Social Credit is calling on Kiwibank to drop its lending rates, particularly for first home buyers and small and medium businesses.

As a bank owned by all New Zealanders Kiwibank has a responsibility to take into consideration social factors rather than simply commercial ones.

The vast majority of Kiwibank customers are superannuitants, individuals, and small businesses, so once again those who can least afford it are being hit hardest.

Under Kiwibank’s current operating mode, its shareholders, the New Zealand Superfund, the Accident Compensation Corporation, and NZ Post, are effectively taxing Kiwibank’s customers to pay for their own superannuation, accident compensation, and government services through dividends from NZ Post.

Unlike the four Australian Banks which extracted six billion dollars from Kiwis’ pockets last year and exported the majority of it to overseas shareholders, Kiwibank’s shareholders should not be expecting similar profit returns.

While the Superfund and ACC should be looking for good returns on the money they have to invest, that investment should be in shares of productive New Zealand enterprises, allowing them access to lower cost finance for development than is available by bank borrowing.

In the same way that other commercial banks do, Kiwibank creates the money it lends to borrowers out of thin air, by simply entering digits on a computer keyboard. It does not lend money that people here deposited with it so it could easily lower its lending rates.

That being the case, the bank has no need to drop the deposit rates it offers to customers and in fact could increase the rates slightly in order to boost its reserves to enable it to settle its accounts with other banks that borrowers money might be deposited into.

Offering slightly higher deposit rates would in any case be more likely to attract some of that money back by way of deposits.

The government should reverse the 2016 decision to make the Superfund and ACC buy 45 percent of Kiwibank and the shareholding should instead be taken up by the Reserve Bank.

Kiwibank should be assisting in the development of the country at least cost, not acting as just another profit-oriented commercial bank.

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