Our $20 million bill for Nats’ expediency

28 comments on “Our $20 million bill for Nats’ expediency ”

• Comments are now closed

1. Scott 1

   1 September 2010 at 9:31 pm

   Getting the overseas investors out of the picture will probably save the taxpayer more money in the long run. It was done to ensure that the Government will be the sole creditor in the receivership and can call the shots when it comes to selling the assets of SCF. That way it will probably be able to achieve a better price.

   Armstrong is right that it was a smart move, even if (as always) he seems more interested in the politics of the Government’s action than whether it was the right thing to do.
   • BLiP 1.1

     1 September 2010 at 9:48 pm

     In first with the Blinglish National Ltd™ “official version”, eh Scott? Perhaps you can be a little more specific than “probably” – the names of the foreign investors for whom the government broke the rules to spent my money would be interesting. How long before we get that information?

     The only thing smart about this issue is the fact that National Ltd™ have pulled of a billion dollar shell game sleight of hand move right in front of the public eye. But, never mind, Clueless is off to see the Queen – did you know? – just like Dick Whittington – perhaps she’ll make Lord Mayor of London when he scarpers with his suitcase full of money.
     • Scott 1.1.1

       2 September 2010 at 7:05 am

       “In first with the Blinglish National Ltd™ “official version”, eh Scott?”

       You’re accusing me of being a Bill English supporter? I can’t stand the man. It is possible to dislike a government without disliking every single thing it does. They’re bound to get it right occasionally. In this case they did.

       “Perhaps you can be a little more specific than “probably””

       It’s not that complicated. When a company is in trouble and multiple creditors are scrambling around to get paid and assert rights, things can get messy and potential buyers can be deterred. I don’t see it matters who the overseas investors were.

       If the govt hadn’t done this people would be attacking them in six months time for failing to spend a bit more to secure a better sale price.
   • Loota 1.2

     2 September 2010 at 12:46 am

     Yeah, we’re going to crucify National over this, over the next 12 months. Over and over again.

     About 1.77 billion times.
2. TightyRighty 2

   1 September 2010 at 10:01 pm

   45k? way to lower the bar on being rich. all issues aside, terming someone with 45k rich is a bit low brow wouldn’t you agree eddie? a useful bit of information might be the average age of the depositors. but that would diminish your spin wouldn’t it?
   • Ari 2.1

     1 September 2010 at 10:13 pm

     $45,000 was not the income of those investors, it was the amount invested. As in “oh, look what I had left between the couch, $10,000! Let me find a few more of those and put them together in a fund.”

     Anyone who’s investing that kind of money is taking a big risk and ought to know it.
     • TightyRighty 2.1.1

       2 September 2010 at 8:38 am

       not really taking a risk, see the last labour moved to shore up confidence in the finance industry by guaranteeing the deposits of all people in selection of finance houses. government backed security for your deposit? bring it on.
       • Marty G 2.1.1.1

         2 September 2010 at 8:54 am

         it was national’s decision to extend scf’s guarantee in april of this year.

         and it was treasury that failed to carry out proper oversight.

         you may recall that cullen never wanted to put in the guarantee but at the height of the financial crisis he was advised that everyone else had done it and there would be capital flight if nz didn’t.
         • TightyRighty 2.1.1.1.1

           2 September 2010 at 10:05 am

           but you guys always say capital flight won’t happen when taxes are raised etc, so it’s only when treasury advises to do something because of the risk of capital flight that it actually occurs? get your myths straight boyo.

           the capital flight would have been to safe deposit options, like the big 4, kiwibank, psis and tsb and all the other stable institutions. the ones who paid the fees to fund the deposit guarantee scheme i might add, $600m dollars worth i believe.

           it’s not like cullen ever really cared about treasury advice and it’s also not good listening if you come up with shoddy policy withing 48 hours of said advice.
   • Marty G 2.2

     1 September 2010 at 10:42 pm

     how many kiwis,even retirees, have $45k to put in a finance company? and that’s just the average – as always, it’ll be a smaller subsection with the lion’s share
   • Draco T Bastard 2.3

     2 September 2010 at 1:06 am

     45k that they can lose without worrying about it – yeah, I’d call them rich. Unless they were stupid, which is possible – they do vote NACT after all, and didn’t have that money to begin with in which case they should lose everything.
     • TightyRighty 2.3.1

       2 September 2010 at 8:40 am

       no shit they should lose everything. but 45k is not masses of money if you have been saving all your life. so i want to know, before anybody with 45k in the bank starts feeling persecuted for being dilligent and hard working, what the average age of investors was? if it’s 22 then yes they are probably quite wealthy. If, as i suspect it’s closer to 60 then the vast majority will have worked hard and saved to achieve that.
     • Lanthanide 2.3.2

       2 September 2010 at 10:29 am

       “which is possible – they do vote NACT after all”
       Citation needed that all investors in SCF vote National, please.

