National’s ‘line calls’

Written By: - Date published: 7:38 am, September 1st, 2010 - 76 comments
Categories: Economy - Tags: ,

The retail deposit guarantee scheme, which has just led to the government handing over $1.7 billion of borrowed taxpayer money to the depositors in South Canterbury Finance, was extended less than a year ago. There are now serious questions being asked why SCF was allowed to join the extended scheme in April given that its financial problems were well-known and its credit rating was downgraded just weeks later. The guarantee was instrumental in SCF taking on all the bad loans that have led to its collapse.

Corin Dann on Breakfast this morning reports that Bill English says allowing SCF in was a ‘line call’. (will have to see English’s interview when it comes online).

That’s another of National’s line calls that’s cost us a fortune. In this case, it’s expected the final bill will be at least $600 million (plus the cost of borrowing the $1.7 billion).

It follows their great call to cancel contributions to the Cullen Fund, which has cost us over a million dollars a week and rising.

And don’t forget the government’s failure to invest more than a few tens of millions in jobs when the fiscal cost of additional unemployment is over a billion a year. Of course, that mistake wasn’t a ‘line call’, it was ideology all along.

The one upside of this is that Kiwibank might be the buyer of SCF’s assets. Someone’s got to buy them. If it’s Kiwibank then the profits on those loans will stay in New Zealand, rather than going to a foreign institution. English hasn’t ruled out Kiwibank being the buyer and says he will be talking to Kiwibank. Let’s hope he makes the right call for once.

76 comments on “National’s ‘line calls’ ”

  1. luva 1

    Marty, please do not take this the wrong way but what the hell would you have done? It is very easy to criticise what Bill English has done here but I would love to know what Marty G finance minister would have done over the past week with this mess.

    Those on the right believe a company that cannot pay it’s bills should be allowed to fail. Those on the left believe….im not sure fill in the gaps.

    Bill English and the western world have take a pragmatic approach which seems to piss everyone off.

    • Luva

      Those on the left believe that if it is in the national interest the Government should take action. As simple as that. We are not handcuffed by ideology that says that Companies must be allowed to fail.

      The response is never simple and depends on circumstances. The original guarantee scheme was put in place because the economy was showing signs that the flow of finance would freeze. The guarantee scheme kept the flow of finance going.

      I note that SCF’s cover under the scheme was extended in April this year, just before it’s problems became public. At that time I agree that it should have been allowed a peaceful death. I cannot see the national interest then being in issue.

      Blinglish’s “line call” just cost us $600m. Can we, like, sack him or sue him?

      • luva 1.1.1

        You can definitley sack him Mick. Offering a half decent alternative should guarantee that.

        In 12 months time there is an election that is playing into the labours hands. I just dont thing they have the leadershp to grab it.

      • Pascal's bookie 1.1.2

        Also, the left tend to having fewer compunctions about stepping in to prevent things getting too big to fail in the first place. Regulate against individual players gaining that sort of position.

        The right tend to argue that that would be unjust and/or inefficient, that players should be free to get as big and powerful as the market allows, as the market will price the risk of failure with pixie power.

        If it fails, let it fail, they say,
        but when it fails, we must be pragmatic.

        If you accept the latter, (and there seems to be consensus around that in the real world of what politcians actually do) then it’s also pragmatic to prevent companies becoming too big to fail in the first place.

        • ZB

          You don’t get it. English and Key spent his time in government blaming Labour for the high
          unemployment only to turn round and justify the collapse of SCF on the recession!

          The left has to get its head out of its behind, because we’re in a recession, a pretty
          nasty and not your bog standard cyclical one. So Labour’s voters are locked in,
          they’re hurting and want relief. Labour doesn’t need to convince people who are
          unemployed, who are on a benefit, who are paid crap, they are in the booth
          already voting Labour!

          Labour needs to undermine the middle right vote, and it does this by attacking on
          financial dithering (however worthy) of National. SCF was down to the recession,
          so is unemployment so why is Labour getting blamed for that! Labour built up
          the government books, National have throw money around to mates while
          unnecessarily cutting.

          Labour should be going for the jugular, National alignment with free market
          philosophy that has so wrecked the world western economies. US is a dire
          economic situation because of free markets – no regulation.

          You ask what National would have done, they would have extended the
          scheme to more of finance companies, just like they gave tax cuts to the few,
          just as they’d have buried us in debt to give tax cuts before the recession hit.

          National are exposed on their core financial competency and the best you
          have is nickpicking over SCF? Its far bigger and more reckless than them.
          And also bad politics since National heartland – the south island – just got
          a bail out, why bring too much attention to that – move on and turn the
          facts about the double dip recession around.

