The review into Australia’s banking system really matters to New Zealand. The Australian Royal Commission into Banking has held actual inquiries with evidence from actual citizens and customers, and is issuing reports about the performance of each bank. I’ll leave you to research the other reports, including all the daily humiliations of their customers, but the one issued about the Commonwealth Bank is a slam.
The banks, these towers of power, are being held to account in a way I have never seen before.
For those not aware, BNZ is owned by National Australia Bank. ASB is owned by the Commonwealth Bank of Australia. BNZ is owned by National Australia Bank. ANZ and Westpac are of course Australian.
It’s almost all of our banking. For the doughty few who are in Kiwibank or otherwise, good on you, but sadly the whole of New Zealand is a small branch office of the Australian banking system.
Here’s the Melbourne Age’s view of things, and it’s an opinion as angry as it is informed.
The actual Royal Commission report card is here.
The report paints a picture of an organization where the Board failed to challenge their executive team who had a propensity to bury bad news and weave it into something positive. If issues were found they weren’t followed up, allowing them to fester into bigger problems, If they spilled into the public arena, they paid any financial penalty and sailed on not giving a damn.
Despite our Prime Minister saying a week ago that the Australian banking inquiry “will be of use and interest to us”, our new head of the Reserve Bank Adrian Orr dismissed it.
He believes that our banking culture is better than Australia.
Hopefully he will learn to take a Prime Ministers lead, or provide outstanding evidence for his claim.
Maybe this is the issue with putting an investment leader from NZSuperfund in charge of our banking regulator. Maybe it’s just he’s new to the job. Or he might find that the findings of the Australian Royal Commission will get added to the Terms of Reference of the review of the Reserve Bank now underway.
We can argue about how much the Australian banks have been strip-mining New Zealand.
And the alternatives to Australian banks for consumers, though small and weak here, do exist.
The point is, you measure a government by how brave they are. The last time any government here really had a crack at a large corporation was when the Clark government finally forced Telecom to be competitive, and all hell went down about that.
The Turnbull government, run by an investment banker, showed no qualms about taking on the biggest of the biggest on. The head of the ANZ has already resigned, and there will be a lot more before this review is done.
I hate banks. I hate interest. But banks have been with us for a very long time, and they are not going away.
Good government can take on the biggest of the biggest, and it needs to takes them down. In doing so it strengthens the state against capital.
It’s still the case – at least in Australia – that only the state can do this.
I hope that is the core lesson for this government. Be brave and take them on.
Meantime, Turnbull’s Royal Inquiry is doing New Zealand an almighty good service.