8. Dr RUSSEL NORMAN (Co-Leader—Green) Link to this
to the Minister of Finance
Has he received any advice that would lead him to question that all banks operating in New Zealand are acting responsibly?
Hon BILL ENGLISH (Minister of Finance) Link to this
I have not received any policy advice in that respect, but in dealing with my constituents when I am getting around the country, I often do receive quite strong advice from people about their bank not acting responsibly.
Does the Minister believe that rorting more than $400 million from taxpayers is an example of responsible behaviour, which is what the High Court ruled that the Bank of New Zealand has done?
That is a matter that has been pursued through the courts. I understand there is still some way for the issue to go. It will probably be better for me representing the Government to not comment on that matter in detail.
Hon Jim AndertonHow does the Minister explain that the increase in remittances of profit and interest charges by overseas-owned banks in New Zealand—primarily Australian—to their overseas parents has risen from $4 billion in 2004 to $11.7 billion last year?
That is a question that the member might like to answer himself, given that he was the leader of the previous Government’s economic policy and that he oversaw the banks for the best part of a decade.
How can the Minister be confident that the banks are behaving responsibly, relative to passing on interest rate cuts, when we have prima facie evidence that the banks are behaving in a grossly irresponsible way when it comes to tax evasion?
Mr SPEAKERI caution the member that the Minister of Finance is not responsible for the private sector banks. I will allow the question, but I alert him for any further supplementary questions. The Minister needs to be conscious of that when answering the question.
The behaviour of the banks is determined by the competitive pressures of their customers and by the regulatory regime that applies to them. The current rules under which banks conduct their business were laid down by the previous Government and the Reserve Bank. We are most open to any suggestions about how to improve those rules for the improvement of the competitiveness of the banking system. We asked for suggestions but have not heard any. We do not believe that a meeting of Opposition MPs with their supporters in a phone box will solve any problem.
Why does the Minister continue to defend the banking industry that is happy to make loans at unusually low interest rates to firms working out of the Cayman Islands, when farmers and small-business owners are offered rates here that they cannot possibly afford, which is what the Minister referred to from being told during his travels around the country?
As I have said, the behaviour of the industry is nothing in particular to do with my own role. It is dictated by the regulatory regime, which is, as far as I am aware, supported by the whole Parliament. I have not heard any particular suggestions about how that ought to be changed. It is also determined by the law of the land that industry is expected to behave lawfully, and if those involved do not behave in that way then the Crown will take action. The Crown has taken a court case against the banks. It is also determined by the behaviour of the banks’ customers, and probably the least influential group to the industry is Opposition MPs.