          That governments of left and right loosen finance to keep up with ever
          groing oil surpluses, and the loose finance days are over, free markets
          theory is too shallow for the economy going forward. The left have
          every opportunity now to stamp a new ideology on the political landscape.
          Moderate popular capitalism for all – not just the extreme finance for the few.

    • Blighty 1.2

      was it pragmatic to allow a company on a verge of collapse into the scheme? Bernard Hickey says that being in the scheme allowed SCF to go wild with its lending, helping to lead to its collapse.

      • Loota 1.2.1

        This was all about setting the scene for short term game playing by the high rolling finance guys.

        Gaming the system, the few win, the many pay for their entertainment and their profits.

      • Ari 1.2.2

        Not sure why ANY investment company needs into the scheme, let alone one on the verge of collapse. Banks might need guaranteeing, but if you tie up your retirement money in private investments, you ought to be liable for the risk yourself.

        Really, the need to guarantee private investments is predicated on a failure of retirement provisions anyway, which is its own problem that needs to be sorted out.

  2. Richard 2

    I had no idea that SCF was only allowed to join the scheme in April. That is a bit like giving life insurance to someone diagnosed with a terminal illness.

    • Red Rosa 2.1

      Precisely the point Cactus Kate is making, Richard. Well worth a read.

      • Pascal's bookie 2.1.1


      • just saying 2.1.2

        Cactus is worth reading on this issue.

        She makes the point (fleetingly) about the questionable haste with which the guarantee is being paid out, possibly related to whether the terms of the guarantee might have meant the public was not liable.

        I’m even wondering if SCF being allowed into the scheme might have been because, rather than in spite of, the problems it was already having, ie helping out rich mates save their dodgy business, and farmers their investments.

        • just saying

          oops, scratch the “fleetingly” I thought the blog had ended way before it had.

          Strongly recommend CK’s investigation linked at 2.1, and hope the media starts reading it very soon.

          Reeking of corruption.

          • Carol

            There’s a lot of useful info in Cactus’s piece. But I’m not sure that I wholeheartedly support her favouring the basing of the economy on good ideas and entrepreneurialship, creating something out of nothing (sake-oil?) – as compared with getting back to more of a “real” economy…. but, in this instance, it’s prpbably going off into another argument.

            • just saying

              Agree with you Carol. Didn’t mean to seem to be whole-heartedly agreeing with her, (always unlikely given our politics are almost polar opposites).

              One thing that niggled with me was the idea that rural NZ is just farmers. There are many country wage earners, small business people etc. Rural economies may be mainly based around farming, but I suspect actual property owning farmers are very much a minority.

            • Cactus Kate

              A “real” economy? You mean peasant low real returning activities like squeezing milk from cow’s tits, encouraging banks to ease liquidity and plowing the money earned back into land at inflated values to let farmers “earn” tax free capital gains in the meantime driving property prices up so they can buy more land off the increased unrealised equity? In the meantime leveraging with interest so highly that farmers are paying stuff all tax?

              I’d take a Trademe entrepreneur anyday, a young fellow or felless with an IT idea, a restaurant owner or tourism operator, the jetpack dude….hell I’d even take Peter Jackson…without a haircut.

              Fonterra talks about “value add” all the time but at the end of the day it’s still milk powder and packaged butter I am seeing in supermarkets overseas. If NZ is basing its future off that then it will be a low earning future.

              • Bored

                Thank you Ms Prickly for using the words “cow’s tits” and “liquidity” in the same sentence. Gave me a good laugh, as did your very precise description of the NZ dairy industry vis a vis the economy. For once we are agreed.

                In todays world you are spot on, we will have to wait until Global Warming drives dairy herds from formerly formerly temperate climates to sell butter fat as a “value add” i.e something to eat because theres nothing else. Until then give us a Morgan.

              • just saying

                I didn’t read “real” as ‘agricultural,’ CK,.

                I agree with you about tax-dodging capital-gain farmers. Like the anti-smoking ads say: “Not my future”.

          • Draco T Bastard

            Definitely reeking. It’s too much of a coincidence that they went into the guarantee scheme and then pretty much fell over immediately without being in the process of falling over already. In which case, they shouldn’t have been in the scheme. If it was a “line call” then it was a political decision and the fact that SCF was falling was known.

            How many of National and their backers wanted that guaranteed 8% return? Even better question: How many of them entered SCF after the guarantee was ensured and who are they?

  3. infused 3

    I haven’t been watching this much at all – but.. What would happen if the govt haden’t steped in? I’m guess a lot worse.

    • Bright Red 3.1

      informed comment from infused.

      Step 1) event happens

      Step 2) people discuss how it should be handled

      Step 3) Infused sez ‘I love Key!’

