Arena Williams (Te Aitanga-a-Māhaki, Ngāi Tahu, Ngāi Tūhoe) is the Labor MP for the Auckland Electorate in Manurewa. She is a lawyer and mother of two children. Stuart Smith is the National MP for the South Island Electorate of Kaikōura. He is a former winemaker, winemaker and inducted as a member of the New Zealand Winegrowers Board for his service to the wine industry.
David Clark announces changes in the banking sector
OPINION: It would take a Kiwi worker earning a median hourly wage a quarter of a century to earn what the bosses of Australia’s big banks receive in just one year.
Banks make exorbitant profits and are accused of seeking short-term bonuses for themselves before what is good for customers. We are told that “open banking” is the way to get a better deal. What is it and does it have cross-party support or is it yet another policy that will be repealed and will get us nowhere?
A member from each side of the House gives their point of view.
Stuart Smith, National MP Kaikoura
When looking at the profits of the banking sector, it is essential to understand the underlying reasons why they make such profits.
To understand why the banks made such a profit would require an independent investigation of the Reserve Bank and being open and transparent with New Zealanders about why they made the decisions they did.
* Covid-19 and KiwiSaver point to bank investigation
* We’d all be better off if “open banking” wasn’t blocked by the banks
* Kiwibank’s purchase of an Australian competitor would be good news for New Zealand
The Reserve Bank printed and borrowed excessive amounts of money during and after the pandemic, which led to the high inflation we are experiencing today and increased the official exchange rate. This means that Kiwi households are in a difficult financial situation and the future looks even more difficult.
New Zealanders deserve to know why they are going through tough times, and also why their banks are making record profits while they are struggling, and a survey of Reserve Bank stock will at least help provide some of those answers. .
Open banking exists in other parts of the world and frankly, New Zealand has been far too slow to adopt it. It makes it easier for customers to compare mortgage rates, apply for loans, and switch banks, much like you might already do with your power company.
However, any suggestion that this proposal is somehow a way to deal with the cost of living crisis is far from accurate.
The New Zealanders are retreating under Labour. Families face pressure at the pump, chaos with their mortgages and a crisis at the cash register. Wages are not keeping up with inflation, the cost of living crisis is getting worse and the government has done nothing to bring it under control.
Instead of coming up with a plan, the government has blamed supermarkets, oil companies, banks, Covid or the war in Ukraine – anyone but themselves.
Unnecessary government spending has contributed to making inflation higher than it otherwise would have been. They also need to urgently fix our broken immigration metrics, which means there is a shortage of workers driving up prices across the economy.
The economic outlook is dire and New Zealanders need a capable government and an economic plan to get them out of this mess. More of the same: more spending, more bureaucrats, more taxes, will lead to worse results.
National has a plan to fight inflation. We will restore discipline in public spending, reduce unnecessary costs for businesses, remove bottlenecks in the economy that slow growth, adjust tax brackets to allow Kiwis to keep more of their hard-earned money and will ensure that the Reserve Bank focuses solely on controlling inflation.
We will manage the economy better and deliver better public services to all New Zealanders.
Arena Williams, Labor MP Manurewa
Like the rest of the world, New Zealand has significant cost of living issues. As a government, we have been clear in calling on anyone who might have the ability to alleviate this pressure to do so, and the banks are included in that.
In addition to supporting families with the cost of living, including with our fuel tax, we are moving forward with our plan to ensure Kiwis get a better, fairer deal in the bank.
A return to authoritarian regulation would stifle innovation and create the risk that the market will exploit gaps in the rules. That’s why we’re putting in place sensible policies that will provide a better deal for Kiwis by increasing competition and empowering bank customers.
We’re moving forward with ‘open banking’, which ensures banks have to share customer information if they ask, making it easier for people to compare mortgage rates, apply for loans and switch of bank.
Open banking is a requirement for the parent companies of Australian banks across the divide and is an integral part of the UK banking system. It is a common tool used to increase competition and make it easier for customers to get better deals.
We are also taking over full ownership of KiwiBank. This simplifies the ownership structure and will allow KiwiBank greater operational flexibility, and potentially access to capital, to grow and challenge the big four banks.
Although Australia has the same big banks as us, it now has 97 banks in total, compared to our 27 –
and many of these are not fully fledged retail banks, so the vast majority of customers are focused on the wholesale. The benefit of this additional competition in Australia can be seen in banks’ margins (the profit they make between borrowing and lending).
At a time when the cost of living is high around the world, we believe Kiwis should have the power to seek out better deals and ensure they get the best value from their banking arrangements.
It is hard to see how other political parties could reasonably oppose it.