- Date published:
4:16 pm, March 29th, 2012 - 12 comments
Categories: bill english, treasury - Tags: retail deposit guarantee scheme, south canterbury finance
Treasury must have been pleased to get one of their own, Bill English, as its head.
Now they can tell other departments how they should be run, oversee massive cuts to them – all safe in the knowledge that they’ll continue to have fat budget increases and not be judged by any performance criteria they might apply to others.
Except, oops, the Deputy Auditor-General has been poking her nose in. And Bill’s Treasury hasn’t been doing such a sterling job.
And not just on their murky crystal ball predictions, constantly telling us National’s ‘aggressive recovery’ is just around the corner. No, on something that cost the taxpayer hundreds of millions of dollars.
The Retail Deposit Guarantee Scheme was set up in haste as needed by the Global Financial Crisis, but then Treasury, despite lots of near identical schemes in other running in other countries, failed to learn or move on from “reactive and crisis management mode”.
“They didn’t move to a more strategic approach to think in broader terms, what they were doing, what were the issues they had to manage. They did eventually but perhaps not as soon as they could have,” [Deputy Auditor-General] Ms Smith said.
“As a policy ministry, where was the policy work? Where were the policy expertise to say ‘actually we’ve got something unprecedented here, is there a better way of going about it?’.”
It’s pretty damning.
As a result Finance Companies and their customers knew they could use the advantage of their high interest rates, with no risk to anyone but the taxpayer. The outcome? South Canterbury Finance and 8 others folding and a $2 billion taxpayer bill. Still, at least their customers got all their high-interest payments…
Treasury basically buried its head in the sand as to the obvious problem, not even asking the Reserve Bank for information. Bill English appears to have shown no lead – he doesn’t appear to have requested any information or shown any oversight of Treasury.
Which is surely the point of a Minister of the Crown.
Sigh, more incompetency. I’m starting to see a pattern here……
Of course he would show no interest and not oversee – that would just leave a trail. A trail that would leave only one conclusion, given the then state of affairs with SCF and others, namely that SCF should NEVER have been allowed to remain in the scheme that long. English would have been well aware of this.
In fact, that is what John Key admitted the day he and Bill English came to power – that they knew SCF was going to go bust. Key said Treasury told them that very thing (and they would have known personally anyway – bloody everybody else with a business brain in the South Island did).
This was is the biggest vote buying scandal ever.
The greed of the investor saps who lusted after an additional 2% per annum on their savings and refused to consider the risks.
The greed of the finance companies as they didn’t get off the runaway train (though some did).
The greed of the politicians as they saw the opportunity to preserve some of their voting base.
Aint it great to have such fine upstanding people running our government at the moment.
Despicable, is it not…
We know what the answers will be when questions are asked of Bill English
Its only one persons opinion !
Blame labour, Chch, the GFC then create a diversion using sock puppets which is all it takes with our MSM.
Wow, to make a sock puppet of Gerry would entail getting a mighty big sock – Nick Smith just had one, wonder where it went? Then we could donate said “Big Ger” puppet to the Children of Finland!! Who needs Pin the Tail on the Donkey when you can stick pins in Old Ger?
Generally, I think you’ll find this is Treasury itself and has nothing to do with which government is in power. The mindset at Treasury is probably due to the delusional, reactive theory that they get crammed into their brains while at uni – to be able to accept the BS that they’re taught they, quite literally, have to turn off their thinking. So we get a culture of reactive, non-critical thinking based around trying to fit what actually happens into the ideology that they carry.
Sounds like management studies or an MBA where the sheeple perform like trained seals for the pleasure of working under such demi gods.
I don’t think that washes does it mr b… the retail deposit guarantee scheme was a very large gigantic scheme to cope with a genuine financial meltdown (not tyhe finance companies but they tagged along) and as such whichever government was in power had this surely near the top of the list. It was no small matter.
Again, English and Key have deceived over this and SCF and this treasury incompetence would have been well known at the time by English.
you can fool some of the people some of the time ……
In the house english still blames labour,it was labour’s policy, he says with glee,ok mr
english please explain that when the treasury warned that he wasn’t acting under the
terms and conditions of the retail deposit scheme,why did he change the terms and
conditions of the retail deposit scheme and then called a meeting for investors of scf to tell them ‘you now have a crown guarantee’
The dates of the change of terms and conditions can be found on the treasury website
and also on the national party website.
A google search will give the meeting he called with scf investors,so all the info
is out there.
His continual blaming of labour may just come back to bite him where it hurts.
Excuse the slight hijacking of the thread, but can anyone enlighten me as to the constitutional positional of the Secretary of the Treasury? Makhlouf seems to feel mandated to mouth off about any government policy and anything he thinks should be government policy. Any other civil servant would be strung up for the same behaviour. Is treasury entitled to behave like this (publically) or does the Government (and opposition, media…) have such neo-liberal penis envy that they’ll let them get away with anything?
Makhlouf was at the ‘asianbankerforums.com’ meeting and one of the speakers at the
Global Government Finance Summit on september 28-29 2010, he worked wtih
gordon brown in the uk.
He began his employment in the treasury in march 2011.
If you go to the above link there is more about him.
It’s not unusual for Treasury Secretary to set out pretty robust policy. In fact you can go back to Sutch with that kind of independence.
Question is whether the new Ministry of Business and Innovation will have the clarity and drive to offer competing advice to Treasury. Or at very least that the two Ministries are required to be unanimous and integrated in their views. Unlikely, and I don’t even see that under Labour.
If only Social Development had that kind of ambit.
Huge pity that the current government gets to choose the new Governor of the Reserve Bank. That’s a real 10-year policy lock-in.
We should be on the watch for senior appointments prior to 2014 – because that’s where real policy implementation lies.
If this lot get a sniff that Labour-Greens are only in for a term at the end of 2014, then they will stall and just wait them out. Again.
Only way to turn the system is to come in with a Cabinet with real unity and muscle and purpose. Shearer for that, anyone?