James Shaw announced a Green policy to “repurpose Kiwibank and save Kiwis hundreds of millions”:
The Green Party will strengthen Kiwibank so that it can compete with the big four foreign owned banks leading to better interest rates, the Green Party said today.
To achieve better bank interest rates, the Green Party will:
- Inject a further $100 million of capital in Kiwibank to speed its expansion into commercial banking;
- Allow Kiwibank to keep more of its profits to help it grow faster; and,
- Give Kiwibank a clear public purpose to lead the market in passing on interest rate cuts.
“The Government has limited Kiwibank’s ability to scale up and compete, leaving the big foreign banks free to make unnecessarily large profits off Kiwis, rather than pass on recent interest rate cuts to us all,” said Green Party Co-Leader James Shaw.
“New Zealanders could be getting better interest rates no matter who they bank with if Kiwibank was allowed to properly compete with the big four Australian banks.
“Under our plan, a first home buyer in Auckland with a $500,000 mortgage could save $690 per year, meaning they pay off their mortgage earlier.
“Across the entire economy, these mortgage savings alone translate into savings of $312 million per year. That’s a massive saving for NZ Inc.”
New Zealand’s banking sector is amongst the most profitable in the developed world. Four foreign-owned banks control 87 percent of New Zealand’s banking industry — a situation ratings agency Standard & Poor’s recently described as ‘oligopolistic’.
“Our plan will help Kiwibank lead a change in New Zealand banking, by giving it a clear public purpose that requires it to drive competition to generate better interest rates for New Zealanders,” said Mr Shaw.
“We’ll help Kiwibank to grow faster by injecting $100 million of capital into the bank and let it retain more of its profits.
“Strengthening Kiwibank so it can create competition in the banking sector is the smartest way to ensure all banks pass on the best interest rates to Kiwis.”
Link to more information:
NZ Herald: ‘Beefed up’ Kiwibank would save homeowners big bucks – Greens
“Beefing up” Kiwibank would lead to lower interest rates and could save homeowners hundreds of dollars, Mr Shaw said.
“Under our plan, a first-home buyer in Auckland with a $500,000 mortgage could save $690 a year, meaning they pay off their mortgage earlier.”
Across the entire economy, these mortgage savings alone translate into savings of $312 million a year.
That’s a massive saving for NZ Inc.
But is it realistic? I’m sure the Green numbers will be checked over.
But Labour are sticking to strong arm tactics for now:
Labour leader Andrew Little said he would not rule out legislating to force banks to pass on cuts by the Reserve Bank…
It’s worth keeping in mind that with current support levels any changes to Kiwibank would also require NZ First support.
Last month Winston Peters slammed trading banks but gave no specifics on what he would want to do about them:
Winston Peters has got no sympathy for our trading banks.
The New Zealand First leader said the excuse used by the banks that they’re facing higher international borrowing rates doesn’t wash.
“The disparity between the actual borrowing rate and what they’re charging the borrowers in this country is a disgrace. We’re paying not the lowest interest rates in 50 years but in fact, in comparative terms, the highest”.
That doesn’t make sense. But NZ First voters, many of whom are retired and rely on interest earnings on savings, may not be happy with pushing interest rates down.