Before the last election the usual right wing spinsters tried to paint Labour as financially incompetent for buying back KiwiRail. Never mind that we had to rescue this vital piece of infrastructure from oblivion. Never mind that spending on KiwiRail became part of the stimulus package which the Nats proudly claimed as their own response to the recession. Never mind that any sane government would be making rail (and light rail in Auckland and Christchurch) a centrepiece of their planning for a post-oil economy. Never mind all that, the purchase was to be mocked at all costs, and KiwiRail saddled with the image of a child’s plaything, a mere “train set”.
All those right wing knockers are strangely silent now that their own National government has thrown away almost twice the cost of KiwiRail on a stuffed company. The saga of South Canterbury Finance just keeps getting worse and worse:
SCF insider loans push bill up by $300m
Insider loans? Sounds a bit like insider trading doesn’t it. Say – isn’t insider trading illegal?
The taxpayers’ bill for the South Canterbury Finance failure rose by a further $300 million to $1.2 billion yesterday as a result of loans to company insiders going sour – and Prime Minister John Key is unable to rule out a further blowout.
Unable to rule out a further blowout? Well that’s what you get for writing a blank cheque to a failing organisation. You’d have thought an ex money trader might have been able to work that one out.
“Overall, we now expect a net loss from the Retail Deposit Guarantee Scheme of around $1.2 billion, compared with earlier estimates of around $900 million,” said Mr English. Mr Key emphasised the shortfall in recoveries related to South Canterbury’s loans to “related party” borrowers. That includes the company’s management as well as friends and associates of Mr Hubbard.
Why? Why did the Nats ignore repeated warnings and sign SCF up for the Guarantee Scheme? Why did they write a blank cheque from we the taxpayers to bail out SCF “insiders”? In this time of so many financial challenges and needs, why has New Zealand spent $1.2 Billion (and climbing) on a stuffed company?
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