National gives up on banking

21 July 2009 Media Statement

National gives up on banking

The National Government has given up on the search for solutions on banking, says Labour finance spokesperson David Cunliffe.

David Cunliffe said Finance Minister Bill English and Prime Minister John Key had both been enthusiastic advocates earlier this year of cheaper bank interest rates for New Zealanders and businesses.

“But now they are happy to leave it to banks to decide what’s fair and what isn’t, or else, in John Key’s case, desperately hope the Reserve Bank can come up with a solution.

“The turnaround since Bill English met the banks personally has been remarkable. From wanting New Zealanders to get a fair deal, and talking about pushing and shoving to make sure banks were fair, he’s now not even prepared to try to get to the bottom of what’s happening.”

David Cunliffe said Labour, the Greens and the Progressives had announced their own bank inquiry because National and its support partners had so far failed to stand up on behalf of hardworking Kiwi families.

“We still hope National, ACT and the Maori Party join us in the inquiry, but if they don’t it will go ahead anyway because we are committed to unearthing the facts for New Zealanders.”

David Cunliffe said comments made by Bill English recently included:

• 15 June 2009, NZ Herald: ‘Taxpayers are supporting the banks, and we want the banks to be able to demonstrate that they are going to support businesses and households through a tough time in the economy, even if it affects their profits a bit’.
• 10 June 2009, NZ Herald: ‘Remember, these are organisations with hundreds of thousands of customers, and those customers are keen to see they are treated fairly.’
• 16 May 2009, Taranaki Daily News: ’We made it clear right through with the banks that with taxpayers supporting them and their depositors and their overseas borrowing, we expect that they will give borrowers a fair go’.
• 14 May 2009, NZ Herald blog: ‘It ($4.5b) is a big profit and we would expect that in the next financial year they will be less profitable.
• 14 May 2009, NZPA: ‘There's going to be a bit of pushing and shoving over making sure they keep to their side of the bargain.’
• 3 April 2009, NZ Herald: ‘No one quite understands what's going on there but looking out over the next 12 or 18 months, the taxpayer is picking up a lot of the risk in the banking system and they should be expecting to make lower returns’.

David Cunliffe said John Key had made a number of statements in similar vein, particularly on One News on 10 June, when he said: ‘Our big aim is that if the Reserve Bank Governor does cut rates tomorrow that actually flows through to what consumers are paying, because in the last cut that Alan Bollard delivered it ended up with the banks and not with the consumers.’

“They seemed like fine words at the time,” David Cunliffe said. “But now both Bill English and John Key say they can’t see any value in an inquiry that helps New Zealanders understand why banks are operating the way they are.

“Well, Labour, the Greens and the Progressives believe New Zealanders are entitled to the facts, and we are determined that will happen.”

ENDS