3. Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this
to the Minister of Finance
Does he stand by his statement that “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”?
Hon BILL ENGLISHHon David Cunliffe Link to this
Has the Minister, in reaching his view that a select committee inquiry into banking is unnecessary, taken into account the view of the 86 percent of respondents to a Manufacturers and Exporters Association survey who say they want a public inquiry to establish whether they are being overcharged interest on their business loans at a time when many can barely afford to make their next GST payment?
The matter of whether there was an inquiry was a matter for the committee. But as I understand it, the committee was not going to be inquiring into the issues that the member raised. I tell him that if grandstanding and hand-wringing fixed problems, then interest rates would not have reached record levels under Labour.
Amy AdamsReserve Bank data shows that the average floating first mortgage housing rate for new customers in May this year was 6.41 percent. In May 2008 the average rate was 10.9 percent, the highest interest rate in more than 10 years. Of course, the people now saying you can fix interest rates with an inquiry did nothing about record rates then, and those record rates had a big impact, particularly on our export sector.
Hon David Cunliffe Link to this
As the Minister seems willing to confuse the level of interest rates with interest rate margins, has he taken into account the publicly expressed view of the Governor of the Reserve Bank that the proposed inquiry should proceed, and that there has been an unexplained hike in the margin spread between the official cash rate and short-term interest rates up to 275 basis points? Has he also taken into account the views of the chief executives of the ANZ National Bank and the BNZ, who have publicly supported the inquiry proposal?
The committee made its decision about the inquiry. I assure that member that, actually, people in the real world are worried about the absolute level of interest rates more than the margins. Of course, the absolute level of those interest rates is much lower now than it was when he was in charge. If he could have lowered them with an inquiry why did he not do it then?
Hon David Cunliffe Link to this
If the Minister believes that the committee has made up its own mind, has he had any contact with the Finance and Expenditure Committee chair Craig Foss on the matter in recent weeks, noting that Craig Foss has said there is “a lot more communication going on with senior banking industry figures”; if so, has he received any new information from the banks, their Australian parents, or the Australian Government, and did this information assist him to change his mind on an inquiry?
The inquiry was a matter for the committee. I have made it plain to anyone who will listen that our top priority is to ensure that banks keep lending, because when they stop lending, people lose jobs. There is some argument to be had about margins that apply to a very small amount of the lending they do, but we want to maintain the advantage New Zealand has of a stable banking system, which is rare in the world at the moment, and can make sure the banks keep lending to businesses, which can keep employing people. Grandstanding over an inquiry about a marginal issue is the proper role of the Opposition, but it has no impact on economic policy.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. I expect you will know what the point of order is. The Minister has not attempted to address the process question that I just posed to him, which was whether he had had any contact with the Finance and Expenditure Committee chairman, with the banks, with their parents, or with the Australian Government. He did not attempt to address that question.
Mr SPEAKERI hear the point the honourable member is making. I could have assisted the honourable member far more if he had asked just that question. If the honourable member wanted that question answered, he should have just asked whether the Minister had had any contact with the chair of the select committee. Then we could have had an answer. But no, the member went on and added at least three other questions that I heard. There is no way I can assist him in getting an answer to whichever bit of the question he particularly wanted answered. I think that is an object lesson in how to keep his question to the point if he wants it answered.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. It may assist the House and the Minister if I were to reread a more truncated version of the same question.
Forgive me but I cannot give the honourable member that benefit, this time around; but does the member have a further supplementary question?
Hon David Cunliffe Link to this
Has the Minister taken into account the views of the Productive Economy Council, which points out the irony of the Government spending $9 million on a smacking referendum that it plans to ignore, while deeming unnecessary a banking inquiry that affects many thousands of hard-working New Zealanders potentially paying too much for their mortgages and business loans?
I understand that the Productive Economy Council consists of one person. But, nevertheless, the overriding issue for all New Zealand businesses and households is that there is an adequate supply of credit and that the banks are able to keep lending. The select committee came to its own conclusion about an inquiry. The inquiry seemed to be focused on a very limited aspect of what is going on at the moment. I can assure anyone in the productive sector that this Government is working a lot harder than the previous Government to provide a better environment for them because we understand what they need, whereas the previous Government did not.
John BoscawenWhat options, if any, does the Government have to tell the ANZ that it should not bully its elderly customers who wish to accept ING’s offer into waiving their legal rights to obtain proper redress through the Commerce Commission, or does he think that this sort of behaviour is acceptable on the part of the ANZ?
I will leave it up to the Minister to assess whether that question is consistent with the primary question.
As I think I said to the member yesterday, we would certainly sympathise with older people who have lost their savings through bad advice, bad choices, or bad management of those savings. The Government does not have any legal means of determining the way the ANZ should behave in these circumstances.
Hon David Cunliffe Link to this
Is the Minister of Finance therefore saying—when Government members of the Finance and Expenditure Committee initially proposed a narrow inquiry, and the Opposition proposed broader terms of reference but later compromised and said it would accept either, but Government members voted against both, including their own—he would support broader terms of reference and reconsider the Government position on that basis?
Hon David Cunliffe Link to this
Does the Minister agree with Don Nicholson, the President of Federated Farmers, that “Small businesses … are paying a lot of money for their working capital funding, so I’m not sure what took the steam out of the sails of the committee.”, or with banking union FinSec: “What this shows is that the Government is either impotent or in the pocket of the Australian banks.”?