Newsgroups: soc.culture.new-zealand
Subject: NZ news to 21/11/92
From: cctr123@csc.canterbury.ac.nz (Alan Murray, CSC Operations, Uni of Canty)
Date: Sun, 22 Nov 1992 23:46:38 GMT
Organization: University of Canterbury, Christchurch, New Zealand

News for the week ended Novenber 21

Report on Fay loan exonerates the BNZ
Sir Michael Fay breached none of his duties as a Bank of New Zealand director 
in searching to extend a BNZ loan on Fay Richwhite's Auckland headquarters, a 
published report says. Nor had the BNZ done anything which was "outside the 
objectives of (its) own lending policy," the report by Mr George Barton, QC, 
says. Commissioned by the BNZ, the report represents the most significant 
action the bank and Fay Richwhite have taken to counter the myriad of 
allegations against them by the National MP for Taurana, Mr Winston Peters. 
The report looks solely at allegations made in late June that Sir Michael, 
as a director of both the BNZ and Fay Richwhite, in 1990 intimidated the BNZ 
into extending a loan on the Fay Richwhite headquarters.
"There is nothing to indicate that the facility was granted otherwise than in 
the ordinary course of the bank's business. Futhermore, there is no indication 
that the normal procedures for credit approval were by-passed or 'fudged', or 
comprised in any way," the report said. "In the mass of material there is 
nothing to indicate that any director of the bank ..... and in particular 
nothing to indicate that Sir Michael Fay or any other director associated with 
the Fay Richwhite interests applied or attempted to apply any influence on the 
bank's internal processes for considering and finally approving the facility." 
He noted a memorandum from a BNZ executive saying that "due to the indirect 
shareholding of Fay Richwhite in the bank, we need to be doubly sure that the 
bank maitains a neutral stance in this matter."
Mr Peters criticised the report for failing to deal explicitly with his claim 
that the loan had exceeded the bank's standard loans-to-value ratio of 50 per 
cent. He called it "defective" and claimed that "certain files are obviously 
missing."

Charges 'equal to tax hike of 26%'
Government user charges and special levies mean that many middle to high income 
earners have had the equivalent of a 26 per cent hike in their tax rate in the 
last two years, says Labour's revenue spokesman, Mr Peter Dunne. He released a 
list of what he identified as 14 new charges and levies, and a similar number 
of tax increases, since National came to power. They included hospital user 
charges, new accident compensation levies, redundancy taxes, increases to the 
national superannuation surcharge, and increased prescription charges. He said 
that the charges, levies, and tax increases were bringing in at least $855 
million extra a year for the Government, or the equivalent of an increase of 
just over 8 cents in the present top tax rate of 33 cents in the dollar.

Bill 'sanctions violence'
The reintroduction of corporal punishment would be a retrograde step which 
would legitimise the use of physical force against children, says the Director 
of the Mental Health Foundation, Dr Barbara Disley. She said that most schools 
"have moved away from the use of corporal punishment as a means of discipline 
... most teachers are aware of the need to provide non-violent role models for 
young people and have adopted alternative methods of dealing with conflict and 
anger."
A parliamentary Bill to make corporal punishment optional in schools would "in 
now way provide the support, direction, guidance, and counselling that most 
students likely to be receiving such punishment need," Dr Disley said.

Fay sues to 'clear reputation'
Sir Michael Fay says the wish to clear his reputation has prompted him to sue 
Mr Winston Peters and a former Bank of New Zealand employee for defamation. He 
said Fay Richwhite's business as a merchant bank had also suffered because of 
claims made by the Tauranga MP and Mr Larry Johnson. Sir Michael is suing Mr 
Peters for $350,000 and Mr Johnson for $150,000.
Mr Peters said the action for defamation was a gagging writ against himself and
Mr Johnson for challenging "the might of money." Government MPs would use the 
action as an excuse to say the BNZ loan issue was subjudice and could not be 
discussed in Parliament.

Maoris protest after $350 million Sealord sale
The country's biggest commercial fishery, Sealord Products Ltd, was sold for 
about $350 million to a consortium of Maori interests and Brierley Investments,
but immediately ran into trouble with the Maori partners. The sale endorses the
deal under which the Government will provide $50 million a year for the next 
three years so Maoris can have a share in Saelord. In return Maoris forgo all 
future commercial fisheries claims under the Treaty of Waitangi. Legislation 
will be introduced making the deal binding on all Maoris whether they 
authorised the deed of settlement or not. 
However, one of the signatories of the deed, Mr Matiu Rata, has accused the 
Government of changing the rules and having got Maoris where it wants them. The 
Minister of Maori Affairs and Fisheries, Mr Kidd, is looking to end Government 
funding of fisheries management and requiring user pays by the fisheries 
companies. Mr Rata said such a move would halve profits and treble costs. It 
changed the nature of the deal he and other signatories had accepted and he no 
longer felt bound by it.

