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Sue Bradford Speech - PM's Statement Debate

Sue Bradford Speech in Parliament
Thursday 15 February 2001
In Debate following Prime Minister's Statement

Mr Speaker,

On Tuesday the Prime Minister gave us a speech full of hopeful messages and promises, many of which I'd love to see fulfilled over the coming year. However, as we all know, fine words are never enough.

For example, Ms Clark talked about the falling unemployment rate and rising labour force participation. I am as pleased as anyone here that unemployment is lower now than at any time since June 1988 - but I also remember that at that time unemployed workers groups saw the fact that we had well over a hundred thousand people out of work as completely unacceptable. It is still intolerable in the year 2001.

I will continue to press this year for a greater Government commitment to job creation; for better resourcing for beneficiary advocacy groups and other community sector organisations; and for serious progress to be made on reforming our whole fragmented and dysfunctional benefit system.

Elsewhere in her speech Ms Clark clearly expressed her Government's commitment to the free trade and globalisation agenda. Along with my Green Party colleagues, I will continue to challenge Labour in this area, not by saying that somehow Aotearoa NZ must turn its back on the realities of the global marketplace, but by demonstrating that there are viable and realistic alternatives in terms of how we develop our local economy, and in how we conduct our international trade.

I believe that one of the critical pathways away from foreign control and towards economic sovereignty is through progressing cooperative and community owned financial institutions in this country. We already have an array of such institutions, from larger establishments such as the Taranaki Savings Bank, the PSIS and the Southland Building Society through to the plethora of credit unions, ethical investment trusts and so on.

However, these bodies have not been able for understandable reasons to fill all the gaps left by the inadequacies of this country's largely foreign owned banking system. And so we have before us Mr Anderton's plan for a new state bank, which I have to say the Green Party caucus has been debating with considerable vigour over the last few days.

As of today we have come to a decision to support the bank, and I would like to take this opportunity to go over some of the issues we've been discussing in the past few days.

First off, I've been all too aware over the years of the needs of unemployed people and beneficiaries who face constant difficulties even with the simple task of setting up a bank account through which they're required to receive a benefit. It is hard therefore for the Green Party and myself not to support a proposal which will make banking both more accessible and more affordable to people who other banks often don't want to touch with a bargepole.

Secondly, our Party has a strong commitment to increased NZ ownership of our economic and financial resources of which of course banking is one aspect.

One of the Green Party concerns has been that the security of staff and customers would not be adequately met as small Post outlets were converted to banking However, we have received assurances from Post of their intention to take very seriously training and protection issues. Once the bank is up and running I'm sure I and others will be keeping a watching brief on how well these guarantees are being put into effect.

Another concern has been that a reformed Postbank could be sold off at any time - it will only ever be one election away from privatisation. A quick look at the recent history of Trust Banks from 1986 onwards shows how speedily local ownership can move to full foreign control.

Perhaps most important to me personally is that I don't see this as a genuine community bank.

I think the term 'Peoples Bank' which has been so frequently applied to the proposal is a total misnomer. 'Peoples Bank' seems an inappropriate term for an exercise in nationalisation whose most critical function, at least at this stage, appears to be the offering of lower bank fees. Nothing wrong with this, but I believe that genuine community banking means a lot more.

I believe true peoples banking would include provision of full retail banking which would enable people of whatever income level to have access to local facilities, including in areas such as the Hokianga which currently has neither trading banks nor prospectively convertible Postshops.

Secondly, real community banking would mean a commitment to reinvesting a high percentage of money in the geographical region from which it is sourced, including with small business, farmers and community enterprises.

Thirdly, such a bank should be willing to look at a wide range of means of securing loans to community organisations, way beyond what is possible at present, thereby capitalising the third sector so that its ability to create jobs and meet human and environmental needs could be more adequately realised.

And finally, it'd be great to have real community ownership - that is, local shareholding which is structured so that the bank cannot easily be privatised, and in which trustees/directors can be selected through an accountable and democratic process.

One of the problems I've seen with Mr Anderton's original proposal is the fact that it will not be in true community ownership. Ordinary people will only have roles as taxpayers - supporting the enterprise with large amounts of public money - and in playing their traditional and distant role as customers. People are disenfranchised from the banking system now. Opening an account with a Postshop cum bank is not going to change that one little bit.

We would have preferred the Government to have taken a longer and closer look at other options beyond simply reverting to an old style Post Office. In my work on this issue over the years, I've come to believe that the Bendigo Bank in Australia offers one of the best models for genuine community banking.

Bendigo is one of Australia's largest banks which in recent years has taken on a mission of trying to find practical and empowering solutions to the loss of local banks in rural areas and suburbs.

Their solution since 1998 has been to support local communities in owning and operating a Community Bank branch of Bendigo Bank. Each of these is a franchise literally owned by its community. A local trust raises investment funds locally from as wide a range of people as possible, through a lot of small investments, not a few large ones. Shares can be anywhere between $100 and the maximum $5,000 allowed. There is one vote per shareholder, and board members are elected. Most communities who have entered this process have found themselves oversubscribed.

The mainstream Bendigo Bank - the 'hub' - provides banking expertise, infrastructure and support and provides credit cover and balance sheet security. The local partner trust in turn provides capital to open their branch; gathers the customer base; hires local staff to run the shop; and pays rent and outgoings. The local bank directly shares in the profits - any profit the community bank makes after deducting operating expenses can be ploughed straight back into local businesses, farmers and community needs.

Since 1998 when Bendigo's first community bank opened in Rupanyup/Minyip, 32 have been established, with 15 more confirmed in the pipeline. Bendigo has had inquiries from over 1000 districts interested in looking at the community bank option, and has had tremendous commercial spinoffs from this venture.

In our discussions with NZ Post and Government this week, it has become clear that Post is open to going into partnership with communities to set up genuine community owned local banks on a Bendigo model, and are in fact willing to meet immediately with sector representatives to make sure this goal is built into their plans.

After years of unsuccessfully trying to find an appropriate hub bank to provide the infrastructure for community banking in this country, this is good news indeed, and for this reason I do genuinely welcome and support the Post initiative.

I also look forward to Government progress in reviewing the regulatory and legislative framework which holds back existing credit unions, building societies and similar organisations from flowering in their own right.

Rather than returning to the past in the provision of banking services in this country, I think this is an opportunity to invent a future in which a diversity of locally owned banking options are stimulated and encouraged.


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