Little’s banking ballsup

Andrew Little is getting clobbered from all directions for suggesting he would ‘stiff-arm’ banks to get them to cut interest rates in line with OCR reductions, and if necessary legislate.

Radio NZ: Labour call on bank OCR cuts ‘dumb idea’ – English

Andrew Little says the government should pressure the major banks to reduce their mortgage interest rates, and if he was prime minister he could go as far as legislating to make them do so.

“I would start with pretty serious talking, you might say ‘stiff-arming’, and if they are not responsive to that, I guess you’ve got to look at your options when you are in government.

“You have the power to legislate, but I think you have got to have a pretty serious talk to the banks about expectations.”

Mr Little said if he did have to legislate he would do so reluctantly and with a heavy heart.

Responses have been scathing, with Little getting ridiculed in parliament by John Key.

And Bill English:

“I don’t think anyone in New Zealand wants the leader of the opposition setting interest rates, we tried that back in the 70s and 80s and it ends up with politicians always deciding to try and keep rates in a different place than they should be, so I think it’s a pretty dumb idea.”

Mr English said he was quite surprised by Mr Little’s comments.

“I mean the Labour Party in the past has always been fairly mainstream on economics, but now they are opposing trade, want the government to set interest rates, it’s headed in a fairly different direction, I think they’re just competing with the Greens.”

But even the Greens have declined to back political directives to banks, which is managed by the Reserve Bank with a separation from political interference.

Although there was no competition with the Greens on the matter, as the party’s finance spokesperson, Julie-Anne Genter was somewhat lukewarm on the idea of forcing banks to drop their rates.

Little didn’t say whether he would stiff-arm banks to raise interest rates if the OCR went up.

He has landed a balls up in his finance spokespersons lap, presuming Grant Robertson recognises the foolishness of Little’s remarks.

The only positive for Little is it is not election year.

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29 Comments

  1. Pantsdownbrown

     /  15th March 2016

    If people haven’t seen in the past that Little is just making policy up on the fly with no regard to reality then this is the ‘light-bulb’ moment for them.

    Traditional Labour supporters must be wondering where their party has gone, even the Greens can’t find it in themselves to support Little on this one which just goes to show how far out there he has gone.

    It is sad that currently in New Zealand we have only one party (the current govt) that can be trusted to run the economy.

    Reply
    • Alan Wilkinson

       /  15th March 2016

      Does Labour have a policy? No. Does it have a strategy? No. Does it have a leader? No. Does it have a future? Not much at present.

      Reply
      • Mefrostate

         /  15th March 2016

        Let’s hope for the sake of a functioning democracy that they sort themselves out quick-sharp.

        Reply
        • Kitty Catkin

           /  15th March 2016

          He is making sure that he loses any support that he might have had from people in that sector.

          Reply
        • Iceberg

           /  15th March 2016

          Why is Labour, or Little, required for a functioning democracy? It’s worked fine without him before, and there are plenty of other parties happy to fill the void.

          Reply
      • Kitty Catkin

         /  15th March 2016

        And making sure that he’s on the Christmas card list of everyone in National.

        Reply
  2. Kitty Catkin

     /  15th March 2016

    I would think that this could only happen in a time of national emergency-when the banks would probably be doing it anyway. I can’t think of an emergency that would justify it, but there could be some.

    Let’s hope that Andrew Little doesn’t play rugby-he’d be forever scoring own goals.

    Reply
  3. Kitty Catkin

     /  15th March 2016

    LOST: one sense of proportion. Urgently required. Reward to finder. Please return to A Little. c/o Beehive.

    Reply
  4. jamie

     /  15th March 2016

    Everyone repeat after me:

    ‘The banks know best, we must never question the supremacy of the banking system’

    Reply
    • Art Croft

       /  15th March 2016

      So your suggestion. “Labour knows bes….” ha ha I can’t even say it with out laughing.

      Reply
      • jamie

         /  15th March 2016

        Funny, I don’t remember making that suggestion.

