Jim! Please Answer These Five Questions

Sunday 28th Jan 2001 Rodney Hide Media Release -- Economy

ACT Finance spokesman Rodney Hide said today that Deputy Prime Minister Jim Anderton needed to be up-front with taxpayers on the risks, costs and benefits of his “People’s Bank”.

“So far Jim Anderton has told us nothing. It’s taxpayers’ money he’s proposing to pour in and put at risk. The very least he should do is explain his plans to taxpayers.

“Here are five basic questions that Jim Anderton should begin by answering:

1. What is the expected total cost of the “People’s Bank”?

2. What services will be offered – will it just be a “cash in / cash out” bank or will it offer a full range of banking services including debit cards, housing loans, and the granting of overdrafts?

3. What is the expected customer base for each year over the next five years, what is the expected revenue and what is the expected cost?

4. Will the government allow the “People’s Bank” to fail; and what is the expected risk especially in light of the cost to the taxpayer of the DFC, BNZ and Rural Bank when they were under government ownership?

5. What has been the advice of the Treasury and of the Independent Reviewers on the Bank’s viability and will this advice be made publicly available in its entirety?

“The “People’s Bank” is a very risky venture. Jim Anderton has no banking experience. NZ Post has no staff experience and no banking facilities. The “People’s Bank” will be small and desperately under-capitalised.

“The five major private banks in New Zealand have assets totallling $144,000 million, annual profits totalling $2,000 million, and they pay a total of $560 million a year in tax. Against this, the “People’s Bank” really looks a “Peewee Bank”.

“Tomorrow’s cabinet must ask the tough questions – and Jim Anderton should start providing some answers,” said Rodney Hide.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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