Mark Patterson said the Bill was needed for several reasons.
“There’s evidence of a systematic pull back by the Aussie banks and we’ve had costly biosecurity incursions like M bovis. There’s also a major power imbalance between banks and farmers.
“In addition I’ve had a lot of paper over my desk about farmer bullying by banks,” Patterson said.
The proposed legislation requires creditors to offer farmers who default on payments mediation before any enforcement action is taken. Farmers can also initiate mediation.
Federated Farmers is in favour of it. Their recent survey showed one in six farmers claimed to have come under pressure from their bank, up 5% since November 1918.
Also last week the Court of Appeal awarded compensation to a Taranaki farming couple over the ANZ misrepresenting swaps.
My issue with the legislation is that it’s but step one in a long journey to make the Australian banks accountable, rather than being a harsh drain on the entire NZ economy.
According to media reports the Australian owned banks make $580,000 in New Zealand each and every hour and that’s obscene.
They were 26% more profitable here than in Australia.
An Australian investigation into the banks found “serious misconduct”.
Here we haven’t had a Royal Commission and as the past week’s activities have shown they’re out of control.
Recently the Governor of the Reserve Bank Adrian Orr suggested increasing the capital requirements of banks to protect the economy.
That suggestion encouraged hysteria from those banks.
In Farmers Weekly back in April we had dire predictions from Westpac.
There’s also been a campaign to panic ordinary lenders.
The proposed increase, and it is only a discussion document if accepted, would mean the banks would have five years to increase their deposit rates.
The Reserve Bank estimates if the proposition became law then interest rates would increase by just 20 to 40 base points.
That tells me that the banks built profiteering into their estimates.
That they are out of control is also obvious from the recent antics of the ANZ.
The Reserve Bank found that ANZ had failed in its “control and attestation process”.
Former BNZ director Kerry McDonald said that chairman John Key and chief executive David Hisco should resign.
It was a major error and one that could have left depositors vulnerable but Key claimed, almost sotto voce, that the fault was caused by “someone quite junior in the organisation”.
Is that telling me that the ANZ board and senior management don’t know what’s going on?
The Reserve Bank has asked the ANZ for two independent reviews, the first on capital reserves and the second as to whether the ANZ is complying with rules for the running of the bank by directors and staff, an indictment on the bank surely.
That was followed by the Hisco expenses saga.
The chief executive had annual “non-monetary benefits averaging $A418,855” a year. That came to $A3.35 million for the eight years he was in the job.
That was on top of his $A1,168,324 salary and $A644,397 bonus.
That’s a little over the top especially considering he was paid out for 12 months and won’t have to pay any of the expenses back.
My issue is that the ANZ, according to media reports, makes $3800 in profits each minute.
It was caught using an unauthorised operational risk capital model with the mistake palmed off as the problem of a junior staffer.
Then we had the expenses claim that wasn’t detected here but in Australia.
The Key response was that “the way expenses were recorded made it difficult to detect”.
I would have also thought the selling of a central Auckland house to the Hiscos at a considerable discount was obvious to all except, possibly, the IRD.
Key’s claim that Hisco had to go because the bank had a “culture of integrity” to uphold is laughable.
So who is in control of the ANZ? It doesn’t seem to me as if it’s the board or senior management.
In the last few days we’ve had the minister of finance Grant Robertson telling us he’s going to guarantee bank deposits, which is good. National says Labour hasn’t done enough, which is laughable as they abolished a former scheme and refused to reinstate anything.
The Government is also considering making bank boards and senior executives accountable, which I’d support. I’d also like to see the Reserve Bank better resourced.
My view is that we need stronger legislation and better enforcement as the culture of blamelessness and denial, as evidenced by ANZ’s actions, shouldn’t be tolerated at the corner dairy let alone by our largest bank. Fortunately it’s not mine.
