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Thursday, September 09, 2010

Bailing out Mr Magoo demands an inquiry

Opposition parties want inquiry into SCF
Opposition parties are demanding full disclosure of South Canterbury Finance's (SCF) situation before it went into receivership and a parliamentary inquiry into the way the Government handled the crisis.

The calls for an inquiry into bailing out Mr Magoo will get louder as the economic pinch starts on October 1st with the new GST increases. People will want to know why Mr Magoo was bailed out $1.6 billion as they feel John Key's vacant promise that they would be better off under his tax cuts for the rich drain away from their pockets...

Labour's finance spokesman, David Cunliffe, said the $1.6b payout was the biggest corporate bailout in New Zealand's history.

"What went wrong and was the cost to taxpayers really minimised?" he said.

"Serious questions need to be answered so we can ensure this doesn't happen again."

Cunliffe said those questions included how much the Government knew and when, whether SCF should have been in the scheme, whether it had been in breach of its eligibility, what deals were on the table to save it before it went into receivership and what other options had been considered and discarded.

...Cunliffe is sharp and English will want to resist allowing him sniff through the decision making process of why National bailed out SCF's well connected investors...

Green Party co-leader Russel Norman said Parliament's finance and expenditure select committee should hold an open inquiry into SCF and the Government's actions.

"When taxpayers have to fork out billions of dollars they have a right to know why," he said.

Dr Norman said lax financial sector regulations were partly to blame for the company's collapse.

...Russel is 1000% right, this cock up was caused by the utter lack of regulation thanks to our neoliberal free market crap, and the Maori Party make the same point my co-blogger Tim Selwyn made about bailing out Mr Magoo compared to Treaty payments...

Maori Party MP Te Ururoa Flavell said Maori were comparing the $1.6b with the $1b cap put on Treaty of Waitangi settlements 15 years ago to cover the following 10 years.

"That was $1b to settle all claims for a Maori population at the last census of 643,977 people. It compares miserably with $1.6b paid by the Crown to settle with a few unhappy investors," he said.

...the political fallout from bailing out Mr Magoo has only just begun.


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