web analytics

The Australian banking system review

Written By: - Date published: 8:00 am, May 2nd, 2018 - 17 comments
Categories: australian politics, business, capitalism, Economy, Financial markets, International, jacinda ardern - Tags:

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.

17 comments on “The Australian banking system review ”

  1. roy cartland 1

    “I hate interest.”

    Can you elaborate on this a little bit? Is it just because it’s a rent on something the owner isn’t even using that someone has to pay because they need it (like a rental property)? How would a system work without it?

  2. Hooch 2

    I’m not sure I’d credit Turnbull much, he tried to resist and downplay this inquiry.

    • tc 2.1

      Malcom’s a banker so he knows what’s at stake here and he’s been grilled by a royal commission before. The HIH insurance collapse in 2002.

      He’s relented after fighting it behind closed door tooth and nail as it’s about political survival nothing more. Tony’s snookered him here as he doesn’t care that it’s got the potential to ruin them all which would be well deserved.

      Mal’s probably aware of the banking practices and the fact these royal commissions have teeth, they bite hard, dig even harder and have wide discretionary powers….unlike here.

  3. dukeofurl 3

    The head of ANZ hasnt resigned.

    You may be referring to the token immediate departure of the head of AMP ( he had given his notice to leave in Dec before the Commission started its hearings)

    The idea that Turnbull was a willing party to this Royal Commission is laughable
    https://www.smh.com.au/politics/federal/banking-inquiry-all-but-inevitable-after-another-nationals-mp-vows-to-cross-floor-20171127-gztm8l.html

  4. Zorb6 4

    NZ Banking Assoc head McClean was on RNZ this morning saying just how different the culture here in NZ is compared to that of the parent banks in Australia.
    He tried to make the case that NZ had more effective oversight mechanisms.
    He mentioned they employ human beings in Australia that made mistakes.
    He was totally unconvincing and Espiner pointed out the C’V’s of senior banking executives in NZ and their previous roles in Australia.
    McClean laboured on employing NZ’ers and a ‘Kiwi’ culture that was distinct and subject to the banking ombudsman.
    Trust the big 4 banks?

    • SpaceMonkey 4.1

      A load of rubbish from McClean. So we’re expected to believe that because of our Kiwi cultural approach to things everything here is dandy. In my experience our “she’ll be right”, head burying apathy produces exactly the opposite and allows these executives and directors to get away with murder… sometimes literally.

      I don’t trust the entire corporate culture, let alone the big 4 banks. The frustration for me is that’s my professional world. It’s a bloody club with a toxic reach into our political system.

    • Dave 4.2

      I certainly dont.

  5. SpaceMonkey 5

    “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.”

    Yet another good example of corporate governance failure. I guess as long as they’re all making pots of money (and a banking licence is a literal licence to create money) they don’t really care.

  6. Draco T Bastard 6

    Quoting from the Melbourne Age’s Editorial.

    Before the appointment of the new chair Catherine Livingstone in 2017, the report found, the board’s agenda was “relatively static” and “not tailored to the issues, risks or focal areas that demanded attention”.

    This is standard Ivory Tower thinking and it is, IMO, what you’re going to get in every hierarchy when the people at the top are entrenched. Things are working for them and so they do nothing about all the problems.

    Capitalism is all hierarchies and putting a few people at the top so that they can then bludge off of the rest of us. As such, it will always engender this type of thinking and thus will always fail.

    What we need is for businesses to become cooperatives where everyone is cycled through management and worker positions. This will ensure that everyone who works there fully understands the business and has opportunities to suggest and implement their own ideas.

    This report lays bare something else we have known for a long time: the cosy connections between directors, executives, consultants and regulators. If things are to change, this needs to stop.

    Yes, the majority of us have known for a long time that the Old Boys Club is corrupt but what’s stopped anything being done about it? Is it that our democracy isn’t democratic and thus preventing the people at the top from being held to account?

    In the case of its audit committee she will need to consider whether the audit committee chairman Brian Long deserves to remain in that position until he retires in October.

    He needs to be fired. He failed to do his job and you don’t keep people like that in place and this failure needs to be seen to be addressed. Letting him retire without firing him won’t be doing that. It’ll just be proving that the Old Boys Club is still looking after its own.