    • Loota 3.2

      Damn right it would have been a lot worse, there would have been money to fund community services, night schools, sexual abuse counselling services and more good **** the NATs don’t give a damn about ahead of their tax cuts and bailing out rich mates.

    • bbfloyd 3.3

      infused… the real question is,, why didn’t the govt get involved much sooner. the fact that they sat on their hands for so long has allowed this to turn into a nightmare for everyone.

      same approach they have to anything that involves real governance it seems.

  4. BLiP 4

    Who are the foreign investors National Ltd™ bailed out by bending the rules?

  5. Red Rosa 5

    From Interest NZ last spring. Comment – ‘John Key will have a lot of explaining to do’. Well, now is the time.

    Would love to have been a fly on the wall at the meeting JK & AH in Timaru, 12 months ago! Note this is 6 months before the GG was extended to SCF in April this year.

  6. grumpy 6

    Way back in 1969 when I started studying Accounting and Economics at Canterbury, I thought that lenders either had the cash or security of a value at least equal to the cash.

    Silly me.

    It appears that SCF, emboldened by the Govt guarantee lent money and had NO security. Now, I can understand how being (say) a 4th Mortgage behind Hanover to Henderson’s Hole might set SCF back a few mill – but $700mill??????

    All those crooks who say “I lost it on the horses (or Casino etc etc) your honour” and it eventually turns up after they get out of jail from Caymans, Fiji, Jersey, Cyprus etc.

    Where is the list of these “toxic” debts and what is their listed security? Until I see it, I will suspect some off-shore dodgy facility is sitting on the cash.

  7. Bill 7

    I’m going to guess that a majority of people are, like me, fairly illiterate when it comes to these kinds of shenanigans. We know something isn’t right, that we just got mugged, but can’t help but glaze over as the details approach.

    So anybody capable of bringing it down to basics?

    If SCF had collapsed would land prices, as an example have dropped? Meaning, poorer people would have had a better punt at getting a bit of financial security for themselves as the market flooded with cheaper land and properties through mortgagee sales or people desperately down sizing?

    If so, could the bailout be fairly described as many poorer people paying to ensure that the privileges of poverty are maintained just as much as, or as well as guaranteeing that the terrible burden of wealth remains unshakably weighted on the shoulders of the already rich?

    And would it be fair to say that a farm owner having to downsize doesn’t really lose much? If they have to sell a $10 million farm for even half price, they would pick up a $5 million farm for $2.5 million and probably clear most of their debt in the process?

    Or am I being way too simple and missing something that is glaringly obvious?

    Any way to find out exactly who is stepping through the revolving doors between government and business?

    • Bored 7.1

      Bill, the usual scenario for the reciever / statuatory managers in these situations is to ascertain what mortgages / loans are recoverable and which need to be foreclosed upon.

      As I understand (without having read too much) the major exposure from loans is not from diary farms but from failed property development in Queenstown (Henderson?) and the major cities. Which would indicate that with regard to the farming sector sound mortgages and loans would be continued with, or packaged for assignment to other financial institutions who would take them on as a going concern. So a collapse in farm prices is unlikely to be a result of SCF, something else will have to cause this.

      I suspect there will be some farm foreclosures but given what has been said they wont be major and the resale of the assets will reflect current market prices, which given the payouts and returns dairy is still making should ensure that the losses to the taxpayer are not extensive. The same cannot be said for the likely return for the commercial property developments.

      The place you should be looking for shenanigans is amongst the financial community who probably knew that SCF was shaky but who under the regulations knew that they could invest with impunity as the government would bail them out. Legal but morally dubious, the government knew this and mad no attempt to close this off.

  8. Jum 8

    This government has sewn up Auckland, ECAN, and now it’s moving in on the asset base of New Zealand land, by stealth.

    No fire sale of assets, no siree, the public might get jittery. We’ll create an urgent crisis with SCF and then instead of working alongside the borrowers and lenders to stabilise this huge finance conglomerate we’ll take over that ‘asset debt’ with tax payers’ money, pay out value to our rich investor mates on high risk/miraculously now/no risk high return shares, and then start slippery/sliding the assets to foreign corporates or expat mates to plunder quietly over the ‘next 3 to 4 years’ says English.

    Any money ‘we’ make from those sales and all others going out under the radar, ‘we’ll’ give out as tax cuts to the rich to go out and buy up more of ‘our’ assets that JKeyll and Hide have legislated for unapproved sale, while the poor worker fools continue to vote for that nice rich male Mr Key.

    What is it going to take for the majority of New Zealanders to wake up to the sleight of hand devilry by this government?

