Professor Robert MacCulloch: Newstalk ZBs Mike Hosking should stick to being a DJ

Wasted "Minutes": Newstalk ZBs Mike Hosking should stick to being a DJ. When he does economics, its empty status-quo stuff.

Mike Hosking has unhelpfully entered the "how-to-get-more-competition-in-banking" debate, but gets it all wrong in his "Mike's Minute" commentary. The low point of his argument is when he says, "Here's your trouble: we have a lot of banks, we just don't use them. We can switch banks, we chose not to". No, no, no. It is costly and time-consuming to switch banks. I challenge Mike to spend the next couple of months changing his bank.

He will have to start off by telling Newstalk ZB to deposit his wage into another account. Then he better contact the outfits that manage his (no doubt quite substantial) share portfolio (or maybe a bunch of the companies direct) telling them to direct credit his dividends into another account. Then do the same for any rental properties he owns. Oh, and then call his electricity supplier, water company, telecoms company, gas company & probably Auckland Council for his rates, notifying them his Bank account has changed. I bet you he won't do it in a million years. His time is way more valuable than messing about with such mundane chores, I expect. It might even cost him time on the relative's superyacht, eh Mike? 

So don't give us this nonsense that its easy for folks to change banks but they willingly choose not to. (We didn't even mention changing a mortgage to another bank. Do you have a mortgage, Mike?) Oh, and we forgot about the issue of getting new credit & debit cards issued. Today this blog has, unlike Mr Hosking, provided a solution to bust the Big Bank Monopoly in one swoop, in a way that doesn't require legislation. 

It's to get young Kiwis banking with Kiwi Bank when they're still at school which will mean they'll most likely then retain that account when they get older. In a few years, a million Kiwi school children could thereby switch away from the Big Banking Oligopoly - and capitalize their accounts with wages as they grow up. Call them Kiwibank Squirrel accounts, to invoke the good old Post Office Bank "Squirrel School a/c's" we all had in the old days, before ANZ bought Postbank after it was privatized, which is where the trouble began. The government could put $100 in each one to give the children a start. Mike's Big Bank Mates would fall out of their trees.

Sources:
https://breakingviewsnz.blogspot.com/2024/08/mikes-minute-there-wont-be-any-action.html

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.