$1.6 billion bail-out - just like that!
Willie Jackson opinion
Friday 3rd September, 2010
OPINION: It's amazing how much money the government can come up with when they think the country might be facing a crisis. Certainly that seems to be the line being run following the $1.6 billion bail-out of South Canterbury Finance.
Finance Minister Bill English said it was necessary to reduce costs to the taxpayer and minimise disruption to the wider economy.
English's view, shared by many economists, is that the government really didn't have much choice and the bail-out gives much better control of the situation.
But something about the deal doesn't sit right. I can't help but think about the thousands of mum and dad investors who have lost their hard-earned savings in other finance companies in recent years.
The government didn't move an inch to look after them.
And how come National and Labour governments have never accorded Maori the same priority and respect that they have given to investors in South Canterbury Finance?
The $1 billion treaty settlements fiscal cap that successive governments imposed on all the tribes in New Zealand as reparation for the grand theft of Maori land is an insult in comparison to the South Canterbury Finance deal.
The biggest tribal claims were settled in the mid-1990s when Tainui and Ngai Tahu each received a paltry sum of $170 million. By my reckoning, that's less than 1 percent of the actual worth of those settlements because both tribes could have claimed up to $20 billion.
So when I look at the deal that was done by the government for the mainly Pakeha investors in the South Island, it's important to note the double standard that's applied to Maori and Pakeha financial affairs.
Maori were ripped off by successive governments who stole their lands and when the Crown finally acknowledged their crime, the government paid them off at one cent in the dollar.
But when Pakeha investors are threatened with the loss of their money in South Canterbury Finance from which they were trying to make money, they are compensated 100 percent.
There's no doubt that the deal smacks of hypocrisy and double standards.
New Zealanders, both Maori and Pakeha, should be clear that while the economic arguments for the payout are strong, what's even stronger are the obvious negatives for the government if they had done nothing.
Failing to secure investors' interests in South Canterbury Finance would have led to a major loss of voter support for the government in the South Island.
Ad Feedback And that was a risk that John Key was not prepared to take.