Jim's Bank Will Profit More than Other Banks

Monday, August 13 2001
Rodney Hide Press Releases -- Economy

ACT Finance Spokesman Rodney Hide today released a Treasury document revealing the 'People's Bank' would profit from its customers even more than existing banks.

This document is in addition to the documents he released yesterday.

"Deputy Prime Minister Jim Anderton claimed his bank would drive down profits in the banking industry. He attacked other banks for charging too much.

"This previously secret document reveals the truth. The Treasury paper declares: '[NZ Post's] business case assumes profit and interest rate margins that exceed industry averages'.

"I can now see why Jim Anderton is so upset at the whistleblowers who are lifting the lid on his proposed profiteering.

"Jim's so-called 'People's Bank' based its case for a taxpayer subsidy of $80 million on profiting at a greater level than existing banks.

"And that's not the only revelation in this document. The proposal involves 'significant fees' according to the Treasury paper: just $22 a year less than its nearest main competitor for transaction accounts. The 'People's Bank' 'does not offer the public any significant gains in banking accessibility, with all but 9 of its 250 outlets expected to be situated within the catchment areas of branches of other banks'.

"These facts blow Jim Anderton's promises of a better deal and better access clean out of the water.

"The Treasury report details that 'Telephone Kiosks connected to customer service centres will be used in smaller outlets, enabling customers to deal with more complex matters over the telephone.'

"Until now, voters have never been informed that the 'People's Bank' would amount to little more than a telephone booth for many New Zealanders.

"The paper provides the ten-year financial projections for the 'People's Bank'. The base business case assumes over 1,200 new and profitable customers each and every week for three years. It's easy to see why NZ Post's own independent reviewers canned the 'People's Bank'. Cameron & Co declared that 'the numbers of customers attracted to [the 'People's Bank'] is likely to be lower-than-expected and the mix of customers is likely to be poorer'.

"The 'People's Bank' is a dog. It is sponging off taxpayer dollars for no benefit. It's well past the time when the Government and the NZ Post Board blew the whistle on full-time.

"The Treasury document was prepared in October last year for the Minister of Finance and the Minister of State Owned Enterprises last year. It can be found at http://www.act.org.nz/kiwibank (http://www.act.org.nz/kiwibank)

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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