Wednesday, March 09, 2011

Crony capitalism

A company is in trouble. It's short of cash, and can't pay its fees to the government to use slices of the radio spectrum. So it goes to the Minister - who coincidentally used to own them - and arranges a $43 million secret loan as "bridging finance".

No, its not China, Indonesia, or any of the other places we think crony capitalism occurs. It happened right here in New Zealand. The company is MediaWorks (formerly known as RadioWorks), and the Minister is Steven Joyce.

This smells bad. Its certainly unseemly. And I'd love to see the advice on it. I'd also love to see whether Joyce recused himself or declared his conflict of interest when the loan was discussed around the Cabinet table. But we're not allowed to know that. Apparently, we have to take the honesty of our politicians on faith - something which lets them play us for suckers if they want to.