No Need for Knee-Jerk Bank Bashing in New Zealand
Submitters to the Finance and Expenditure Committee showed that New Zealand can afford to spare itself a round of bank bashing.
“Consumer New Zealand presented pitiful evidence," says ACT Leader David Seymour. “They showed a few people they knew of anecdotally had been sold insurance they didn’t need and, with some exacerbation, revealed the predictable news that banks try to upsell their customers extra products.”
Under questioning, Consumer New Zealand could not say how banks operating in New Zealand compared with those operating in Australia. When asked, ‘on a scale of 1-10, 10 being bad and representing the behaviour of Australian banks, where would you rate New Zealand banks?’ Consumer New Zealand said ‘that’s a hard question for us to answer.’
The Banking Ombudsman, ‘claiming to be the canary in the coal mine,’ submitted that the New Zealand banking system is functioning well compared with Australia’s. Significantly, they said the systematic abuses found in Australia do not exist here. They went on to agree it would be implausible that the Banking Ombudsman would not be aware of what’s happening in the sector, given the level of engagement they have with bank customers.
“There is a real danger to exaggerating problems in any industry, and the danger is knee-jerk regulation that leaves industries hog tied in red tape,” says Mr Seymour.
“The financial sector is already regulated by the Commerce Commission, the Reserve Bank, and the Financial Markets Authority.
“Already, practitioners complain of burdensome red tape and regulation. The worst thing that could happen is further regulation of the sector, adding costs to solve no problem.
“It is important to recognise that just because something happens in Australia, does not mean it happens here. In cricket, Australians bowl underarm and tamper with the ball but New Zealanders play fair. It may just be that the problem with banking in Australia is cultural, not systematic.”