Why do we have a high cost of living? Because even when you break the law in NZ at the expense of your customers, the penalties are so small its worth doing. White collar crime pays here. The best policy for a government on matters of economic wrong-doing by powerful interests is, "Talk quietly & carry a big stick", attributed to Teddy Roosevelt. It was promoted in a paper of mine, which Nobel Laureate, George Akerlof, husband of former US Treasury Secretary Janet Yellen, called "important".
The message is that the best policy for economic growth & fairness is to have relatively light regulation but "aggressively prosecute those who misuse the freedoms granted under such a policy" (quoting Akerlof). By stark contrast, National's (Luxon - Willis) policy is, "Talk your mouth off about monopolies & cost of living, and carry a toothpick, white flag of surrender, or do back-room deals". On that note, our Deep Throat Informers tell us how National MPs are up to no good. ANZ Bank (former National PM John Key was Chair and its new Chair flew to India with Luxon in an Airforce plane) & ASB Bank face a class-action lawsuit. In the past few days it has been uncovered that National Party Members of Parliament want to get it thrown out.
The Big Banks already admit to breaches of the disclosure requirements of the Credit Contracts & Consumer Finance Act, after a Commerce Commission investigation. Under that law, they must repay all interest and costs associated with a loan for the non-compliance period, regardless of materiality. Thousands of affected Kiwi borrowers are entitled to large payouts. Their law-suit awaits judgment. So what have the Prime Minister, or members of his Caucus, or both, done? Nothing less than try to thwart the Justice system of NZ. Parliament cannot typically shut down law-suits. The PM keeps telling us he cannot legislate to overwrite the Treaty of Waitangi and freedom of the courts to adjudicate it.
Yet that's exactly what he wants to do when it comes to Big Business dispossessing the weak, meek and vulnerable in NZ. He's trying to pass into law what he calls, "The Credit Contracts & Consumer Finance Amendment Act". It is retrospective, backdated to 2015, and so shuts down the existing class-action law suit. That suit is seeking enforcement of the law that was in place when the breaches occurred. National Minister of Commerce Simpson said the reason for the retrospective Bill is, “balance and equity in terms of allowing the courts to make decisions that are not going to be overly harsh.” Do folks know he's saying that he wants "balance & equity" to be tilted in favor of the Big Oligopoly Banks and against the little guy, because he regards the Big Banks as the ones suffering injustice? My view is that the new Commerce Minister and Prime Minister should be prosecuted over this matter.
The Big Banks already admit to breaches of the disclosure requirements of the Credit Contracts & Consumer Finance Act, after a Commerce Commission investigation. Under that law, they must repay all interest and costs associated with a loan for the non-compliance period, regardless of materiality. Thousands of affected Kiwi borrowers are entitled to large payouts. Their law-suit awaits judgment. So what have the Prime Minister, or members of his Caucus, or both, done? Nothing less than try to thwart the Justice system of NZ. Parliament cannot typically shut down law-suits. The PM keeps telling us he cannot legislate to overwrite the Treaty of Waitangi and freedom of the courts to adjudicate it.
Yet that's exactly what he wants to do when it comes to Big Business dispossessing the weak, meek and vulnerable in NZ. He's trying to pass into law what he calls, "The Credit Contracts & Consumer Finance Amendment Act". It is retrospective, backdated to 2015, and so shuts down the existing class-action law suit. That suit is seeking enforcement of the law that was in place when the breaches occurred. National Minister of Commerce Simpson said the reason for the retrospective Bill is, “balance and equity in terms of allowing the courts to make decisions that are not going to be overly harsh.” Do folks know he's saying that he wants "balance & equity" to be tilted in favor of the Big Oligopoly Banks and against the little guy, because he regards the Big Banks as the ones suffering injustice? My view is that the new Commerce Minister and Prime Minister should be prosecuted over this matter.
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.
4 comments:
How can they shut down an existing class action by retrospective legislation? People need to realise hardly any of these politicians actually are "for the people". It stands to reason then that well-educated, intelligent New Zealanders need to discard their party loyalties.Most New Zealanders fall in to this category of being reasonably intelligent to some extent. My whole thrust in speaking out is always that politicians are self-serving and some quite extreme. Find someone who speaks for the majority of New Zealanders next election. People pay their taxes, most are law abiding and most want to live in harmony. We aren't there to support extremist ideology or greed.
A lot of people assume that, when a government doesn't act in the interests of those who voted for it (and even those who didn't), something has gone wrong and they are somehow governing regardless of interests. Wrong. They always govern based on interests, but often those interests and who they belong to aren't spelled out. In this case, its the banks (and they aren't Australian owned, but largely American owned, as I recall the author pointed out in an article some months ago). In other words, we aren't as sovereign a people assume, and, like a lot of the "liberal democratic world" our policies are dictated to us by Wall Street.
What about organisations that have already been penalised under the CCCFA for (unintentionally) doing the same thing as ANZ and ASB? Will the government compensate them for the 'restitution' they've already been forced to pay? I'm thinking about the ~$10m Auckland Council (ratepayers) was made to refund to borrowers under its Retrofit Your Home scheme....
I would have thought that Comity would prevail where respect for the individual differences between Parliament , Judiciary and the Executive are maintained .
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