What on earth is going on between the National Party and the banks?
The week before last Key and English were waxing hot on how the Australian-owned banks that dominate the New Zealand market were charging relatively high interest rates in New Zealand. The Reserve Bank also thought the differential between their rates and the overnight cash rate was too large. The same issue looms for borrowers in Australia. Craig Foss, Chair of the Finance Select Committee, supported by David Cunliffe from Labour, was calling for an enquiry into their interest margins.
Then last week Key and English suddenly went cold on the whole idea. What mattered now wasn’t whether small and medium businesses were being charged high interest rates, but “stability in the banking system”, whatever that may mean. It sounds like an implicit threat. It looks like the banks’ interest, to coin a phrase, is being put ahead of that of Kiwi borrowers by the National government leaders.
Rod Oram thinks we should all switch to Kiwibank. I agree, did so a few years ago from Westpac and have never regretted it.
The other strange phenomenon was a post by David Farrar at the time the National Australia bank-owned BNZ’s case against an Inland Revenue assessment for $466million for avoiding tax was being wound up in the High Court. The other Australian banks are up for the same amounts. Quoting “informed sources”, Farrar implied that National Party Ministers favoured Inland Revenue settling out of court for a quarter of the amount they had assessed as owing.
It now seems that only David Cunliffe wants to speak up for Kiwi borrowers.