        Reply
      • Kitty Catkin

         /  15th March 2016

        The idea of ANY government forcing banks to do things should ring alarm bells-if National suggested it, they’d have the same response. This would be starting things off on a very slippery slope. Banks have to charge more interest than they’re paying out themselves or they’d go bust. Would Labour force them to GIVE customers more interest as well ? I am speaking disinterestedly about the mortgage rates, as I am mortgage free so it doesn’t affect me, but would be very wary of any government, no matter who, doing this-banks don’t want their customers to go belly-up, contrary to what some people think and are run by people who know what they’re doing.

        Reply
        • jamie

           /  15th March 2016

          “The idea of ANY government forcing banks to do things should ring alarm bells”

          That’s quite an odd thing to say.

          If banks are above the government, they are above the democratic will of the people and above the law of the land.

          What makes you wish that banks not be subject to sovereign governments?

          Reply
          • Alan Wilkinson

             /  15th March 2016

            Because the banks should not be used as a cash cow to favour the government’s supporters.

            Reply
            • Kitty Catkin

               /  15th March 2016

              And because the banks are not SOEs. They have to obey the appropriate laws of the land, of course, and would rightly be pulled up and charged if they did not. But the idea of banks or businesses being forced to do things to suit a government-except,possibly, in some really dire national emergency-sounds like Communist Russia and is a very different thing.

            • Kitty Catkin

               /  15th March 2016

              At no point did I say that they should be above the law, that is a very different matter as you must be aware.

            • jamie

               /  15th March 2016

              Every bit of legislation on our books represents the government forcing us to either do or not do some thing or other.

              If the government is unable to pass laws that apply to banks (or anyone else) then they are by definition above the law.

            • jamie

               /  15th March 2016

              p.s. I note that while you argue that the banks are not above the law (which I agree with btw), Alan argues that they should be.

  5. Oliver

     /  15th March 2016

    Little is smart.. he can see the big picture. What he is doing is cleverly calling out National, because he knows the banks are on the ropes at the moment. Not many economists will admit what’s going on but I will fill you in. The dairy crisis is hitting the banks hard, that’s why they have been given a OCR to give them breathing room. Lower the Interest rates on mortgages would put the banks in the red again. The banks a stuck between a rock and a hard place.

    Reply
    • Kitty Catkin

       /  15th March 2016

      Nobody WANTS to be in the red (in debt), dimwit, they want to be in the black (in credit). I sincerely hope that no government would force banks to be in the red-what a stupid move. That’s not seeing the big picture, it’s insanity.

      You told us before that the dairy industry was ticking over-which is it ? You repeat half understood things that you have read as if only you knew them and sound very silly indeed. You have no insider information, so don’t try to sound as if you had.

      Reply
    • artcroft

       /  15th March 2016

      So Little’s urging Key to turn the dairy crisis into a banking crisis as well. When do I get the chance to vote for this petite genius.

      Reply
      • Kitty Catkin

         /  15th March 2016

        Wait your turn, Arty, I’m ahead of you in the queue ! (treads on Artcroft’s toe as a gentle hint to move back)

        Reply
      • Oliver

         /  15th March 2016

        OMG do I have to spell it out to you? Little is highlighting that the economy is in distress. However John Key is trying to hide the fact that the economy is in distress. It’s politics… You need to be able to read between the lines to get it.

        Reply
        • Kitty Catkin

           /  15th March 2016

          And you’re the confidante of both of them, I suppose, as the CEO of a major bank and the second in command of the Reserve Bank.

          Reply
        • Iceberg

           /  15th March 2016

          Nonsense. Tourism is booming. Wine industry is booming. Manufacturing is growing, dollar is down, exports are up. Tech sector is growing. Trade agreements are being negotiated left right and centre.

          Little is a lightweight fool with minority support from his caucus, Labour members and the public. He’s a placeholder.

          Reply
    • Alan Wilkinson

       /  15th March 2016

      For once there’s a grain of truth amongst the buckets of nonsense in that, Oliver.

      https://www.fitchratings.com/site/fitch-home/pressrelease?id=1000771

      Reply
    • Pantsdownbrown

       /  15th March 2016

      Little is so smart that everybody is having a laugh at his expense? What’s he trying to do? Leave parliament and join the circus as head clown?

      Reply
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