Bank profits costing our economy

Media release: FIRST Union
Wednesday 19 September, 2012

Bank profits costing our economy

It’s not just skilled workers that the Australian economy is sucking out of New Zealand, but massive bank profits too, the finance sector union said today.

Just-released figures show our current account deficit has widened in the June quarter by $300 million since March, due largely to the higher profits foreign-owned New Zealand banks are sending back to Australia.

This follows last months PwC report showing that the big five banks had a combined profit of nearly $2.5 billion in the first half of this financial year.

“The New Zealand economy is worse off as a result of the massive profits Australian banks are making off the back of New Zealand,” FIRST Union Finance Secretary Andrew Casidy said.

“We have a jobs crisis in our productive sectors, and sluggish growth in many other industries. Why is it that bank profits can rise so much, when the rest of the economy, and households, continue to struggle?”

Andrew Casidy said the community should be aware that aggressive sales targets regimes in the banks drove up New Zealand household debt, in order to boost profits.

“In many cases the management of these targets is causing bank workers considerable stress. Banks are wealthy employers who should lead from the front in their work practices, and not push staff so heavily to meet targets, in order to boost profits back in Australia.”

“No one is suggesting our banks should run at a loss. Of course not.”

“But they have every opportunity to shift their focus to reinvesting in New Zealand through good jobs, higher levels of customer service and support for local businesses, and away from just sending back as much profit as they can across the Tasman,” Andrew Casidy said.

“Big bank profits are seen as a good news story. But when their massive repatriation of profits continues to cause imbalances in our economy, where is the good news for New Zealand,” Andrew Casidy said.

Ends.

The National Distribution Union and Finsec joined forces in October 2011 to form New Zealand’s newest union – FIRST. The union represents over 27,000 people working in Finance, Industrial (Textile and Wood) Retail, Stores & Transport. http://firstunion.org.nz

© Scoop Media