  9. prism 9

    Bill English comes from south of Christchurch, he must know a lot of the wealthier people down there. Which means that likely they will have contacted him as ‘one of us’ with ‘What is going to happen to this company Bill’ (and our money)? And the government had appointed some accountant/ financier Stiasis? to keep a watching brief for some months/a year? Apparently the rot set in to the integrity of the investments over the past three years with too much going to property speculation, someone mentioned as far as Fiji, and the usual NZ suspects and those riskier ones causing the ship to list, too much ballast not spread!

    English must have had a good handle on the breadth of SCF lending and that there were bad apples about to spoil the good ones in the barrel when he let the company join the guarantee scheme in April. And agreed to pay all investors in full and with interest which I presume is the hiked up rate that was offered by the company to induce new investors.

    Listening to the speakers I had the impression that the investors had been flocking in since the guarantee was agreed, but if that was just last April then there must have been a desperate attempt in these last few months to entice investors who in turn had no risk and high interest, great if you have spare money!

    It seem that it was like a Ponzi scheme teetering on its toes ready to fall if new investment wasn’t obtained to plug the gaps. The longer left to teeter, the more it would have cost the country so the government, having signed SCF on to the guarantee, can argue that they had no option or there would have been a loss of confidence in our country’s ‘sovereign’ finances. Our hands were tied etc.

  10. Look. This is all about rent farming land for speculative gain. English is worried the the downturn in land prices will plummet further.
    He’s propping up land values by injecting our wages and social wage into the balance sheets of corporate capital.
    The answer is more state intervention like nationalising the gains as well as the losses.
    Preferably nationalising land and going with leases that allow hard working farmers to concentrate on production and not speculation.

  11. john 11

    Why must Public money be used to bail out a Moneylenderwhose bets went wrong!? Surely this is a free market correction (Something Nact fervently clings to,unless it affects their mates).The free market is always right!

    • Draco T Bastard 11.1

      NACT don’t believe in the free-market and never have done as a free-market would kill their income. What they believe in is being rich and being paid because they’re rich and not because they actually produce wealth (which they don’t).

      • aj 11.1.1

        Think like a cross between Nationalisation, and socialisation of losses and privatisation of gains. Standard Nat policy

  12. Blue 12

    On the bright side, the righties can no longer scream about the Labour Govt buying KiwiRail. 690 million to buy a rail company vs. 1.7 billion sunk into a failed finance company.

    I always thought investment meant the investor takes the risks. If you want higher returns, you take a greater risk of losing everything.

    The absurd situation where you can put money in a dodgy finance company, take the high returns and have the taxpayer pick up the bill if the company goes broke defies all rules of logic, investment and justice.

  13. outofbed 13

    Amazing Thread

    So its not like we didn’t see this coming
    Some dodgy dealings Key has a lot of explaining to do

    Well fuck it, I can do some dodgy dealings too
    I’m fucked if my tax is going to be used to prop up some shady cunts in the South Island
    I’m going to to be working for the folding stuff as much as possible from now on

    • Draco T Bastard 13.1

      Companies office records show that three other companies (Little Cow Company LLC, Pals Plus LLC and NZ Cow Company LLC) own a further 25% of Dairy Holdings. These three companies are based at 39 George St in Timaru, which is the same address as Allan Hubbard and South Canterbury Finance.

      All three companies at the same address. So who owns the companies? Is it the same people?

      Oh, look at that, none of them in the companies register except Dairy Holdings LTD. At a guess I’d say that the whole damn thing was some sort of incestuous tax rort.

  14. Red Rosa 14

    Well said in the Herald this morning. Here are the questions – let’s see if Key and English have the answers.

  15. ak 15

    Watershed lose-lose for the grinning asp: his own rural rump siding with honest Uncle Al’s scream that the gummint killed their ponzi, the other pimply Actoid cheek crying “nanny state” and sniffing for “corruption”. Betwixt, a $400/head haemorrhoid for everykiwi blurring the Midas image of their $50mill cypher irreparably.

    Time for Labour to dig hard and apply the iodine.

  16. outofbed 16

    List of finance company failures

    I reckon John key’s plan to make us a financial hub isn’t a flier , but i could be wrong

  17. outofbed 17

    $400 per kiwi yes But $2000 for every taxpayer

    • Bright Red 17.1

      how many taxpayers do you think there are? less than a million?

      IRD says there are 3.1 million

      • prism 17.1.1

        How many taxpayers pay substantial amounts? Old age pensioners are taxed on their grants so they must count. If IRD figures take in all comers, as in employment stats with everyone who is in paid work for more than one hour a week counted as an employed person – then seedbed taxpayers ie earning money for work, not paying it on benefits or interest earned must be a lot less than 3 million.