       You’re no worse than Fisiani making hyperbolic crap up.
3. Cactus Kate 3

   1 September 2010 at 11:43 pm

   I would have to agree that compared to other New Zealanders, having $45,000 in a deposit does sadly put you in a wealthier category than many others. Today those people have every right to ask the questions they are asking. Why bailout people (and paying out on the DoG’s is a bailout) with more money than I’ve got?

   If you argue against welfare (as I do) for the poor then you have to be consistent and argue against it for the not-so-poor.

   Given Treasury’s steadfast announcement today in response to my post that SCF did not breach the guarantee, I am more interested now to know for how long officials have known the precise potential exposure and that risky lending that was still being written during the guarantee period. If SCF disclosed what they were doing then that is about the only conclusion I can draw to Treasury’s claim that SCF did not breach the DoG.

   Labour started the nonsense however the original DoG with SCF was signed in the first two weeks of the National government in 2008.

   Labour should be asking how long this was going on.
   • BLiP 3.1

     2 September 2010 at 1:09 am

     Oops.
   • Lazy Susan 3.2

     2 September 2010 at 7:39 am

     Appreciate your great analysis of this Cactus but take issue with

     Labour started the nonsense

     This was not nonsense – Labour implemented the scheme at the time of the global credit crunch. Most developed countries had put in place similar schemes and without it there would have been a flight of capital from NZ to safer havens.

     The “nonsense” is that SCF was allowed to write up millions of dollars of dodgy loans and get themselves so far underwater before anything was done about it.

     The “nonsense” is that this government has coughed up $1.7 billion of taxpayers money so readily without any analysis of what their true obligations are and how best to meet them. They’ve already admitted $20 million they were not even obliged to pay. Compare this to the penny pinching that is going on in such areas as early childhood education.

     This is a gift for Labour – a fairly easy to understand mighty f*** up by National. A simple “privatise the profits socialise the losses” story but on a gigantic scale. If Labour don’t run with this one I really will despair.
     • outofbed 3.2.1

       2 September 2010 at 7:42 am

       If Labour don’t run with this one I really will despair.

       gee you have lasted this long ?
   • pollywog 3.3

     2 September 2010 at 8:14 am

     Why bailout people (and paying out on the DoG’s is a bailout) with more money than I’ve got?

     …cos Rich Whitey will always look after their own first.
4. Draco T Bastard 4

   2 September 2010 at 1:05 am

   We can argue till the cows come home over whether the whole bail-out was even legally required (Cactus Kate and others think not).

   I’m wondering if it’d be possible to make a police complaint about it actually.

   In particular, they might like to look at section 6 of the Crown Retail Deposit Guarantee Scheme Act, bearing in mind that Bill English extended SCF’s guarantee on April 1:

   What are you getting at with that because I can’t see anything.

   The RWNJs complained about the $800k used for the election card that Labour used and now their in there giving away 25 times that amount and nary a whisper can be heard.
   • Loota 4.1

     2 September 2010 at 1:15 am

     Labour has got to get stuck into this with a red hot pitchfork.
5. Carol 5

   2 September 2010 at 7:20 am

   And some of the investors have A LOT of money spare for investing, and sped the decline of SFC:
   http://www.stuff.co.nz/business/industries/banking-finance/4085964/The-rich-blamed-for-SCFs-fall

   South Canterbury Finance’s collapse appears to have been caused in part by rich investors pulling out cash to get below new limits for the government’s deposit guarantee scheme.

   Trustee Executors regional manager Yogesh Mody said “many investors” with deposits above the $250,000 limit that will apply to the revised scheme from October 12 had been “rearranging” their investments to get below that figure ahead of the deadline.
   • Loota 5.1

     2 September 2010 at 8:02 am

     Yeah like instead of having one of their family trusts having $500K in SFC, have $250K in each of two family trusts and hold it in SFC.
     • Lanthanide 5.1.1

       2 September 2010 at 10:33 am

       Moving money between trusts accrues gift duty, unless you do it over a period of several years. It really isn’t simple to just magic money from one trust to another.

       captcha: instantly
       • Bill Browne 5.1.1.1

         2 September 2010 at 12:10 pm

         Ooh look – just in time!

         http://www.stuff.co.nz/business/3799652/Dunne-to-look-at-axing-gift-duty
         • Lanthanide 5.1.1.1.1

           2 September 2010 at 1:37 pm

           “Mr Dunne said gift duty would be repealed only if “valid concerns” over matters such as the rights of creditors or use of gifting to gain social assistance were allayed.”

           In other words, don’t count on it. But assuming they do remove gift duty, I’ll probably be setting up a trust to take advantage of that in the near future.
6. just saying 6

   2 September 2010 at 8:13 am

   Did Key chuck in the interest for them too?
7. quasimodo 7

   2 September 2010 at 10:21 pm

   Forgive me for sounding cynical, but it looks as though Key’s minders have removed him as far as possible from the blowback of the SCF collapse. They don’t wish to tarnish their prized electoral asset, and he gets to resurface after a discreet interval with a bit of the reflected glory of President Sarkozy and PM Cameron.

Links to post

1. The Standard: posted on 1 September 2010 at 8:47 am

• Comments are now closed

• Log in
• Donate
• Contribute post

• Articles RSS