By Green Party co-leader Russel Norman
New Zealand's biggest banking contract has been a tightly-guarded secret for 21 years. The Government first signed the master banking contract with Westpac back in 1989 when David Lange was Prime Minister. There has never been a single competitive tender since.
The Green Party was the first to highlight this cosy banking relationship last year as part of our campaign to make our banking sector — a key sector within our economy — more competitive. We secured a copy of the original master banking contract under the Official Information Act and offer it here publicly for the first time.
You may be disappointed by how much of the information has been censored by Treasury. What convoluted rationale did they use to deem twenty-one-year-old data 'commercially sensitive'? Did they not want us to know how much money the bank was making? Or how slow their computers were back then? (Their minimum performance specifications for a computer balance enquiry were 'no more than 30 seconds after the ‘enter’ key is struck'.)
For what it’s worth, here’s the entire contract, including the original request for a proposal.
The Government has recently made a commitment to re-tender the master banking contract. We’re hoping some of the contract can be secured by Kiwibank and, in time, all of the contract. Our Government's banking should be done by our New Zealand bank.
And we’ll keep working to make sure our banking sector becomes more competitive, and more New- Zealand owned. It's not in New Zealand's long-term interests to have 95% of our banking industry controlled by four foreign-owned banks that send a majority of their profits off-shore each and every year.
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This item was first posted on Frogblog.
For background see:
Government considers future of Westpac's key 21 year-old banking deal
Greens ask why Westpac's Govt banking deal hasn't been put up for tender since David Lange was PM
5 Comments
Russell, get your head out of the sand. If it wasn't for the NZ Banking system being dominated by the Aussie banks then how do you think the bank credit ratings would have faired over the last couple of years? You should know well how important it is for our biggest companies, including our financial sector, to have strong backing and this only benefits the NZ economy. Yes some profits will go offshore but a fair amount is also paid out to the shareholders in dividends to people like me who see it wise to invest in the NZ economy. Oh, and by the way I seem to recall a TV interview in the last couple of days with the CEO of ANZ who made a comment that ANZ contribute 1% to the countries GDP... Perhaps that doesn't count much for the Greens in terms of jobs, opportunities, investment in our economy, etc.
It's true that the Australian banks send their profits back to Australia, but it's also true that they leave their costs, including tax, in New Zealand.
And if we're that upset about watching the profits leave, why not buy shares in them using the superannuation fund?
Leave the tax in NZ???!!!! You might want to do some reading on the great efforts they went to avoid paying such tax in the last fews years through shonky accounting back to their parent banks. Regards paragraph 2, couldn't agree with you more, perhaps that'd be a better investment for the fund than Indian Submarine reactor technology.
Tailslide - alot those tax deals as I understand it were initially deemed ok by the IRD, and many were just tax effcient deals for customers where alot of that tax benefit was passed onto the NZ company which enabled things to happen in NZ that might not otherwise e.g. very big films.
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