Dozen rejected for guarantee scheme - English
About 12 companies had sought protection under the Government's Retail Deposit Guarantee Scheme but were knocked back, Finance Minister Bill Englishhas revealed.
About 12 companies had sought protection under the Government's Retail Deposit Guarantee Scheme but were knocked back, Finance Minister Bill Englishhas revealed.
The scheme was put in place during the global financial crisis and was extended until December 31 this year.
The Government now expects a net loss from the scheme of about $1.2 billion, compared with earlier estimates of around $900 million. Most of the loss is due to the collapse of South Canterbury Finance.
Mr English defended extending the scheme on TVNZ's Question and Answer programme.
Four companies - Fisher and Paykel Finance, PGG Wrightson, the Wairarapa Building Society and the Combined Building Society -- remain in the scheme, which has an exposure of $1.7b.
"The companies that have had any kind of support from the government are a fraction of those that have approached the government over the time that we've been in government," he said.
"I mean, from very early on, we had a number of companies approaching us for support."
When pressed for numbers he said about a dozen.
"And we followed some pretty straightforward principles, which is we should not get involved at all if there's any kind of commercial solution that's available, that they'd have to represent some kind of large-scale systemic risk to New Zealand for it to be considered at all, and you'll remember the discussion about Fisher and Paykel early on, which was fairly high profile."
Mr English said the Government had been pragmatic in its approach and tried to retain jobs where it could.
"Where there's a strong case, we've taken some action, but we do clearly want to get out of this situation, as the economy picks up, where this is going to happen."
Last week the Government also announced a support package for AMI Insurance and said it could cost taxpayers up to $1b to safeguard policy holders, including thousands of Christchurch home owners.
NZPA and NBR staff
Mon, 11 Apr 2011
Mon, 11 Apr 2011
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Dozen rejected for guarantee scheme - English
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