The Insider

What they're whispering about in Parliament...

The Insider: Brinkmanship

Solid Energy open mine site. Photo / Greg Bowker
Solid Energy open mine site. Photo / Greg Bowker

Finance Minister Bill English's Mexican stand-off with the Bank of Tokyo-Mitsubishi over Solid Energy really is a matter of who blinks first. Bank officials are convinced their lending to the SOE came with more than just an implied guarantee; they also do not believe the Government would really allow Solid Energy to fall over. English says that if the High Court challenge to the major lenders taking a haircut on their loans is successful, the SOE will be liquidated. The Japanese bankers don't believe he will do it. A liquidation would be politically painful for the Government, but economically it makes sense. Profitable parts of the business could carry on, the other bits would be put out of their misery, the debts would disappear off the Government's books and the money being used to prop it up could go elsewhere. Also, English can't blink because other banks might see that as confirmation of a government guarantee on all SOE lending.

Protecting the pay

Sometimes, interesting things turn up in dull places. For example, as MPs were working their way through an overhaul of the legislation regulating their pay and expenses, they discovered some of them may have been illegally paid.

It turns out there is some uncertainty about whether list MPs who replaced other list MPs between elections are, in law, allowed to be paid. This slip-up appears to have gone unnoticed for years. Just in case, amendments are being made to the bill to retrospectively validate payments made to list MPs who came to Parliament mid-term.

Red tape tangle

Glacial progress is being made in tendering out the Government's banking contract, held by Westpac for many years. The process has been caught up in the Ministry of Business, Innovation and Employment's "all of government" procurement process, which is trying to stitch together a wider panel of banks to provide services for all government agencies, and not just look at the Government's contract. People in the banking business say it has all become bogged down in masses of red tape and the exchange of very complex documents (and bankers aren't exactly allergic to complex documents). One participant notes that there is a limited number of banks and they all offer similar services with similar fees, so the whole process feels like an artificial "make work" scheme or an attempt to delay tendering out the main contract.

A friend in need...

Ministers and diplomats are adamant New Zealand must attend next month's Commonwealth Heads of Government meeting in Sri Lanka, hosted by President Mahinda Rajapaksa (above), despite growing calls for a boycott. Canadian PM Stephen Harper is not going because of human rights abuses in Sri Lanka, and other leaders are likely to join him. But diplomats want to ensure the rather jaded forum remains in existence, and say attending is very much in New Zealand's interests, as the Sri Lankan Government helped smooth unease about the contaminated dairy products scare and there is still some ill-feeling about that incident.

It's the same at home

People who blame "Asian investors" for driving up house prices and say New Zealand should ban foreign property investors should take a look at what is happening in China. On the Chinese mainland, new home prices increased in 69 of the 70 cities the Government monitors. This includes 20 per cent increases in Shenzhen and Guangzhou, while year-on-year prices rose by 16 per cent in Beijing and 17 per cent in Shanghai. This is despite repeated lending curbs and other efforts to control the rampant market.

Shot down in flames

How not to do social media, lesson 1. Ryanair boss Michael O'Leary (below) - one of Britain's most colourful, and most-hated, chief execs - this week took part in an online debate, answering questions via Twitter. Things soon went wrong after O'Leary's response to an early (female) questioner: "Nice pic. Phwoaaarr! MOL." The reply was rapidly re-tweeted and the vitriol flowed. As O'Leary said, in answer to another query, on Ryanair's biggest successes and failures: "Biggest failure, hiring me."

All in the family

Winston Peters has always run NZ First like a family business and still has not bothered appointing a deputy, two years into the parliamentary term. The recent party conference elected Anne Martin to the presidency after years of party service. Martin was the unfortunate functionary who approved donation declarations not knowing they should have included payments made through the Spencer Trust. She is also the mother of NZ First MP Tracey Martin, who at No 2 on the list could be a candidate for deputy - not that anyone could ever replace Peters.

- NZ Herald

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