Alliance says New Zealand should follow European lead on finance exec bonuses

Alliance Party media release FOR IMMEDIATE RELEASE Saturday 19 September 2009

The Alliance Party wants New Zealand to follow the lead of European Union leaders and end bankers performance bonuses.

Alliance Party co-leader Ms Murray says that while the EU leaders have voted to seek curbs on bankers bonuses at upcoming G20 summit, the Alliance would like to see bonuses stopped altogether.

"Banking executive salaries must be brought back to a realistic level in comparison to the rest of the population."

The Alliance agrees entirely with French finance minister Christine Lagarde who told the EU leaders that public opinion is horrified by the amount of compensation paid to traders.

There is no question of a return to the old rules on bankers' pay, which is blamed by many for encouraging a short-term pursuit of profit that helped to severely destabilize the financial system.

Ms Murray says this is the ideal time to make these demands with banks still heavily dependent on public money and general agreement that there needs to be urgent regulation to avoid ongoing financial disasters.

"It is totally inappropriate that taxpayers are asked to underwrite the performances of traders when the amount of money they take home each year would enable most of us to live comfortably for the rest of our lives."

The Alliance simply doesn’t buy the argument that these massive payments are needed to attract the best people to the jobs or that additional incentives, in the form of bonuses, are needed to keep already highly paid people working to the best of their ability.

The catastrophic events of the past year have shown that recruitment and retention strategy to be fatally flawed.

"Clearly it simply attracts the greediest people. People who will do whatever it takes to make more money for themselves regardless of the consequences for the organization or the public at large."

Ms Murray says it is unfortunate that, because our banking system is now largely controlled by Australian banks, the New Zealand government is able to exert little direct influence over what happens in our banking sector. However New Zealand can, and should, still make its voice heard on this issue.

ENDS

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