    • SpaceMonkey 6.1

      +1 However, cooperatives can still be hierarchical. The key differentiator is ownership.

      The executive MUST be accountable to its board and the board MUST be accountable to the business owner(s).

      At present we have in many business organisations the executive operating regardless of board directives and boards directing without regard to the shareholders. IMO, what we need to do is casualise the executive and return control to the owners.

      • Draco T Bastard 6.1.1

        IMO, what we need to do is casualise the executive and return control to the owners.

        Little difficult to do that when the first thing we need to do is to get rid of the owners.

  7. Ad 7

    A little update:

    The Financial Markets Authority and Reserve Bank spoke with the heads of New Zealand’s major banks on Monday, telling them to provide evidence that they’re not engaged in practices unearthed by a Royal Commission in Australia, an RBNZ spokesman confirmed. There was no set timetable for responses.

    “We’ve asked them to provide reassurances to us that they have scrubbed their business models, and they have a basis for being confident that those issues don’t exist here,” FMA Chief Executive Rob Everett told Radio New Zealand, which first reported the news. “We’ll be testing some of what they show us to make sure that we think it really stacks up.”

    https://www.bloomberg.com/news/articles/2018-05-01/new-zealand-banks-feel-the-heat-from-australia-s-bad-behavior

    • Draco T Bastard 7.1

      The Financial Markets Authority and Reserve Bank spoke with the heads of New Zealand’s major banks on Monday, telling them to provide evidence that they’re not engaged in practices unearthed by a Royal Commission in Australia, an RBNZ spokesman confirmed. There was no set timetable for responses.

      So the banks will send a letter saying Yes, we aren’t doing any of that. and that will be it?

      Yeah, you don’t get the truth unless you go looking for it. This is just more of the regulator not doing their job.

  8. Dave 8

    I think our banking situation will be even worse than Australia. Everything I have read suggests they take more advantage of kiwis, higher fees, charges, penalties etc and make very large profits. Its difficult to believe that it doesn’t cross all aspects of their corporate culture.

    • Tricledrown 8.1

      Dave $5billion profit and rising Cartels run NZ.
      When ever they get exposed they run massive PR campaigns to cover their collusion.
      Price gouging and forced up selling.
      Monopolistic behaviour.

  9. Paul Campbell 9

    imagine you went to your bank for financial advice, and they recommended a better financial account you could put your kiwisaver in, a few months later you discover that your $60k savings have become $45k because they neglected to stress the substantial penalty for early withdrawal.

    That’s the sort of thing that’s happened in Oz, by the very same banks we have here. Part of the problem is that in Oz, like here, people who work in banks live in a world of stress, because their take home pay depends on how much money they earn for the bank, churn is good for them, but is seldom good for you and I because it means more fees to the bank.

    In general your retirement should be in a long term diversified investment, you should dial down the risk as you approach retirement age – don’t get sucked into specialised all-your-eggs-in-one basket high risk high return things.

    Anyway I can’t believe that the NZ arms of the Australian banks aren’t as predatory (or even more so) than their parent offices, they suck billions in profits out of our economy every year – of course we should do at least the same oversight as they do in Australia and probably more so – roll on a NZ royal banking enquiry ….

