English refuses inquiry into $1.7bln SCF bailout

Written By: - Date published: 11:00 am, September 11th, 2010 - 34 comments
Categories: accountability, public services - Tags: ,

Bill English has ruled out an inquiry into the SCF affair. Think about that: the government is forced to spend the annual Police budget in a single morning and it isn’t even interested in learning what could have been done better.

Compare that to the public service’s response to the earthquake, on the other hand, which will doubtlessly be subject to numerous inquires. It’s just good governance to examine how things went in a major event so that they can be done even better next time.

Imperator Fish, whose a lawyer, has a piece on the SCF bailout that says the Crown was legally obliged to pay out New Zealander depositors, would have been obliged to pay out existing depositors even if it had kicked SCF out of the guarantee scheme, and was under no legal obligation to pay out the foreign depositors or the other creditors. It seems to me that means if the government had kicked out SCF earlier and only paid who it had to then tens or hundreds of millions could have been saved. Imperator Fish is largely pro the bail-out yet calls for an inquiry. It’s just good practice.

What good reason could there be for not investigating the SCF bailout? When there’s billions of dollars on the line, it’s irresponsible not to try to learn from experience.

PS. If you haven’t been already, you should check out Brendon Burns‘ accounts from on the ground in Christchurch. Brings a far more human angle than what I’ve seen in the msm.

34 comments on “English refuses inquiry into $1.7bln SCF bailout ”

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  1. Draco T Bastard 1
    11 September 2010 at 11:09 am

    Of course he does – he knows damn well that the SCF bailout should never have happened and wouldn’t have if they’d been held to the terms of the agreement that the government guarantee scheme enforced. Which means that he, himself, would be found culpable for it.

    RWNJs – preach personal responsibility but refuse to take any themselves.

  2. JJ 2
    11 September 2010 at 12:39 pm

    The SCF bailout shouldn’t have happened, as no finance companies should have been covered by the guarantee – risk free rate of return much? But this is a thing that should have been debated when finance companies were included into the guarantee, not now when the governments hands are (in the opinions of legal experts) unquestionably tied. I generally support an inquiry into the matter.

    This talk of 1.7 billion is mislreading rubbish, of the money injected (I thought it was 1.6 billion) the majority will be recovered thus the net bailout will be closer to $300-600M.

  3. Loota 3
    11 September 2010 at 1:01 pm

    And when is Labour going to start promising a top to bottom inquiry into SCF?

    • Tigger 3.1
      11 September 2010 at 2:09 pm

      Hang on, Labour is the government?

      But Loota, got to assume you agree an investigation is in order.

      • Draco T Bastard 3.1.1
        11 September 2010 at 8:25 pm

        They’re not the government ATM but they can promise an investigation for when they get in power again.

        • Tigger 3.1.1.1
          12 September 2010 at 10:27 am

          Yea, they can promise to promise to do it, not actually do it. We need the investigation now. Labour need to hammer this one in the House until this lot are forced to do it.

      • Loota 3.1.2
        12 September 2010 at 1:39 pm

        With over a billion dollars handed out I think the term “Inquisition” would be better suited than “inquiry” 😛

  4. nzfp 4
    11 September 2010 at 1:04 pm

    What, hold on didn’t Winnie get investigated by the Police, Parliamnet, the SFO for his involvment with a Billionaire? Yet the collapse of the largest Finance company leading to the largest bailout – bigger the the Maori Waitangi Tribunal settlements by the way – in NZ history doesn’t require an investigation? What country is this?

    I mean come on the liquor store down the road gets ripped off and that gets investigated but this doesn’t?!?

  5. kriswgtn 5
    11 September 2010 at 1:10 pm

    The tories cant afford for ANYONE to poke around into this
    so do as you’re told and accept “”NO investigation””

  6. Anne 6
    11 September 2010 at 4:11 pm

    Yes. Another Winebox (any old chardonnay will do) is in order. And if Labour, the Greens and other interested parties don’t pick up the ball, then it’s game on for Winston Peters?

  7. tea 7
    11 September 2010 at 4:41 pm

    sorry to be a prat Eddie- any chance you could change ‘whose’ to ‘who’s/who is’ – hang over state it is bugging me. cheers

  8. jbanks 8
    12 September 2010 at 11:03 am

    “It may seem unfair that some people are getting the benefit of a guarantee not designed for them, but the alternative is to risk getting much less during the receivership. English’s position on this matter is at least defensible, and may in fact be financially prudent.”

    Like the Govt. has been saying all along, SCF’s collapse would have damaged the economy a whole lot more than the cost of paying out investors.

    Financially prudent = Good

    • Loota 8.1
      12 September 2010 at 1:43 pm

      Like the Govt. has been saying all along, SCF’s collapse would have damaged the economy a whole lot

      How?

      Small investors could have been paid back in full. Large speculators could take a sharp haircut and be made to eat some losses.

