New information indicates at least $300 million of taxpayers funds may have been wasted by Bill English when he turned down recapitalisation offers of SCF, leaving the taxpayer with a much larger liability.
If there were good reasons for this apparent fiscal lunacy, lets hear them rather than hide behind mock commercial confidentiality and ”public interest” grounds.
Part one of today’s House question is here and part two is here.
So that’s why English took the $2.8M in home help away from the old people, to pay for 1/100 of his SCF waste.
i have to wonder, that if there have been multiple offers to buy scf assets, then why couldn’t the company have sold off assets in order to stay solvent?
or are we looking at free for all for nationals mates?
The justification I heard was that the Crown would stand to socialise the risk, and private investors would reap the profits.
But how is that any different to what eventuated?
P
L I C Y P A R R 
T !
I’m not particularly interested in the Labour Party talking about squandering taxpayers money after the Kiwirail fiasco, the Skyhawks “deal”, the ACC debacle, interest free student loans and Welfare for Families – to mention but a few.
sounds like a free for all no matter how it’s put. except us ordinary folk get the cleaning bill.
Radman… you’re supposed to blow the whistle, not swallow it!
@Radman- The SCF bialout is as big as Air NZ and Tranzrail combined!
The ppotential value loss to the taxpayer alone here of 300 to 500 million dollars is a third to a half of tranzrail !
So surely we are all entitled to more transparency on how our money is being wasted?
$1,600+ million wasted on the SCF bailout?
Fixed…
If we we want to talk about historical waste radman we can talk about how Jim Anderton talked the Labour caucus into turning down a $1,100,000,000 bid for BNZ in the 80s… Cost us over a billion (in 80s dollars)…
While the government was bound by law to bail out SCF, from what I gather the could have done a way better job. They where are offers on the table and he not telling us, the taxpayers/citizens what those offers where and WHY did they turn them down.
There need to be more transparency about this issue, it all just got a fishy smell to it.
@David Cunliffe
Do you know why only a few months before the activation of the GGT, Sandy Meiar (CEO) declared SCF was $200M in the black then only about 4 months later SCF was suddenly $600M in the red? What cause such a sudden loss.
That in itself seem very fishy!
Plus, the Bill a while back mentioned about government advisers who were inside SCF for about 12 months or so. What where they doing… just monitoring or what?
Circumstantial evidence points to it being a FFA for NACTs rich mates. this is why I want to see a full investigation. It doesn’t need to be done now (this government just won’t) but the end of 2011 early 2012, once we have a left government back in, is just fine.
That is only true if SCF didn’t break the rules which it seems that they may have.
The Govt needn’t have extended coverage to SCF and could have imposed far stricter conditions on the SCF monies they would protect once they did extend said coverage. Pretty much a case of the foxes looking after the henhouse.
Nice try, but IMHO not really a runner.
There seems to be enough public detail now available to support the English claim that offers for SCF in August were at firesale prices, with the government itself being required to fund them in some cases. Enough said.
The hard questions should be around whether the GG should have been extended in April. There was public evidence then that SCF had breached the GG, sufficient to let the taxpayer at least partially off the hook.
I like to correct the figure “$200M” suppose to be $2million. I screw it up. I should proof read more often
@Colonial Viper
Your right, but they did and they where bound by law to bail it out!
@Draco T Bastard
“That is only true if SCF didn’t break the rules which it seems that they may have.”
Well, SCF did still carry on with silly will high risk lending. Some of that no doubt is suspect. Being careless.
It is important to make the distinction between the equity owners in SCF (shareholders) and the bond and debenture holders. The guarantee only covered the bonds and debentures.
SCF equity is about nil.
So then you have the tangled mess of equity holdings and related party loans around SCF, Southbury, and the Hubbard funds. Not to mention the 500 odd Hubbard companies.
It will be months, maybe years, before all this is sorted out. But we should have an SFO report before Xmas, which may clarify things somewhat.
Individual Hubbard/SCF investors’ positions and likely payouts will vary greatly, depending on precisely what paper they hold.