        And what about GST taxation of 12.5% soon to be 15%, We all must be taxpayers on this basis. The only ones who aren’t are in nappies and short trousers and even they might be juvenile taxpayers for trust receipts. Yet the pollies always finish their speeches with something about hard-working taxpayers as if they are rare, special and bearing all the burden of funding the country, What are becoming rare are people in full-time, stable jobs to pay the tax needed to be a modern progressive state.

  18. Carol 18

    Marty said:

    The one upside of this is that Kiwibank might be the buyer of SCF’s assets. Someone’s got to buy them. If it’s Kiwibank then the profits on those loans will stay in New Zealand, rather than going to a foreign institution. English hasn’t ruled out Kiwibank being the buyer and says he will be talking to Kiwibank. Let’s hope he makes the right call for once.

    Ya think?

    This just in:

    South Canterbury Finance may be sold off to foreign investors, Prime Minister John Key said today.

    antispam: failed

    • Draco T Bastard 18.1

      Well, those of us who understood NACT knew that would happen. They’re not their for NZ but for their rich mates – where ever they may be.

    • marsman 18.2

      Does the Chinese Bank which Shipley is involved in figure in the “sold off to foreign investors’ equation. Same as the Crafar Farms?

  19. BLiP 19

    This whole deal just gets murkier and murkier. Rich-listers began pouring money into SCF in June and even until Monday were buying discounted bonds on the NZX at 70c and now will not get paid out $1 – a 42.8% return in just 24 hours.

    As the Prickly One has pointed out, SCF was in breach of the government’s guarantee provisions at the time National Ltd™ made the decision, based on Treasury advice, to extend coverage for SFC in April. As Liam Dann points out:

    A lot was already wrong with South Canterbury when it had its public guarantee extended. For a start it was effectively in breach of its trust deed and had failed to file audited accounts. Having a look at the numbers is usually considered important when assessing a business decision. The Treasury – which officially makes the call on who gets in to the scheme – could have waited months before accepting the finance company. But it didn’t. It rushed South Canterbury in to safety because the Government knew it was a goner without the guarantee – although in the end it was a goner anyway.

    When the audited accounts finally did turn up, credit agency S&P downgraded SCF’s rating and John Key’s mates sniffed blood in the water. Just to add a final, lethal stab wound, the Serious Fraud Office is sent in with a blaze of publicity and the feeding frenzy begins.

    Well done, the Banksters. We have just seen the effective and lightning-speed transfer of $1.7 billion from the public to purse to the private sector and, as promised by National Ltd™, the “deepening of the New Zealand sharemarket”. Corporate welfare by stealth.

    Meanwhile, the MSM political commentators are painting the endeavour as “text book crisis management” and reiterating the Blinglish line calling for gratitude from the hinterland.

    What a fucking rort!!

    • BLiP 19.1


      and now will not get paid out $1 – a 42.8% return in just 24 hours.

      . . . and now WILL get paid out at $1.

      • pollywog 19.1.1

        *sigh*… if only us brownies weren’t so broke and ignorant as to capitalise on the culture of white capital.

        hmm…i wonder if any of the Ngai Tahu corporate warriors were in on the scam ?

        hope not, but then again, hope so…

        • prism

          pollywog – I met a man involved with a vibrant waka enterprise the other day. Thought of your ideas for future project.

          • pollywog

            Hah…it might have been me and you’d never know or somebody i been talking to 🙂

            • prism

              Don’t think so – this bloke’s name is Graham and he’s involved with Wala Ana I think it’s called. Heard of it? They do their thing at numerous coastlines in NZ.

      • Loota 19.1.2

        Also known as a cool 15,600% return p.a.

        Much more with compounding.

        captcha: counts

        • prism

          There is a smug saying about how the hustlers amongst us will always shine and if we were all given $1 million, soon some would have tripled it and others
          lost it. Like the biblical story of the servants and the talents. Well I think that with compounding interest and a prudent yet acutely intelligent approach I could do well and I am willing to undertake this onerous experiment as long as I don’t have to sell my soul to raise the wherewithal.

    • Ari 19.2

      I’d hesitate to glorify that as “political commentary”.

      • Ari 19.2.1

        Especially now I’ve had time to get to the last comment- effectively he said “this is Labour’s fault for managing the economy too well”. O_O

    • Draco T Bastard 19.3

      That’s not murky – that’s clear proof of corruption.

    • Cactus Kate 19.4

      To be fair based on the CEO’s evidence on Campbell Live last night, SCF were in breach during the entire guarantee period which was 2 years from 2008 October from their signing in November 2008. Of course now Treasury are denying SCF ever were in breach, but then they are in the gun themselves having overseen the whole thing.

