Do you think the banks are ripping you off because they’re owned by Australians, and that if only one of them were owned by us again, they wouldn’t?
Take a look at the home loan rates Kiwibank is offering right now. They’re basically the same as - if not higher than -those offered by the Australian-owned banks.
Do you think this might improve competition? In that case, how does taking BNZ and Kiwibank and combining them into a single bank - leaving one fewer bank in the market - help competition?
Do you think it will stop $1.5 billion in profit heading to Australia, making us richer? Sure, the logic stacks up at first glance. But first, we’d have to borrow huge amounts of money to buy the bank and pay significant interest on that debt.
It could take 10 to 20 years before we start seeing those profits flow into New Zealand rather than going toward interest payments.
And all of this comes at a time when two credit ratings agencies have warned that we can’t keep increasing our debt without risking a downgrade next year - which would make all our borrowing more expensive.
That’s not even considering the fact that we can’t be sure BNZ would generate the same level of profit under Government ownership as it does under private ownership. In fact, I would argue the opposite is more likely.
Publicly owned assets often become less efficient - they can grow bloated, unproductive and undisciplined.
That might explain why BNZ collapsed back in 1990 when it was publicly owned and hasn’t repeated that since returning to private ownership.
To me, this policy looks like a classic nostalgia play by Winston Peters - appealing to voters who believe life would be better if we could just go back to 1992.
I suspect this will be the first policy dropped in any coalition negotiations. It’s likely the first thing Winston Peters will let go of because it’s simply too expensive, and he knows it.
So don’t get too attached to this policy. I just can’t see it happening.
Heather du Plessis-Allan is a journalist and radio broadcaster who hosts Newstalk ZB's weekday Drive-Time Show – where this article was sourced.
7 comments:
Just a WP click bait.
You are right, he is not going to buy back the BNZ. I doubt he even has a genuine intention to do so.
It's just Winston being Winston.
Absolutely Heather !! Would cost BILLIONS and is just another Winston look-at-me drama moment.
You're right on this one, Du Plessis. Its a click bait policy. But the Nats are playing you for all they're worth. Luxon laughing at this nationalize-BNZ-plan when his government is in bed with the big banks, refused to make their FX fee charges which I pay more transparent, refused to stop paywave charges, tried to screw ANZ customers class action law suit with retrospective legislation, and loosened the RBNZ capital requirements due to Big Bank lobbying, is unpleasant. Why did they do these things? Because Lux & Willis dream of one day being ANZ Chair like Key was. You scratch my back I scratch yours. Its how NZ works nowadays.
Our political class has become sleazy. Lets not draw imagined distinctions between any of them. A wholesale refresh of our sad political scene is required. The country can't stand either of the two Chrises. One is Mr Auckland Lockdown. Did the vaccine cover up. Blew out the country's debt. The other is pro monopolies, pro incompetent general skills CEOs, only reads exec summaries, talks in mind numbing advert style soundbites, has no plan (its all talk) and looks down on the little guy.
Heather, there's one other factor relevant to overseas ownership that seems to escape everyone's attention. For there to be profits or dividends flowing out of the country, there must have been foreign capital flowing into the country in the first place. Capital that was either invested in a start-up, or (in the BNZ's case) paid to existing owners who then reinvested it in some presumably worthwhile venture. We are only a little country whose citizens don't save very much, and tend to put their savings into real estate. Were it not for foreign capital, we wouldn't have half the infrastructure and half the employers we have now. So if we're going to prohibit foreign ownership of our assets, let's just go back to horses and carts, and be done with it. Thank God we were granted the privilege of paying some profits and dividends overseas.
Looking down on the little guy would be pretty hard for someone as little as Lux
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