Friday, April 08, 2011

Crony Capitalism II

Steven Joyce's decision, highlighted last month, to bail out his former company MediaWorks with a $43 million soft loan smelled pretty bad already. Now it smells worse. Last night TVNZ revealed that the loan was initially denied after consistent advice of Treasury and the Ministry of Economic Development, but granted after former MediaWorks CEO Brent Impey personally lobbied the Prime Minister.

In the documents obtained by ONE News, the Ministry of Economic Development said it "does not see a strong case" for the loan, and warned the deal will "carry a financial risk" for the government.

Treasury said the loan would effectively see the government "acting as a bank" and taking on additional risk.


Initially Communication and Information Minister Steven Joyce said "no" to the deal. But then the former head of MediaWorks went lobbying, taking the matter higher.

Brent Impey talked to the Prime Minister during the TV3 Telethon, asking for payment to be deferred for radio licences. And eventually Cabinet approval was given.

So personal networks trump considered government advice. This is not how our government is supposed to work. Instead, its just crony capitalism. And we should not tolerate it in New Zealand