wide range of community and environmental projects in Hawke’s Bay, Under-Secretary for Regional Economic Development Fletcher Tabuteau announced today. These announcements today are part of the Government’s commitment to supporting regional economies in the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Low-emissions options for heavy transport a step closer
    Getting low-emission trucks on the road is a step closer with investment in infrastructure to support hydrogen vehicles, the Energy and Resources Minister Megan Woods has announced. The Infrastructure Reference Group has provisionally approved $20 million for New Plymouth company Hiringa Energy to establish a nationwide network of hydrogen-fuelling stations. ...
    BeehiveBy beehive.govt.nz
    1 week ago