  20. Treetop 20

    What a jewel in the government’s crown Kiwi Bank is. To think National ever considered selling/privatising Kiwi Bank tells me that this government is short sighted and daft when it comes to considering not to retain (100 %) the financial control of Kiwi Bank. What I cannot figure out is how one minute Kiwi Bank is surplus and the next minute it is vital for economic stability. I think I get it that the government bailed out SCF so as to have economic stability. I just hope that the government gets it, that once Kiwi Bank is gone, economic recovery/stability is so much harder to achieve.

    • BLiP 20.1

      What I cannot figure out is how one minute Kiwi Bank is surplus and the next minute it is vital for economic stability.

      Blind ideology tempered with Crosby/Textor focus group feedback.

  21. Jenny 21

    Marty Your figure of $60 million for teachers, to properly compensate them for the huge responsibility they have for the guidance of our youth, looks pitiful, against the $100 million given to just one single investor in South Canterbury Finance.

    What is really sickening is that George Kerr doesn’t need this money, as with a personal fortune of $180 million, Kerr ranks amongst the most privileged and fortunate of individuals to have ever lived in this country.

    This is a slap in the face for all New Zealanders on low wages and long hours and those suffering unemployment due to the recession.

    Tamsyn Parker, New Zealand Herald Business:

    George Kerr is to receive a $100 million taxpayer-funded payout from the Government in order to make the receivership of South Canterbury Finance run more smoothly.

    How on earth did Kerr get the government to give him so much money?

    It seems that Kerr along with a number of other ‘sharp’ investors in South Canterbury Finance are being given a return of $1 for every .70c they put in to this “failed” investment company.

    So not only is Kerr and his mates getting their money back from their failed investment, but they are being gifted a sizeable profit as well – the whole lot, out of our taxes.

    In the normal scheme of things, if the Government hadn’t stepped in his behalf, Kerr and his mates would have lost the lot.

    With other more worthy line calls on our tax dollars for teachers and radiographers being rejected –

    Is this fair?

    Is this just?

    Is it even sane?

    • Draco T Bastard 21.1

      It’s pure corruption and these people need to be treated as the thieves they are.

      • Bill 21.1.1

        You mean put them in public stocks, throw away the key and leave a tomahawk handy for some sympathetic passer-by to use to set them loose?

  22. Red Rosa 22

    Sandy Maier gave it his best shot, and his latest candid comments do not reflect well on the Timaru Saint. Comments on the post itself are also revealing.

    • BLiP 22.1

      Ahhh . . . the cherry on top! Just what National Ltd™, John Key, Blinglish, Treasury, Torchlight, the NZX, Lachie McLeod, the Reserve Bank, and Maier need – a nice, juicy, doddery old scapegoat. Very clever.

  23. Frederick 23

    I have been reading avidly all the comments. I note with interest that no-one has even speculated what a labour government would have done if they were still in power. I would contend exactly the same response. Imagine if they did though. Congratulatons all round on a well managed Cullenesque response to a difficult situation.

    • Marty G 23.1

      National is the government. They make the decisions. They get the critique.

      ‘What would Labour have done?’ is a classic attempt at distraction that basically admits National’s actions have been bad, only claiming that Labour would have been just as bad

    • Draco T Bastard 23.2

      Hell no, I’d be jumping up and down on Labour even more than I am on NACT. I expect NACT to do underhanded things to benefit themselves and their rich mates (it’s their modus operandi and always has been). Labour pretends to be left so when they do things that the right do I let them know.

  24. smhead 24

    marty first comment from luva is what YOU would have done, thirteen hours ago, not what labour would have done. you haven\’t answered it

    • Marty G 24.1

      I wouldn’t have extended SCF’s guarantee in April. And, as SCF was in breach of the terms of the guarantee, I would have evicted if from the guarantee before that.

      Would have bought the assets for Kiwibank in at a fair price in the ensuing collapse and the bond buyers and depositors would have borne the loss, rather than walking away with a profit paid by the taxpayer.

      why, what would you have done?

      • IrishBill 24.1.1

        Absolute worst case scenario, assuming the problem was dropped in my lap a week ago, I would have picked up the minimum percentage of bad debts required to halt the recievership and then restructured/forgiven them to ensure the moral hazard signal was sent to borrowers (i.e. the people and companies that took money to make/grow stuff) rather than to investors.

        But this is a financiers’ government. They’ll back the people speculating on stuff over the people making stuff every time. Something to do with having a currency trader as a PM perhaps?

  25. Jenny 25

    At risk of being accused by of quoting myself. I set out what I thought should be done in the comment, Social Welfare for the Rich? Which I posted yesterday.

    In a nutshell – What should be done, is nothing.

    Let SCF collapse.

    When property values and mortgages naturally settle at a less inflated speculative level then the government can buy them all up, at a fraction of the cost of a bail out.

    From there the government could re-negotiate all outstanding loans and mortgages at lower more affordable rates, keeping people in their houses and on their farms.

