David Cunliffe
Finance Spokesperson

21 July 2009 Media Statement

Labour, Greens, Progressives announce inquiry into bank profits

The Labour Party, the Greens and the Progressives will hold the equivalent of a parliamentary select committee inquiry into bank profits, says Labour finance spokesperson David Cunliffe.

“Kiwis believe they are paying higher interest rates than they should be paying. Banks believe interest costs are justified. The facts should be put on the table fairly and openly so that people can see whether they are receiving a fair deal.”

David Cunliffe said Labour and the Greens were disappointed that the Finance and Expenditure Select Committee had decided not to proceed with its own inquiry despite the view of Reserve Bank Governor Alan Bollard that banks have set their interests higher than needed.

The inquiry being announced today would have a similar primary focus as that originally agreed by the select committee, he said. “It will be an inquiry into the relationship between the Official Cash Rate and short term interest rates, in the context of matters raised by the Finance and Expenditure Committee in its report on the Reserve Bank of New Zealand’s financial stability report.”

David Cunliffe said Labour and the Greens wanted the inquiry to be cross-party, he said.

“We are writing to the leaders of all parties in Parliament asking them to participate. We have also written to a cross-section of New Zealand organisations and businesses, including banks, inviting them to participate, and expect a significant number of positive responses.

“We want ordinary New Zealanders to share views with us. We will ensure their views get the wider audience they deserve. We have also asked Dr Bollard to consider asking the Finance Minister for approval to attend and give evidence at the inquiry.”

A letter had been sent to the Speaker seeking appropriate parliamentary logistical support for the inquiry, David Cunliffe said.

“This is a serious inquiry by parliamentarians on behalf of New Zealanders. We believe it is appropriate support, including a venue, is made available, so that the public and media can attend.”

David Cunliffe said further details of the inquiry, including a starting date, would be announced in the next few days. “The committee will be supported with high quality expert advice to help the committee come to robust and considered conclusions.

“We want to get started as soon as possible. New Zealanders deserve that,” he said. “Our aim, at the end of the inquiry, is that New Zealanders have had the opportunity to learn why banks are making the decisions they are making, and to discover if customers are getting a fair go or not”.

The bank inquiry website is at: http://www.bankinquiry.org.nz

ENDS

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