Recent Comments

Recent Posts

  • Environment Court Judge appointed
    Prudence Steven QC, barrister of Christchurch has been appointed as an Environment Judge and District Court Judge to serve in Christchurch, Attorney-General David Parker announced today. Ms Steven has been a barrister sole since 2008, practising in resource management and local government / public law.    She was appointed a Queen’s ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Government moves on climate promises
    The Government is delivering on its first tranche of election promises to take action on climate change with a raft of measures that will help meet New Zealand’s 2050 carbon neutral target, create new jobs and boost innovation. “This will be an ongoing area of action but we are moving ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Jump starting research careers
    The Government is investing up to $10 million to support 30 of the country’s top early-career researchers to develop their research skills. “The pandemic has had widespread impacts across the science system, including the research workforce. After completing their PhD, researchers often travel overseas to gain experience but in the ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Project protects jobs and nature
    A Waitomo-based Jobs for Nature project will keep up to ten people employed in the village as the tourism sector recovers post Covid-19 Conservation Minister Kiri Allan says. “This $500,000 project will save ten local jobs by deploying workers from Discover Waitomo into nature-based jobs. They will be undertaking local ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Minister Shaw speaks with U.S. Presidential Envoy John Kerry
    Minister for Climate Change, James Shaw spoke yesterday with President Biden’s Special Presidential Envoy for Climate John Kerry. “I was delighted to have the opportunity to speak with Mr. Kerry this morning about the urgency with which our governments must confront the climate emergency. I am grateful to him and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Minister of Foreign Affairs makes three diplomatic appointments
    Foreign Affairs Minister Hon Nanaia Mahuta today announced three diplomatic appointments: Alana Hudson as Ambassador to Poland John Riley as Consul-General to Hong Kong Stephen Wong as Consul-General to Shanghai   Poland “New Zealand’s relationship with Poland is built on enduring personal, economic and historical connections. Poland is also an important ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Major redevelopment of Wainuiomata High School underway
    Work begins today at Wainuiomata High School to ensure buildings and teaching spaces are fit for purpose, Education Minister Chris Hipkins says. The Minister joined principal Janette Melrose and board chair Lynda Koia to kick off demolition for the project, which is worth close to $40 million, as the site ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New expert group appointed to advise Government on Oranga Tamariki
    A skilled and experienced group of people have been named as the newly established Oranga Tamariki Ministerial Advisory Board by Children’s Minister Kelvin Davis today. The Board will provide independent advice and assurance to the Minister for Children across three key areas of Oranga Tamariki: relationships with families, whānau, and ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • COVID-19 vaccine slated for possible approval next week
    The green light for New Zealand’s first COVID-19 vaccine could be granted in just over a week, Prime Minister Jacinda Ardern said today. “We’re making swift progress towards vaccinating New Zealanders against the virus, but we’re also absolutely committed to ensuring the vaccines are safe and effective,” Jacinda Ardern said. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New ACC Board members announced.
    The Minister for ACC is pleased to announce the appointment of three new members to join the Board of ACC on 1 February 2021. “All three bring diverse skills and experience to provide strong governance oversight to lead the direction of ACC” said Hon Carmel Sepuloni. Bella Takiari-Brame from Hamilton ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Economic boost for Southland marae
    The Government is investing $9 million to upgrade a significant community facility in Invercargill, creating economic stimulus and jobs, Infrastructure Minister Grant Robertson and Te Tai Tonga MP Rino Tirikatene have announced.  The grant for Waihōpai Rūnaka Inc to make improvements to Murihiku Marae comes from the $3 billion set ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Celebrating the Entry Into Force of the Treaty on the Prohibition of Nuclear Weapons
    [Opening comments, welcome and thank you to Auckland University etc] It is a great pleasure to be here this afternoon to celebrate such an historic occasion - the entry into force of the Treaty on the Prohibition of Nuclear Weapons. This is a moment many feared would never come, but ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Supporting disabled people to stay connected
    The Government is providing $3 million in one-off seed funding to help disabled people around New Zealand stay connected and access support in their communities, Minister for Disability Issues, Carmel Sepuloni announced today. The funding will allow disability service providers to develop digital and community-based solutions over the next two ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Voluntary saliva testing offered to quarantine workers from Monday
    Border workers in quarantine facilities will be offered voluntary daily COVID-19 saliva tests in addition to their regular weekly testing, COVID-19 Response Minister Chris Hipkins said today. This additional option will be rolled out at the Jet Park Quarantine facility in Auckland starting on Monday 25 January, and then to ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Next steps in firearms buy-back
