11. SUE BRADFORD (Green) Link to this
to the Minister of Finance
What conditions, if any, has the Government placed on financial institutions participating in the wholesale funding and retail deposit guarantee schemes?
Hon BILL ENGLISH (Minister of Finance) Link to this
A range of eligibility requirements must be met by institutions that receive the guarantees. The requirements are primarily designed to ensure that participation is restricted to genuine institutions that are financing New Zealand’s economic activity, and also to limit risks to the taxpayer. Full details of the eligibility criteria are available on the Treasury website.
Does the Government agree with the 79 percent of respondents to a UMR Research poll, released today, who supported job protection conditions being placed on banks that are participating in the schemes, and does the Minister agree with the 10,500 New Zealanders who signed the FinSec petition that called for job protection conditions to be introduced?
Yes, I do share their concern about the retention of jobs in New Zealand. However, I think that the sanction of removing a guarantee from a bank that breached those conditions is very heavy-handed. The removal of a guarantee from one of our major banks would have a very significant economic impact, and I am sure FinSec and the people who answered the poll would also share a concern about that.
If the Minister does agree in part that keeping jobs in New Zealand is a fair thing to ask of the banks, which, after all, are relying on our taxes to back them, then why has the Minister refused to meet with representatives of FinSec to discuss the proposals and find a way forward on this?
Well, I met with representatives of FinSec a few weeks ago and did an interview for its newsletter—which I see has been published—covering this matter. I am quite happy to discuss it, but I have made it clear today that there is no prospect that the Government will enter into an agreement that raises the possibility that a guarantee may be removed from one of our major banks, because the effects on the economy would be significant.