Matthew Hooton in NBR (I bloody had to traipse up to the Howick Stationers again) makes the case based on an Australian precedent that Michael Cullen and Maryan Street should be in the slammer doing hard time for their deliberate malfeasance over ACC.
In 2001, Australian insurance giant HIH collapsed with debts of around A$5 billion, caused by gross mismanagement, including charging too little for premiums and failing to put enough aside for claims.
The Australian authorities took the matter seriously, including Prime Minister John Howard, who established a royal commission. The company’s principals were jailed for offences including knowingly disseminating false information, filing false financial statements, being intentionally dishonest and failing to discharge their duties in good faith and in the best interests of the company.
The Australian authorities’ rigor might help explain why the Australian financial system is perhaps the only one in the world to be almost entirely untouched by the global financial crisis.
Exactly, I was living in Australia at the time of this collpase and was also involved with helping ASIC with some software that nailed these pricks. The other thing that Australian has is the ACCC as well that has largely prevented the collapse of financial institutions like the collpases we have seen here.
The similarities between ACC and HIH are astounding.
This week, New Zealand’s biggest insurer, ACC, reported a NZ$4.8 billion loss on top of a NZ$2.4 billion loss the previous year.
Major factors were charging too little for premiums and paying out too much in claims. It contributed materially to the Crown’s deficit reaching an unprecedented and disastrous $10.5 billion in the year to June 2009.
Like HIH, ACC’s crisis was knowingly hidden from the public. The Treasury’s Pre-Election Economic and Fiscal Update, signed by then finance minister Michael Cullen, did not disclose it, a failure subsequently found by an independent inquiry to have breached the Public Finance Act.
Even worse were the public statements of then-ACC minister Maryan Street.
On June 26, 2008, ACC was apparently strong enough for Ms Street to announce that 400,000 casual and seasonal workers would get improved cover.
On September 11, she had enough confidence in the company’s finances to announce a re-elected Labour government would cut the motor vehicle levy from $254 to $203.
Three weeks later, and just five weeks before the election, Ms Street was at it again, announcing an expansion of ACC entitlements to people over 65.
The most charitable interpretation is that the former university academic might suffer from some advanced form of oniomania that makes her believe that, despite ballooning liabilities and a global financial crisis, it was possible to keep buying new services from ACC, while cutting its revenue, and expect it to remain viable. Alternatively, perhaps she was just telling lies in the heat of a close election campaign.
Union boss and Labour insider Ross Wilson, then ACC’s chairman, was also complicit.
Why are they not awaiting trial no? Oh that’s right, maryan is off on a jaunt with deputy leader Phil Goff and Michael Cullen got given a job to fuck off out of parliament. This is why, I have been calling, seemingly upon deaf ears about the formation of an Independent Commission against Corruption. if this wasn’t collusion at a minimum then it was corruption to deceive in an election year.
Perhaps we even need a Truth and Reconciliation Commission, without the reconciliation.