$1.78b bill tops costs for police

Finance Minister Bill English. Photo / Greg Bowker

The Government's $1.78 billion payout to South Canterbury investors is more than it spends each year on police or the ACC.

But Finance Minister Bill English doesn't expect further big calls on the Government's retail deposit guarantee scheme.

Tuesday's payment equals $405 for every man, woman and child in New Zealand. Spending on police is $361 a person and on the ACC $285.

The bulk of Tuesday's payment - $1.6 billion - was made under the terms of the Government's guarantee scheme set up in 2008 to prevent a run on banks and other financial institutions during the height of the credit crunch.

The guarantee covers 73 financial institutions with deposits totalling $133 billion.

Mr English this week said he wasn't worried about the banks which comprise the bulk of that total and which have paid nearly all the $228 million in fees collected under the scheme.

For the remaining institutions, including finance companies and credit unions, the Treasury has set aside $887 million to cover losses.

That includes the $600 million the Treasury expects to be out of pocket once its $1.6 billion payout to investors on Tuesday is offset by the proceeds of South Canterbury's receivership.

The Treasury has paid $250 million to cover deposits in other failed finance companies.