    The next steps in the Government’s ambitious firearms reform programme to include a three-month buy-back have been announced by Police Minister Poto Williams today.  “The last buy-back and amnesty was unprecedented for New Zealand and was successful in collecting 60,297 firearms, modifying a further 5,630 firearms, and collecting 299,837 prohibited ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Jobs for Nature projects target iconic ecosystems
    Upscaling work already underway to restore two iconic ecosystems will deliver jobs and a lasting legacy, Conservation Minister Kiri Allan says.  “The Jobs for Nature programme provides $1.25 billion over four years to offer employment opportunities for people whose livelihoods have been impacted by the COVID-19 recession. “Two new projects ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Public Housing Plan announced
    The Government has released its Public Housing Plan 2021-2024 which outlines the intention of where 8,000 additional public and transitional housing places announced in Budget 2020, will go. “The Government is committed to continuing its public house build programme at pace and scale. The extra 8,000 homes – 6000 public ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister congratulates President Joe Biden on his inauguration
    Prime Minister Jacinda Ardern has congratulated President Joe Biden on his inauguration as the 46th President of the United States of America. “I look forward to building a close relationship with President Biden and working with him on issues that matter to both our countries,” Jacinda Ardern said. “New Zealand ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Jobs for Nature funding will create training and employment opportunities
    A major investment to tackle wilding pines in Mt Richmond will create jobs and help protect the area’s unique ecosystems, Biosecurity Minister Damien O’Connor says. The Mt Richmond Forest Park has unique ecosystems developed on mineral-rich geology, including taonga plant species found nowhere else in the country. “These special plant ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pre-departure testing extended to all passengers to New Zealand
    To further protect New Zealand from COVID-19, the Government is extending pre-departure testing to all passengers to New Zealand except from Australia, Antarctica and most Pacific Islands, COVID-19 Response Minister Chris Hipkins said today. “The change will come into force for all flights arriving in New Zealand after 11:59pm (NZT) on Monday ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Bay Cadets learn skills to protect environment
    Bay Conservation Cadets launched with first intake Supported with $3.5 million grant Part of $1.245b Jobs for Nature programme to accelerate recover from Covid Cadets will learn skills to protect and enhance environment Environment Minister David Parker today welcomed the first intake of cadets at the launch of the Bay ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Cook Islanders to resume travel to New Zealand
    The Prime Minister of New Zealand Jacinda Ardern and the Prime Minister of the Cook Islands Mark Brown have announced passengers from the Cook Islands can resume quarantine-free travel into New Zealand from 21 January, enabling access to essential services such as health. “Following confirmation of the Cook Islands’ COVID ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Supporting communities and landowners to grow employment opportunities
    Jobs for Nature funding is being made available to conservation groups and landowners to employ staff and contractors in a move aimed at boosting local biodiversity-focused projects, Conservation Minister Kiritapu Allan has announced. It is estimated some 400-plus jobs will be created with employment opportunities in ecology, restoration, trapping, ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exception for some returning international tertiary students
    The Government has approved an exception class for 1000 international tertiary students, degree level and above, who began their study in New Zealand but were caught offshore when border restrictions began. The exception will allow students to return to New Zealand in stages from April 2021. “Our top priority continues ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tiwai deal gives time for managed transition
    Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New member for APEC Business Advisory Council
    Prime Minister Jacinda Ardern has appointed Anna Curzon to the APEC Business Advisory Council (ABAC). The leader of each APEC economy appoints three private sector representatives to ABAC. ABAC provides advice to leaders annually on business priorities. “ABAC helps ensure that APEC’s work programme is informed by business community perspectives ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Govt’s careful economic management recognised
    The Government’s prudent fiscal management and strong policy programme in the face of the COVID-19 global pandemic have been acknowledged by the credit rating agency Fitch. Fitch has today affirmed New Zealand’s local currency rating at AA+ with a stable outlook and foreign currency rating at AA with a positive ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Additional actions to keep COVID-19 out of NZ
    The Government is putting in place a suite of additional actions to protect New Zealand from COVID-19, including new emerging variants, COVID-19 Response Minister Chris Hipkins said today. “Given the high rates of infection in many countries and evidence of the global spread of more transmissible variants, it’s clear that ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 19 projects will clean up and protect waterways
    $36 million of Government funding alongside councils and others for 19 projects Investment will clean up and protect waterways and create local jobs Boots on the ground expected in Q2 of 2021 Funding part of the Jobs for Nature policy package A package of 19 projects will help clean up ...
    BeehiveBy beehive.govt.nz
    3 weeks ago