26 October 2008

Aussie banks should suspend export of dividends

The Aussie banks should cease exporting dividends back to their Australian parent banks while they are getting financial support from the Reserve Bank, says the Green Party.

"The Reserve Bank's support for the Australian-owned banks - by offering to purchase billions in securities backed by home mortgages - reinforces the Green Party's call for a limit on dividends flowing out of New Zealand into overseas owners' pockets," Green Party Co-Leader Russel Norman says.

"News that the Reserve Bank has agreed to accept $8.7 billion of housing loans from the ANZ National and Westpac banks as security should they run short of cash must be accompanied by an easing in banks sending money offshore.

"These Aussie-owned banks are taking up the Reserve Bank's offer to provide extra liquidity during the global financial crisis. But this liquidity could be undermined if the banks pay big dividends overseas during this critical period.

"If New Zealand is supporting the liquidity of the banks then in return the banks must not drain liquidity to Australia.

"Over the last three years, ANZ has sent over $2 billion in dividends out of the country to their Australian parent company. At times, this has amounted to up to 84 percent of its profit.

"The Green Party is committed to providing stability to the finance sector. In return taxpayers now expect increased transparency from our banks. Paying large dividends in light of the current situation is unacceptable."

ENDS

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