5 November 2012

Westpac profits, admits manufacturing is faltering


Westpac today announced record profits while at the same time admitting that it was a tough time to be an exporter or an import-competing manufacturer, the Green Party said today.

Westpac New Zealand reported $707 million in after-tax cash earnings for the year to September 30, a 22 percent jump from last year's result.

“Westpac’s record profits come at the same time as Westpac confirmed the difficulties in the manufacturing and export sectors,” said Green Party Co-leader Dr Russel Norman.

Westpac’s November Economic Overview states that ‘Conditions have become more challenging for exporters and import-competing manufacturers, as a deepening global economic downturn has coincided with a persistently high NZ dollar.’

“Westpac is confirming that the New Zealand economy is heading in the wrong direction – it is becoming more imbalanced,” said Dr Norman

“The non-tradable sector, including banks, is doing well. But the tradable sector, including manufacturers, is suffering under the high dollar policy of this Government and Reserve bank.

“This is the exact opposite of a sustainable economy, and the worsening current account deficit figures confirm this reality.

“It seems that the only group in denial about the manufacturing crisis is the Government. It’s time for them to wake up and join the Manufacturing Inquiry.”

The dividend and interest payments the big four Australian banks pay offshore constitute the single biggest income outflow of our current account deficit.

“Westpac is the fourth Australian-owned bank to announce record final profits this year – profits which flow offshore leaving the country poorer as a result,” said Dr Norman.

“One way to help address the profit outflow is to change banks.

“The Government’s banking contract with Westpac – the biggest banking contract in New Zealand – has been held uncontested by Westpac for 23 years.

“It doesn’t take four years to change banks.
“When you combine the loss of skilled labour to Australia and now capital, in the form of excess bank profits, one has to wonder in whose interests National is running this economy.”

Westpac economic overview (p3):
http://www.westpac.co.nz/assets/Business/Economic-Updates/2012/Monthly-reports/QuarterlyEconomicOverviewNOV12.pdf

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