Banking is too important to be left to Bankers
“ Banking is too important to be left to Bankers” - Winston Peters
[An address to the Waikato branch of the Financial Advisers and Planners Association]
I welcomed the invitation to meet with you today.
There are important financial sector issues being debated at a national political level that will affect your ability to meet your client’s best interests.
So let me commend the Waikato executive for their initiative.
Let me also commend those Waikato FAPA members here today and their guests for sharing in this meeting.
Active membership of such an association is the hallmark of professionalism.
With the blurring of the edges between insurance and banking, the whole financial services industry is coming under increasing public scrutiny for its want of that same professionalism.
The traditional values of thrift and prudence on which people borrow and lend money, on which they insure and save, of giving something back to the community, all seem to have been abandoned in the pursuit of the corporate Mammon.
It is becoming increasingly clear that “ Banking is too important to be left to Bankers.”
The finance sector plays a critical role in the modern economy. It is a huge generator of the savings that business needs as a source of the investment capital that in turn creates jobs.
It touches everyone’s lives intimately. In order to operate at all, everyone from beneficiary to millionaire needs a bank account.
That is a politically generated business situation of which those same deposit-taking institutions take full private commercial advantage.
No other business has that sort of privilege. No other business is less regulated.
New Zealand is unique in the Western world in relying upon the mantra of self-regulation.
Even the United States, that bastion of capitalism and the free market, has strict regulations for investment.
Washington does not want cowboys on Wall Street.
It has proved that.
It should be no surprise that the industry that relies upon you to sell its products, and which is cutting costs, including your remuneration, is:
Concentrated in a few hands;
And, highly profitable.
Since the BNZ was bought by National Australia Bank in 1992 for $1.48 billion, it has returned its new owners $1.76 billion. It is literally a cash cow.
It is one thing to milk a cow. It is another thing to water down the milk.
You and I do.
As does the pensioner who cannot afford increased charges or premiums;
As does provincial New Zealand which has borne the burden of branch closures;
As does the farmer or small business facing bankruptcy having earlier been encouraged to expand;
As does anyone who can no longer afford the private health insurance meant to replace the tried and true public health system.
And all us are dissatisfied with the seemingly increasing incidence of the breakdown of the supposedly sophisticated computer and data entry systems that allow three trillion dollars to slosh around the world overnight.
When the most sophisticated computer information systems in the world are applied to a military target in Belgrade, and end up taking out the Chinese Embassy instead, one has to wonder whether it was deliberate or accidental.
Either way I am unimpressed.
The personal and financial cost to the people who suffer from such failure do not seem to matter.
Nor do those who suffer in New Zealand from the failure of the financial system to meet its social responsibilities.
For whatever the jargon, whatever the new names, how lovely the advertisements, the new breed of financial institution have one customer—their foreign board room and their corporate shareholders.
Within that framework, the general shareholder interest is being ignored in favour of individual managerial greed.
Make no mistake.
The new broom Chief Executive from overseas typically sees New Zealand as an economic colony from which the highest company profit, and personal performance bonus, must be wrung in the shortest possible time.
That system is no different in principle to that applying in the ancient Roman Empire.
Provincial Governors extracted as much revenue out of the province as possible to pay for the self-indulgent tastes of the Emperor, and for their own retirement in a Florentine palace.
That sort of public policy had an inevitable result, including in the then minor province of Judea.
History is cluttered with the wreckage of nations which lost their economic sovereignty.
Look at Africa – many countries were colonised and exploited to provide goods and labour for the financial barons of Europe and England.
Centuries later, they are still trying to recover.
The whole financial betrayal of our country is anathema to New Zealand First.
[I don’t need to remind you that I of all people should know how the New Zealand taxation system can be bent and twisted by the rich and the powerful].
Now, our political competitors would love to know New Zealand First’s policy platform and campaign strategies in advance. I don’t think I will give them that pleasure today.
But this audience knows the business, and should be aware of what will be in the next Coalition negotiations that are of direct relevance to the business you are in.
1 The Farm Debt Mediation Bill already introduced to Parliament by New Zealand First will be passed into law.
[NZF is working on a portfolio of cases where farmers have been forced off their land following poor and self-interested institutional advice]
2 The Offices of the Banking and the Insurance Ombudsman will be merged, better resourced, and given serious teeth including criminal sanctions.
[The $100,000 fine the Banking Ombudsman can impose is a mere bagatelle]
3 The Office of the Retirement Commissioner has failed, and will be retired.
[The latest survey of the Investment, Savings and Insurance Association demonstrate what financial advisers already knew: people are not saving for retirement because they cannot afford to save; because there are always other priorities. Instead, a pro-active savings regime will be put in place.
4 The Life Insurance/Superannuation taxation regime will be changed to ensure that low income savers with marginal tax rates of 20c or less will not be disadvantaged by having their savings in such products taxed at 33c as currently applies.
[This is iniquitous. It is a form of capital gains tax]
5 All financial advisers in terms of the Investment Advisers [Disclosure] Act 1996 will be required to undertake a registration process, and maintain this through a continuing professional development programme similar to the Accountants Society.
[The industry was given the opportunity in 1996 to clean up its recruitment and training and sales procedures.
The cases I have got show it has not. We will force out the financial cowboys who ride the range one day, and spend up large on someone else’s hard earned savings.]
For all this is what the consumer, the public and the taxpayer are urging us to do.
New Zealand First is the only centre party on the political spectrum.
We do not accept the light-handed regulatory approach of National/Act.
We do not accept the heavy-handed approach of Labour/Alliance.
We do stand for a middle handed approach that combines consumer, distributor, producer and the sovereign interest.
The MMP system of proportional representation has given us the opportunity to do so – even though the thought of a fair and representative political system is anathema to our opponents.
This week, a year ago, the coalition government ended.
There was no revolution. People did not drive down the streets of Wellington firing machine guns in the air. We are a stable and conservative people.
One year ago, New Zealand First, in the perception of nearly every journalist and political commentator, was finished.
How times change. Many of these same people who said a year ago that we were finished, now want me to discuss New Zealand First’s place at the centre of New Zealand politics.
We always knew it was only a matter of time before people realised that New Zealand First was actually the prudent and sensible partner in the coalition, and that our policies worked!
What these self-opinionated experts failed to understand, was that we were in a new political era, and that there were always going to be a few hiccups with MMP.
A political system can’t be changed overnight and be expected to function perfectly the next day.
Some critics of MMP say that when smaller parties go into coalition with bigger parties, it becomes a case of the tail wagging the dog.
This is not true. It is more a case of the dog being kept on a leash, restrained from chasing cats, worrying sheep and biting passers-by.
That is what New Zealanders want. That is why they voted for MMP in the first place.
They don’t want backroom deals between political parties and politicians deciding the outcome of the election, before the election is even held.
They want politicians who will share power with the people.
That’s why we are not aligning ourselves with either Labour or National.
We will talk to them after the election, when the voters have decided on the shape of the new Parliament, and not before, when nothing has been decided.
We now have experience in MMP and the transition to the next government will be a lot smoother than the last.
What a lot of critics forget is that most coalition governments throughout the world are very stable. Even tiny Israel, surrounded by enemy states has a robust democracy, healthy debate, and a coalition government.
The scare tactics used against MMP always come from vested interests who are used to controlling the old parties.
This was not intended to be a political speech but it IS election year and I want to assure you that New Zealand has nothing to fear from New Zealand First again holding the balance of responsibility.
We will always act in the best interests of the people. We will maintain stability - with a safe and certain pair of hands.