    Another benefit of allowing the SCF to fail, is that all the overpaid managers and executives etc. would all be out of a job. Consequently we would be spared the spectacle of these shameless bastards rewarding themselves with huge windfall bonuses paid out of the bail out money, as was witnessed overseas in the US and the UK.

    The bail out of South Canterbury Finance is a doomed effort to inflate a burst speculative bubble and artificially keep up an unnaturally high rate of profit for investors. The interests of the shareholders is the primary concern here. (Particularly the major shareholders)

    Putting investor interest first, means artificially trying to re-inflate the busted speculative market and keep the profits rolling in at the pre-bust levels. In practice this means keeping mortgages and loans unaffordably high, as compared to income in a recession. As night follows day, this will lead to more defaults, more foreclosures and more bad debt.

    Though major conservative commentators are defending the SCF bailout as a “stimulus” for the economy. Experience from overseas shows, that as a stimulus package, using tax payers money to re-inflate the speculative pre-recession bubble economy, by propping up the failed Finance Companies actually makes things worse.

    Why would it be any different here?

    So why can’t we learn from the overseas experience of bail outs?

    The answer is greed and the self interest of a tiny minority used to getting money for nothing, and of course, a government politically inclined to cater to this minority.

    Today’s Emerson cartoon in the Herald asks the same question.
    ‘Should public money be used to bail out sinking Finance Companies?’
    In my opinion Emmerson gives the best answer yet.


    The only thing to come from the public purse, should be…….

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    The first big test of the new Government’s approach to Treaty matters is likely to be seen in the return of the Resource Management Act. RMA Minister Chris Bishop has confirmed that he intends to introduce legislation to repeal Labour’s recently passed Natural and Built Environments Act and its ...
    PolitikBy Richard Harman
    1 week ago

