Import News: So, does Corporate Welfare work?

Import News from the Importers Institute of New Zealand
19 November 2003 - So, does Corporate Welfare work?

Like the hospital with no patients, the insurance office with no business is a model of efficiency.

We recently saw "The Compassionate Society", an episode from the "Yes, Minister" series of 1981. The brand new St Edward's Hospital had been open for 15 months with 350 administrators and 150 ancillary staff. As far as Sir Humphrey was concerned it was an efficient operation. So why was the Minister obsessed with the fact that the hospital had no patients?

It couldn't happen here, could it? The business weekly "The Independent" reported that the government decided it would be a good idea to set up an Export Credit Office (ECO). At the time (1999), the Importers Institute said, "Export credit guarantees is what happens when taxpayers pay for the losses of exporters stupid enough to sell to people who do not pay their bills."

Minister Pete Hodgson said in 2001: "We're opening the ECO because we said we would before the last election, because it's standard practise throughout the world and, most of all, because we want to help small exporters become big ones."

An international tender was won by a Danish company, for $200,000 a year. The Office employs five public servants seconded from other departments and has a board of three directors. To date, it has cost taxpayers about $2 million.

In two years, the office has yet to underwrite a single export deal.

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