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Strength to care about our own

4 April 2008 Media Statement

Strength to care about our own

New Zealanders need to save more and develop mechanisms to limit the outflows of profits to foreign-owned banks, Progressive Party leader Jim Anderton said today.

Jim Anderton said that in the last financial year for which figures are available, registered banks made a net, after-tax profit in New Zealand of $3,199 million.

"Nearly all of it went back overseas to the banks' owners.

"Most of it used to stay here in New Zealand, when those banks were owned by us."

He said that he had predicted the investment flows would happen when he opposed the sale of those banks - BNZ, TrustBank, Post Office Savings Bank.

"And I did something about it by getting Kiwibank going. After six years, I think we can declare the bank a success.

"Six hundred thousand New Zealanders have voted with their feet and opened accounts. They bank with Kiwibank because fees are lower and there are branches in their communities. And they do it because it's ours."

Jim Anderton rejected recent criticism of Kiwibank as pathetic.

"KiwiBanks' accounts are signed off by a respected board, they are audited and the bank is subject to Reserve Bank supervision. If it were making up its profitability, there would be an awful lot of people involved in the conspiracy."

He said one of the criticisms was that KiwiBank was less profitable than big overseas banks.

"But that's the whole point of it!

"What that shows you is the shallow nature of the opposition to good ideas. It shows that - no matter the evidence - there are still people who will oppose good ideas."

Jim Anderton said one of our main challenges as a country was our poor savings rate.

"The government has introduced the NZ Superannuation Fund and KiwiSaver. Kiwisaver in particular is a landmark piece of social and economic legislation and if enough New Zealanders save through Kiwisaver it will reduce interest rates, the exchange rate and it will make a substantial difference to the strength of our export sector.

"When we look at our income gap with Australia, one of the major explanations for Australia's success has been the trillion dollar pool of investment funds its compulsory superannuation scheme has created. Those super funds are behind those Australian investment firms that keep coming over here and buying up our most promising companies."

Jim Anderton said the challenge for New Zealand was to create a high-wage, job-rich, globally connected and innovative economy that succeeds by being better and smarter.

"The alternative is a low skill, low wage economy that competes on price. And while an economy like that might offer some returns to a few, it cannot deliver enough for the majority of New Zealanders. "

ENDS

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