  • COP28 National Statement for New Zealand
    Tēnā koutou katoa Mr President, Excellencies, Delegates. An island nation at the bottom of the Pacific, New Zealand is unique.          Our geography, our mountains, lakes, winds and rainfall helps set us up for the future, allowing for nearly 90 per cent of our electricity to come from renewable sources. I’m ...
    2 days ago
  • Ministers visit Hawke’s Bay to grasp recovery needs
    Prime Minister Christopher Luxon joined Cyclone Recovery Minister Mark Mitchell and Transport and Local Government Minister Simeon Brown, to meet leaders of cyclone and flood-affected regions in the Hawke’s Bay. The visit reinforced the coalition Government’s commitment to support the region and better understand its ongoing requirements, Mr Mitchell says.  ...
    3 days ago
  • New Zealand condemns malicious cyber activity
    New Zealand has joined the UK and other partners in condemning malicious cyber activity conducted by the Russian Government, Minister Responsible for the Government Communications Security Bureau Judith Collins says. The statement follows the UK’s attribution today of malicious cyber activity impacting its domestic democratic institutions and processes, as well ...
    3 days ago
  • Disestablishment of Te Pūkenga begins
    The Government has begun the process of disestablishing Te Pūkenga as part of its 100-day plan, Minister for Tertiary Education and Skills Penny Simmonds says.  “I have started putting that plan into action and have met with the chair and chief Executive of Te Pūkenga to advise them of my ...
    4 days ago
  • Climate Change Minister to attend COP28 in Dubai
    Climate Change Minister Simon Watts will be leaving for Dubai today to attend COP28, the 28th annual UN climate summit, this week. Simon Watts says he will push for accelerated action towards the goals of the Paris Agreement, deliver New Zealand’s national statement and connect with partner countries, private sector leaders ...
    4 days ago
  • New Zealand to host 2024 Pacific defence meeting
    Defence Minister Judith Collins yesterday announced New Zealand will host next year’s South Pacific Defence Ministers’ Meeting (SPDMM). “Having just returned from this year’s meeting in Nouméa, I witnessed first-hand the value of meeting with my Pacific counterparts to discuss regional security and defence matters. I welcome the opportunity to ...
    4 days ago
  • Study shows need to remove distractions in class
    The Government is committed to lifting school achievement in the basics and that starts with removing distractions so young people can focus on their learning, Education Minister Erica Stanford says.   The 2022 PISA results released this week found that Kiwi kids ranked 5th in the world for being distracted ...
    4 days ago
  • Minister sets expectations of Commissioner
    Today I met with Police Commissioner Andrew Coster to set out my expectations, which he has agreed to, says Police Minister Mark Mitchell. Under section 16(1) of the Policing Act 2008, the Minister can expect the Police Commissioner to deliver on the Government’s direction and priorities, as now outlined in ...
    5 days ago
  • New Zealand needs a strong and stable ETS
    New Zealand needs a strong and stable Emissions Trading Scheme (ETS) that is well placed for the future, after emission units failed to sell for the fourth and final auction of the year, Climate Change Minister Simon Watts says.  At today’s auction, 15 million New Zealand units (NZUs) – each ...
    5 days ago
  • PISA results show urgent need to teach the basics
    With 2022 PISA results showing a decline in achievement, Education Minister Erica Stanford is confident that the Coalition Government’s 100-day plan for education will improve outcomes for Kiwi kids.  The 2022 PISA results show a significant decline in the performance of 15-year-old students in maths compared to 2018 and confirms ...
    6 days ago
  • Collins leaves for Pacific defence meeting
    Defence Minister Judith Collins today departed for New Caledonia to attend the 8th annual South Pacific Defence Ministers’ meeting (SPDMM). “This meeting is an excellent opportunity to meet face-to-face with my Pacific counterparts to discuss regional security matters and to demonstrate our ongoing commitment to the Pacific,” Judith Collins says. ...
    7 days ago
  • Working for Families gets cost of living boost
    Putting more money in the pockets of hard-working families is a priority of this Coalition Government, starting with an increase to Working for Families, Prime Minister Christopher Luxon says. “We are starting our 100-day plan with a laser focus on bringing down the cost of living, because that is what ...
    7 days ago
  • Post-Cabinet press conference
    Most weeks, following Cabinet, the Prime Minister holds a press conference for members of the Parliamentary Press Gallery. This page contains the transcripts from those press conferences, which are supplied by Hansard to the Office of the Prime Minister. It is important to note that the transcripts have not been edited ...
    7 days ago
  • Lake Onslow pumped hydro scheme scrapped
    The Government has axed the $16 billion Lake Onslow pumped hydro scheme championed by the previous government, Energy Minister Simeon Brown says. “This hugely wasteful project was pouring money down the drain at a time when we need to be reining in spending and focussing on rebuilding the economy and ...
    1 week ago
  • NZ welcomes further pause in fighting in Gaza
    New Zealand welcomes the further one-day extension of the pause in fighting, which will allow the delivery of more urgently-needed humanitarian aid into Gaza and the release of more hostages, Foreign Minister Winston Peters said. “The human cost of the conflict is horrific, and New Zealand wants to see the violence ...
    1 week ago
  • Condolences on passing of Henry Kissinger
    Foreign Minister Winston Peters today expressed on behalf of the New Zealand Government his condolences to the family of former US Secretary of State Henry Kissinger, who has passed away at the age of 100 at his home in Connecticut. “While opinions on his legacy are varied, Secretary Kissinger was ...
    1 week ago
  • Backing our kids to learn the basics
    Every child deserves a world-leading education, and the Coalition Government is making that a priority as part of its 100-day plan. Education Minister Erica Stanford says that will start with banning cellphone use at school and ensuring all primary students spend one hour on reading, writing, and maths each day. ...
    1 week ago
  • US Business Summit Speech – Regional stability through trade
    I would like to begin by echoing the Prime Minister’s thanks to the organisers of this Summit, Fran O’Sullivan and the Auckland Business Chamber.  I want to also acknowledge the many leading exporters, sector representatives, diplomats, and other leaders we have joining us in the room. In particular, I would like ...
    2 weeks ago
  • Keynote Address to the United States Business Summit, Auckland
    Good morning. Thank you, Rosemary, for your warm introduction, and to Fran and Simon for this opportunity to make some brief comments about New Zealand’s relationship with the United States.  This is also a chance to acknowledge my colleague, Minister for Trade Todd McClay, Ambassador Tom Udall, Secretary of Foreign ...
    2 weeks ago
  • India New Zealand Business Council Speech, India as a Strategic Priority
    Good morning, tēnā koutou and namaskar. Many thanks, Michael, for your warm welcome. I would like to acknowledge the work of the India New Zealand Business Council in facilitating today’s event and for the Council’s broader work in supporting a coordinated approach for lifting New Zealand-India relations. I want to also ...
    2 weeks ago
  • Coalition Government unveils 100-day plan
    Prime Minister Christopher Luxon has laid out the Coalition Government’s plan for its first 100 days from today. “The last few years have been incredibly tough for so many New Zealanders. People have put their trust in National, ACT and NZ First to steer them towards a better, more prosperous ...
    2 weeks ago
  • New Zealand welcomes European Parliament vote on the NZ-EU Free Trade Agreement
    A significant milestone in ratifying the NZ-EU Free Trade Agreement (FTA) was reached last night, with 524 of the 705 member European Parliament voting in favour to approve the agreement. “I’m delighted to hear of the successful vote to approve the NZ-EU FTA in the European Parliament overnight. This is ...
    3 weeks ago

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