Labour and Nats quarrel on SCF debt

A $331 million blowout in the taxpayer bill for South Canterbury Finance has sparked calls for Bill English to resign. Photo / Paul Estcourt

A tit-for-tat battle erupted in Parliament yesterday as National and Labour tried to foist responsibility for the billion-dollar South Canterbury Finance failure on to each other.

In what John Key dismissed as grandstanding by a contender for the party's leadership, Labour's finance spokesman David Cunliffe yesterday called for Finance Minister Bill English to resign after the taxpayer bill for paying out South Canterbury's investors rose from $900 million to $1.2 billion.

But Mr Key pointed out it was Labour's Retail Deposit Scheme - created just before the last election - under which South Canterbury's deposits were backed by the taxpayer.

Labour's Trevor Mallard said it was the freshly sworn-in Mr English who several weeks later formally accepted South Canterbury into the scheme.

Mr Cunliffe said Mr English's handling of the affair during which the Government rejected a series of offers from bidders was "a scandal of epic proportions". He claimed the bids could have saved taxpayers as much as $500 million.

Without giving detail he has suggested the deals were rejected for political reasons.

But Mr Key yesterday said no credible offers were made.

"If there was a decent bid, we'd take it," Mr Key told reporters.

"But the bids were, 'we are taking the upside, you wear all the downside, we can't quantify it and by the way there's no cash up front, you have to fund the entire transaction'. Well, it doesn't sound like a very good deal."

South Canterbury's receiver, Kerryn Downey of McGrathNicol, said he doubted the outcome would have been much different had a receiver been appointed to SCF six months earlier, given the severity of its problems.

The Herald understands the Treasury will release SCF-related documents next week which may shed further light on offers from would-be buyers and Mr English's handling of the affair.

Mr Downey refused to speculate on the final bill to taxpayers as he did not want to prejudice the sales process.

He expected the taxpayers' final position would not be known for a year or more.

additional reporting NZPA