Alliance plans banking talks
The Alliance is planning meetings with international bankers to warn them of
its plans to re-schedule New Zealand's public debt, if elected next year. The
Alliance leader, Mr Jim Anderton, confirmed the re-scheduling was part of the
grouping's policy when it was unveiled last night as part of the Wellington
Central by-election campaign. Apparently anticipating that any such move would
be likely to unsettle financial market confidence in New Zealand, Mr Anderton
said it was prudent to start talking to the country's lenders now about the
Alliance.
"There are some major finance institutions which lend us money and it is
sensible for us to start talking to them. I am looking at that at the moment,"
said Mr Anderton. "We would be entering into long-term negotiations about how
New Zealand could better manage its debt portfolio to take the pressure off
capital refinancing and give the economy a chance to grow."
The rest of the policy draws heavily on previous NewLabour Party Budgets, and
appears little changed from the partially completed policy put up by the
Alliance during the Tamaki by-election campaign in February. In return for
higher Budget and balance-of-payment deficits, inflation, and tax rates, the
Alliance believes it could produce an extra 45,000 jobs in its first year and
restore more equal access to welfare, education, and health services. A managed
exchange rate and more protection of local industry are also still part of the
platform, as is a sliding scale tax system exempting all income under $2900
from tax, moving to a top nominal rate of 40 per cent for incomes over $72,500.

Tax claim judgement may set precedent
A Christchurch man's claim against the Inland Revenue Dept that losses suffered
in the October 1987 share market crash should have been tax deductible has been
upheld in the Court of Appeal. In a far-reaching judgement that may open a 
floodgate of claims against the department, the Court of Appeal ruled that the 
losses suffered by investors were deductible. Three judges of the court 
dismissed two appeals by the department. Mr Michael Stockwell, of Christchurch,
said his case against the department had been going through the courts for the 
last four years. "Having won the case once I've had to defend it a second time.
" Mr Stockwell, who admits to losing a "substansial amount" in the crash, said 
he thought the matter was resolved in 1989. The department's appeal against an 
earlier High Court decision is seen as a precedent for other investors to claim
against their share losses.

Blood screen delay 'scandalous'
A Christchurch family says the delay in screening blood for hepatitis C in New 
Zealand as the French Government's delay in testing blood for HIV. The Mouat 
family said tests to identify hepatitis C had been available for 18 months, but
the New Zealand Government introduced screening only in July this year. A 
haemophiliac, Mr Stephen Mouat, aged 21, contracted hepatitis C about the time 
the Government was first asked to screen for it. He blamed the Government for 
people becoming infected with hepatitis C through unscreened blood since 
testing became possible. Many of the blood products available now would have 
been prepared when testing was possible but not compulsory in New Zealand. Mr 
Mouat and his sister, Christine, aged 22, are both medical students.
Miss Mouatt said her brother was one of the fortunate few who had been exposed 
to the infection and managed to fight it and clear his system. They said the 
scandal of untested blood would be more obvious if hepatitis C resulted in 
emaciated children dying in a comparatively short period as is the case with 
AIDS. Instead it can take up to 20 years to destroy a person's liver. Mr Mouatt
could be reinfected by the Factor-9 blood products he takes every time he 
bleeds.

Ministers 'knew'
Two Cabinet Ministers, along with senior Treasury and banking officials, knew 
Equiticorp was backing the purchase of its own shares in the wake of the $327 
million New Zealand Steel deal in 1987, Equiticorp's executive chairman, Allan 
Hawkins, told the High Court in Auckland. Conducting his own defence against 
conspiracy charges, Hawkins listed 62 people, including the then Minister of 
Finance, now Sir Roger Douglas, and a second minister, Mr David Caygill, who 
knew the true position. The Government sold its 89 per cent of NZ Steel to 
Equiticorp on October 19,1987, announcing the deal the next day - the day the 
sharemarket crashe. Equiticorp's share price fell sharply, and the company went
under statutory control in January 1989.


Alan Murray
CSC Operations
University of Canterbury
a.murray@csc.canterbury.ac.nz