      Any businesses who had been promised credit or cover of cashflow by SCF could still have had credit extended to them fully underwritten by the Govt.

      Financially prudent = Good, only problem is != Bill and John’s antics in draining the public purse.

      • jbanks 8.1.1
        12 September 2010 at 4:40 pm

        Excluding some investors most likely would have ended up in years of litigation at the taxpayers expense. Also this would have been devastating to our image of being a desirable place for foreign investors to bring capital. The effects of not paying out ALL the investors would have been shooting our economy in the foot.

        Thankfully the current Govt. were the ones making the decisions here as Labour’s lack of financial and economic knowledge could have been tragic for New Zealand.

        • Puddleglum 8.1.1.1
          12 September 2010 at 7:59 pm

          “Also this would have been devastating to our image of being a desirable place for foreign investors to bring capital. The effects of not paying out ALL the investors would have been shooting our economy in the foot.”

          So, you’re telling me that we have a system in which we need to keep foreign investors sweet by periodically providing them with government guaranteed, above bank rate returns for investments in finance companies that are known to be in financial trouble? Is that a good system?

          • jbanks 8.1.1.1.1
            12 September 2010 at 8:25 pm

            No. I’m telling you that IF an institution covered by the Guarantee Scheme fails – then paying out all investors is the ‘financially prudent’ decision.

            Whether Labours Guarantee Scheme is good or not is no reason to make bad decisions regarding foreign investors.

            • Loota 8.1.1.1.1.1
              12 September 2010 at 8:31 pm

              Whether Labours Guarantee Scheme is good or not is no reason to make bad decisions regarding foreign investors.

              Oh, I see what you did there.

              Labour put the scheme together to help mum and dad investors, National ran the scheme to payout big time financial speculators.

              no reason to make bad decisions regarding foreign investors

              its these bad decisions regarding NZ taxpayers you need to be worried about, and how we are all being ripped off to provide corporate welfare to foreign investors.

              • jbanks …
                12 September 2010 at 9:07 pm

                How is the decision to pay out all investors not a good decision for tax payers given that not doing so would cost them a lot more?

                Your idea that National wants to take our money and give it to foreign investors for “welfare” sounds like some kind of wacky conspiracy theory.

                • Puddleglum …
                  12 September 2010 at 10:16 pm

                  jbanks, do you think that the decision in April regarding SCF and the guarantee scheme was a good one?

  9. ron 9
    12 September 2010 at 12:34 pm

    four words for Double Dipton – brooooook, brook, brook, brook………………………………….

  10. Treetop 10
    12 September 2010 at 12:49 pm

    Year two of the National Government’s three year term. This government is shaping itself to be the government of avoiding inquiries as too much would be exposed. SCF is the tip of the iceberg. Beneath this iceberg will be the EQC.

    This government also needs to be aware of their excessive borrowing which will lead to one of the biggest deficits this country has known within a three year term. The recession cannot be blamed for the bail out of SCF or decisions the EQC make.

    • Loota 10.1
      12 September 2010 at 1:36 pm

      The recession cannot be blamed for the bail out of SCF or decisions the EQC make.

      Watch them try their line about Labours 9 years of economic mismanagement over and over and over and over again.

      • Treetop 10.1.1
        12 September 2010 at 2:21 pm

        Loota you mean like buying Kiwi Rail back (even though a broken arse when brought, at least we own it) and Kiwibank, (I’d like to give Michael Cullen the oppertunity to grow it).

        • Loota 10.1.1.1
          12 September 2010 at 3:13 pm

          I have a feeling that Kiwibank should be hugely grown, and be used to force the private financial sector to take less money out of the productive economy. They’ll hate it, but too bad.

  11. Tanz 11
    12 September 2010 at 6:33 pm

    English is just trying to be fair and to play fair. Give him a break.

    • Puddleglum 11.1
      12 September 2010 at 7:54 pm

      “English is just trying to be fair and to play fair.”

      ‘Fair’ in what sense? And to whom? (to non-investors in SCF?)

  12. Jum 12
    13 September 2010 at 12:36 pm

    We wait til the election runup and ask Bill English the same question: what does his government have to hide in not having the enquiry? If Bill English was indeed the feeder of emails for the Hollow Men, and he’s not dishing out emails now, it means his fingers are all over this pie, like they were with the betrayal of ECAN and the Pacific funding without paperwork. This guy, along with JKeyll and Hide and Brownlee is going to give New Zealanders not only a giant headache but a giant bill to pay because of him and his government’s betrayal of Kiwis to big business mates. Auckland ATA’s pretence of open and transparent governance in the wake of giving Auckland’s IT computer contract to international mates would have had Hide’s and JKeyll’s sign-off.

    They’re all pond-scum feeding off New Zealanders and betraying us in the process. I should hope these betrayals and more to come will be writ large in the sight of all Kiwis come 2011. The rugby world cup outcome should be the least of this corrupt government’s worries.

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