Saturday, July 25, 2020

Heather du Plessis-Allan: It is not a bank's job to decide who are the goodies and baddies

Shane Jones reckons that Kiwibank's board has gone bonkers and I have to agree with him.

If you haven't caught up on this, Kiwibank seems to have taken it upon itself to be New Zealand's moral police. It has released its Responsible Business Banking policy, which bans a whole bunch of industries from doing business with it.

Casinos, fossil fuel producers, the non-medicinal and recreational drugs industry, the military grade firearms industry, predatory lenders, tobacco manufacturers and, a bit of a surprise, brothels and strip clubs.

It turns out that Kiwibank's not really that committed to its own stated morals though. The sex industry, quite rightly, objected and Kiwibank, again quite rightly, backed down.

What was Kiwibank thinking? Sex work is legal in this country. Brothels are legal. Kiwibank's board might not like the industry but it is not its place to start vilifying certain sectors just because a bunch of people around a board table might have a moral objection to a particular way of doing business.

The same thing arguably goes for all the businesses Kiwibank has banned. The majority of them are legal. Liquor shops aren't outright banned but, can you believe it, are deemed "sensitive" so have to "demonstrate good practice" to earn the right to bank with Kiwibank.

Isn't that a bizarre situation? That the only New Zealand-owned bank in the country is warning it might refuse banking services to Kiwi owners of liquor stores. The only obvious outcome here is that the bank set up to compete with Australian banks, just sends businesses like liquor stores to those very banks.

What's more, these moral lines seem arbitrary. Liquor stores are out unless they can prove they're okay, but bars are fine. Casinos are banned, but bars with pokies could be fine. The cannabis industry is out, but the pharmaceutical industry is fine even though pharmaceutical companies are the ones copping huge fines in the US for pushing opioids at kids. Businesses extracting coal are banned, but businesses selling coal are fine.

How arbitrary is that?

It is not the job of a bank to decide goodies and baddies in society. It is the job of a bank to bank.

It is highly ironic that our only NZ-owned bank would refuse banking services to Kiwis because it has moral objections to how they earn their coin. It is even more ironic that we're getting a lesson in morals from a bank.

Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show.


Doug Longmire said...

Woke virtual signalling gone mad. I would leave this bank if I was a customer. Their job is to provide best service to customers, not to engage in Left Wing posturing.

Anonymous said...

Ahhhh given that coal is a sunset industry, i say its a sound economic pickin you would have been the last one to invest in the waggon wheel making industry before it went bust.

Ross said...

Coal a sunset industry !! Tell that to the Germans, the Japanese and the Chinese. All are building new coal fired power stations.
Similarly in many South East Asian countries-- have a look at the millions of new houses being built in those countries and you will see an air conditioning unit (sometimes 2 or 3 ) on the outside of each house or apartment. Where doing think all the electricity is coming from?
Just look at the increase in electricity consumption of any of those SEA countries over the last 20-25 years.

Anonymous said...

How would Heather describe Taranaki Savings Bank (TSB Bank) and SBS Bank?
I bank with both because they are NZ owned.

Russell said...

I imagine the large part of Kiwi Bank's customers are beneficiaries, and I guess there is huge profit in overdrawn account fees.
Perhaps the board should stick to their knitting.

Anonymous said...

Luckily KiwiBank isn't the only Kiwi owned bank. TSB, Heartland and other remain an option. Unless a client presents an unacceptable financial risk or is unprofitable I, as a shareholder, feel KiwiBank should provide the service.

Lloyd said...

Watch Michael Moore's 'Planet of the Humans' and read about Michael Shellenberger and get his book 'Apocalypse Never', both set out the true facts on climate change and renewable energy, the banks actions at this time are of no help to the scary future of New Zealand.