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Cullen Says He Shares Views On Scheme With English

Fuseworks Media
Fuseworks Media
Michael Cullen
Michael Cullen

Finance Minister Michael Cullen says he won't rush a wholesale bank guarantee scheme and that National finance spokesman Bill English and he share similar views on the way forward.

The Government has already guaranteed retail loans in the face of an international financial crisis.

National's leader, John Key, yesterday said urgent progress was needed on a wholesale bank guarantee scheme and a bipartisan approach was needed.

Under a wholesale scheme the government would guarantee money loaned to New Zealand banks by foreign banks, a scheme being established in Australia and in place in other countries.

This morning Mr Key told Radio New Zealand that banks in New Zealand would not get the money if debts in other countries were government guaranteed.

He said a complicating factor was that Australian banks had a limit on how much they could lend to New Zealand subsidiaries.

"We are less than three weeks from an election, under the complexity of MMP it may take a further three weeks to sort out a government," Mr Key said.

"All the while the clock is ticking on these banks and they simply need to react by either increasing the price of credit, by raising interest rates, or probably simultaneously restricting the amount of credit available, and that's bad for our economy."

Officials would have confidence negotiating if they knew both parties supported the scheme, Mr Key said.

He accused Labour of being "fair weather economic managers. They've been great at spending your money".

Finance Minister Michael Cullen was dismissive of Mr Key's remarks.

He said Mr Key's push for a bipartisan approach had lasted about a minute.

Dr Cullen said he was keeping Mr English in the loop about progress and yesterday gave him a Treasury paper looking at the issue.

He said negotiations with Australia was only part of answer.

"I'm very happy to listen to comments or feedback from Mr English, he seemed to be happy yesterday with the pace with which we were proceeding, while Mr Key seems to be calling for some sort of panicked reaction."

Dr Cullen said his views and Mr English's were close and it appeared National needed a bipartisan approach internally.

Dr Cullen said he was happy to work with National on the issue but Labour was still the Government.

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